#FASuccess Ep 158: Leveraging Outsourcers To Go From Employee To Independent Without Building It All Yourself, with Stephanie Bruno

What You’ll Learn In This Podcast Episode

• What It Was Like For Stephanie To Go Out On Her Own After Already Being Established In The Industry [04:40]
• How Steph Started Figuring Out Her Vision For Her Firm [13:51]
• Why Steph Decided To Hire A Coach And How She Helped [26:45]
• What Was The Blocking Point When Deciding To Launch Her Own Firm [41:22]
• What Sea To Peak Financial Advisors Looks Like Today [47:42]
• What Steph’s Client Base Looks Like And Where They Come From [57:09]
• What She Does For Her Clients And What Her Planning Process Looks Like [1:13:45]
• What Surprised Her The Most About Building An Advisor Business And What Success Means To Her [1:25:05]

Resources Featured In This Episode:

Full Transcript:

Michael: Welcome, Steph Bruno, to the "Financial Advisor Success" podcast.

Steph: Thank you, Michael. I am honored to be here today.

Michael: I'm looking forward to today's discussion and this what I think is a really interesting journey that you've been on in, oh, I was going to say in building an advisory firm, but really kind of navigating through the advisor industry that I feel like there's a lot of discussion these days of kind of like entrepreneurial advisors in like their 20s who go out there and start their own business. We've always, I think in the industry, largely recruited people into the business often straight out of college, throw a bunch of them at the wall and see which ones stick.

And I know you have had a very different path in that you worked elsewhere in the industry, you worked in an employee context in large firms and small firms for many years and only then decided to kind of take this shift and this leap to go independent. And I know for a lot of advisors, it's exponentially harder to do it then. At least when we do it in our 20s, usually like, I don't necessarily have a mortgage yet and then kids responsibilities and all this other stuff that maybe gives us a little bit more flexibility. It's, I think, for a lot of people harder when we get further on in life and career and just things get more complicated. And so I'm fascinated by this leap you took to go out on your own after already being established in the industry and just what that transition and leap looked like.

What It Was Like For Stephanie To Go Out On Her Own After Already Being Established In The Industry [04:40]

Steph: Well, Michael, yes, I agree, it was very difficult to do it later in life, but there's both pros and cons as well, too. If you do it later in life, I feel like I had the perspective of how would I set this up the right way or the way that I would like to have it, as opposed to just throwing things out there and going from scratch, when I didn't know the business as well. I'm sure other people have it more together than I did when I was in my 20s from that standpoint. They may not face those issues. But I felt like my path prepared me to be able to set up the kind of practice that I wanted to have. And it also gave me the education and the knowledge to do that. But it was a big, big struggle because here I was financially had a six-figure salary and then had to give that up to say, "Well, I'm going to go start my own firm."

Michael: Yeah, you make an interesting point about this, I think, effect of, at least when you do it a little bit further along, you've just seen more of the industry and you know what you actually want. It's something that's fascinating to me looking at a lot of advisors sort of coming into the industry and navigating over the years, and including people who're coming in sort of from day one and getting their careers started and have this focus of like, "I've got to find the perfect firm that does exactly what I want to do the way that I want to do it and that I'm going to spend my whole career there."

I love the focus for people trying to find that awesome, perfect ideal firm in the long run straight out of the gate at their very first job, but I think part of the challenge of the business is you don't even necessarily know what you want, really what parts you really actually enjoy until you've been doing it for a while. Most advisors I know now that have...when you really look back at their path, it's like, I joined an initial firm or something in the industry. I did that for a while. I decided I didn't like that. I went to another firm. I did that for a while. I decided I didn’t entirely like that. And then by my third firm, I figured out what I actually wanted it to be, and I found it or I joined it or I launched it, whatever the journey was. But that it's usually not until about the third round that you actually figure out the thing you really want to do. And rarely is it the first, even when you really think you know what it is.

Steph: Yeah. And I agree. I think a lot of times we start out and we do things that we're good at and we don’t necessarily love those things. So I started working when I was 16. I was in business. I was in Distributive Education Clubs of America, did finance in college. So right away, I went right into the finance industry and plowed away. And I was very successful but didn't always love the work. And I think that was sort of the difference or the turning point for me. I'd worked at a Fortune 100 firm as well, but then the next step, I was working for an accounting firm that had a financial practice. And it was a great opportunity to get education. I had them put me through the CEG program. I also got my CPWA, Certified Private Wealth Advisor through...that's now Investments and Wealth, which was really helpful.

And when I was at the accounting firm, I could see how, wow, when the accountant works with the financial advisor and they work with the estate planning, like, wow, that's great work that can happen when all three of those are partnering together. But in the end, I felt like we would do these great investment plans and great financial plans and our clients have more money, but they weren't any happier. So I just felt like we were missing something. And there was one story in particular that really I think was the turning point for me. I had a client who had told us...he had a successful business. He had told us that the most important thing in his life were his kids. And I remember going into a meeting with the accountant and the estate planning attorney, and this client was selling the business. Their kids basically weren't in a position to be able to take over the business or do something equally inspiring on their own. In fact, we were setting up spendthrift trust so that they wouldn't go through the assets too quickly.

And I thought about this guy, here was the most important thing in his life and all we did was address a piece of the money part of it, and this guy is going to retire and not really be happy. And I thought of that time, I thought we have failed him, or I have failed him. And I just said, "I want to do it differently now. I want to make sure that when we are doing these things for clients, we're doing plans, we're doing investments, that they're really going to make a difference in people's lives. It's not just going to make them more money."

Michael: And so how far into your career were you when you started having these realizations and thoughts?

Steph: So out of college, I went into banking. So I was a credit analyst. I did private banking, like commercial lending for, I would say, executives and professionals. And then I moved to a Fortune 100 firm. And I was there for almost 10 years. So, it was a great place. I could get all my education, CFP, the AIF. I could also see how all the financial products were created and see how advisors do things, but I really missed working one-on-one with clients. So that's when I went to work...I worked with that Fortune 100 firm helping accounting firms with their financial practices. So my role with that firm was to help those accounting firms be successful in their financial practices, and then eventually went to work for one of those clients.

So I had been in the industry 10 or 12 years by then, by the time I was at the accounting firm and having this realization that this isn't working. The traditional model of how I'm told to be a financial advisor, it isn't working for clients. And quite frankly, it wasn't working for me. Again, I could do good work, but I wasn't happy with it. I didn't love the work that I did. And that's when...at that point, I moved to a firm that was an independent broker-dealer and RIA and went to work with the owner of that firm. So took a decrease in pay, gave up the salary and bonus from the accounting firm, took a decrease in pay, went to this independent firm as sort of like an associate advisor to start building my own practice and started working from there. That's when all the fun started in that you've got less money. Okay, well, I can cut back, I can do that. I knew I'd have less money. And I started working with my coach, who I still work with.

And then you start discovering, before you can really show up for everybody else, you've got to take care of yourself. So at that point in time, I went through a divorce, because I realized that that was a relationship that wasn't working for me either. And so here I am now at this firm trying to build a practice. I've got a little bit of salary, but I'm actually paying all my marketing expenses, because they aren't really marketing. Now I've got twice the bills, because financially, I don't have that support of the spouse that I thought I had at that point in time.

And so it was during this phase when I really looked at, "Okay, what am I going to do now? Am I going to stick with trying to build my practice and am I going to do it with this firm that I'm with or am I going to try and go work for somebody else maybe as a paraplanner or an advisor?" Which I felt like was going backwards for me. I really still had this vision of a different way to work with clients and help them really dream and act on those dreams, and then plan around that. And so that's when things got tough is I had to say, "All right, I'm going to stick with this," then it's going to be scary because financially-wise, I was running out of money from that standpoint.

Michael: Well, and you make an interesting point around, I guess, at least in retrospect, the unfortunate financial timing of getting divorced as you're trying to launch a firm. Because I know for a lot of advisors that launch, when you get down to it from just the financial perspective, a lot of the time it's a couple and we say, "Look, we're going to live on one spouse's salary or income while the other spouse goes and starts this advisory from." I see that pattern happen a lot. Usually a spouse with a fairly stable salary and income, so we can plan around that, which lets the other one do, call it the riskier thing of, "I'm going to go start this advisory firm thing where I get little or no money upfront, but I build some clients that will hopefully turn out well in the long run."

Just the financial constraints of launching a firm, not in terms of the startup costs, it's not like we're building a factory where you need hundreds of thousands of dollars of equipment to launch an advisory firm, but you have to figure out how you're going to handle the personal upkeep of your household while you're building client base and trying to get to the point where you get money out of your firm. And just mathematically for a lot of people, that is much easier when there's a spouse with enough income to partially or fully support the household, and a lot harder when you're on your own.

How Steph Started Figuring Out Her Vision For Her Firm [13:51]

Steph: Yeah, most definitely. And especially because here I was trying to build an advisory practice. At that time, I was still with this independent firm that was a RIA and a BD, but I had done very little brokerage work my entire career. It was mostly RIA, even though I had my licenses. So I was like, will I stay with this firm, who had promised some growth, they were supposed to be growing and marketing, and that didn't really pan out, and it wasn't as good a fit culturally, or do I try and go to another firm? So I did meet with a lot of other people. And it turns out that the firms I really wanted to go to just didn't want me because I didn't have enough in assets. I was building. I had a dream. They liked my story, they liked what I wanted to do, but in the end, I didn't have enough assets for them. And then the folks that wanted me, it would be more of a...I felt like going backwards to more of a financial services firm or operations role or a planning piece, which isn't a bad choice for some folks, but I still had this vision of what I could do.

And fortunately, I had a really good coach, too. So I think that's a piece that really has helped me throughout my advisory career is having a good coach to work with you and somebody who can kind of get you through those tough times, especially when you don't have a spouse or partner. Or even if you do, those people don't often understand what you're going through when you're starting that business. So I talked to a lot of folks during that time. I had an advisory board for my practice. And eventually, enough people said, "What you're doing, why don't you go set up your own firm?" And I thought, "Well, I'm running out of money at the firm I'm at, they're not really adding anything at this point in time, what more do I have to lose if I go and start my own firm." Which was really scary, and I had no money. I've shared with you, I had to take money out of my IRA in order to support myself at that point in time, which although it didn't feel...

Michael: No, all the financial advisor red flags just went off. Like, you took money out of your retirement account to start your own business? Have we had that conversation with all of our clients not to do that?

Steph: I know, I know. And I did. And it was a tough decision, but I wasn't making any money. And the 10% penalty was a low enough tax rate to take it out. And here's how I look at it. I bought my own practice, right? People don't think anything about going into debt to buy somebody else's practice. And even though I had to take money that was preserved for retirement, I had saved well for retirement, and I thought, "This is an investment in my future. And I'm going to still...I'm going to be thrifty, and I'm going to do it, but I'm going to take this risk and do this and start my firm." And looking back at it, the money I took out starting my firm at this point in time has paid off tremendously, not only in the value of the asset of my firm but in the value of my life, the life that I have that I love now and the work that I do with my clients.

Michael: I love that framing that just we don't think twice about taking on a debt to buy someone else's practice, so what's wrong with, I guess either taking on debt to start your own practice or...strictly speaking, you weren't taking on debt, you were, call it borrowing against your future, saying, "Look, I've got these retirement assets saved, I might easily borrow against them to buy a practice, why don't I borrow against them to start my own practice."

Steph: Yeah.

Michael: Very cool. Yeah, I really like that framing. So help me understand, though, I actually want to go maybe one partial step backwards, that I sort of get the point of, "Hey, I'm at this firm. I'm under their umbrella." I'm presuming they're taking at least a little slice off the top because that's how a hybrid BD RIA structure would usually operate. You're saying like, "They're not really giving me much growth. I can probably handle some of this stuff on my own. I think I'm just going to break out of my own. I'll draw little from my retirement accounts to get there." But take me one step back further from the, "I'm at an accounting firm and doing this stuff in a comfortable salaried environment" to, "I'm going to take this leap and join this hybrid firm and become an associate advisor and start building my own clients from scratch and walk away from that salary and the rest." What was going on at that transition point?

Steph: So there were a few things that were happening there. So one was the piece where I talked about, I didn't feel like, even though we were doing great work, technically, we weren't really making a difference for clients. So I didn't feel like the work was in the level that I wanted it to be. Second, in the accounting firm, the only way to own that business is to be a partner in the accounting firm, right? So you don't get to own the clients, you get to own a piece of the accounting firm. And for non-accountants in an accounting firm, it's really hard to do. And so I felt like there were a lot of pushback in my upward mobility in that firm. When I left, I felt like I should have been in a manager role, which is a certain level at the accounting firm. And I was getting a lot of pushback, even though I managed 10 advisors. And there were people that managed nobody that were at a manager role. So I could see that it was going to be an upward struggle. So I wasn't going to have that wealth. I was going to continue to have a salary.

Michael: And so that's just part of the dynamic of, was literally being in an accounting firm when you don't have "CPA" after your name and just some of the cultural split that happens with accounting firms when you're a non-accountant.

Steph: Yep. Exactly. And then the third piece was, at that point in time, I was actually running the practice and managing advisors. And I quickly learned, one, I probably wasn't very good at it, and two, I didn't like it. I really liked working with clients. I didn't really want to manage advisors. So I wanted to figure out, how do I get back and use my years of experience and all of this education that I've gotten and bring that to my clients and do that work and do it in a meaningful way? And so that part just pushed me to want to say, "I'm going to try and build my own practice." And it was also interesting too because the accounting firm was in Northern Colorado, I lived in Denver. And I had moved to Denver for this other role with the Fortune 100 company. So I actually didn't have a huge network in Denver when I started this, which made it doubly hard.

Michael: So there's kind of these three prongs, like, "I don't feel like the work I'm doing is making the difference in clients' lives I want. So I want to do advice differently. I don't really like managing advisors. I want to just handle clients directly." And then this sort of financial opportunity aspect of being able to own the thing that's being built. So was there, I don't know, a weighting of these? Did one drive it, in particular, you were like, "I really want the opportunity to own a thing in the long run, I ain't going to own it here, so I'm going somewhere else" or was it more of a driver of just, "I want to do planning and advice differently for my clients, and we've got to do it a certain way here, so I'm going to go start my own thing so I can just do my advice my way?" Was there a one that drove it more than the other?

Steph: Well, I think they sort of overlapped a little bit. In other words, because I didn't really have that upward mobility in the accounting firm, then I couldn't do the business the way I really wanted either, right, because they wanted to do the business a certain way. So I would say it was a combination of those two. I would say probably more than anything was the fact that I really didn't feel like I was going to get that value out of the...I wasn't going to be as valued in the accounting firm myself. So it was sort of twofold. I wasn't going to get the value, and I wasn't going to be valued. And I'll be honest that later after I left that firm, I realized that that had had an impact on me. I really had to do some mindset work around that because I felt like it just sort of beat me down a little bit that I had to kind of push and push to sort of recognize what I was bringing to the table on the financial side.

Michael: And so what was the mindset work? What were you trying to reprogram for yourself?

Steph: That the work I do is meaningful and is valuable as the accounting work, and quite honestly, probably brings in more revenue in the long run from that standpoint. And also, that I am valuable as an advisor to a client just like a CPA is.

Michael: And so how was that showing up for you? Where was it creating issues?

Steph: When I moved to the BD RIA, I started working with my coach. And I think, as I was building this business, things were sort of getting in my way. And some of it was this mindset work. It was having to realize that it'd beat me down a little bit, and it was time to really own up to the fact that I do provide value to clients and to get out there and prove it.

Michael: And so that meant like you weren't pricing yourself fairly, you weren't quoting clients appropriately because you were sort of diminishing your own value without realizing it?

Steph: Yeah, exactly. Things like that. Not showing up as confidently with clients as well, which then impacts your ability to bring that client on, even though you have a lot of competence.

Michael: And so what led to the leap to the independent firm and trying to build your own client base that way? Were you even looking at just finding another, I don't know, mid to large-sized advisory firm that's not an accounting firm so you don't have this, "I'm a non-CPA in an accounting firm" and just move to another firm where it might feel like there's better alignment and maybe even a path to partnership? Were you looking for that and couldn't find it or was that not even on the radar screen because you really wanted to go this other direction?

Steph: No, I did talk to a couple of other firms I think trying to come up with an option to...I didn't want to give up my complete salary. I knew I might have to take a decrease. So trying to find an option where I would still get some income and be able to grow my business. And that independent firm offered me that. They basically paid me a small salary for two years while I worked with the owner book of business and tried to help them...the idea was we would grow that, and then eventually I would just be on payout because we were growing so much. But there really wasn't as much growth in that business that they, I guess suggested that there would be.

Michael: And so ideally, they were going to be growing and handing clients off to you that you would be able to service while you're also getting some of your own, and you would grow both of those income streams in parallel? Was that the idea of it?

Steph: Yes, exactly. So I could work on getting my own client base, but then also, the firm would be growing clients. And the owner was more of a rainmaker, and so then I would be taking on helping support his clients and get a share of that revenue as well.

Michael: And then just in practice, the firm wasn't growing, more revenue wasn't showing up on that end. And so at some point, this is not as valuable of a relationship as it once ideally was.

Steph: Right. And also, I was investing a lot in marketing and developing my own brand. I even at that point had my own website and my own blog that was separate from the firm. And so I'm thinking here, "Well, if I'm paying all my own marketing expenses, I'm not getting any leads from the firm, why am I doing this? Does it make sense?"

Michael: Right. So I guess then it just sort of comes down to a, like, "They pay me this much in salary to work with their clients, but they take this much off the top from my clients." And we just start doing the math and figuring out whether this financially makes sense at this point? Is that basically what it came down to?

Steph: Yeah. And then the salary went away after two years, too. So it was sort of like, "Well, let's use this to get started." And then even though I'm trying to grow and supposedly we're growing, the firm isn't growing. And one of the things looking back now, when I think about, "Oh, how do a firm grow," right, it's a lot easier for me to grow now than it was back then. And one of the ways you grow is you have clients and you do good work and they refer people, right? Well, that wasn't happening at that firm. So to me, something wasn't working from that standpoint, that we weren't getting more referrals from existing clients.

Why Steph Decided To Hire A Coach And How She Helped [26:45]

Michael: So talk to us a little bit about this dynamic of having a coach. Maybe this is my own sort of perception bias, but I feel like most commonly I see advisors are working with coaches because they've grown to a certain fairly substantive point. There's a lot of stuff happening in the business. Time is getting scarce. Profits aren't where they want it. They bring someone in to try to help them basically restructure or reposition where their practice is to where they wish it would be or where they wish their lives were. But it's built on a base of, I've got a chunk of revenue and clients, I'm just not entirely thrilled with how it's showing up in my life. So I'm going to work with a coach to reformulate this."' It sounds like you were coming to a coach in a very different perspective. Revenue is already scarce. I'm going to imagine at some point, you had to make a decision of like, "Am I going to do this marketing initiative or am I going to pay my coach again this month?" So talk to us about coaching in this context. Who did you use? How did you come to it? How did coaching come about for you here?

Steph: Yeah. I definitely recommend coaching. I think it transformed, I think, my life both personally and professionally. I often joke with my coach that she caused my divorce, which is kind of funny. But she didn't really, but she pointed out...basically, I began to value myself more. And so I started looking at all my personal relationships. I found my coach, oddly enough, through a colleague of mine, good friend, Chad Williams. He's actually my buy-sell partner on my practice. And he and I were sitting for our CPWA exam in Chicago, even though we were both from Denver. And we started talking and he said, "I want you to meet Kristin. She's like part coach, part marriage therapist, part personal trainer. I don't know how to describe her." And once I met her, it was exactly what I needed.

So I think you have to have a good coach. It's not just a coach or a lot of people out there that call themselves coaches. And I think it is an expense that you should invest in, or at least a coaching program. I know I've also gotten a lot of value out of the Limitless Adviser Coaching Program as well, too. But I think you need to have a coach. People think, "Oh, I can't afford it. I'm at the beginning. I don't have enough money." You probably need it more than...it sort of reminds me of that saying, like, you should meditate for 20 minutes every day, unless you're really busy, then meditate for 2 hours. So you kind of need your...you need a coach in the beginning. So for me, it really helped to have that. And I just found the money to do that if I needed it.

And I still work with her today. We work in a different way today. I don't need it as much as...I was probably coaching every two weeks at that point in time, we do sort of like a quarterly planning now. But I see the value in it all levels of having coaching. But I just talked with an advisor friend of mine, and we were talking, and he's struggling. And again, it's sort of like you said in the beginning, "Oh, it looks great. It looks like everybody else is successful and I'm not." And that's just not the case. We've all had these struggles and gone through them. And it's what I really appreciate about this podcast. I think I mentioned, from the moment I listened to that first podcast with Rick Kahler and listened to his struggles and like, "Wow, that guy had struggles, oh, I'm not alone." And it feels good. But your coach will help you. That person is there for you. And a good coach is, they're not going to consult, they're going to get you to come up with the answers. They're going to coach you through it.

Michael: And so what's the name of the coach or does she have a website or?

Steph: She does, but she's not taking on new clients right now. So I would say her name was Kristin Keffeler with Illumination360. When I first started working with her, she had two aspects to her business. She worked with families of wealth, and she worked with financial advisors as well. And she has done such a fantastic job growing her own business. And she's a model for having balance in life that she's not taking on any private clients right now. She's just working with her families that she works with. But I definitely recommend the Limitless Adviser Coaching Program or Alyse McConnell, who is involved in that program. She is an excellent coach [inaudible 00:31:09] people are looking for folks. And there's definitely good resources. And it doesn't have to be, I would say, necessarily somebody in the financial industry. If you're a solo practitioner, you may want somebody who is used to at least working with entrepreneurs from that standpoint.

Michael: So help me understand from just a financial aspect what this looked like. What were you spending on a coach back in the early years when you were doing this, and how were you budgeting around it? I'm fascinated by the, as you said, like, meditate 20 minutes a day, unless you're really busy then meditate 2 hours, right? There's this like, hey, it's great to get a coach unless your business is really struggling and you don't have a lot of money, then you should spend a lot for a coach. It's like, okay, I get the theory. There's not a lot of money to go around. So you found a way to prioritize this. I'm just really interested in like, what were you spending and how did you think through this expense when all the other dollars are competing as well?

Steph: So, I don't remember the exact cost, but I think it was about $600 a month, which was a lot of money back then. And that was probably for two phone calls a month, so not a ton of time. But usually, if you're coaching well, you can get a lot done in about 50 minutes. And we did it all over the phone.

Michael: By the time your coach sort of blows up your world, it takes a few weeks to assimilate what they just told you and get going again anyways.

Steph: Yeah, for sure. So I think at that point, I think I just knew I needed her. She was the one person who could understand the vision that I wanted to create with my business and be there for me. I think a lot of what I experienced in the industry were people telling me, "This is how you need to do this." And I'll be honest, a lot of that came from a very, I would say, ego perspective. Maybe a more traditional advisor role where people felt like you've got to show up this way or show up that way. And that didn't feel very authentic to me. So I think my coach, I felt like she knew who I was and how I wanted to show up for clients and what I wanted to do with them. And I think it's a crutch. I kind of joke now, because I've been working with her for about 10 years that I'm like codependent on her, but I don't actually think that's the case right now. But I just enjoy. She's just a really good thinking partner for me. And there's much trust and history in our relationship, so I still use her that way now.

Michael: So I understand sort of thinking partner now, what was it like then? What kinds of things were you talking about or trying to navigate as you're working or struggling to get going on new clients and racing against the clock of the money running out?

Steph: So we would talk about some tactical things, but a lot of it, again, was working more on the mindset aspect piece of it, valuing yourself, understanding your pricing, ways to show up really well for clients. So this coach has a big belief, she's got a background in health and wellness aside from business, and so some of the basics, get good sleep, drink water, exercise, eat. If you don't do all those things, you're not going to feel your best the day when you're going to wake up and meet with that prospect. And so take care of those basic things and show up for those clients. But it's also showing up with confidence. So there were things we would do that before I would meet with someone, I would do this...I would sit still for a minute and quiet my mind and read my little mantra of, I'm delivering value to clients, and I know that I am. And just kind of go into that meeting with that mindset.

And there were also times where she would coach me. There's a diagram she used to use where on one ledge you're sitting there and you know there needs to be change. And there's a big sort of cauldron in between. And then on the other side, you see the vision of what you're trying to create. But in the interim, you've got to go through this cauldron, which she called the cauldron of chaos. So there's a bunch of ups and downs, right? So being really mindful that there will be those downtimes, but they're not going to eat you up. You will get past it and go up, and eventually, you will get to the other side.

And I think that was really important because as an entrepreneur, I'm creating things that I'm hoping will stick. Some of them stuck, some of them didn't stick. There was a lot of work that went into, "How do I make even some money, maybe doing financial planning only for clients?" I did this big marketing thing around these private wealth retreats for people who wanted to learn more about their wealth but wanted to do it in a one-on-one arrangement. It didn't really work, but at least I was trying new things and moving forward and not letting that I think really weigh me down, just to keep moving towards that vision, even if that vision changed over time and I just keep moving forward.

Michael: And so ultimately what that...it sounds like from your end, what that built towards is just it got you through the tough years as you managed to build clients and get confident enough in your pricing to get paid what you were worth from those clients and grow the revenue to the point where the math was going to work.

Steph: Exactly.

Michael: So was there some moment or point when you had, I don't know, the realization of, "Oh my gosh, I think this is actually going to work?" Like, "I think I'm going to survive?"

Steph: Well, I would say when I started my own firm, so I left this combo BD RIA. I had enough people say, "Just start your own firm." And I was going to start my own RIA, but I wound up going down a different path that's a better fit for me. And we can talk about that if you'd like as well. But once I started my own firm, it's interesting that I think the energy in my practice changed because everything that I believed in, I could now put full force in practice and do every day and show up that way. And lo and behold, people were honoring that. And they were responding to it. And they were signing up for it. And then also, by that time, all the marketing I had started doing while I was at this BD RIA firm was paying off.

And as soon as I started my own firm, which was about a little bit, I guess about three years into trying to start my own practice is about when it started to tip a little bit. And that's when I started to have some relief. Although I remember when I started my own firm, the day I started, I called her. I was like, "Emergency coaching call," talked me off the ledge. So there were many sleepless nights during that time. And I remember getting like less than three hours sleep at night and worried and worried like I've never been worried in my entire life about money and success. And also, the clients I did have, making sure I wanted to...the few clients I did have to bring, to bring those over with me and take good care of them. But it was scary during that time, but it did start to tip at that point.

Michael: It's an interesting phenomenon I found having gone out and been involved in starting and launching a couple of different businesses over the years, that that three-year mark really does very commonly seem to be the point where it starts tipping. Like, a whole bunch of different businesses and having done this path several times, and there's something about the third year that seems to be the one when things really start picking up. I think year one is just a, you go out there and find anybody you can who will do business with you with whatever your business is going to be. It's scrapping and slogging it out one prospect and one meeting at a time. The second year usually isn't really much better. A few more people will take your meetings and calls because they've at least noticed you've been around for a while, so you seem to be legit, but you don't really have that many clients to give you referrals yet. There's not much momentum to it. It's like a second year of grinding.

And then at some point in year three just it seems to get going for people. You've got a critical mass of folks you worked with in the first year or two and they start giving you some referrals and opportunities. And that networking meeting you've been going to for two and a half years now they actually kind of trust you and know you and like you and trust you. And some people start saying, "Hey, we should do business together." And that there's just this three-year effect that it seems to usually take until about the third year before any momentum starts showing up, and then it starts compounding.

Steph: Yeah. I remember I listened to your podcast with Matt Oechsli and heard him say, "If advisors would just give it three to seven years, they'd have sort of the career of their dreams." And I really do think that's sort of that magic number between when it really starts to take off and then solidify. So it takes time. It takes work. And I was sharing that with an advisor friend of mine. He's kind of going into his third year and he's getting the, "It's hard. It's hard." I'm like, "I know, just stick with it. It will happen. Just keep doing it. You will get there."

Michael: Yeah. I've lived it on a lot of businesses as well, but obviously, there's something pretty brutal for someone who's, I don't know, 3 months in or 6 months in or 18 months in and it's a grind and it's a slog and it's hard and it beats you up, and then someone is like, "Just three to seven more years, you'll totally be there." Like, "You see how much this has kicked my butt for the past 12 months?"

Steph: True. True. True.

Michael: Yeah. But I think just that is the reality. I wish there was some better way about it beyond just recognizing like that first year or two is pretty sucky for everyone. Even the people that are wonderfully successful, those first few years are horrific for everyone. It's, I think, just part of the nature of trying to go out and establish yourself more or less from scratch.

Steph: Yeah, sure..

What Was The Blocking Point When Deciding To Launch Her Own Firm [41:22]

Michael: So I am curious, though, that, you've said a few times that you made the transition away from the BD RIA hybrid out on your own because people were pushing you to just go hang your own shingle and your client advisory board was nudging you to do it and others were nudging you to do it. What was the blocking point that you weren't just leaping in to do that or even that you didn't do it from the start? That it took a few years at the hybrid firm before you were ready to cross that point. What was it that was slowing you down?

Steph: Well, it's scary to start your own firm. And to be honest, I think I thought it would be a lot harder than it actually was. Getting the clients and starting the practice and doing all that, it was hard, right? But the actual starting the business was easier than I had expected it to be. And I think part of me still wanted to learn from other advisors. I do think that's the burden of a solo advisor to some extent. You don't have that person to say, "Hey, what do you think about this?" or, "What do you think about that?" And I had colleagues that were advisors. But there's something nice, I guess, about being in a firm. So I tried to go that route. And I was in Denver at the time. There are many good firms in Denver, but I couldn't land at a spot that felt good to me, that really wanted me as well. But I would say it was definitely easier to start my own firm than I thought it would be. That part of it, just getting the business running.

Michael: I think you make an interesting point, there's sort of these different categories of what really goes on. There's the mechanics of literally launching the business, which I've heard a lot of people say the same thing. Like, "I was really scared of all this stuff because I didn't really know how to do it and what I was doing. And I've never started my own LLC and filed an ADV and all this." But then either you look up online how to do it or you hire a compliance consultant to help you. It's not that horribly expensive. And you get through it, and then that part's done. Then there's the get the clients part. The get the clients part is horrible pretty much everywhere. Because it's just, it's hard and it's sucky and it takes a lot of time to build a relationship and get to the point where people know you and like you and trust you, the old industry saying.

And then there's the colleagues part, the, "I just don't want to be alone part" that to me, that's part of the key role of organizations, of associations as well. Groups like the FPA have long disproportionately been independent advisors, because if you're out on your own, there's no one else in your four walls besides you, your FPA meetings are where you go to find your comradery with colleagues. And NAPFA was the same way for the subset of fee-only firms, which were even more likely to be independent because you had to hang your shingle as an independent RIA. And that, I don't know, it's just this strange effect to me that when you're in a large firm, yeah, you get the colleagues and the comradery because they're literally right there in your firm. When you are more independent on your own, that doesn't necessarily have to not be there, but you have to be more conscious and active about literally like, how are you going to create your own colleagues and support infrastructure of other people around you, because it's not naturally there when you're on your own.

Steph: Yeah. And I would say, I'll be honest, I think it's just the last few years where I really feel like I have a good peer group of folks. And that has made a huge difference in the satisfaction in my business and also just in best practices sharing. And so I would encourage everybody to find a peer group if they haven't already, because I wish I had done that sooner.

Michael: How did you find a peer group? Because I think that's a challenge for all. Like, yes, I would love to find a peer group, but I snapped my fingers and they didn't appear, and I don't know where else to look for them.

Steph: So I had gone to FPA, I had gone to the IMCA, now Investments and Wealth conferences and done some of that. But I didn't really meet folks, I would say, regularly that I connected with. When I started looking at programs that would maybe help my business, I thought, "Well, let me find one where maybe I would find people who do what I do and maybe have some like interests as well." And I think that's where I ran across the Limitless Adviser Coaching Program. I had heard Matt Jarvis's podcast, I'd heard Stephanie's podcast. I had a lot of respect for Stephanie when she started Quantuvis and knew her background. And so I thought what she was creating in that program with working on mindset and combining that with practice efficiency was ideal. And so, my hope going into that program was I would learn a lot about my business. but that I would also meet some great advisors. And that's been the case. So I've got a crew of us, about 13 of us that went to Costa Rica for one of their retreats. And we still meet regularly. And I care about those people tremendously. And they are my team and they're there for me. And it's been great.

Michael: Yeah, I think there's sort of this phenomenon of just like, you have to find your tribe. You have to find your people. Just wherever your people are, right? Your people are people like you, whatever that is for each of us individually. That when you find your people, it just feels natural. This is a good group. I like being with these people. I like hanging out with these people. I like having conversations with these people. I feel like we share with them, they share with me. I start getting the support that I need. And I guess as you articulate, for some people, they find that click. It clicks for them pretty quickly. They find an association group or a membership group or whatever it is, and there it is. And for others, like, you've got to try a few on for size before you find one where you finally go and you're like, "Oh, these are my people. Now I know where I want to be."

So paint the picture for us of what it looks like today in the business.

What Sea To Peak Financial Advisors Looks Like Today [47:42]

Steph: So one of the things that I did when I started my firm is I called a consulting firm about setting up my own RIA. And I was talking to the person on the phone, they're like, "Okay, we can do all of this stuff for you, but before we do this, will you please just call these people and talk to them? Because I actually think you're going to like what they have to offer better than setting up your own RIA." And that was the folks at Dynamic Wealth Advisors. So I work as an IAR with Dynamic Wealth Advisors. So they are the RIA, and they are my back office. And so what I like about that arrangement is it gave me what I really wanted. It gave me the ability to do all the planning for clients and not get bogged down in the back office or the operations or the paperwork and talking with custodians that I really like.

And so I signed up with them. Jim Cannon and Craig Morningstar, great folks who I met with in the beginning, and they took a risk and took me on, because again, I didn't have very much in assets to bring over at that point in time. But I gave up my licenses. I went fee-only with them. And it's just been a great partnership. I haven't placed a trade since I started. I oversee all the investments and the strategies, and I give the direction on them, but they take over once I put what that strategy is in place. They work with all the custodians. They're there to provide support. They also have...they give me all the technology. So it's just been a great arrangement. And it goes back to also, that allows me to have the balance in my life. So again, I can exercise, get sleep, show up for clients and make sure when I'm meeting with clients that I can be fully present with them because I'm taking care of myself as well.

Michael: So functionally, Dynamic is like a back-office provider? An investment manager? How do we think about what Dynamic is?

Steph: Well, they...I don't know, they're an RIA. So they're on the, I guess, "Forbes" top 100 RIAs list. The way I work with them is that it's not a payout arrangement. They charge me service fees for work that they do for me. And you can kind of customize that work. So some people have them do more, some people have them do less. I have them probably do more, because that's a lot of stuff I don't want to do from that standpoint. But you can have them do less.

Michael: So service fees would be like, you pay X hundred dollars a month for this and X thousand dollars for that? That sort of structure?

Steph: No, it's definitely done in basis points, but it's not done as a percentage of revenue. So it's a separate fee based on assets. So it's not done as a payout. So it's a little bit different arrangement.

Michael: Okay. So I make it like, we'll do all your trading for you at 3 basis points. We'll handle your compliance work for another 2 basis points. We put all these pieces together and you pick the ones that you want?

Steph: It's not quite that piecemeal. So there's sort of different levels of if they are basically implementing your models and you're using their models and they're implementing them, they're doing the trading and they are billing your fees. It's one fee. Like if you're doing your own investments and they're only doing a portion of that, it's another fee. So it's not quite that piecemeal, but there is some option to scale it back or scale it up, depending on how you want to manage the investments.

Michael: And so I can just kind of choose, like I can pay them, whatever it is, the 10 basis point tier and I get this set of services and back-office support. I can pay them the 20 basis point tier and they do these other additional things as well. And you decide which tier of stuff you want to outsource.

Steph: Right, right. And it's probably a little bit more expensive than that, but yes.

Michael: Yes, unfortunately, these things do add up. But to be fair, when you look at just the typical profit and loss statement of an advisory firm, it's very common, at least once you sort of get to a size and scale where you've got some staff and infrastructure, that the rule of thumb is about 40% of your revenue goes to the advisor, sort of the work of being an advisor, servicing your clients, 35% of it goes to your overhead and all the back-office end, and then that leaves a 25% profit margin as the advisory firm. And that 40%, 35%, 25% ratios have actually held up pretty well in benchmarking studies for the better part of 20 years. So from that framework, if you're charging the proverbial 1%, a normal amount of overhead would be paying 35 basis points if the firm was doing everything for you. And that even can adjust up and down, depending on quite how deep your service levels are and what else you need or are relying on from the firm.

Steph: Yeah. And I think what I pay is less than that, but I feel like what I pay them is worth every penny because it's something I don't have to do. And if I had to go hire a compliance officer, I had to go hire an ops officer, if I had to go hire a trader and then I had those people and then one of them left, right? So what I'm getting is continuity of business as well. I'm getting peace of mind and I'm getting less aggravation in that I don't have to do all this stuff myself. And quite frankly, they're a lot better at it than I am. And their service, I have to say, one of the reasons I've stuck with them has just been phenomenal. They hire people, and the people stay, and they're very responsive. So that's really helped me. So I've been pleased with the arrangement.

And it's an investment, and certainly, I pay for it, but to me, it's a good investment because I'm not worried at the beginning of the quarter, "Oh, I've got to go bill fees now," or, "Oh, guess what? I've got to go do this. I've got to talk with TD Ameritrade about this form that came back or whatever." They're talking with the custodians. I don't need to do that. Occasionally, I still have to get involved, but for the most part, once I submit something to them, they take it from there. And it's all electronic, too. I don't have one paper file. I love it. I love that I can just scan and shred, basically.

Michael: And where are they based relative to where you are?

Steph: So they're in Scottsdale. So my offices are in Denver, Colorado and Seattle, Washington and they're in Scottsdale. And that hasn't been an issue with my clients. I explained that there's a big firm behind me that oversees what I'm doing from a client's perspective, making sure I'm doing the right things for clients. They also act as my back office and do stuff that I don't really need to be doing or I'm not an expert at so I can really focus on their planning and do that. And I haven't had an issue with any of my clients with that.

Michael: And how does it work from the compliance perspective? Because I know for some advisors, that actually becomes the greatest worry, of being an IAR under someone else's RIA is I've got to answer to someone else's compliance officer. For a lot of advisors, they go independent because they don't want to answer to someone else's compliance officer anymore because that was a frustration in the past. So how does it work from a compliance perspective?

Steph: Well, when I was at the independent BD RIA, so I was being regulated by both FINRA and SEC. So going to an RIA-only environment and just dealing with SEC regulations was much better. And I sort of look at it as, under that fiduciary, you're already acting as a fiduciary. We're all trying to do the right thing, right? So compliance to me is it's ethics, it's integrity, it's doing those things. The compliance team I work with have been excellent partners to me. So I think they both...they're responsive, they keep me out of trouble because they are staying on top of the compliance laws. I'm not reading all of that. I'll read some of it, but I don't know every little rule that's come out from that standpoint. So they're making sure we are aware of different changes, especially with social media and the things that we have to do. They're very responsive. I think I've driven them crazy this year because I've done like Facebook advertising and online marketing and stuff like that.

Michael: Oh, man, you crossed the digital realm. It's every compliance officer's nightmare.

Steph: Yeah. Yeah. But they've worked with me on it. So to me, it's been a support. It hasn't been a hindrance. And I actually see it as a bonus for my clients that somebody else is also looking at the work that I'm doing and making sure I'm doing it to the best that I can.

Michael: I like that framing, like, this is a benefit for clients that just someone else is looking as well. Not that I plan to do anything wrong for you, but someone else is looking as well, it's just an extra layer of client protection.

So what is the status of the business overall at this point? I don't know if you're measuring by AUM or clients. What's the size of the practice at this point?

Steph: So right now I'm at $70 million, and I've got 45 households. That was my goal, in the beginning, is to have fewer clients and do really good work for them.

Michael: And so at $70 million with 45 households, that's a pretty affluent average client. Just sort of doing napkin math here, we're at about a $1.5 million per client as an average household. So it's a pretty healthy-sized household. So who are you working with? What kinds of clients do you bring into the firm and how did that come about?

What Steph’s Client Base Looks Like And Where They Come From [57:09]

Steph: Well, it's interesting, when I opened a new office in Seattle last year, so my life plan with my husband led us to Seattle from Denver. And I still have my Denver practice and I still am in Denver every month working with clients. But my husband had opportunity in Seattle, and we're sort of empty nesters, our kids were in college, and so we decided we could actually move. And it's interesting, I had to sort of go back to basics and again, do the work on okay, what is my niche? Who do I work with? Who do I like serving? And when I added everything up, I would say my favorite clients were executives or professionals. So people who had worked hard and done well. A lot of them are first-generation wealth. People who are busy and need really good advice. They're super smart, but they may not know about finances. And sometimes that actually embarrasses them. So they need to be comfortable saying that to somebody.

And they also need some coaching on life planning, right? What am I going to do? Is this the end-all-be-all? Am I going to do this? For how long can I go at this corporate pace? Or am I going to do an encore career? And what's that going to look like? How do I build that out? And many of them don't know the benefits that they have or the assets that they have. And so I really enjoy that work of working with complicated situations and helping people piece those puzzles together, helping them understand all of their resources, and then how do they use that to make great things happen in their life for themselves and their communities and their family as well?

Michael: So it sounds like you initially had a broader base of clients, but upon the move to Seattle said something to the effect of, "Hey, if I'm going to start over in a new city anyways, we may as well get more focused about this now." And that's where focusing into executives and professionals kicked in?

Steph: Yeah. I think my practice leaned towards executives and professionals, but when I really went to go do the branding, redo the branding for the firm and start out in Seattle, I looked back and I looked at, "Okay, what do my clients look like? And especially, where did the clients in the last three years come from?" Because those were, I would say, the most affluent clients that I brought on probably in the last three years or so. And what do I like about those clients? Why do I like working with them? And then how do I cater to that group? Because those are the people who I feel like I both do really good work for and also enjoy working for them. It's ironic, but they're really busy people, but if I ask them for something, my executive clients get it right back to me. Whereas if I have a wealth inheritor client, it takes them six months to get me the one thing that I really need from that standpoint. So it's interesting to me that the people that are really busy, they work on those things and they get them back. And so then you can see the progress in their plans, and that's satisfying for me.

Michael: So did you have any worries when you started saying, "I'm going to focus more on these executives and professionals about what happens to your earlier other clients who were not executives and professionals?

Steph: No, I did a little bit, but the way I phrased it is that it's executives and professionals and people who've worked hard, just like myself from that standpoint. So there could be some people that maybe don't identify at that level. But I would say most of the people I worked with were people who were in some type...they may not have been an attorney, maybe they were an executive assistant, but they had some type of generally white-collar professional job, and they needed good help from that standpoint. So I think people could identify themselves in that. And also know that maybe that's what I'm looking to attract now. Doesn't mean I don't want to work with them. My clients know that I really care about them and I want to work with them. So I wasn't overly worried about it. And I knew from people like you, from everybody else that if I'm going to do it, I need to niche, and I need to really honor that niche. And that needs to be pervasive in what I do from a marketing perspective.

Michael: And so what does that look like now in terms of a marketing perspective?

Steph: Well, let's see. I had a failed Facebook ads campaign that cost me a lot of money last year or this year. So I...

Michael: So what did you try?

Steph: So I tried...because I'm in Seattle and Seattle, like Denver or any other big cities, a lot of financial advisors, right? So I live in a community called West Seattle. It's Seattle proper, but it's on the west side of town. And so I really wanted to focus all of my, I would say digital advertising on West Seattle because there aren't as many, I would say, people working with affluent people or people delivering a high level of service and the ability to solve complex problems, I would say advisors from that perspective here.

Michael: So will be geographically convenient, not a lot of people directly in the affluent West Seattle suburbs working with affluent folks in the West Seattle suburbs.

Steph: Right. And so I had him...I really focused our Facebook ads there. I worked with a marketing team and we did a lot of advertising. And it took not only a lot of money but a lot of time. And I'll say it here because where else are you going to say it, but I did not get one client out of that. Now, I got a lot of notice. A lot of people saw those ads. So I think it's one of those things that planted the seeds and it'll come around. I think I'm working with one prospect out of that piece of it. And they haven't quite signed on. I think they're just busy, but I think I'll get one client out of it.

Michael: What was the strategy, though? What ultimately were you trying to do? Was this like, "I'm going to do a seminar and see if they come up? I'm going to just try to get them to sign up for a mailing list?" What was the marketing campaign goal?

Steph: So the goal was to introduce me as somebody, even though I was new to West Seattle, not new to working with executives, get people to set up an appointment with me to learn more, to provide education towards that niche. It did help actually inform how I'm marketing now because we could track who was interested and what they most like. And some of the things that people most like were some of the work I did around executives or executive compensation and also first-generation wealth. So right now, what I'm trying to do is when I'm doing my writing or blogging, I'm focusing on those topics that would appeal to that audience. But it was a campaign to try and get folks to set up a 15-minute just introductory call with me.

Michael: And was this something you were running on your own? Were you working with a marketing firm?

Steph: Yes, I was working with a marketing firm to do it.

Michael: Are we still working with that marketing firm? Was this a good enough experiment we're still going with them or was this a like, "I think we're going to go a different direction now?"

Steph: We have one last effort that we're doing together, but I feel like I made a big investment and I really haven't seen a lot of return. And I know we talk all the time about, okay, advisors really don't spend enough money marketing. And if you get one affluent client, the present value of that affluent client is really high, right, because they become a client. So I feel like I'm okay making that investment. I feel like I learned a lot. And I think my name got out in the Seattle market, but I didn't quite get the return. We were hoping that I would get at least somewhere around five clients out of that, right? And so far, I've got maybe one from that standpoint. So from that perspective, it's...again, it's one of those things you try as an entrepreneur. And I can joke that well, there goes my bathroom remodel because I had to invest it in the marketing plan that didn't quite pay off the way I thought it would work. So you just revamp and try a different approach, which is what I'm doing now.

Michael: So out of curiosity, can I ask, how much was the marketing initiative and just what were you experimenting with?

Steph: Oh, Michael. So, it's painful. I would say by the time you add in the professional video, the marketing team, the cost of the Facebook ads and everything, it was probably about $30,000.

Michael: But again, as you pointed out, when your average client is $1.5 million, if you can hit your average clientele with this, you're talking about people where one client may pay you $10,000 to $15,000 a year, depending on your graduated fee schedule. Like, one client, you make the cost back in two years, two clients, you make the cost back in one year. As you said, if you get 4 or 5 clients, you spent $30,000 and you might be bringing in $70,000-plus a year. It is, to me, the fascinating thing around marketing in our realm, like, you really can count on one hand the number of clients you need for tens of thousands of dollars marketing spends to have an amazing return on investment.

Steph: Yeah. And that was my point in doing the campaign. I think part of it too, I wanted to... It took so long to build Denver, right? And coming into Seattle, part of me is like, "Oh, God, do I want to take three years to build this up the way I did in Denver? And could I shortcut this a little bit?" And plus, we get clients differently now than we did 10 years ago from that standpoint. So I think it will pay off eventually. I have one prospect I'm working with that came out of that. And I think a lot of my clientele, they're busy people, right? So I've learned not to take it personally if they don't act right away. Sometimes they just need to get through what they're working on and finish their budget or this or that and they'll come back and sign up. So I tell myself, I get that one client, it will have paid for it from that standpoint. But I know a lot of people around town saw it because when I've been out and about, people have mentioned it. So I think it also set the seed that I'm here. And when people have a need, it will pay off in the long run. It was just painful for this past year.

Michael: And so, what are you now thinking about next? What's the next marketing experiment?

Steph: So with that firm, we are doing an e-book on sort of life planning for an encore career, because there seemed to be a lot of interest in that when we were doing the Facebook ads. So we're going to do some outreach with that on Facebook now. And then I'm also going to really target my writing. I have been using a firm to help me write some stuff, but I felt like I do better when I write my own voice. So just making sure I do that writing. And so I'm really committing the next year or two to doing my own writing that I think is really going to appeal to that audience and making sure that gets out there. So those are the things that I'm doing.

And also, I've been board chair for the Women's Foundation of Colorado, which is a...it's a great organization in Colorado. And I've really enjoyed it and it's been part of my life plan. But I roll off as board chair in March. So I spend a lot of time with that. And I love it. But I'm hoping that'll have a little more time to actually get out in Seattle and meet more folks here. And I think that will help as well.

Michael: Nothing wrong with the good old-fashioned, just get out around town and network and meet people.

Steph: Well, actually, when I started my Denver practice, I had done the CEG program. And I think one of the things that...there were things I liked and things I didn't like about that program. But one of the things that I liked a lot was I had this process whereby you would work with your niche and interview them about the different things that they wanted to see from financial services or an advisor. And it wasn't a sales pitch or anything, but it was more research-based. And honestly, a lot of those people in Denver eventually became my clients. So I went into those interviews as gathering research for how do I better serve that market niche, and then they eventually became my clients. So I think if I could take the time to do that. I did a little bit of that when I first moved to Seattle and then I backed off some of that. But I know if I could spend some of that time working with my target niche and really making it appealing to them. Because obviously, executives are really busy, so they don't just want to sit down with everybody. But trying to find a way that it would naturally work to do that, I think that would be worthy of my trying again. So I'm going to go back to that as well.

Michael: Interesting. Yeah, I've always been a huge fan of that approach, both for well, just kind of finding your niche and figuring out how you're going to refine it and then literally starting to build in it. When you reach out to people that are in that target niche and just say, "Hey, you're a respected member of the community. I'm working on a new business that may be valuable for people like you. And I just love to take you out to lunch and just get your feedback as someone who's respected in the community about what I'm working on if you even think it's worthwhile," a lot of people will take that lunch, right? It feels good to be asked for advice.

And then as you ask them questions and you figure out A, just what it is that's important to them and what you can do for them and reflect that back to them, at some point, you sort of get to this weird, awkward, obvious moment of like, "So you basically just described everything that you wish a financial advisor would give you, and I'm now launching that. So want to work together?" Even what starts out as open and genuinely innocent interviews of just gathering information, if you really make the thing that they say they've always wanted, at some point, it gets kind of obvious of like, "Well, shouldn't we work together then? Because I literally just made the thing that you said you want."

Steph: Yeah, I didn't always make it that clean of a connection myself, but eventually I think it came back around that it's somehow that that meeting stuck with people when I did it before. And when they were looking or ready, they came back to me. And they are some of my best clients now, so it's great.

Michael: Well, I think that's always the challenge around getting clients, particularly in a context like that. Like, people don't work with you when you're ready, people work with you when they're ready. And they may or may not be ready at the exact moment that you have decided to create a niche business and take them out to lunch and interview them, but you get to plant that seed that says, "Whenever it is that you decide you want help from an advisor, I literally made exactly what you said you wanted from an advisor, so just hanging out over here whenever you want to talk."

Steph: Yeah. And I haven't had a lot of luck of using COIs. I know that's sort of a big approach. And I find that extremely more painful, especially as I tried it in Seattle. It's like you're trying to beg these people to meet with you. They get calls every day from financial advisors. And I even tried the Matt Jarvis tip of will offer to pay their hourly rate. I find it's just painful. And having worked for an accounting firm where even the accountants at your own firm won't refer clients, I find it occasionally...

Michael: They kind of leave you with sour taste in your mouth?

Steph: Right. Exactly. I have had an accountant who did refer me and an attorney who did refer me, but I think those people are fewer and far between.

Michael: Yeah, I do think there's just a...there is a challenging reality that the COI, the talk to centers of influence strategy has just gotten so out there in the advisor community. And we generally all look at the same COIs. It's the estate planning attorneys and the accountants that are doing tax work that they've all been called on by a zillion advisors in virtually every area unless you're in a really rural location where you're the only advisor in town. And so it's just, it's hard to find someone who doesn't already have established relationships with 1 or 2 or 3 or 5 or 10 other advisors who have already been knocking on their door for the past 10 years.

So as you've gone down this road of trying to refine a niche and a focus and what you do for them, can you talk just a little bit more about what you do for them? What does the planning process look like with clients now?

What She Does For Her Clients And What Her Planning Process Looks Like [1:13:45]

Steph: I do a pretty in-depth interview with clients in the prospect phase. So we talk a lot about important relationships, their values, what they want to accomplish, what experiences they've had with advisors, what their resources are and their interests. And I use that to create what I call the money meaning map for clients. And this becomes sort of a central focus for all of our meetings. And we update it regularly.

Michael: A money meaning map. So, what is a money meaning map?

Steph: Well, it takes a discovery session where you talk about all those things that are important, and I plot them out. I basically use mind mapping software and plot it out. And I think I may have gotten that from CEG as well. But what it becomes for me is something where we can stay really focused on for the client of, "These are the things that I said are important to me. Here are the people that are important to me. Here are the values that are important to me. Here are the things I really want to happen. Here's things I want to make sure happen in this process. Here's the resources that I have to fund all of this. And here's the stuff I like to do for fun." And we keep that right in front of us. And so when I...I call it a money meaning map because I think it does, it helps us stay focused on what's important to that client, and also, how do we make these things happen to them? How do we take this resource column and use it to fund all this stuff over on the other side of the page? That's really important. So that becomes, I think the beginning part of the planning process. Pardon?

Michael: I was just going to ask, what tool do you use to do this? Are you using mind mapping software or are you just like sketching this out in PowerPoint? How do you create these things?

Steph: I use SmartDraw. It's a mind mapping software. I'm not sure it's any better than any of the other ones, but all of my files now are on SmartDraw, so I just stick with it.

Michael: So we're with it now. Understood.

Steph: Yes, exactly. Unless I want to recreate 45 of these, it's in SmartDraw. But I use it. And it's helpful to me. I actually record my discovery sessions and then go back and plot it out, which takes a tremendous amount of time, which is why I've really focused on making sure I get the right people in the funnel, because if not, you could do two things. One, you could spend a lot of time with the wrong kind of client, or two, you could spend a lot of time attracting a client you don't want, which is painful as well, too. So I invest a lot in that process, but it really, to me, helps me stay focused with that client. And I know all this stuff in their lives that's going on. And that's where we keep track of it all, too.

Michael: And so you're doing this all the way upfront in the prospect meeting? This isn't just once they become a client?

Steph: Right. So I'll do a discovery session, and then I do a second meeting where I present this and another list of what I call planning and investment items. "Here's the things that you need to think about whether we work together or not. These are issues based on what you've told me and what I recognize from your situation of the items that you need to address. And if we work together, we can address them. If you work with somebody else, this is your information to keep, and you can go do it on your own if you want."

Michael: And so you're not necessarily like putting SmartDraw up on a screen and drawing this live as you're gathering data from clients, you're having a conversation with them gathering this data in the discovery meeting. And then in the second sort of planning and presentation meeting, you're showing them, "Here's this thing I created, does this look right to you? And let's talk about some of the observations I see."

Steph: Exactly. It's the latter, basically. No, my goal in that first meeting is to pay complete, utter attention to them and let them talk as much as possible. Being advisors, we all like to talk. So I really work on trying to let my clients talk. I've been reading my Dan Solin book and listen to Dan, let clients talk, because when they talk, they remember things, and they'll like you more, basically. But also, you get to learn more about your clients when they talk. And so I spend a lot of time in that meeting. I record those meetings and then I go back and translate it. And I tell them that in the second meeting, they're going to get this money meaning map. So I always get at least a second meeting with people because they always want the map. So that's kind of good tool as well, too.

Michael: Oh, interesting point, right? If you set up the map in meeting one, they usually want to come back and get the map meeting two?

Steph: And then I'll give them also the list of like planning and investment items. So what I'm doing with that is telling them the items they need to work on without giving them the solution. So I'm not telling them, "Here's the answers to these items, but you really need to look at your estate planning. Oh, by the way, have you reviewed your insurance? What about Roth IRA planning?" Kind of coming up with that list of things that for their situation, they should be focused on. In that, it's usually also life planning and financial planning. And so once they become a client, if they...the way I work with clients now is that I have to manage all of their assets, even if they're in a 401(k). We do that through an intermediary system that links their 401(k) into Orion for us. And we are using both Quovo and ByAllAccounts. Neither one of them is perfect, I'll be honest. But that's sort of what we're using at our firm right now, those two systems.

And so I will manage all of their assets. My minimum investment right now is $1 million. I will make exceptions for executives that have a lot of their money tied up at the company, but we'll be on that path shortly, basically. But that's the piece of it. So once they sign up and we transfer assets, I don't do any planning work now until all the assets are transferred over. And then I do life planning with them. So I try and have them sit down and we have some thoughtful conversations about what they really want to happen. And I use some of the Kinder Institute for Life Planning tools. I've been through George's program. And we create a life vision. Like, here's what we want our life to look like. If it's an individual or if it's a couple and we kind of come up with that vision, and then that begins to be the piece that drives the financial plan.

Michael: So walk me through just how this works from kind of, I don't know, a meeting flow. So we do an initial discovery meeting, you gather lots of information, hopefully, they're doing most of the talking. That turns into a second meeting where you give them some observations. You present them the money meaning map. You ask them if they want to work together. Hopefully, they say yes. So if they say yes, then what? Then just immediately some advisory agreements and investment paperwork and the rest starts to queue up and you say, "We're going to move dollars around and get it situated and then I'm going to dive in and start this life planning process with you?"

Steph: Yeah. So in that second meeting, I don't allow them to commit at that point in time. So I pretty much say, "Look, I want you to think about this, and I'll follow up with you." We come up with a time that I'm going to follow up with them or we set up a next meeting. I'm kind of refining that piece right now because we're doing so much document signing electronically now. It used to be, you set up a third meeting and they would come in and sign all the paperwork. And since we do so much of that electronically, I've kind of turned that into, "Well, let's set up a time for a phone call to see what remaining questions you have about this." And if they have questions, we answer the questions. If not, we move forward.

And then I will have my associate call and get all information, or I'll even take it down myself that we might need further to go ahead and prepare the documents and then send out all of the forms electronically via DocuSign and then start working on the assets. And at that point in time, I'm sending them the sort of exercises to do for life planning. And we set up a meeting where we don't talk about any of the money, we don't talk about anything else other than just the life planning. And we set aside some quality, quiet time to do that work. And we just do that work in that meeting. And out of that meeting will come the vision. And I'll send that to them after that meeting. It'll be the vision we agreed on in that meeting, but I'll fine-tune it and send it to them. And I'll say, "Okay, make this your own. Edit this, send it back to me. Let me know."

And then what I'll do is in the follow-up meeting to that, I will have a draft of the financial plan based on this vision and also review how all the investments are set up and organized. We will have talked about the investment piece briefly. We will have talked about that in that second and third meetings or phone call meetings, but I'll actually show them, "Okay, here's how everything's working. Here's how you access your accounts." Sometimes that part comes up a little bit more quickly on the access the accounts. It just depends on the client from that standpoint. And then we move from there into regular planning-type meetings based on their situation.

Michael: Okay. So there's sort of this parallel effect, once they say yes, they want to come on board, like, account opening and transfers begin, but then as money is moving around in the usual slow fashion it takes, depending on how much is ACAT and non-ACAT, you're beginning these planning and vision meetings. Is that right? They're kind of running in parallel here?

Steph: Right.

Michael: So like, when does...I guess like, when do things ultimately get invested? Or do they still have to get through the planning process before investment stuff happens? And if they're slow on the planning and fast in the transfers, money just kind of sits for a little while before you queue up actual investment changes?

Steph: Yeah, that could be the case, unless there's something dramatically wrong with where they're positioned at that time. Sometime I might take a little action a little bit sooner.

Michael: Oh, they're sitting there with 100% of their money in their company stock and it's like, "I think we need to do something about this before we get through the whole plan. I'm pretty sure whatever your vision is, it's probably not this level of concentration risk."

Steph: Exactly that. Or maybe they're retiring and they're 80% equities and I'm just like, "Look, let's just do this. I know we're going to need to do this based on what we've talked about." So sometimes there's a little bit of work we do ahead of time, but the idea is that, really, it's guided by the plan and what we need to do. And between all of our conversations, between the actual financial plan and the life vision, we get that pretty well. So it's solidified so that we know going forward what this plan looks like. And the main thing to me is that they have confidence in that plan. They can relax and feel good about it. I actually spend a lot of time encouraging my clients to spend money, which I think is interesting. But I really say, "Look, you've got this. You've worked hard for it. I know this is a different stage of life." If they're retiring or if they're moving into an encore career or they're taking a break for a career and we're planning for it. I try and give them the confidence that they can do this. Because I think a lot of people just don't know. They just don't know where they stand.

Michael: Yeah. Most of us are not terribly good at doing the compounding math in our heads. So we just don't necessarily know like, is this actually going to add up in a direction where I'm on track or not?

What Surprised Her The Most About Building An Advisor Business And What Success Means To Her [1:25:05]

So having kind of gone down this journey of all the different changes and shifts along the way, now that you're at a really good place in the business with $70 million and 45 clients and a healthy amount of revenue, what surprised you the most about just this path of trying to build your own advisory business?

Steph: Well, that's a good question, Michael. You've got a lot of these good questions. To me, I think, I mean, I just have tremendous gratitude for where I am now. I think looking back when I started my firm, I was going to be happy if I got to $40 million, and now I'm at $70 million and still growing and wanting to grow. And also that it worked, right? I had this vision for how I wanted my business to look. It didn't fit into a traditional advisory for a model of how people typically got clients or work with clients, and it worked. And so I think having a tremendous amount of gratitude and just life satisfaction that I could show up and be my authentic self and it can provide for my lifestyle, it's just amazing to me.

And it just feels really good. I think I mentioned early on, I was always good at the work I did when I was in college and working and ever, but I didn't always love it, and now I love it. One of the things I encourage my clients to look at when they talk about retiring is I tell them, "You're going to live till 95, so don't be in such a hurry to retire. Just maybe figure out what it is you really want to do." I truly believe in Mitch Anthony's work of "The New Retirementality," put a little bit of your retirement life in your work life, a little bit of your work life in your retirement because you've got to have purpose. I plan to do what I'm doing until I'm 70 or older, as long as I'm competent, because I just love the work. And I truly love my clients. I don't have a client that I don't enjoy going into a meeting with and seeing what's up with them and what's happening in their lives and what changes have happened and sharing the joys and also their sadness with them.

Michael: So given this sort of like the unexpected upside, as you said, when you were getting started years ago it was, "I just hope someday I can get to $40 million," now you've almost doubled that and it's still chugging along, going strong and you've got decades of compounding to go because you don't want to retire from it, so what do you know now that you wish you could tell you from 10 years ago when you were making the leap?

Steph: Do it sooner. Don't wait. Definitely find peer group. I think my peer group has been tremendously helpful to me, even just the success I've had in the last year. So I think support, but also best practice sharing with them and learning from other people. So those are, I think, things that I would do, for sure. And maybe I think it's worked for me, other people have different models, but don't try and do everything yourself. Outsource the stuff you don't love because it's just going to eat away a time that you want to use to spend with your family or your loved ones or your pets or whatever. You don't have to do everything. Just do the stuff you're really good at.

Michael: I love that, you don't have to do everything, just do the stuff you're really good at. So, what was the low point for you?

Steph: The low point, I think the low point along this path was the day you're taking money out of your IRA to fund your business and also sleeping three hours a night wondering if it's even going to work. I remember calling my coach, and I was pretty scared that day. I'm like, "I don't even know if this is right," and her trying to talk me off the ledge of, "You've got this. You've set it up. It's going to work." But those were scary times. When you feel like you aren't showing up as a person you would advise people to be from that standpoint. It didn't feel authentic to me at that time, which was hard, even though I knew it was a good investment in what I was doing. And it turned out to be a tremendous investment and has also informed how I work with clients, how I help them take risks. I don't actually encourage any of them to take money out of their retirement plans when they shouldn't, but I do encourage them to make sure if they need to take a risk to make something really good happen in their life, that they understand that risk and that they are able to make a good decision about, "Should I do this if this is going to bring me this much joy in my life?" Instead of just plugging away and doing something that doesn't feel good to them.

Michael: Well, and there is something to me just, I don't know, fascinating about, I don't know, our own standards of advice and own habits of a thing like what you just said, right? You took money from your IRA to invest in yourself and your opportunity and it transformed your life, but we're still all collectively terrified to ever tell a client to do the same thing. And I see this commonly across the industry of people that borrowed money from their credit cards to start their firms or ran up other debt or borrowed against their house or pulled money from their IRA. Basically, take anything that we essentially tell clients like, "You shouldn't do that, it's really risky," and almost all of us have done it. And just it's, I don't know, it's a weird juxtaposition to me of like, do we ever get to a point where we can actually get comfortable advising clients to do the things that we already do ourselves? I don't know. It's an interesting disparity to me.

Steph: I think it's a worthy thought to think about, for sure.

Michael: So what does a typical week look like for you at this point?

Steph: Well, that's actually something I'm working on because I don't have a good, typical week. I split my time between Seattle and Denver. So I have Denver weeks, and then I have Seattle weeks. And they're very different. And so part of what I'm really trying to do and be thoughtful about in 2020 is really plan my calendar ahead of time. So I will say most of my business is in Denver at this point in time. And I plan to keep those clients and keep that practice. I have an office there, I have office in Seattle. I go to Denver once or twice a month. I'm trying to work that out to where maybe it's once a month, because I feel like because of my practice size and, of course, all my clients don't all still live in Denver either anymore.

Michael: Right, they start dispersing themselves anyways?

Steph: Right. That I could have one week a month where I'm in Denver and really spend three weeks in Seattle and really try and focus on that. What I am trying to focus on is doing client meetings more Tuesday through Thursday, having Monday be sort of a buffer day or a planning day, and really want to spend Fridays on strategy and writing and marketing. And trying to stick to that and not...a lot of times I find Fridays wind up becoming catch-up day and not as thoughtful of work as I want to have. And that's the piece I'm really working on now is to have that time set aside for strategy and then also writing and marketing

Michael: And I guess functionally, your Denver weeks are so different than your Seattle weeks, because when you're in Denver, it's a whole bunch of client meetings because that's where most of the clients are. And you're only there a limited portion of time every month, whereas Seattle is a little bit more open unstructured time because not as many of your clients are local there. So it's more open writing and marketing and networking and business development time because you don't have to cluster the same number of client meetings?

Steph: Yeah. Think of it this way, I've got my mature business in Denver and I've got a startup business in Seattle, and they require very different things.

Michael: So what advice would you give to younger or I guess I can just say new advisors? Because people come into this industry at a wide range of ages and life stages. What advice would you give to someone who's coming in today and wants to build this career as a financial advisor?

Steph: What I would say is to be true to themselves as they're building this business and what resonates with them. Also, that there are a lot more options. I think when I got out of college, I didn't really know that even financial planning was an option. Most of my studies seem more catered around portfolio management. But there are a lot of different options now for how you engage and start in this business. I would definitely like to see more women and people of color serve as advisors. I think we need them. We need everybody. And I work with a lot of great male advisors as well, but I think we need to up the ranks of people who are different in the business. So I would just like to see people know that there are options out there and that there are ways to kind of get started where you don't have to just go sell product to friends and family to get started here, that there's a very different way that you can do business and be thoughtful and also provide tremendous value to people who need it. And you can have your robo-advisors, but robo-advisors don't do the work that I do. So they may replace a piece of it, but they're not going to replace all of it.

Michael: So I am wondering, you mentioned the challenge in particular of the industry just so lacks both women and people of color as advisors. So is there...I don't know, is there some gap that you see just having been down this journey as a woman who created an advisory firm? Was there something we're all collectively missing as to why the number of CFP professionals has been 23% female basically without changing 1% in 20 years?

Steph: Well, I do think it's a couple of things. I think one of it, every sales program I went through early on was very much catered towards I think how men might typically interact in business. And I don't want to stereotype that because I have a lot of male advisors who do work very differently as well, too. But it was very ego-oriented. And I think that wasn't very appealing to me. I didn't want to show up and act like I have the Rolex and the sports and all that stuff. Denver and Seattle, they're very modest communities. They have a lot of wealth, but my clients show up in blue jeans sometimes. It's up to them. But I didn't want that ego. So I think that keeps folks away. I was telling Dan Solin, he spoke at a conference and I was talking with him that his approach by just sitting down with clients and saying, "Tell me why you're here. What are you hoping to...?" Being more open-ended and not salesy with people would so much more apply...would attract a lot more women, I think, to the field. And men too probably as well, and particularly not having to have that sort of sales pitch.

And then I also see it quite often in...I saw this in firms, women got pushed to operations and guys got pushed to advisor roles. And they're...it's a problem we have with corporate America, where we have a lot of times the opportunity is given to somebody that more closely resembles what we look like. And most of those people in upper management are white males, then they tend to do it. And I don't even mean in a conscious way, it's almost unconscious. It's an unconscious bias piece that people need to learn to become more conscious of, I think, so that we could have a more diverse advisor group. Because if we have that, then we're going to have better outcomes, we're going to have better answers for people, we're going to be better as advisors as a whole if we have those people in our peer group.

Michael: So as we wrap up, this is a podcast about success and one of the themes that always comes up is just the word "success" means different things to different people. So you've built this successful practice, already almost 2X what you ever hoped it was going to be when you were getting started. So from like the business metrics, you certainly got to what you were aiming for originally and then some. So I'm just wondering, how do you define success for yourself at this point?

Steph: So to me, success is doing the work that I love and having that be able to afford the lifestyle that I want and the time that I want with my friends and my family. And it's that simple. And having my health too. And I know success doesn't equal health, but taking care of my health. Having time to take care of myself so that I have the best chance of being healthy is important to me as well.

Michael: Well, very cool. And amen, as you said, it's hard to sort of define success solely in terms of health, because sometimes that's a bit out of our control, but there's nothing like having health slipping to be reminded of the value of investing in your health along with the other factors of success.

Steph: Yes, most definitely.

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

Steph: Well, thank you, Michael. And thank you for everything you do for our industry. I really appreciate it. You're one of the people I look up to most in the industry, and you're one of the people I seek out most when I'm looking for answers. So thank you for being there for all of us.

Michael: I appreciate that. Thank you.