#FASuccess Ep 024: How Mindset Drives Success And The 7 Freedoms Of Limitless Advisers with Stephanie Bogan

What You’ll Learn In This Podcast Episode

• How Stephanie launched her own consulting firm for financial advisors at the age of 24. [3:52]
• How Stephanie earned respect through substantive public speaking in the face of public doubt. [9:48]
• The strategies she used to create a recognized brand, which specializes in business strategy and planning, operations optimization, and business development for financial institutions and advisors. [13:33]
• The steps of growing her advisor consulting business from zero to a multi-million-dollar practice. [16:57]
• Why advisors that go out and try to start their own business ensyd up more hireable – even if they fail. [19:42]
• The process-oriented approach Stephanie recommends for any consulting firm and every business. [27:21]
• Why systemization drives enterprise value and allows for individualized customization for every client you do business with. [38:29]
• Why most advisors exist in a state of excitement, overwhelm, or boredom, and what to do if you need to change the current state of affairs [56:19]
• The neuroscience of success, and how our mindset can unwittingly creating “limiting beliefs” that limit our success. [1:06:29]
• How do communicate effective client expectations around your services to avoid the need or temptation to discount your pricing. [1:17:42]

Resources Featured In This Episode:

• Stephanie Bogan – Limitless Adviser
• Stephanie’s One-Page Template on Setting Client Fees & Expectations
• Stephanie's 5 Freedoms of Limitless Advisers
• Genworth Financial
• Assetmark
• Starbucks
• United Capital
• Essentialism
• The Financial Advisor Paradox Of Success
• Building An Advisory Firm With An Abundance Vs Scarcity Mindset
• FAS 007: Matthew Jarvis On Building a Highly Profitable Lifestyle Practice by Age 35
• FAS 011: How Launching An Advisory Business Can Be Safer Than Working In One with Alan Moore

Full Transcript: How Mindset Drives Success And The 7 Freedoms Of Limitless Advisers with Stephanie Bogan

Michael: Welcome everyone. Welcome to the 24th episode of the Financial Advisor Success podcast. My guest on today's podcast is Stephanie Bogan. Stephanie is a practice management consultant for financial advisors, who founded her own very successful consulting firm Quantuvis at the age of just 24 and ultimately sold it a decade later for seven figures to Genworth Financial back in 2008. What's fascinating about Stephanie though is the consulting work she's been doing since then, because as with many entrepreneurs who have successfully built and sold businesses, Stephanie soon realized that what she'd built and sold hadn't really brought her the life satisfaction that she hoped. And that, in turn, led her into a journey of the neuroscience of success and life satisfaction, and what helps us find purpose and meaning in our own businesses.

In this episode, Stephanie talks about that journey she went through in building her own practice as a young 24-year-old woman trying to give practice management advice to advisors with multimillion-dollar firms that were in many cases more than twice her age, the mindset she had to create for herself to stay optimistic and push through the challenges that came up, and the key business areas that she worked on with advisors, including business strategy and planning, human capital, operations, and marketing and growth. We also talk at length about how our mindset as a financial advisor and business owner can both drive our success and often limit it without even realizing there's a problem, leading to issues like what Stephanie calls the "stress of success." And why most time management problems for advisors are really inability to say no problems. And what Stephanie calls the "seven freedoms of being a limitless advisor," to free yourself from the limiting beliefs that may be holding you back.

And be certain to listen to the end where Stephanie talks about how she helped one advisory firm overcome the all too common problem of saying yes to those accommodation clients and not being able to draw the line between investment-only clients and full financial planning clients. And how they created a simple one-page visual that broke up the firm's services into three categories, set prices for each, and what the clients choose which tier they wanted instead.

Remember, as always, you can find a list of all the resources we mention in this podcast, including the one pager that Stephanie graciously offered to share with all of you our listeners at www.kitces.com/24, for this episode 24. And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with Stephanie Bogan.

Welcome, Stephanie Bogan to the Financial Advisor Success podcast.

Stephanie: Thank you, Michael. It's a pleasure to be here.

Michael: So I've been looking forward to this episode because you're in, I think, a very interesting position relative to most of the other guests we've had on the podcast. I first came across your work years ago, probably 10-plus years ago and when you were still building Quantuvis, your practice management consulting firm, and since then I know you've sold the firm, so in entrepreneurial parlance, you had your liquidity events when Genworth bought the company in 2008. And I know you stayed on for a couple of more years, and then you were an executive for United Capital for a while, and now you're, I guess you could say between businesses right now, gearing up for the next endeavor.

How Stephanie Launched Her Own Consulting Firm At The Age of 24 [3:52]

I know we'll talk a little bit about it on the podcast today, but I thought it would be an interesting perspective for our audience to hear not just your knowledge about practice management, as someone who's done it for nearly 20 years working with advisors, but also as a business owner who sold her firm and is now going through, I think, a version of that what's next that I think a lot of advisory firm owners go through and struggle with. And frankly, probably some never want to sell their businesses because they're not certain what they do afterwards. But, and maybe as a starting point, can you tell us just a little bit about Quantuvis and what Quantuvis was and what you did for advisors there that kind of built your career in this financial advisor world of ours?

Stephanie: Yeah. Quantuvis is…you know it's really…as I look back on it, it becomes an even richer story for me. I think many people know, but I started Quantuvis when I was 24 out of a bedroom in my house. And, you know, in hindsight that makes absolutely no sense, right? People, you know, go to school, they go to college, they get a job, they get a lot of experience and then some of them go off and consult. I did it in the absolute reverse.

Michael: Right. The class is kind of you consult because you did it for a long time and then you want to go back and consult with people, not, "I'm 24, I think I've got some things to say about this industry. Let's go."

Stephanie: Exactly. And it really was…You know, people always ask me, you know, they see the success story and they think that there was this, you know, great intention at the beginning. And there was. And I was working as the director of marketing and operations for an estate planning practice that worked very deeply in the wealth management space. And I'd been doing that for a couple of years. And really, this is the genesis of Quantuvis as I look back on it was I had no specific experience in terms of education or, you know, a decade of a career that suggested I should be good at this. But for some reason, my brain sort of works well in the business space. The way that I think about it, and see it, and act on it sort of has really worked. And when I started in the estate planning firm that I worked in, I didn't know any better. I hadn't gone off…you know, I hadn't graduated from an Ivy League school and gone off to Bain or McKinsey and learned the way.

And we'll talk about this but, you know, for many years that was something that I had some insecurity about, right? That I didn't have the confidence of having that pedigree. In hindsight, it was the best thing that could have ever happened because what I'd learned was, "Just figure out what works." And so when I was working in that practice, things would come up. The professional that I worked for was incredibly competent and caring, and knowledgeable about what he did, but we had all these business issues. And, you know, I was at least articulated enough about what was happening and why for him to have a lot of faith and confidence in me. And it's something that I, you know, deeply, deeply appreciate. And he and his wife, Galen and Sharon Griepp, I'll never forget them, just had this huge impact because they gave me this opportunity and viewed me from a place of capability even though I was so young that it really didn't make any logical sense. But I sort of had this curiosity about business and I wanted things to work. So I would say, "You know, I'm following up with people who've come in and met with us for the fifth time, you know." And my list of people to follow up with grew, and grew, and grew. And I just thought, "This is ridiculous. This is not working for us. I need to find a solution." And so I would experiment with things, right? In that case, I came up with what we called the "three-step rule for follow-up."

And this is where I think I've always sort of done…You know, you talk about my on-court career, and we'll talk about this, but I realized that I've sort of always done it as I sat down. And I said, "Why am I following up with people? If they're not motivated enough to have an estate plan, why should I be so motivated." And I went to the principal in our firm and I said, "I have a thought, I just need you to hear me out." And he said, "Okay, what is it?" And I said, "If they can sleep at night without having a plan, I think we should sleep at night knowing they don't have a plan. It can't be more important to us than it is to them. I want to follow up with people three times and then I want to be done." And then, right, sort of the underlying behavioral psychology, which, again, I was 21, 22 at the time, I don't know how I knew it, I just did. And I said, "You know, this makes no sense to me. So I'm happy to follow up. I'm going to follow up with them once and say, "Hey, you know, this is important. You know, you've had some time, if you'd like to move forward." And we would get, as I'm sure many advisors do, right? "Oh, you know, we had to put grandma on a home," or "It's just really busy this week," or "We're going on summer vacation. Can we get back to you?"

And what I realized was it wasn't that, it was people were deferring the decision because it was uncomfortable. They were going to have to spend money, right? And in our case, if…you know, I'd see people rolling up in…I remember a gentleman rolled up in a very expensive Mercedes and he was wearing a very expensive Rolex. And in our initial meeting, he was talking about the $20,000 dining table that he had just purchased. But when we quoted him $7,000 to do the work, he literally said, "Oh my God, you know, why am I going to pay you that much money?" And this is what he said. "You're going to walk out of this room, you're going to hit some buttons on a computer, you're going to print out a document, and why should I pay you for that?" And Michael, I have no idea where I had the wherewithal but I remember looking at him and saying, "I can understand that perspective. You know, yes, we're going to walk out of this room, Galen is going to push some buttons on a computer, but that's not what you're paying him for. You're not paying him to push buttons, you're paying him to know which buttons to push, right? It's the experience in the advice that is the value and the work that we do."

So if I just say he ended up doing the plan, but it was things like that. Why am I following up with someone 17 times, right? If they can sleep at night without a plan, we should. And I developed a three-step process whereby each time I would let them know and then that last time I would say, "I'm going to follow up with you one more time. I understand life gets really busy, you know if it's something you want to move ahead on in the future when you're ready to move forward, we're ready to help. Here's our contact information." And the funny thing is, 50% of the time they would go, "Oh, no, no, no, no, wait, wait. Let's go ahead and get that appointment scheduled."And the other 50% of the time, they would go away. And we got okay with that because…

How Stephanie Earned Respect Through Public Speaking [9:48]

Michael: And both of those are good, productive results, right? Like either get to the yes or get to the no.

Stephanie: Exactly. So out of that, you know, as I started…I started the firm Quantuvis when I was 24, and the way that that came about, again no rend intention, the firm that I worked with belonged to an organization, the estate planning equivalent of the FBA. And they'd just gotten a new national director, and he'd put out sort of an email saying, "We're going to do a California meeting, does anyone want to talk about marketing?" Now, you've got to keep in mind this is 20-something years ago so the idea that someone had someone in a small practice dedicated to marketing was sort of a new thing. And, you know, everyone knows I love talking to people, so I said, "Hey, I'll do it." And I gave a presentation on how we managed and marketed the practice. And then it just so happened that the executive director was there and invited me to speak at the national conference, and out of that came phone calls, and long story short, Quantuvis was born. And what I found is…

Michael: I guess to be fair though, that means you did actually have experience doing this stuff to a non-trivial degree before you went out and consulted. I mean you didn't just come straight out of college and say like, "Okay, I've got my college degree now I'm going to hang a shingle as a consultant for advisory firms." Like, you actually had been doing this hands-on for a couple of years already.

Stephanie: Yeah, I'd been doing it, you know, in different capacities for three or four years, right? And sort of figured out that this was where I gravitated, with the business side of the business. What are we doing? Why are we doing it? And so yes. But, you know, typically people go out and get 10 or 15 years of experience. You know, anyone who knows me knows that I'm…you know, I don't have a great deal of patience, so when I get on something, I get on it. So it was funny because the principals that I worked for after I gave that first presentation said, "You're either going to go work for this organization or you're going to become a consultant." And I said, "No, I love my job," right?

Michael: But they knew you better.

Stephanie: Truly. They were older and wiser, and more experienced, and they could see the writing on the wall, so to their credit. And when I ultimately leave, they were so incredibly supportive. And I really became so appreciative of that opportunity because to your point of how Quantuvis got started, that experience framed the way that I consulted. Which was, "Are we getting the results that we want?" "No." "Why?" Right? So anyone that's ever worked with me will tell you that my favorite question is why, which will almost always be followed by another why, and another why. And when you keep doing that, you get to those layers where real…where the solutions can really be created, right? Because that's where the real challenges are. The challenge in the practice example that I shared about following up with the prospects, the challenge wasn't the prospect, the challenge was the mindset of the principal, right? That we had to follow up with him until they said yes, right? That we would do it into perpetuity. And that shift in mindset is something that I think was a big part of Quantuvis, but sort of what we became known for was practice management consulting. And we focused on the business strategy and planning, the human capital, the operations and the marketing. And we went very deep, right? So we wouldn't just go into firms and talk theory, we would talk about what we wanted, and why wanted, and what the gap was, and then we would come in and identify the solutions, right? There's lots of practice management or business solutions. And then I spent a lot of my time really working with the principals and the leaders in a firm to get to the whys so that what we were developing would really be something that worked, right? It wouldn't be a Band-Aid. We wouldn't be spot-cleaning the carpet, we needed to figure out what the underlying issue was and then solve for it.

The Strategies Stephanie Used To Create A Recognized Brand [13:33]

Michael: So despite that fact that you'd kind of started out with this marketing-oriented angle, you ended up consulting beyond just marketing. And I think you said your four categories were business strategy planning, human capital, operations, and marketing. And those were the four, strategy, human capital, operations, and marketing?

Stephanie: So what we came to call the core four. And yeah, when I started Quantuvis, it really was focused on marketing. That's sort of something that I really write the influence, the psychology of it. How to craft a message, how to, you know, bring people in, how to feel really passionate about what you're doing. But what happened, and I think any advisor listening to this can appreciate this, is I would, you know, have the call with the client the next week and we'd be talking about progress and I would invariably or inevitably hear, "I didn't get to that, I'm busy," or "I'm having some challenges over here," or "You know, I don't have time for that right now." And so I would ask the why question and it was, "Well, I don't have time because." And then we'd, right, dig down the rabbit hole and realize the reason we didn't have time. So I just sort of intuitively kept going down the rabbit hole and saying, "Okay, well I need you to market so let's fix the time problem. And I need you to market so let's fix the staff problem. And I need you to market so." And the next thing I knew, I had this very robust firm then I developed a reputation for really being able to come in, sort of parachute in, figure out what's going wrong and develop real solutions. And that was a really fun thing to be able to do for almost 20 years.

Michael: Right. Because the whole point is, you know, half the time a marketing problem is a marketing problem, the other time or half…the other half the time, the marketing problem is an operations problem, or a strategy problem, or something else at a higher level or outside the marketing scope that you've got to fix before you can actually get back to the actual marketing problem you were trying to work on.

Stephanie: Exactly. Except what I've really come to believe and experience as I look back on, you know, what is now 20-something-year career is that's true of everything, right? You know, most people don't know unless they worked with us specifically, but Quantuvis was actually Latin, and it meant "as great as you please however great." I truly believe that everybody had this vision of greatness within them in terms of their business and their practice and how they interacted with their clients and their staff, and I was really drawn to helping them bring out that potential. And as I've gone through my own journey, you know, you sort of talk about this on-court career, right? Sort of Consulting 2.0 for Stephanie. The name of the new firm is Educe, and the Latin root of that is education. And what it really means is to lead from within, to bring out leading potential. And so that for me has been the shift from Quantuvis and then…You know, we can talk about how that shift happened and why it happened, but version 2.0 is sort of the approach that I was talking intuitively, right? Asking the why questions and what's really holding us back. What I've learned is that's the lion share of success, right? So whether you're looking at marketing, to your example, whether you're looking at your staff problems, whether you're looking at, you know, you're making great revenue but it's not flowing through your profits, a huge piece of that isn't sort of surface level, right? It's about what's driving that scenario and that situation. And if we can identify that then we're in a position to truly create real shifts, and change, and growth in the business.

The Steps Of Growing Stephanie's Business From Zero To A Multi-Million-Dollar Practice [16:57]

Michael: So I'm curious about the growth of your own business, of Quantuvis, because, I mean…So you started at 24 in…what was it? In like mid-to-late 1990s? When did you actually get underway?

Stephanie: It was October 1996.

Michael: So you got underway in '96 as a 24-year-old and spent the next 10-plus years building the business then ultimately you sold to Genworth in 2008, and I'm curious just what that growth path look like, because there's actually…I've long been fascinated and studying and looking at consulting businesses in general, even outside of the advisory industry world, because the reality is how you build a consulting business from a thing where you share your thoughts into an enterprise that has value beyond you. You know, like how do you create a consulting practice with transferable value is pretty darn similar to how you create an advisory business with transferable value because we can kind of be viewed as a subset of consulting with a particular approach. And so I'm curious from your end like what did that journey look like of you started a consulting practice out of your bedroom to you built this thing that had enough transferable value that Genworth Financial wanted to buy it.

Stephanie: Well, it was…You know, I think it mirrors very similarly the life cycle of any sort of professional service firm, right? Advisors, lawyers, architect, consultants. When I started, it was just me in literally in a bedroom in my home, and I did that for a couple of years, and I really…it was a lifestyle practice. When I started, my grand goal was to replace my income. Just replace my income, and I don't have to commute an hour, life is good. Like that was the…

Michael: It was just, "Get back to the salary I used to have before I took this crazy leap, whatever I inflicted on myself."

Stephanie: Right. And the truth was I did it at a time that made no sense. I had quit my job, we had just purchased a house, and I was putting my husband through school with cash payments, right? We weren't taking out loans or anything. And at this point at 24, I decide, "I'm going to give up my nice stable job and my great income, and I'm going to start a business," right? In hindsight, it was absolutely crazy. But I think one of the things that often makes this very successful, someone once said to me, and it was I think probably the greatest compliment I've ever gotten, which is, "You tend to do what you set out to do because it never occurs to you that you can't." And it didn't occur to me. And call it the nativity of a 24-year-old. It didn't occur to me that I couldn't or shouldn't do this. I just thought, "Oh, this will be fine, let's do this. I'm pretty capable, and if it doesn't work out, I think I'm employable. I'll just go get another job.

Why Advisors That Start Their Own Business End Up More Hireable, Even If They Fail [19:42]

Michael: We had Alan Moore on the podcast a little ways back, and he makes the same point as well. You know, his worldview actually is that the…your going the entrepreneurial path and starting your own business frankly gives you more control over your income and your destiny because if you've got a bunch of clients you're working with and one fires you, you've still got the rest of your clients. If you've got one job and they fire you, you're fully unemployed and your income goes to zero. And the point that I know he makes a lot is…You know, and if you try this and it doesn't work out, I mean, if you go out on your own, whether that's as a consultant or as a, you know, advisor on your own, starting your own business, right, the worst case scenario is you'll have created great skills for yourself by having done it, and you'll not only be able to fall back on a job, but you'll probably actually be more hirable after you've done it than you haven't. And I know that's a particular thing in our advisory industry that, you know, there's just kind of this implied respect that tends to come from advisors that have started their own businesses, even if they "fail," that they couldn't get critical mass and enough revenue, that there's virtually no advisor I've ever met who was less hirable after going out to start their own firm and doing it for a while than they were before. You know, the "get a job" is really is always a viable fallback. I think particularly our industry where there's such a shortage of young talent.

Stephanie: It really is, right? Is if you've got the confidence to recognize that there's always that backup plan. You know, when I moved to Costa Rica, you know, someone said to me, "You know, what are you doing? You're crazy." And I said, "No one is going anywhere, right? The town I live in, the people aren’t in the industry. It's not going anywhere." We have this idea that our decisions are so permanent, and we put so much weight on them and so much often times stress and pressure on ourselves to make the right one. You know, should I go left or should I go right? And, like you said, everything…The thing I've really learned is that everything is part of who we are, right? Every experience that we have, good, bad or otherwise is part of our constitution, it's part of our story, you can't take it back. And you're either going to use it as fuel or fertilizer, right? You know, like you said, if you start a practice and it doesn't work, you can either feel defeated or you can feel like, "Okay, that was a right turn, I'm going to get my…you know, get up, dust myself off and go left," And those people will be successful. They just have to find the way that works for them.

Michael: The other thing I'm curious about then, particularly in the early years as you were starting this consulting practice, so, you're 24, you're female in a very male-dominated industry, unfortunately, and even worse so than you were…when you were starting in the '90s than it is today, although it's only very slightly better now, I'm curious, I mean, how does that go when you're a 24-year-old female? I mean, I hate to say it. Like, I'm imagining a lot of experienced advisors running their own firms that are probably in their, you know, 40s, 50s, early 60s, that are sitting across you and saying like, "Oh, this is so cute, you're my daughter's age. What do you know about helping me run a multimillion-dollar business?"

Stephanie: There is a bit of that. I have to say that by and large, right? I mean, there were a lot of women who had laid a lot of groundwork before me, and thanks to them for that, but absolutely right. You're talking about the '90s and the 2000s. I'm 24 and…you know, I didn't appreciate it so much at the time, but I was 24 and I looked 17. No joke. So it wasn't even like I was a 24-year-old that looked 24.

So I can remember a number of instances where I was really directly and quite rudely challenged. And fortunately I had the good sense to take them with grace, and, you know, it never actually occurred to me to let them stop me. But I remember I was giving a presentation at a Schwab event for their top, top advisors. So I'm in New York, there's maybe 50 people in the room, it's the top advisors from the Eastern Seaboard, and I'm maybe a minute or a minute and a half into the introduction of my speech, and a gentleman on the front row, an older gentleman, probably in his 60s, raises his hand to ask a question. Now, if you've ever seen me speak you know I don't memorize speeches, right? It's a conversation I…and I love it when people ask questions, because…

Michael: Except as an experienced speaker, like I've been down this road as well. Anyone who raises their hand with a question a minute and a half in, it's not a good question. It's not going to be a constructive question.

Stephanie: But I was really young at the time, so I didn't know any better, right? So I'm thinking, "Great, someone's going to have a question because that's where I get to provide the context. Oh yeah, let me tell you how this applies to you." Except that his question was, no joke, out loud in front of everyone, "Can you please tell me the point of this presentation?"

Michael: You've been talking for 90 seconds, I'm already bored, can you just tell me the point of the presentation?

Stephanie: What he was really saying is, "I just don't even think you need to be up there, so why don't you just save yourself the trouble. I'm going to embarrass and humiliate you, and let everyone know how I feel." And that's cool. I mean, that's one way to approach it, I get that. And I don't remember exactly what I said. I just remember having that moment of panic on the inside, where you're, "Oh my God, he did not just say." Okay, what…

Michael: It is pretty much what every speaker fears and is terrified of.

Stephanie: So I took…I don't know how I had the wherewithal to do it, but I took a deep breath and I said something along the lines of, "I understand that you're eager to hear where we're going. If you could just give me a couple more minutes I think it will become a lot more clear to you." And I kept on going. And he came up to me after the presentation and let me know that I did in fact know what I was talking about. And I've had that…a very similar type of circumstance where I've given presentations to, you know, Schwab's top…or, I'm sorry, LPL's top advisors in a room of 20, right? I'm with them for four solid hours. And I get out of that and there's one advisor who's just hitting me hard with questions. Not rude but just really pushing for the substance and the content. "And what about this, and why would you do it that way?" And I just thought, "Wow! This guy is really challenging me. Okay?" Because at least I knew what…You know, I had enough experience at that point, I was not making the stuff up, right? I'd done this in several many, many practices.

But it was great because, at the end of the presentation, he came to me and said, "I'm going to be really honest with you. When you walked out, you're the age of my daughter and I was certain that you couldn't know what you were talking about." He said, "But I just want you to know that after spending this time with you, I'm quite certain that you know more about running an advisory firm than pretty much everyone in this room." And to his credit, right? It's not about whether I did or didn't, it was just that he had the wherewithal to allow the experience to speak for itself. And I'm certain that there were many, many others who felt that same way, who just weren't going to raise their hand or push that hard.

Michael: So you went around this road for 10-plus years, like, by the time you were getting to the end, what did Quantuvis look like? Like, what was the thing that Genworth bought? What were you doing and how many people were on board, and like what did that business look like as a saleable practice management consulting business?

Stephanie: Well, that's a question I get a lot because as you point out, a consulting firm and often true, less true I think of an advisory firm but still that general feeling that, "How do you sell something so intangible? How did you pull that off?"

The Process-Oriented Approach Stephanie Recommends [27:21]

Michael: I mean, how do you sell something where the primary value is Stephanie? Okay, we've accepted you actually know what you're talking about on practice management, so when someone buys that and you're going to go away, how exactly does that keep its value?

Stephanie: How does that work? Well, this goes back to the phase's question that you asked, so I'll kind of bring it back around to that. Which is when I started, like most advisors, I had a lifestyle practice, right? If I could replace my income, I could do great work. And somewhere along the way, I think it was three or four years, and I'd really put off hiring someone, because at the end of the day I just knew that was going to be more work, so I had…there was actually someone that I knew, that was a family friend that was also incredibly good at business. So about a year and a half in, I asked him to join me, and he did. And, you know, we really together for the next three years really kind of continued this work and built it out and put off hiring someone. But it just got to the point where that was necessary. So, right, we hired that first person, and then the second person and so on.

But there was a really pivotal point. And this is a big part of the work that I think practice management consultants do with advisors, and there's a lot to talk about it. But it's a fundamental shift, which is I remember consciously making the decision to create a business, to make that shift from, "Okay, if I'm going to do this and scale it, then it's going to have to be bigger than me," right? So it really became about following my own advice. I really set out to institutionalize, to…right? To capture, to define and document everything that we did so that there was a tangible process that could lead someone to the outcome, right? So how do you take the idea in my head the way that I look at a situation, and how do you make that tangible and repeatable? And so we actually made a decision that we would always be our biggest client. We put ourselves on the calendar like a client, we had meetings and did work on Quantuvis like we were a client.

And so for every solution, right, we sort of have, you know, what I call "the three-step follow-up rule," right? That three-step process of, "I'm not going to follow up with these people into perpetuity," right? "If they're not motivated to have a plan, I need to focus the principal of my firm. There are plenty of people out there who are, so let's go find those people," right? So we turned that into a process right? We had these papers, we would write, you know, "Here's the thinking, here's what you want to do." We built training programs for our internal team, and then we built processes and documents, okay? "Here's the why, right? We want to work with clients who are motivated, able to see the value and willing to pay." That was the premise at a theory level. "How do we get that? Okay, this is the way we're going to follow-up, these are the things we're going to say."

And so we packaged that process and then could hand it to any other person in my firm and say, "Here's the thinking that you want people through. Here's how you get their buy off. Here's the process that we're going to use." And we did that for everything. Every presentation we had a follow up process for everything that we did. The way that I worked, I would come into the conference room in the morning on call days and the screen would be up, WebEx would be open, my relationship manager would be there, the binder and the work would all be laid out in an organized way. And I knew what I was supposed to do because we had prep meetings, and I would talk and give advice, right? That's what your advisors do. That's the value, that's, by the way, the core of the value. We just get so caught up in everything else. And then I would walk out of that room and everything that needed to happen happened because of the people, and the process, and the platform.

So my job, at a high-level, was packaging. How do I take these ideas, and thoughts, and theories that seem to work, and how do I package them so that with the right people, process, and platform, I can get, and this was a big part, maybe not 100% of the result, right? I have my way, you have your way, John the advisor has his way, but if I could get to 80% or 85% of a consistent result, to me that created…what we did, which is what we ultimately taught advisors to do, is we figured out how to systematize a very specialized process. And when you do that, what comes from all those ideas and theories was a lot of intellectual property that had the platform to back it up. And so that was the value. And Genworth, which is now once again AssetMark, to this day has integrated that content, the coaching programs, they have practice management consultants who have access to all of that, who years ago were trained on all of it. So the value was that I handed them something that had been proven over time, and packaged it in a tangible way so that they could extract value from it. And that's how I was able to turn sort of this little consulting practice into a seven-figure business that got sold, right, in a seven-figure deal. And I get that question all the time like, "How did you do it?" I say, "I followed my own advice." Right? Anyone can do that.

I've had multiple firms that I've done M&A work on over the years, and when that is the core of when you have institutionalized the intellectual property, the ability to get a client to an outcome, that's where you get far greater value for a business, right? I mean, we had one firm where sold them for 20 times earnings to a bank. Now, one is strategic buyer makes that easier, but the bank was able to look at them and say, "The build cost versus the buy cost, there's no comparison." And they had, through the work that we'd done, institutionalized it, scaled it so that, right, that it could be expanded to a level where the value could be spread out, right? And that's how you drive those great evaluations.

Michael: And it strikes me, and really that parallels pretty well into an advisory firm, right? You can build a great practice around yourself, your ability to give advice, you can hire various types of worker bees to support your personal productivity, so a para-planner an administrative assistant and so forth, and you can make some pretty darn good income. You know, we've had folks on the show here, Mathew Jarvis, that climbed to a million dollars of revenue clearing a 50% profit margin with a couple of staff and taking 80 vacation days a year. And for anyone that wants to go back and listen to that that was episode seven, so kitces.com/7. You know, there's certainly the model out here of what highly productive, incredibly efficient advisors look like and the kind of, you know, really good incomes that you can take home, but it's different than building a business where the whole point of the value is it's not necessarily your ability to give advice, or in your case your ability to consult, it's your ability to create advice systems and advice processes that other people in the firm can pick up and use, and implement with clients, because that's what makes it reproducible value beyond just your ability to serve clients. And that's what turns it from a practice into a bona fide business that extends beyond the founder's ability to just give the advice or give the consulting.

Stephanie: Right, yeah. When you look at valuation, right? When we look at it from an economic or a formula standpoint, we always say, right, that value is a relationship with the predictability of future cash flow, right? And so when you want to maximize that value, what we were really able to do, which is exactly what we teach advisors to do at a business level, is create a consistent outcome. So when an advisor sits down with a client and takes him through the process, and builds the trust and the relationship, and gives them advice, and they do that over a long period of time, that's a very personal, right? It's a specialized relationship. And the value, and I don't mean value from a pure, right, monetization of value in a sale play, right? The liquidity event, I mean value in terms of what is it that you want the business to be and do, and to achieve, and how do you want your relationship with it and your life to benefit from having it, right? So when we talk about value, we tend to think, you know, numbers, but to me, there's a lot of other value in having a business.

But it really comes down to being able to create a consistent outcome. And I cannot tell you how many times I've had an advisor look me in the eye and say, "What I do is different, what I do is specialized, I can't systematize this." In every single one of those cases, I promise you, we got over the hump and we figured out that, "Yes, you really can't systematize this specialized process." And there is this fear that if you do, you're taking away the secret sauce, right? Somehow clients are going to get less. And in every single case, what happens is clients get more and better because what we're really doing is creating focus, and leverage, and scale. And we can talk about, right, the actual practice management solutions, but at the end of the day, when you're able to do this, it's inherently better for clients. But it's that fear of creating the change, that if we give up, you know, this spirit or the essence of who we are, or the secret sauce, that somehow there's going to be less. And in the end, it turns out that there's just a lot more possible but we have to overcome those hurdles.

And that, you know, kind of, to the conversations that you and I have had over the last year is sort of why the on-court career for me, is I think that that's the most important conversation of my career is that it's not about what's happening out there. Yes, there are business issues and we need to address them, and I've done that really, you know, fortunately and successfully for 20 years, but that's not what's driving the circumstances 90-plus percent of the time. It's sort of, you know, the iceberg picture that you and I looked at, right? It's we see the surface and we focus all of our attention, and time, and effort there, but what I've learned is it's really what's happening under the surface, right? And I had to go through that myself sort of in my own what I like to call an inflection event, pivot point, right? In my own life to really figure that out and then to put all those pieces together and then go, "Oh, now I get it." Let's go back with this deeper level of knowledge and understanding. And when we can share that, we're talking not just good work, we're talking about radical shifts, right?

You mentioned Matthew Jarvis, who's a client of mine, and we'll talk a little bit about him because he's a great example of the iceberg. But I've been working with him for a few months, and in the first couple of months, we were working on stuff under the tip of the iceberg. And he sent me an email one day and he was like, "Mind-blowing. This is just mind-blowing. I never even thought about it this way. It never even occurred to me that this is what was driving my behavior and in turn, right, my business outcomes," and in turn, some of the personal struggles that he was going through that were really showing up in his work. And when we can kind of allow ourselves to have a greater awareness and to sort of peek under the surface of the water, that's where the real solutions are, that's where the big shifts happen.

Why Systemization Drives Enterprise Value [38:29]

Michael: You know, it's an interesting effect, and we'll talk more about it, but just the dynamics to that, your own mindset plays on what you can do and what you can't do, just all the stuff that we convince ourselves of what's possible, what's not possible. You know, you can't possibly systematize everything in your business because the more you systematize your business, the less unique it is, the less valuable it's going to be.

You know, by the way, ever been to a Starbucks? Right? You know world's most valuable coffee chain. And, I mean, the first thing I think about Starbucks, and there are entire books written about this but, you know, the process from when you order at the cash register until your…whatever your personalized coffee drink is that comes up at the end of the line, that entire process has been analyzed, systematized and refined in like 15-second increments of what happens all the way down the line to figure out each possible step along the way. "What can we do to make this two seconds faster? And what can we do to make this a tiny bit better?" And it's the systematizing that not only creates the tremendous enterprise value but creates things like customer loyalty. Because I know every time I go to Starbucks and I get my Venti Vanilla Skinned Chai, I know I'm going to get the same drink, prepared exactly the way that I like it wherever I go, whatever Starbucks I walk into because the whole process has been systematized. And the key point to that is it's the systematizing that means I get my personal customized solution that fits me right every time because you can actually be more effective at consistently giving customized solutions when you standardize the components to the process.

Stephanie: Exactly, right? So when you talk about systematization is what drives enterprise value, you said something at sort of the very beginning of that sort of path of conversation that I think is so important and so often overlooked, which is so often advisors…What's the word I'm looking for? They misunderstand their real value, right? So to your point, it's like, "Well, I can't…if I systematize that, you know, the shininess of it will wear off. It won't be as valuable.

The value in an advisory practice is the outcome that you get for a client. And it's the experience along the way. It's the advice and the experience together that create the outcome. But we look at it in such a functional way. The value is the alpha that I can get in the investment portfolio. The value is how thick the financial plan is. The value is, right, it has to be me, it can't be someone else, which is much more a self issue than a true business issue. And when we focus on the wrong value, we create the wrong solutions. And what I always figured…what I figured out for myself and then taught advisors is what we do, the most important part of what we do is build a relationship and create an experience that allows us to give advice that people can be positively influenced by in a way that gets them to a better outcome. And I tell every single client I've ever worked with, "You can do that sitting on your hands. You don't need to check your email seven hours a day to do that. You don't have to answer the phone. You don't have to ever click a button on a computer to create a financial plan." Your value is in that interaction and engagement, and in creating an experience at a firm level like Starbucks has done.

Starbucks is a great example because what Starbucks has done, because if you think about the coffee Brewster in your local coffee shop, right? That they know you, and the flavor, and the context, and that whole feeling, right? You're buying a feeling, you're buying…At Starbucks you're not buying coffee, you're buying the experience and they know that. That's their value proposition. So what they did, which was very much a big part of my job when I went to United Capital, was, "Okay, we have to build, right, an enterprise model where we can have practices." You know, we were at 20, and then 40, and then 80 and 100. How do you acquire these different firms or bring them in and then it would be the equivalent of buying 80 coffee shops and saying, "Okay, over the next year we're going to turn you into a Starbucks," right? And a huge part of my job was to create the blueprint for that at a business level, right? How does the business work across all offices?

And then the second piece of that, which is critically important, and you put these two things together and that's where the value comes from, was creating and building on the client experience. And that's something that United Capital has done exceptionally well is they've taken the behavioral piece of the client experience and like Starbucks said, "Let's look at this with a…through a business lens. How do we create the systems and the scale so that we can deliver a specialized experience that's a better experience than there used to, and do that, whether we're in California or Connecticut." And everyone can learn from that, even if you're not doing it at the scale that United is doing, which most people aren't. Matt Jarvis did it in a one-adviser practice. And, as you pointed out, if people got back and listened to that podcast, they can see the results, right? He's making over a million dollars, he's taking over 54% of it, he takes off 83 days a year, right? In many people's minds, that the having it all.

Michel: So I'm curious then from your own kind of "having it all" perspective, so you get 10-plus years into your consulting business and systematized the process, and you're growing staff, and I'm going to presume it's reasonably profitable, why sell? I mean, what drove the decision to sell the business in 2008? You know, you were the mid-30s, right? So I'm going to presume you weren't…or maybe you were but like you weren't saying, "Yeah, you know, I've built a business, ready to be done. I'm going to be one of those people that retired at 36, drop mic, exit stage left," right? So what drove a decision to do a transaction when you're still young, you've got a lot of career ahead and the business is going so well? What led to that choice?

Stephanie: Well, it was a couple of things. One, you know, it wasn't intentional. I never set out to build a business that I was going to sell, right? As I said, I went through the same phases that most advisors and most professionals go through. I had a lifestyle practice, I decided to make it a business, right? I wanted to have greater impact and scale it. And when Genworth approached me, I hadn't had the thought of selling it, I was just sort of on my path doing what I was doing, and, you know, you have sort of that immediate gut level of response where you're like, "No," right? "Why would I do that? And then I reminded myself that I'm a business person, right? That who I am is not the business. And so I had to ask myself, now keeping in mind that at that time I was pregnant with my son when they first approached me, I had, I don't know, 12 or 14 people working for me, right? So I had a multimillion-dollar business, I was traveling all over the place, and it was wildly successful. We did, I think, really good work. We developed a reputation for that. We had a waiting list, right? I mean, we had a really, really well-run business.

And in my mind, it was going to be the way that would allow me two things. One, it would allow me to scale it and have a greater impact. So one of the tenets of our deal was that it was open architecture, right? We would not be only Genworth, right? We would still get to continue to perpetuate it across the profession. One of the other big deals was I had sort of this vision for a technology platform that would take the institutionalization to a whole another level. And that was going to cost millions of dollars to build and they were up for it, which was very exciting to me. And I had…

Michael: Getting new capital to put into the deal.

Stephanie: Right. For me it was so much about the vision on the one hand, right? I loved what I was doing and I wanted to make it bigger and better, and they were an avenue for that. And then on the personal front, anyone who owns and runs a business understands the…what I call the swing from euphoria to exasperation, right? You've got all these people working for you, if you don't show up and do a good job, right, their livelihoods are on the line. You know if you want to grow it and give them opportunity. And here I was bringing, you know, my first child into the world, and I just thought, "I might want to make this less dependent on me at the next, next level." And so for me, that's what really drove it was the ability to see the vision realized at a higher level with outside resources, and to do that while giving myself some of the freedom and the flexibility that we all want so that, you know…so that the business could grow and blossom and do all that I had hoped it would do while demanding less of me personally. And so at the time, it was a good decision. And in hindsight, I still think it was the right decision.

You know, one of my favorite sayings is "you can be smart or you can be lucky." I will take lucky every time because we sold in September, we signed the deal, and in October the market crashed. And I was very fortunate because it was an all-cash deal, not stock, which was good because the stock went from $30 to 97 cents. No joke. And to their credit, I mean, the nice thing is we had a deal, right? We had terms, we had an earn-out, so I got to continue to execute on that vision. We built a multimillion-dollar platform where you upload your client list and all the service model analysis. Who's profitable, who's not, what tiers they've got. I mean, the system did everything for you. It would build a marketing plan for you, it would do that…we'd analyze your compensation for you. And so that was really, really exciting. They ended up as a function of…You know, I left, I think I was there…We sold in 2008, I joined the executive team there, and that was an incredible experience, right? I mean I'd built this little practice out of nothing and now I'm on the executive team, right, of the wealth management division of a Fortune 200 company. I mean, it was a fantastic learning and growth experience for me. I learned so much about how Fortune 200 companies work that I decided I no longer wanted to work for one. It's just not my gig. You know, the incremental, "Let's kind of just keep things kind of going. Like let's not…don't get crazy." You know, I'm like, "But I'm a mountain climber, I've got this vision, and we can do all these amazing things." And it was like, "We don't really…we don't need to do any of that." I was like, "Okay." So I was there for four years.

Michael: Welcome to corporate environment versus the entrepreneurship firm.

Stephanie: Exactly. And I think I fall distinctly into the category of controlling my own destiny. I had to learn that over the years. And look, and they were really good to me, it was a good experience. You know, we had some philosophical differences and as a result, you know, I said, "Look, this has been great, but I've done what I set out to do." We integrated everything, we built the platform, and so I was sort of at this pivot point where I sort of had this…I don't want to say knowing but I just sort of had this angst inside that said, "This isn't it." Right? I just couldn't see myself doing that for the next 20 years. And, like you said, I was, you know, in my mid to late 30s at this point. So figured, you know, "I go figure out." So we took a year, we traveled abroad, and I had my second child, my daughter Emma, and then I joined United Capital, which was a fantastic experience. I so loved what they were doing and I still do, right? And everybody's got their views on, you know, it's good or bad, or…But the vision of what they're doing at a client level and the client experience that they're bringing is, I just have to say it's bar none the best that I've seen. And I was really privileged to be able to be a part of improving, and growing, and expanding on that. And I did that and I worked on the enterprise piece of it for about a year and a half.

But what happened Michael, and I think that I'm not the only person that feels this, but what happened was I literally had this moment where I realized as I looked around that I had everything that I thought I'd ever wanted. I'd built and sold a firm in a seven-figure deal, I'd been on a Fortune 200 executive team. Now, remember, I came from having no pedigree, so that feels very validating, right? Oh, you know, I went through the backdoor and I was still able to get here. I was, you know, courted and brought on by United Capital and I was able to do good work there and yet, you know, I had a beautiful home and a beautiful family, I had money. I mean, I'd been on the cover of Financial Planning Magazine, I was named an industry influential, I had this great business, and yet something was missing. I remember telling people I felt like The Princess and the Pea, right? I had every convenience, I had every comfort, and yet something inside me just wasn't settled.

And I struggled with that for about six hard months, and I realized that I had to follow the advice that I'd give my clients. So, you know, a client will say something to me. "Well, you know, it's this, and this, and this, and this." And I'll say, "Well, what about this?" And like, "Oh we can't do that. You know, da-da-da-da." And say, "Well, how's that working for you?" And then you get to pause because it's not. And so I just looked around and knew that in spite of the fact that by all definitions I had it all, something was missing. And so, you know, that's when I left United Capital, we took…my husband and I took a couple of months and then we decided, "You know what? We're going to live a little weird, we're going to move to Costa Roca." And we've been here…we moved three years ago." So I literally, at the apex of my career, as I was reminded by one very influential CEO, he said, "What are you doing? You're at the apex of your career. You've built a business, you've sold it, you've been on the Fortune 200." You know, you just kind of follow the path of the phase that you're on and you're going to be able to write your own ticket. Literally, he said, "This is the worst thing you could do for your career." And I said, "It might be." That's very reassuring. And I had…

Michael: I wonder if they're just trying to give you their honest, genuine view of…

Stephanie: Off from a good place, right? From that perspective, from the perspective of the goal is to climb the ladder and get from A to B, that made perfect sense, except that I just knew in my soul somehow that that was not the path I was supposed to be in. And I remember looking at him and said, "It might be, but I think it's going to be the best thing for me and my family." And that's what I need to explore. I've spent, at that point, you know, 17, 18 years working with and in very intense focus, right? Working and achieving is the best way that I can explain it. And I just knew that I needed to get off that path. I literally knew I needed to go be a nobody on a beach. Just some random woman walking around, you know, surfing in the lineup or practicing the conjugation of her Spanish verbs, just completely and totally irrelevant.

And it was the best thing I ever did, not because of that specific action but because of the shifts that came out of it. It gave me the time and the reflection without what I call the "background noise." And we can talk about that, right? But to really explore without the pressure of, you know, the business, and the time, and the travel, and the expectation…you know, without all of that. I just got to be for a while. Which I realized I'd been so busy achieving that I hadn't really spent any time being. And I don't think I'm particularly uncommon in the world of entrepreneurs.

And so when I came to Costa Rica, I had a lot of my time on my hands, right? I went from working, you know, 60-plus hours a work and having two small kids to having a condo on the beach, and, you know, walking up and down it. And that's where, for me, the great learning was. I started to really ardently study the science of success, and leadership, and happiness, right? So sort of on this journey of exploration if you will. And really some really important things came at out of that for me both at a personal level and a professional level. For me, the big learnings were that I was…I loved my work, I always have. I've never had a day where I didn't truly enjoy and believe in the work, but what I realized is the problem wasn't my what, for me, the problem was my why. I was very driven to achieve, and that all felt good along the way, but when I got there and I looked around, right that fulfillment factor just wasn't there. And through all the learning that I'd done in terms of, right, the psychology of success and behavioral insights, and a lot of neuroscience, and we can geek out on that in a little bit, but what I realized was for me I thought at not at a sort of an awareness level but I had been driven to achieve by this thinking that success would give me significance. That I made a lot of money, I would have meaning. And, of course, we all know as I say that that's not true, but that's what I had carried sort of around with me because of some of the experiences that I had had in my life.

And then as I looked at that and I looked at all of these learnings about our brain, and our behaviors, and what drives us, and how we get to the outcomes that we get, I realized that that was…the shift for me was I had without knowing it, and I think that happens to a lot of advisors, because to your point about the life cycle, it just tends to happen, is I'd moved from that place of passion and purpose to I was sort of being pushed by my need to achieve. And when you do that, it sort of loses the spark, right? The creation piece of it, which I really wanted to talk with your audience about, but the creation piece of it was lost for me. And when that happens, the spark goes away and it becomes a job. You start doing instead of creating.

What Advisors Need To Do To Change Their Current State Of Affairs [56:19]

Michael: You know, folks on the podcast, I've probably mentioned this before but I've been fascinated by the book called "Essentialism" by Greg McKeown. And he has a thing about this that he calls the "paradox of success." We did an article about it on the site last year, that, you know, there is this progression that tends to happen particularly, I think, for people who start businesses and try to build businesses, including advisory firms, right? You start because you've got this particular vision of a thing that you want to do and a problem that you want to solve, or like for most of us, you know, businesses get created because we just see a thing that's wrong in the world that's like, "I can make that right for someone and hopefully they'll pay me for it." And we go off and we start this business. And it's driven by a passion, and it's driven by some creativity about how we think we can accomplish it. And we do it for a while, and if it goes well, if it's successful, then it starts growing. When it starts growing, it starts bringing new opportunities or new customers, clients seek you out. As you know that new business acquisition opportunities come along, you can hire and attract staff and team members to build this thing that's even hopefully bigger and better.

The challenge that emerges in that is it means as you get more successful and more stuff starts piling on, life gets more complex, there's more things to deal with. Your focus gets distracted almost inevitably, and suddenly you get to the point where all the things that drove your success, the focus, the creativity, the passion, the inspiration have kind of gotten squeezed out and now you're stuck in just a grinding, doing phase with this beast that you can't let go off, and all of a sudden it's like it's not exciting and it's not fun anymore. You know, your passion, your business turned into a job and a taskmaster.

And we had Angie Herbers on the podcast a couple of months ago. She had a fantastic analogy for this. But she said the…and I think it's truly true that you can essentially view your business as like another person, another thing that you have a relationship with. And the problem with the relationship that you end up having with the business you create is the business is an extremely demanding self-centered, selfish person to have a relationship with. Like it only cares about itself, it's just a me, me, me kind of thing, it will just keep taking more and more view if you give it and don't create some lines and barriers, and you can get sucked into this world where all the stuff that actually drives your success makes the business so big and so demanding that you lose the focus on the success, you lose the focus on what made it work, you get stuck in this business that's controlling you instead of you controlling the business, and all the fun and passion starts going away in the process. And it just kind of sips in over time because it's usually not one thing, it's you do this one other thing you can do now and you do this one other thing, you can do this one other thing, and suddenly you look back and go, 'Wow! We've veered really far off course from what it was we were doing originally that we enjoyed."

Stephanie: Yeah. And I listened to the podcast with Angie, it was a great one, and it's a fantastic analogy, right? Because it helps you to really get it. But it's what I call the "stress of success." So you talked about, right, we…

Michael: The stress of success? That's optimistic for anybody who's working toward success.

Stephanie: You know, and therein lies both the challenge and the opportunity. And what I mean by that is, when we all start, right, you talk about the life cycle of the business. We go from lifestyle to business, right? And then you have the levels, and then you go from business to enterprise, right? And we can track that. But what few people talk about, and what I get so passionate about these days, some will say a little obsessed but is this idea that each of us as people and leaders have that evolution as well. So you talked about the state in which we start. We are focused, we are creative, we are passionate, we are inspired, and from there we create. All good things come from this place. As the business gets more successful, as you pointed out, those little things just kind of pile on, right? The day in and day out functional work. And so the price of success becomes this complexity.

And so what happens without us even knowing it is that we compromise our conditions. And you mentioned this idea of, you know, sort of how do you put boundaries on it and contain it? There are, at least from my vantage point, sort of three ways that people are going to feel about their business. Now, I realized that as a practice management consultant or a business expert, no one expects me to be having a conversation about how people feel about their business, but for me that was the great learning, right? That's the point of sort of the coming back and doing what you…I love you it the on-court career, is when you think about how you feel in your business each day, the work that you're doing, almost always you're going to fall pretty squarely in one of three camps, excited, overwhelmed, or bored.

And it doesn't mean that you can't have a little of each, but for most people, if they're really honest with themselves and they get to that quiet space and say, "You know, how do I feel?" You know, not just one day, because we all have bad days or hard days, right? But when you string them all together, what's the feeling? And when we start, it is excitement and enthusiasm, and "We're going to conquer the world and we're going to climb the mountain or do these amazing things." And how do we all start? "I think I can do better work. You know, I want to bring more to my clients. I want more financial success. I want freedom and flexibility to control my destiny and add the value that I think is right for clients and to do it on my terms." And if you fast-forward in most businesses 10 or 15 years later, they're not living that. They feel burdened by the business, right? They are constrained by, "You know, I can't leave," or "The systems aren't working," or "I'm having problems with my staff," right? Those struggles that we experience tend to…right? It's the stress of success. And what it is is we compromise on our conditions along the way. And here's an example of that, right?

So I had a client years ago, his name was Brian. He had about $800,000, $850,000 practice, and he brought me in because he'd sort of been…you know, he was growing but he was sort of hitting his head, and he knew that much, much more was possible. He just kind of couldn't figure out what he was or wasn't doing that wasn't getting him there. So I came in, you know, we did all the practice management stuff, and one of the things we did was we sort of looked at his client list and his fees, and I noticed that, you know, people weren't exactly paying the same amount. And I asked about it. He's like, "Well, you know, I'm made a few exceptions to the fees over the years." And when I hear an advisor say "a few exceptions," that's code for gold digging, because "a few" usually means "a lot."

Michael: Yeah, unfortunately, once we get in the habit of making exception it's hard to stop making exceptions.

Stephanie: But here's the important distinction for anyone who's listening. Don't tell yourself that you're making an exception, you're compromising a condition.

Michael: Compromising a condition.

Stephanie: Right? So we all have conditions, we just don't…we're not aware of them. So when someone starts out with that vision of what they want, right? "I want to do great work for clients, I want to make great money." If you think about it, there are business conditions that are required to make that happen. You have to charge a fair amount for the work that you're doing, right? You have to leverage your time. You probably don't want to work 80 hours a week so how do you do all this in…right? A condition, what I call guardrails is, "I'm going to work this much." So when I had my son, for example, I, like most entrepreneurs worked however much I needed to work, right? The relationship I had with the business was demanding and I loved it, so I would just work more and more and more. When I had a son, I felt compelled to put a condition on the business that said I'm leaving every day at 5:30. Scary thing to do, but what happened was when I put that guardrail in place, it was a forcing mechanism for me to make better decisions. I couldn't just have an hour and a half long chat with someone about something that wasn't focused because they walked into my office because I had to leave at 5:30 no matter what. I couldn't get lost for my email in 45 minutes because I had work I needed to do and I had to leave at 5:30. When you are an advisor and you set out and you set a fee, you set that fee for a reason. It's because you think that's the fair fee for the work and the value that you're providing.

So in Brian's case, he compromised a condition, he made an exception. And from that exception came more, and more, and more exceptions. Now, we can look at this from a practice management standpoint, which is what I did, right? We had to fix the fee issue, right? We had to tier the clients and do the things that you would expect. But at the underlying level, right, the real question is, "Why did we have to fix that condition in the first place?" And it was because he made a compromise. And then the question becomes, "Why do we compromise?" And this is what I get so excited about, this is why I think this is such an important conversation because when you look at a business, we sort of look at, right, to your point about the iceberg. It's the tip of the iceberg but there's so much more underneath it. So when we compromise those conditions, it becomes unwieldy. It's what I call, you know, "the deadly 1%." The first time he made that exception, it took away 1% of his possibility, and the next time another 1%, and another 1%. And when we added it all up…So we did an analysis of all his clients, what they were paying and what they would have paid on the published fee schedule, and for his $850,000 practice, it was over $80,000 a year that would have dropped directly to the bottom line, 10%.

Michael: Eighty thousand dollars of just, "I gave this client a fee break, I gave that client a fee break. This one, you know, was with me early on and you know what? Fees were lower back then and we're just sticking with it." Eighty thousand dollars.

Stephanie: And you think, "Okay, that?" Literally, his mouth dropped. He was speechless. And I said, "Well, that's not the real problem, the real problem is that's $80,000 a year." So he was in his late 30s and like you multiply that out over another 10 years, that's $800,000. You multiply that out over 20, it's $1.6 million. That's assuming you never make a single discount from today forward.

How Our Minds Unwittingly Create "Limiting Beliefs" [1:06:29]

Michael: And truly like those are clients you already have that you're already doing the work for, so like that's pure profit, that's not like, "Oh well, then we've got to do more stuff and I can't keep all that. Like, you're already servicing these clients, you're just undercharging them relative to the rest. So that's $80,000 of annually recurring pure profit lost by not dealing with this fee discount issue.

Stephanie: Right. So the real question to my way of thinking is in order to really solve for that situation, you have to understand why, right? There's no business case for that except, "I didn't want to lose the prospect," right? That yes is good. We are in this industry sort of, right? Many people who've been doing this for a while started out, right? You're dialing for dollars. And you just…you go to talk to every single person you know and, right, you build the business in that way. And that sort of mindset, that frame of thinking is yes is good, no is bad. And it's no different than the firm I worked in at the very beginning of my career. If yes is good and no is bad, I will follow up with these people until the end of time. But if you believed that you want your clients to be three things, motivated, able to see the value, and willing to pay, yes can be bad and no can be good. So in this particular case, the reason why he was doing that is because his underlying belief system lies that yes is good and no is bad.

And really, the time that I spent since moving to Costa Rica and doing all of that sort of setting and learning around, right, the science of success and leadership and the neuroscience is there are very real, and practical, and functional reasons for that. And when we look at an advisory practice and we look at all the things that they're doing and what's helping, and what's hindering, almost always the hindrances are compromises of conditions, right? This is the fee at which there's what I call reciprocity, a fair exchange of value. We provide services which create value for you, you give us fees, which create value for us. Or, this is how many times we talked to our clients, or this is the work that we do, right? There's a million examples that I could give you of a firm that said yes so much that they moved themselves into that state of overwhelm. And in Brian's case, as in most of those cases, it wasn't a method issue, it was a mindset issue. And this for me was sort of the big aha was I had been doing it all along; I just hadn't been doing it from a place of knowing.

And what I learned in all of this study is that sort of there's an underlying formula for our success. What I call the "science of success." And it's really simple but very powerful, which is our brain plus our beliefs equal our behavior. And our behavior is what drives our business outcome. Not the circumstances, not the conditions, not whether someone asks for a discount or doesn't, it's the behavior that ultimately drives those outcomes. Why do we make the decisions and the choices that we make? Now, here's the kicker. They've done a lot of research around this and what they've ultimately concluded is success is about 80% mindset and 20% methods. We spend all of our time…

Michael: Eighty percent mindset, 20% methods. Right?

Stephanie: Right. And if you think about sort of what we do, we spend most of our time focusing on the methods, right? If it's not working, we work harder, or longer, or we push more. And, you know, we always joke about the definition of insanity, but Einstein has a quote that I really love. And he said, "No problem can be solved with the same consciousness that created it." And so that's what I had really done all those years was help people sort of shift the way that they thought about their business, right? And now in, right, on-court career 2.0, that's just a much bigger part of the process is this underlying premise that…And it's why I named Educe what I did, right? It is Latin for "to lead from within," to bring out the leading potential. And if you look at a business and you draw a line, and on the left side of that you're basically going to see the external, right? The business of your business. But on the right side of that is…so that's your external game. On the right side of that is the inner game, right? It's the leadership, who we are, how we're showing up in our business, we decisions we make, why we make them. And they've done so much research on this that I just feel really compelled to share with people, right? We're going to geek out here a little bit.

Michael: It's okay. It's the Nerd's Eye View podcast, or about to become.

Stephanie: It is the Nerd's Eye View, right? The latest neuroscience research basically shows that we have between 12,000 and 60,000 thoughts a day. Now, we all know that I'm on the right side of that spectrum, right?

Michael: Twelve to 60,000 thoughts a day. Okay.

Stephanie: That's a lot of thoughts.

Michael: There's only 1,400 minutes in a day, so like, you're pretty much talking thoughts almost every second. That's every couple of seconds overall.

Stephanie: So you're thinking to yourself, "How 1is that possible?" Well, it's possible because what they've also uncovered is that 80% of those thoughts are unconscious. And here's where it gets interesting, 80% of them are negative, and 95% of them are in a replay loop. So basically we have a bunch of negativity just on…in the background just going, going, going.

Michael: Continuous self-looping self-doubt. So for everybody out there that feels like, "I have a lot of worries in my head, you know, the…I feel like the voice is always really negative for me," the answer is like no, no, they're really negative for everyone. We all have this.

Stephanie: We all do, right? And that for me was because of my background and sort of what I went through in my childhood, which wasn't traditional so to say. I had to learn that. And so we sort of all, you know…right? You and I have talked about this, and I'll share with the audience, right? My mother was diagnosed with a mental illness when I was nine. It did not go great from there. I can't count the number of psychiatric hospitals, panic attacks, prescription bottles, physical, emotional abuse. You know, I was…I think I went to seven or eight schools from third grade to high school. So, you know, long story short is I sort of had…You know, remember brains plus beliefs. I had these underlying beliefs, and everyone has them, good, bad and neutral. I believed that I wasn't important, right? Because if I was, I wouldn't have gotten bounced around. My dad would have taken better care of me, my mother would have gotten better. I believed that you had to perfect to be loved. I was chastised for being chubby by relatives. My mother would sometimes wake up at 11 at night or 2 in the morning and find a piece of lint on the carpet. I'd have to get up and clean the whole house.

So, you know, because I bounced around from school to school, to school, I didn't get to make deep friendships, so I didn't have that sense of love, and acceptance, and belonging that we all need to feel good, and whole, and fulfilled. And, of course, I didn't know any of that. No one knows it. And, again, it doesn't have to be that bad, right? It could be, you know, your dad wasn't…You know, if you missed the ball in a strike out, right? You took that to mean something. So we create these interpretations. It's proven, everyone does it. So everything that you take in in your early childhood or any significant experiences that you have, your brain interprets them. And our brains are very busy but they're very lazy. And what I mean by that is their job is to take in all this information and then create shortcuts, right? These neural pathways that say, "If this then this." And so that's what happens is some beliefs are, you know, you're capable and you can do anything, and other beliefs are filled with self-doubt and worry, and internal criticism. And, you know, the degree to which we all have, you know, the ones that challenge us is different for everyone but we all have them.

And so when I look at the example of Brian and the prospect fee, right? This is where the real geeking out begins. But at the end of the day, that was an autopilot response on his part, right? He did not consciously sit down and say, "I've been asked for a discount on a fee. You know, I set my fee because I felt like that the value that was fair, and I've got some other clients so it's not like I'm starving, so I'm just going to have to politely say no." What happens is there are two significant parts of your brain relevant to this discussion. One is your limbic system, which is the oldest, deepest part of your brain, and the other is your prefrontal cortex. The oldest, deepest part of your brain has one job, Michael, just one, stay alive. It's survival. It doesn't care about your happiness, your joy, your bank account, your body, just don't get eaten by a hungry tiger. And so what happens is your limbic system is very, very quick. There's a part of it called your reticular activating system and its job is to filter out…to filter all the information that you take in, which is so much more than we know, find the 1% that's relevant, interpret it, and then based on that act, create an action, or a response. And that happens in, I'm not kidding, one-fifth of a second.

So when Brian was faced with a prospect for the first time asking for a discount, I asked him, "How did you feel?" And he was like, "I felt really nervous. You know, like that sense of unease, my heart was pounding." And it's like, okay, what's really happening is our brains don't know the difference between a threat and a challenge. A threat is, right, compromising your potential to live, a challenge is just something you have to deal with. Brian was facing a business challenge but his brain interpret it as a threat. So what happens is when your limbic system goes into this state, we're all familiar with the concept of fight or flight, what happens is all the blood flow from your brain goes to your limbic system. It moves away from your prefrontal cortex. This is important…

Michael: You literally stop using the fuel, you need to think.

Stephanie: Yes. The prefrontal cortex is the cognitive rational thinking part of our brain. It literally, when we're faced with this threat in an instant because remember that's being decided at an unconscious level, our brain kicks into overdrive and says, "Okay, don't die." And for Brian, don't die meant, "Yes is good, no is bad. Say yes to get the client. Good job. You stayed alive today." But what that really did was compromise one of the conditions of his success, because what happens is our brain, remember it's lazy, it sets neural pathways. So now what's the path of least resistance the next time someone asks for a discount?

Michael: Oh yeah, well, we just say yes. We know that if we just say yes quickly, the client comes on board, and that feels good.

Stephanie: Right. And then we get that nice shot of dopamine that makes us feel really good. So remember, when he's in that stress state, he's got adrenalin and other chemicals coursing through his body, he's not thinking, he's reacting. And so much of what we do running a business is a reaction, right? Someone walks into your office and the report…you know, the financial plan isn't right and we get really upset, right? Or when I listen to advisors talk about, you know, any of their struggles, right? "I don't have enough time. I feel overwhelmed. I'm not working with the clients I want. I have problems with my team. I have problems with my partner. Our systems aren't reliable. You know, the business won't survive if I'm not here." Are there practical business solutions to those things? Yes, there are best practice strategies that work, but that's not the real problem. The real problem is why are we even creating circumstances that compromise on our conditions?

How To Communicate Effective Client Expectations And Avoid The Temptation To Discount Your Pricing [1:17:42]

Michael: Well, it strikes me. I found for years…I just stumbled into this that…You know, particularly when I do things like consulting and speaking services because the pricing is just kind of…I mean, it's set, it's sort of an auditory number in and of itself, right? Like, how you…you know, for anybody that prices on their time, how you value your time is kind of like you throw a number out there, right? If you bill at $200 an hour and someone says, "Why is it not $190 an hour," there's no particular rational explanation or likelihood as to why it has to be 200.0 and not 190. It's just kind of the number that you've set that you're accustomed to, which makes it hard not to compromise when people challenge it.

And so I found even for myself that I often default. Like, I've defaulted myself to a system where those kinds of pricing things where I just have to quote someone a number, I try to do it by…in print, like by email or correspondence and not with an in-person conversation. I think just reflecting on it because I've actually figured out a long time ago when I say these things in conversation, it makes me so antsy about saying the number, whatever the number is, that I'm too quick to capitulate if they push back at all. When I put it in an email and they get the number, and then they have to take some time to respond, and then if they do respond, even if they…you want to haggle around price, I don't have to respond in an instant when the email comes back to me. I can see that they want to talk about pricing and I can take a deep breath, and a stroll around the block, and then come back in in a, you know, frontal cortex-driven thought process of, "Okay, how do I want to handle this situation? And do I want to compromise my pricing or not?" But, you know, having a structure to the pricing. "Here's what we do, here's how we do it," and try not to put myself in a position where I have to hide or face to face.

I think in retrospect like that's even become my defense mechanism about how to not have that problem. Ironically, I find it easier in the context of our advisory firm because we have a published fee schedule, and it is just, "This is our fee schedule. This is how it works." And we don't compromise off of it, which I guess is a feet unto itself, but, at least for me, like I find comfort in that kind of structure to say, "Here's our fee schedule and how it works, and just it is what it is." And that way, I don't have to get into a haggling world where it's so hard to haggle because you don't want to lose the client in real time.

Stephanie: Right. And we all go through those processes, we're just not always completely aware of them, right? Because remember 80% of those thoughts. What you're really doing there is you're avoiding, right, by doing it in an email versus a phone call, is you're creating a set of circumstances that allow you to avoid the discomfort of challenge or conflict. And so you're saying, "Okay, in this construct, it could go this way so I'm going to create a new contract," which is a good thing, but that underlying discomfort comes from something, right? So remember, it's our brains. I've talked a lot about how our brains work, but what drives the brain's functions, the beautiful part of the brain, is that it will do whatever you tell it. So we know there's a lot going on in the brain, and we know that from a lot of different angles, but as an example, our brain consumes 20% of the calories that we take in. That's how much energy is being expended up there. That little lump of organic stuff.

So if you know how the brain works and you understand the impact of our belief systems, right? If I don't think I'm important, then, of course, success is going to give me significance. Or I'm going to be driven to achieve that because right at an underlying level, that's what's going to get me that validation that I need, right? Or I can avoid the discomfort of having to hold firm on my fees by managing it in this way. Those belief systems are ultimately…Think of it as sort of the software program, right? If your brain is an organic computer, which is essentially what it is, those beliefs become the software. If you think the world is a place of abundance, then that's the lens through which you're going view it. If you think the world is a place of scarcity, that's the lens through which you're going to view it. If you think yes is good and no is bad, all of your decisions in that one-fifth of a second are going to be framed by, "Yes is good, no is bad, equals this outcome." But those outcomes, 90% of the time are compromises to the conditions that will give us the success, the happiness, the revenue, the fulfillment, the freedom and the flexibility that we want. So we make these incremental compromises, not on purpose, not even from a place of knowing.

And then to your point, we have this sort of business that's successful, but the more successful it becomes, the more complex, the more challenging it can be to manage. And so, you know, again, it's that stress of success. So if you're an advisor and you find yourself with any persistent issue, we all have situations that come up, right? The key is if there's anything that's persistent, right? What's that feeling that you have about the business? If you're not in excited land, if you're in overwhelmed or bored land, I'm guessing that's not what you started out to do. You didn't say, "I want to build up a business and be completely overwhelmed and feel out of control," Or "I want to build up a successful business and be bored out of my mind." That's not what we want, right? We just sort of get there. And so there are ways to really very quickly identify sort of the limiting beliefs. There's lots of good ones, but if we know what the limiting ones are and we can reinterpret them, which is a pretty straightforward coaching process, then what happens is we change the interpretation. And let me give you an example of that. It's one of my favorite examples. So many, many firms struggle with servicing expectations, right? They've got too many clients, they're doing too much.

Stephanie: Clients ask for all sorts of exceptions of, "I need this," or "I want that."

Stephanie: Right. Or, "You're managing my money and you do some planning so I've asked you for something and you've never created that barrier between what's an investment client and what's a financial planning client." So we just go, "Okay, I'll do that for you quick." And then the next time you call, right? And it just builds, and builds, and builds.

So when I talk to advisors about these kinds of challenges, which I do as you can imagine very frequently, it's always, "You know, this is the problem, this is like..." "Nope, nope, nope, that's not the problem," right? So we go through a process of peeling back the layers of the onion. And what I really do is help advisors reframe, right? So first it's really interpreting what's really happening and why, and then we reframe it.

So here's the example that I use with advisors that I think really makes the point. Client service is a real challenge for most firms. And when I give presentations, I always ask the question, "How many of you are servicing your top clients in a way that you feel great about the time, the attention, the quality of advice, right? And in a room of 200 people, three or four might raise their hand. And I think that's probably a fair representation of the profession. And I say, "Okay, let's talk about how we can change this, but I'm not going to talk to you about the solutions, first I want to talk to you about the cause, I want to talk to you about the thinking that got us here, why we made these compromises. So we're going to talk about a client appreciation event, right? And we all have either had one or know what they're about. But we're going to do a different kind of client appreciation event. The next time you do one, I want you to identify your top clients, I want you to take their name badges, and I want you to put a gold star in each one. And on the night of the event, I want you to put one top client at each table, and then let all of the other clients sort of fill in around them. And when you get up to the podium and you say thank you to everyone for being a client to the firm, I want you to take a slightly different approach. Instead of saying thank you, I want you to say, "Thank you so much for being a client to this firm, but instead of thanking me, I want you to find the person with the gold star at your table, and I want you to thank them, because their fees are underwriting your relationship with our firm." And I'm telling you, I've done that…

Michael: That's a painful visual.

Stephanie: Well, but it makes the point. And every single time I've ever told that story people go quiet. Because, right, in that instant, don't you know that there's some inherent truth in it? That's what we're doing. So then I'll sit down with a client and I'll say, "Okay, let's talk about when you took a client on. Did you tell them you were going to give them great service?" "Yep." You're going be attentive, you're going to give…I say, "Did you tell them that the way that you were going to deliver that amazing service was you were going to be on call 24/7, you were going to take the phone anytime it ringed." And, you know, you might be doing work for someone else, but if they just called you and asked a question, you would, of course, stop working for the other client and immediately start working for them. And that's great as long as they don't mind when you sit down to focus on their needs and their work. You're going to let them know that you're going to drop them like a hot potato in a second because someone else pushes the call button. And I had that conversation with a client recently and they went, "No, that wouldn't be great service. We would never sell that." And then they went, 'Oh! But wait, that's what we're doing." And I said, "Okay, how do you feel about that?" And they went, "Not good at all." I said same set of circumstances, just reframed it, different interpretation." And they just went, "Wow! That's exactly what we've created and we don't feel good about that at all."

And so then the business piece kicks in, right? You know, the funny thing is success is 80% mindset and 20% methods, but when I coach with people, it's only 20% mindset in terms of the time we spend on the conversation. And we spend 80% of our time on the methods, but if you don't deal with the mindset first, it's just going to keep popping up. So in their case, we did, we tiered, we looked at all their clients, we tiered them, we ran a profitability analysis, we defined every service and every tier for every segment of client, investment, planning and what I call collaborative, right? People that sort of have short-term or one-time needs. The levels of tier for each of those…

Michael: So investment-only, full planning clients, and then you're like one-time collaborator heck you can work with through this thing but then I'm done.

Stephanie: Right. And then tiers for each of those. What's a tier one investment client? What's a tier two, right? And then every single thing that that type of client gets, who in the firm does it? We can analyze the cost of providing that and then come up with a profitability analysis. And you just tweak that until you get to a place that works. Now, in their case, what we then had to do was literally go back to every single client and we set the expectation. So one of the great things, and I think I'm going to write the next column about this is this issue of expectations, I sort of started to weave it in, but 90% of the problems that firms have really are a function of what I call a common language. Because when you don't have a common language, everybody is interpreting, and we all know from the geek-out that I just did, right? We all interpret from our own perspective. Staff, challenges, client challenges, relationship challenges, right? It's all about interpretation. And then what happens is when you don't set an expectation, someone else will. Once client will call you, and if you don't call them back in two hours they'll be calling again, and another client won't call back for a week. Different set of expectations. Some clients ask for discount, some…or prospects do, some don't different set of expectation.

So the real challenge in this firm was one, they compromised the conditions of success, right? Charging fair fee for a fair work and that has to be a reciprocal exchange. They didn't do that so the client set the expectation. And when clients set the expectation, the business is really doing it. And to Angie's point, the business will just take, and take, and take. So what happened is they became overwhelmed. And so here's a practice that's, you know, about a million and a half, they have nine people, and the profit margin isn't anywhere it needs to be. They're working too long, they're frustrated, their staff are frustrated, but they're great advisors, they're doing good work for clients, but they're making it 50 times harder than it has to be.

And so we put the solution in place from a practice management perspective, and to your point, and I love this, right, you talked about you have the printed fee schedule. We built a one-pager, and it has three columns, investor clients, planner clients, collaborator clients, and then it has three rows, and the top row is the goals for each of those types of clients. Investor clients want, you know, expert investment advice, managing portfolio, you know, blah, blah, blah. Planner clients want holistic competent advice, every aspect of their financial… right? So what you're doing is focusing on what's your goal? That's going to define what kind of client you are. The next row has the services, and the third row has the fees. And then we laminate that. I started doing this, it's got to be 15 or 18 years ago. It was pretty early on. And we did it for a client who had an expectation issue with his clients, which was he had some larger, very wealthy clients who were bringing in their employees and their grandson, right? People who just shouldn't have the same level of service because not because he was a bad advisor but because their situations just didn't warrant it. But because we don't know how to deal with that, we just say yes, and right? There goes…someone goes to compromise it.

So when we first created this, that was the intent, was to identify the distinction between clients. What happened was what we found is when you walk someone through that as part of that initial meeting, the great tendency is for them to go, "I am that one." There's no selling. They just go, "Oh yeah, we only want the investment stuff," or "We really want this comprehensive," or "You know what? We just need you to help us open a 529 plan for our kid." And so it did so much more because what it created was a common language. There was no interpretation, there was no stumbling over the fee. There was only, right, "Here are the conditions under which we can work with you."

Michael: I was going to say are you willing to share a copy of that? Like a template that folks can look at?

Stephanie: Absolutely. So this is one of those very simple things that is a huge game changer because what it's doing is it's creating a common language. And to your point about you'll answer those in an email because you've learned this about yourself. We're not doing therapy here by the way for anyone that's rolling their eyes and going, "Oh my God, what's happened? She moved to Costa Rica and got soft." It's just what we would like to call practical psychology. It's just if you know this, then as you've done, you can create a set of circumstances that say, "This is one of the limitations. This is something that if I don't manage it, if I'm not aware of it and I don't manage it, it will hold me back." So you found a construct that allows you to manage that to a good outcome. Right? If I do it by email, I have the time and space to reflect, right? Or if I print it and laminate it, right, it becomes concrete. People don't tend to argue with something that's laminated. There is some inherent psychology in that, but it's true.

Michael: I'm sorry, I can't change our fee schedule because like it's laminated and I can't cross out the number, right?

Stephanie: I can't do it.

Michael: And we'll make a copy of that available on the site then. So for people that want to go with the show notes or…kitces.com/24 for episode 24. Obviously, you have to adapt it for your firm and laminate it yourself, but we'll at least put the template up for you.

So as we come towards to the end here, I'm curious like what are you actually doing now? So you've mentioned you move to Costa Rica and have been, you know, doing all this research around, you know, the neuroscience of success and our mindsets and our limiting beliefs, but you mentioned you have been working with some advisors and coaching as well, including Matthew Jarvis, right? I didn't even realize that you've actually been coaching him until you were on the episode. So for anybody who's listening, that's purely incidence that she was coaching the person who was on episode seven. But like what are you doing now or what are you working on at this point? Like, can people engage you the way that Matthew is if they're interested in this kind of stuff that we're talking about? Like what's your business today?

Stephanie: So it's sort of all of it, right? So it's the shift from a pure practice management, if you will, to what I call business strategy and executive coaching. And it's really the same work with that added sort of level of awareness and understanding. It's yes, we have to focus on the methods. We also want to be mindful of the fact that mindset is the biggest driver of our success. So as we evaluate the business, where are you? Where do you want to go? What's the gap, right, that we need to cross or fill? That becomes, now, part of the conversation, right? So I will only work with advisors who are comfortable engaging that part of the conversation as well.

And, again, it's not…you know, it's not deep therapy. I'm not a therapist, nor do I want to be, it's more just…sort of what I've always done is that it's the, "How's that working for you?" And we all have things that aren't. And like I said, if they're happening persistently, then you know that there's, right, sort of something underlying that's driving it. If you're consistently stressed, if you're consistently frustrated with your staff, if you feel like there's so much more possible to you and you just can't tap into it, if you feel that way for a day and the rest of the time it's great and groovy, then you're fine. But for most of us, there are things that are sort of very persistent, and we know they're holding us back. And so really the work I'm focused on is yes, it's the business strategy, it's the mindset and the methods at this point. And I'm really working on this concept that I call "the five freedoms of being a limitless advisor." Except I actually think now they're seven, so, right, it's a work in progress.

Michael: What are the five freedoms really first? Because now I'm curious.

Stephanie: The five freedoms are purpose, time, value, money and freedom. And purpose is, right, it's that reason that we start. And to our earlier conversation, what happens is is the stresses of success start to pile on. We move from a place of creation to a place of doing. And for most business owners, entrepreneur types, doing isn't sort of what they're hardwired to do, right? They're hardwired to push the envelope and challenge, and create. Matt Jarvis is an amazing example of that, right? He's built this incredibly successful practice. And he called me, not to help him build on that success, he called me because he was in camp number three, "I'm bored, because I've got all this success, and…But think about it. And I had a woman call me like last week and we had a conversation, and she basically said, "I'm bored." And I said, "You've been doing this about 12 to 15 years, right?" And she said, "How do you know?" I said, "Because when you're the type of person who does this, there are sort of these mountains that you have to climb, but when you get to a certain place that you're just going around the mountain every day doing the same thing, you're pushing people from the left side of the desk to the right that is energy-draining."

And I really think there are like two kinds of energies, or activities, energy-creating, and energy-draining. And we all know when we're in the energy-creating, right? There are things that you love to do that you could do infinitely, and there are things that you do 15 minutes in and make you want to put a pencil in your ear. And so the purpose is making sure that we stay in that place of creation, that we're engaging in the business in a way, and an approach, and a level that keeps us in that state of purpose and passion so that we get excited, right? Remember excited, overwhelmed or bored. I want my clients to live in the excited box most of the time. And so step one is making sure that your business is aligned with your purpose and your passion so that you are in a position to do that.

The second freedom is time. I've mentioned time several times in this podcast. Whenever I talk to advisors who have challenges, time almost always comes up, and I get to be the bearer of the bad news, which is you don't have a time problem, you have a priority problem, you have a focus problem. We all have the same amount of time, it's a level playing field, and yet Matt Jarvis can create a million-dollar-plus practice, you know, working a couple of days a week and having 85 days off, and someone else is working 80 hours a week in a $1.2 million practice and they can't get out from under it, right? Time is a level-playing field. And so knowing how to use our time in ways that create the greatest lift is really important.

Michael: There's a quote out there, again, I at least heard it first from Greg McKeown in a speech he was giving around his "Essentialism" book. I don't know if it actually came from somewhere else, but the comment was that "the difference between successful people and very successful people is that very successful people say no to almost everything." And it's that effect that most of us get stuck basically by our inability to say no and to say no to people and say no to opportunities. And the more successful we are the more opportunities that come and the more that you have to say no, or you end out getting, you know, stuck and drifting off course, and then you're doing all the busy work and you move from energized to overwhelmed and all the bad stuff.

Stephanie: We're all hardwired to not want to say no in those circumstances, right? All those what I call those compromises of our conditions that sort of incrementally steal our success. But, again, it's a reframing. If I came into any advisor's office and I said, "Tell me what your challenge is," and then I put $100,000 on the conference room table and said, "I'll make you a deal. Here's the solution to your challenge, right? Instead of doing this, do this, instead of taking the phone call, right? Instead of taking the exception and saying yes, say no, show him the one-pager, whatever it is." If I went into an advisor's office, put that $100,000 on the table, and it was there so that they can see it, feel, and touch it, and said, "Every time you compromise, I'm taking $5,000," I promise you, at the end of the year, there'd be $100,000 on the table, or very close to it, because it's real. So what happens is along the way, to your point of all these little things adding up, these compromises, it's $5,000 here, but we don't know it because it's not tangible. But here's the thing, we feel it. Going back to, right, if you feel that stress, the tension, the frustration, the anxiety, the worry, then there's something there. And yes, there are strategies that can improve that and remedy that, but it really goes back to the mindset, right? And back to those freedoms.

So the third freedom is value. You have to know what you do that creates value, right? It's not a 40-page report. I had an advisor once that had, no joke, four inches of paper when I was at United. And I was trying to explain to her that that was not the standard practice across the firm, right? That we were going to have a consistent deliverable. And she spent an hour telling me why she needed these four inches of paper. And I said to her, "Did clients walk in and say, "These were all the things we want to see when we meet with you?" And she said, "No." I said, "So where did the four inches of paper come from?" And she said, "Well, I gave them to clients." I said, "Oh, okay. So you set the expectation, not her…not them." And she was like, "Well, yeah." I said, "Okay, the reason that you feel so deeply like you need those four inches of paper is because you think that's the value. So here's what I want you to do." Remember I said there's strategies for everything, but first, you need to know the mindset. I said to her, "The next 10 meetings that you have, I want you at the end of that meeting to tell clients that you'll be happy to send them…to make a copy of any important information they want to take away from your meeting. Which of these pages in this four-inch stack would they like to take home?" I said, "You do that for the next 10 meetings and we'll both know what is really important." And do you know how many pages clients asked for? One or two. So where's the value?

She believed that the value was in the paper because when she started out, she didn't have that confidence, right? There is a mindset thing, and I don't…right? I didn't have that conversation with her but I promise you there was one. And in her mind that paper validated her. "Here we go, I have a lot of smart stuff that shows you I know what I'm doing." And over the years she became…that became part of…So what happens is when we talk about brain and beliefs equal the behavior, the behaviors become patterns, they become the habits. And we do them on autopilot. So, right, to that third freedom, you need to know what you do that adds value really clearly. And equally important, it needs to be reciprocal, which means you need to know what value you earn in exchange for that. And if your value is X fee, then really your value shouldn't be X free minus 20% just because someone asks.

Michael: So we have purpose, time, value, so what are the last two freedoms?

Stephanie: Money and freedom. So money is really you can make as much of it as you want, you just have to decide how you want to make it. And you need to feel good about it. Matt Jarvis is a great example, right He's got a great practice, he's pulling in 54%, he takes a lot of time off. And, you know, as we went through sort of the strategy session, which was the first part of the process to figure sort of where is he coming from, right? You know, he's got this great practice and he's bored, what's driving all this? And the part that Matt found mind-blowing, to use his words, which, right, which is what you'd love to hear, that's kind of the goal, like, "Let's create a shift" was that in his own mind, to his way of thinking, his belief system was you can't be too successful or you're greedy, right? Too much is bad, right? Money is the root of all evil sort of thing. And he grew up in an environment where very middle-class family, middle-class values, right? You work hard for 40 years for the same rate and then you sock a little away. And there were, you know, sort of…there was feedback given to him, not intentionally, right, but this idea that if someone's dad wasn't at the boy's scout camp out, it was because he was working, right? So that meant being here is good and working is bad, or if people had big houses and fancy cars, you know, some comment would be made. You know, "Well, who needs that?"

And so as a child, right, Matt internalizes this. And what happened was in his mind, a million dollars was sort of that threshold of success, right? When you're an advisor you think, Okay, if I get to a million dollars, I've kind of made it." As soon as he got there, he stopped growing. And what we figured out was that Matt had sort of hit his head on the ceiling of giving himself permission to be more successful. Because in his mind, that meant he felt guilty and it made him greedy, right? "Why do I need more?" And so Matt, being a mountain climber, he needs to do stuff. He picked a different goal and his goal was time off, so he took 10 days, 20 days, 30 days, 40. I 1mean, he's up to 85 days at this point. But what he realized is, "Well, I can keep doing this but it's not going to give me the challenge." And so when Matt called me it was, "I've got this amazing practice, I have it all, I'm bored and I feel guilty." And so for him, it's been a re-shift. And there's lots and lots that we've worked through, but when he was talking about his options, he's like, "I can do this or this." And I would say to him, "Why only two?" And he literally went, "I don't know. It never occurred to me that there were options three, four, five, six and seven, right? So we sort of have this process, but value is great but money becomes a part of that equation. How much do you want to earn, but also how are you going to have an equitable exchange with someone over it?

And then the fifth is freedom, which is when we all started, right, I did, I'm sure you did, every advisor listening has this idea that they're going to have this financial success and they're going to have this business that gives them the freedom and flexibility to live life on their terms. Except that most of the advisors I talk to feel like they are not free, by a long shot, right? That they're sort of tied to this thing, that they're not running the business, it's running hem. And so there are sort of strategies that we can engage to shift people. And then there's more areas but I think these are the big five.

Michael: And so if people want to engage you like that's what you're doing now? You're doing like executive coaching with advisors about just how to help them get unstuck in these various realms. I guess particularly if you're in the overwhelmed or the bored categories?

Stephanie: Yeah. And I work with people on the excited phase. You know, "Hey, I've got two offices and I want to have 20," right? There are different barriers going from one to two offices to 20 but the short version of that is yes, right? So the business now is really focused on business strategy and executive coaching. So it's the same thing that I've always done but just with this extra layer of, "Let's make sure that we're bringing out all of our latent potential. Let's make sure that we're leading first from within because each of us has, I genuinely believe, the ability to be, have, achieve, do more, and experience more. And the real question in my mind is, "Why are we settling for so much less?" And that's my job is to help someone figure out what do they want to be, have, do, achieve, experience in their business and in their life, and how do we align their business with that so that anything that they can imagine for themselves is possible, right? If someone said you could have a million-dollar practice, take home $600,000 and take 85 days off, a lot of people would say, "No, you can't." And, right, Matt's not the only one, there are lots of people who have these kinds of practices, right?

You know, one of my favorite sayings is, you know, we make these compromises and we sort of settle for the status quo because if nothing else, even though the status quo might not be fully satisfying in terms of happiness, wealth, income, fulfillment, you know, what we're doing, it's safe and comfortable, right? So our brain says, "You know, it might not be a perfect value but let's stay in this value. Let's not go over there to that other value where it might be better but it's unknown and it's uncertain." And so what happens, as we've talked about, we make these compromises, we sort of get in the mode and the habit of running the businesses. And what I really help people do is sort of break out of that. One of my favorite quotes is "take one lick from the lollipop of mediocrity and you will suck forever." Now, it's not an elegant quote but I think it makes…The point is once you get in the habit and pattern of compromising and feeling like, "This is the way it has to be," I think all of us sort of have that draw of feeling like, "It shouldn't have to be this way." And my work is really focused on helping advisors understand now that it doesn't. They really can be limitless. The only limits we have are the ones that we place on ourselves.

Michael: And for people that are interested after this conversation want to engage you, like where do they find you? Like how do they look you up?

Stephanie: So they can go to limitlessadviser, adviser with an e.com, or they can email me at stephanie.bogan@educe, E-D-U-C-Einc.com. And then going back to sort of your earlier question and sort of how Quantuvis grew, it's a very similar model, right? I'm working with a handful of what I call private clients. People that want their firms and themselves to go through kind of a major shift or a breakthrough. It doesn't have to be overwhelmed and bored, it can be, you know, you're excited and there's great things you want to do, but it's very…right, sort of very personal and very intense and very one-on-one. And then I'm creating some options for scaling it, so I'm going to be doing some workshops in the fall and sort of an online program and then a group coaching program, right? Where we get 15 or 20 advisors together and kind of go through a process.

Michael: So there'll be someone for many options along with the way.

Stephanie: Yeah. Because I do feel that this work is really important, and at the same time, I'm in a place in my life where I've had to go through this process and asked myself, "You know, where's the balance for me?" So when people ask me what I do, the best way that I've come up to explain it at this point is to say that I help entrepreneurs build wildly successful businesses and lives that they love. And I was able to go through that journey on my own. And so when I moved to Costa Rica, I set a new set of conditions, right? Those guardrails, which is I believe I can have a huge impact, I can be really, really successful in doing it, and these are the conditions, right? I'm going to allocate this much time, which then is the forcing mechanism that says, "Okay, well then, how are we going to help people so that we can have a huge impact and still be able to scale it?"

Michael: And we'll make sure we put a link to that in the show notes as well for people that are curious. Again, we're episode number 24, so kitces.com/24. And we'll have links out to Limitless Adviser as well so people can find their way.

Stephanie: Yeah. And I'm working…we're just finalizing the piece on the five freedoms, so I'll be happy to, if people want to go limitlessadviser.com and put in their information, I'll make sure that they get a copy of that as well as soon as that's ready for publishing.

Michael: And we'll have that one pager around client expectation posted to show notes as well. So people get a lot to play with at the end of this podcast.

As we come to the end here, this is a podcast about success, and one of the things I've long observed about success is that it means very different things to different people, and frankly and often different things to the same person over time as our lives and circumstances and perspectives evolve. So as someone that built a successful business, sold a successful business, decided that didn't scratch the itch for success and now is coming back for, I guess an on-core career, and an on-court business, I'm curious how you look at this now like for yourself personally. How do you define success?

Stephanie: It's a much broader definition than it was before, right? Success before was an economic, right? If I hit this number, if I have this kind of house, if I'm…you know if I get this kind of recognition professionally. Again, not necessarily knowingly but sort of that's how we tend to frame it for ourselves. And I think for me, the greatest lesson in all of this, and I know that there will be more to come, but for me, the greatest lesson was that success without fulfillment is failure, to me. I realized that not everyone will share that definition, but to me, if you were going to open a business, right? You're going to become an advisor, you're going to put in the blood, the sweat, the tears, the time, right? That swing from exasperation to euphoria and back again. You're giving so much of yourself in that process.

I genuinely believe that you should get everything you want out of it back. And most of us want to feel better, right? At the end of the day every problem, every frustration, every sentiment, at the bottom of that is we want to feel better, right? We want success, we want financial security, we want freedom. And everyone has to define what success is for them, but to me, success is, right, across the spectrum of your life. It's feeling good about who you are and how you show up in the world. And realizing that there's not just an economic indicator to that but a personal one, right? That we feel good, that we feel like we're impacting, that we have a purpose for making progress, that we're contributing in some way.

And so to me it really now just includes this level of fulfillment. And in my world, at least, it means that I'm aligned with those five freedoms. That I'm working on purpose, on things that I have passion around. That I'm using my time in ways that create a much bigger impact than the time itself would necessitate. And I'm focused on the things that I enjoy, that are energy-creating and are going to give me that impact. That I'm adding value and receiving value, that I have the financial success that I want and the freedom that I want. And that's why I call them the five freedoms, right? Is if we can get to that place, I think we can have success under the traditional definition, but also the fulfillment that comes from doing good work, having an impact, making progress, right? Being able to feel fulfilled in what we do. And if we can do that then I think that's a win for us as owners, it's a win for our clients. And in the end, right, it's a win for anyone that we can impact or influence. And to me, that's a broader definition of success that I now, you know, sort of make my own decisions by it.

Michael: And I think it's a powerful statement this idea of success without fulfillment is still failure. So for those maybe that are…you know, that are listening and feel successful in many ways and something still doesn't feel right or complete, or good about where they are, you know, maybe that's the point that it's, you know, maybe you've got the money stuff figured out, or some of the business stuff figured out but is there a fulfillment piece that just hasn't connected yet, that you have to figure out as well if you really want to feel good about the success in the end?

Stephanie: And I think most people sort of intuitively know that. You know, this idea that I always tell new clients, "Feedback is your friend," right? As you sit back and you look at your business and you look at your life, think about how you're feeling about it. What kind of feedback are you getting? And the feedback, by the way, isn't always what we want it to be, but it tells us something. And what it tends to tell us is that there's something more or better that we want to have, or experience, or do. And what stops most people is one, they don't necessarily have the awareness of what we've talked about, right? And I've now made it my mission to change that. But the second is, there's sort of this underlying very simple concept that if there's a change that we want and it's not happening, it either means that we can't, we don't want to, or we don't know how. And for 99% of the challenges that I've worked with advisors to overcome, it's not that they can't. Sometimes it's not even that they don't want to, although sometimes, right, there are different issues that drive that, but it's the "don't know how" piece. And, you know, it's funny because we all have sort of experiences or interactions that sort of push us in a direction or shift us a little bit. And I had mine about a year, a year and a half ago with Bob Veres who I met literally when I started my career 20 years ago at an FPA conference.

Michael: We had him on the podcast in episode 19 talking about his whole career in the industry 30-plus years.

Stephanie: I remember meeting him. I had a client…Norm Boone took me to my first FPA conference and literally I was 24 or 25, and he introduced me to Bob Veres, who so graciously saw something in me, took me under his wing, walked me around, introduced me to everyone, introduced me to Financial Planning Magazine, which is how I got that first column. And he's been a…just a mentor, and a friend, and a colleague, and just this really impactful, influential person to me over the years. And I hadn't talked to him for a number of years when, I think it was about a year and a half or so ago, he'd reached out to me to see if he could connect me and Angie Herbers, who I know, right, mentioned that on her podcast, the conversation that we had, and I was very touched to hear that there'd been an impact there, so was super happy that I'd been able to help.

But he said, "You know, hey, I think you need to come back. There is work that's still be done." And I'm like, "Oh, I'm in Costa Rica. I'm having a good time in Costa Rica." And I said, "You know, it's funny because I've been studying all this stuff for the last few years and I'm just…I'm really passionate about bringing this message back." I said, "I'm going to tell you I sort of have my own kind of limitation here." And he said, "What is it?" I said, "I'm a little bit worried that people are going to think, "Oh, you know, here's this business expert and she's gone off and moved to Costa Rica and she's gotten soft," right? "She's talking about all this woo-woo stuff all of sudden." And Bob and I had never really had these types of conversations. And he was really the impetus because he said to me, "I actually think that's exactly what you need to come back and talk about. And I don't think people are going to think that you've gone off and gotten soft. I think you're going to open a conversation that people are really ready to have." And he was really the one that sort of pushed me to sort re-engage and bring it back, and to sort of bring this message to people with a level of confidence that I really had to work through. And Bob being Bob, again, right? He said, "You know, you need to write a column again." And the next thing I know he's gotten me and InvestmentNews on the line. And I'm doing that column now, which is great. And so he's just someone that has been really influential and kind of gave me the push and the nudge.

And my hope for this conversation…because you're that to many, many people, and I've started…I've followed you over the years and now I listen to all the podcasts religiously because they're just awesome, right? To get this insight and sort of authenticity from people about where they are and what their message is super impactful. And so my hope genuinely is that…You know some people hearing this, it's not going to resonate, but for some people, it will. And my hope is that this message, however they choose to act on it, becomes that push, right? That I, in this message, can be that push for them, because anything is possible. Some things are harder than others but anything is possible. I just want everyone to know that they can be limitless, that they can have a wildly successful business and a life that they love. It's there for them.

Michael: Well, Amen. Thank you for coming back to us, coming back to the industry and sharing this. I think we're going to get a lot of good feedback that this resonated well. But I'm so thankful that you came on the podcast and were willing to share this story and what you're working on now with Limitless Adviser.

Stephanie: Well, I hope it adds a great deal of value to everyone listening. And I thank you for the…I mean, it's a great privilege to do it, and certainly a lot of fun. So thank you, Michael.