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#FA Success Ep 273: Scaling Yourself As An Advisor: Tucking In Or Institutionalizing Your Own IP, With Penny Phillips

March 22, 2022 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Penny Phillips Podcast Featured Image FAS

Welcome back to the 273rd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Penny Phillips. Penny is the president and co-founder of Journey Strategic Wealth, an independent RIA platform for advisors that manages over $3 billion in assets through the firms that they work with to outsource their back-office compliance and operations management.

What's unique about Penny, though, is her expertise in helping advisors to scale their own time and productivity to work more effectively with clients, both as a consultant who has trained advisors to turn their planning approach into processes that other advisors in the firm can be trained on, and as an outsourcing provider to support advisors who don’t want to have to build the processes themselves and prefer to simply tuck-in to a larger enterprise so that they can focus on the client work they enjoy.

In this episode, we talk in-depth about how Penny spent years helping advisors build systems and processes to eventually institutionalize their vision of how clients should be served so that the advisor’s legacy can live on after they retire, why Penny decided to launch her own advisor platform to offer advisors a space to tuck-in and to plug-in to existing operational infrastructure without needing to be bound up by restrictive covenants, and how advisors can decide for themselves where they want to be on what Penny calls the RIA “spectrum”, from being totally independent and having everything on your shoulders, to being an employee of an RIA that uses but is bound by the firm's own systems, or any of the growing number of mid-points now available in the advisor landscape for those who want to balance between the two.

We also talk about Penny’s own journey through the advisor industry from how she accidentally began coaching and consulting advisors while running a pilot program for an insurance company to transition their agents into financial advisors, how working with transitioning advisors inspired Penny to start a firm of her own that would provide advisors the platform to make that transition from working at a product-centric company into building their own advice-centric business, and why Penny ultimately decided to take her own leap to start an advisor platform in the midst of a pandemic.

And be certain to listen to the end, where Penny shares how she was surprised by how despite technology advancements in the industry, it still remains remarkably challenging to build structure and centralize operations, how Penny came to realize that making tough decisions that aren’t always popular just comes with the territory of becoming an effective leader running a growing business, and why Penny believes it is important to not only do what you love but to also keep an open mind to opportunities that may come along in life.

So whether you’re interested in learning about how Penny helps advisors maintain their independence while tucking into an RIA and leveraging its services, how she went from an ‘accidental’ coach and consultant to owning and operating a multi-billion-dollar firm, or how she is fulfilled in her career by providing the tools and concepts to help other advisors succeed, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Penny Phillips.

Creating A Financial Planning Residency Program To Develop The Next Generation Of Advisors

March 21, 2022 07:04 am 3 Comments CATEGORY: Planning Profession

One of the most important aspects of the development of financial planning as a profession is the setting of standards, both for the practice of financial planning and for those who can call themselves a Certified Financial Planner (CFP) professional. But while CFP Board has created a universal set of practice standards, the experience requirement for CFP certification can be fulfilled in a variety of ways and does not require experience working directly with clients.

The range of accepted options available to fulfill the experience requirement leads to newly minted CFP professionals with varying skill levels to handle the client issues they will face as a financial planner. Which means that clients may not get a consistent level of quality and service from financial advisors, even though they may be CFP practitioners. However, by replacing the current options of broadly defined experience requirements with a comprehensive universal training program for all aspiring CFP certificants, the profession could potentially elevate what it means to have CFP certification, in addition to ensuring that clients of CFP professionals can be confident that they will receive consistent, high-quality financial planning consumer experiences.

Such a comprehensive universal training program could be modeled on the accredited experience requirements that prospective doctors must complete to achieve certification. Following medical school – which provides a mixture of didactic lectures, interactive training opportunities, and heavily supervised patient experiences – graduates generally engage in a 1-year internship and a 2- to 6-year residency program where they are given increasingly more responsibility under the supervision of higher-level residents and attending physicians. This model of accreditation emphasizes the resident reaching significant experience ‘milestones’ instead of just the amount of ‘time served’. The resident’s progress is tracked by monitoring education and achievements using real-time data.

A financial planning residency program that replicates this format, where an expansive body of knowledge is reinforced through relatively standardized educational experiences, would help to create a consistent curriculum providing CFP professionals with the right breadth and depth of training to prepare them for a wide range of client encounters. Over the course of 3 years, aspiring CFP professionals (who have already completed the education requirements for CFP certification) can gain the experience needed across the range of financial planning practice areas to become a successful CFP professional. At the same time, throughout the 3-year program, residents are immersed in aspects of practice management, including compliance, business planning, and understanding the firm’s financial status. In addition to assuring clients that the CFP professional they are working with has both the education and expertise to serve their needs, such a training program would also give new advisors the confidence that they have been prepared to handle client issues they will face in their work as a planner.

Ultimately, the key point is that by using the medical field as a guide to create standardized and valuable residency programs for financial advisors, the financial planning profession can develop an educational structure that will not only raise the image of the profession among consumers, but also provide new financial planners with the real-life experience they need to build confidence and serve clients on their own!

Weekend Reading for Financial Planners (Mar 19-20)

March 18, 2022 02:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news of the Federal Reserve’s long-anticipated interest rate hike – the first of what will likely be a series of increases to combat the current spike of inflation – and a look at the wide-ranging effects it may have for consumers and investors, including volatile markets and higher debt costs (in addition to the already-existing effects of inflation).

Also in industry news this week:

FINRA has issued a regulatory notice on the ability of retail investors to trade options and other “complex products” on brokerage platforms, which stops short of proposing new regulations but suggests that broker-dealers may need to do more to affirm the suitability of options trading for their retail customers
A new report from Cerulli suggests that firms should focus on a target niche (or more generally, the advisor’s “ideal” clients) to increase their efficiency (a finding that echoes previous Kitces research as well)

From there, we have several articles on ways advisors can help clients maximize their cash flow:

Why it is important for clients who are planning to leave their job to create a strategy to maximize the financial benefits from their employer before they go
How advisors can support clients in appealing a college’s financial aid offer
Why now is an opportune time to use airline miles and hotel points, and how advisors can support clients in earning and using travel rewards

We also have a number of articles on marketing:

How advisory firms can make the best first impression with their websites using a few best practices (like making it clear who the firm serves, what makes it different, and what visitors are expected to do next in the first five seconds of viewing the site)
How firms with limited resources to put towards their website can focus on their most-visited pages to maximize the return on their investment
How advisors (even those with limited web design knowledge) can improve the search engine optimization of their website content to draw in more visitors

We wrap up with three final articles, all about productivity systems:

How using a ‘productivity funnel’ can help advisors organize and execute on, but first and foremost select, the right projects
Why advisors might consider different productivity systems for projects with a set deliverable and timeline, versus those that are more intangible in timeline but still ‘need’ to be done
A look at a number of popular productivity systems that can help solve a range of challenges, from Getting Things Done to Zen To Done and more, supporting everything from tackling projects that require a consistent effort to organizing the firehose of information that advisors face each day

Enjoy the ‘light’ reading!

Asking ‘Have You Worked With An Advisor Before?’ To Uncover What Prospects Really Value Most

March 16, 2022 07:09 am 1 Comment CATEGORY: Client Trust & Communication

When meeting with a prospective client for the first time, two of the advisor’s primary goals include making a positive impression on the prospect and determining whether the prospect will be a good fit. However, if the prospect feels nervous about the advisor potentially judging their previous financial decisions, they might become uncomfortable or defensive when asked direct questions about their financial situation. And without asking the prospect about their financial history, the advisor might be challenged to determine whether the prospect would be a good fit for their services. Given this delicate balance, one particularly helpful question for the advisor is to ask, “Have you ever worked with a financial professional before?”.

This versatile question, along with relevant follow-up questions based on the prospect’s answer, can help advisors understand not only what the prospect really wants, but also how much financial planning education the advisor will need to provide to help the prospect identify and attain their goals. For example, many consumers who have never worked with a financial planner before don’t understand what advisors actually do for their clients. Additionally, prospects don’t always understand what a financial plan consists of or how they can benefit from using one. And prospects who have worked with an advisor before might come with unrealistic expectations about what they want from an advisor.

For prospects who previously worked with an advisor, good follow-up questions include asking about the length of the relationship with the previous advisor (which may give insight into when the prospect decided to examine their financial goals); why the relationship with the previous advisor ended (to see whether the advisor did something that made the prospect unhappy); and what the prospect found was most beneficial from working with their previous advisor (which can show the values the prospect finds most important).

And for prospects who have not worked previously with an advisor, helpful follow-up questions include what led them to take action now (to see what motivates them and whether they recently experienced a major life change); with whom they currently talk about their finances (to learn about alternate sources of information for the prospect); and what questions they have about the client-advisor relationship (which can show why the client wants to work together in the first place).

Ultimately, the key point is that the question, “Have you ever worked with a financial professional?” can be a useful tool for advisors not only to illustrate their value to new prospects, but also to determine potential fit. It can help them understand how much the prospect knows about the financial planning process as well as their experiences with previous advisors. And by asking appropriate follow-up questions, the advisor can learn everything from the prospect’s motivations for approaching the advisor to their expectations for the relationship. In the end, this conversation can help both the advisor and the prospect decide if a working relationship together can be beneficial and – possibly even more important! – one that they will both enjoy!
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#FA Success Ep 272: Streamlining Operations And Workflows With The Advisor CRM As The Centralized Hub, With Kate Guillen

March 15, 2022 07:07 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 272nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Kate Guillen. Kate is the founder of Simplicity Operations Management, a consulting firm based in San Diego, California, that specializes in helping advisory firms get the most out of their CRM systems and streamline their internal operations along the way.

What's unique about Kate, though, is the way she utilizes the advisor’s CRM system – not their broker-dealer or RIA custodial platform – as the central hub of their entire business, and then builds multi-system workflows from that base to ensure that everything gets done and nothing falls through the cracks.

In this episode, we talk in-depth about why Kate views the CRM system and its four core components of Calendaring, Task Management, Sales Pipeline, and Contact Management as the center around which all advisory firms should be built, why the key to building good workflows is about not just articulating the steps of a process but also the follow-up to demonstrate that good service to clients, and how firms can start the process of systematizing the key repeatable steps of the business in new client onboarding and ongoing client service.

We also talk about how working for an advisory firm herself and observing their operational systems (or lack thereof) encouraged Kate to first master Redtail and its intricacies, how Kate was inspired to launch her company after discovering how often advisory firms underestimate and underutilize their CRMs operational potential, and why Kate has found that it can take up to 6 months to really go through the process of overhauling an advisory firm’s operations to be more efficient.

And be certain to listen to the end, where Kate shares how her nervousness at launching a consulting business just as the pandemic first broke out (and how her fear subsided once it became clear that the pandemic was actually amplifying the need for advisory firms to better systematize their suddenly now-remote businesses), how Kate believes achieving goals begins with having confidence in one’s own abilities and not being so hard on yourself, and why Kate feels, while it is great to do what you love, she has had to learn to get better at saying “no” to find her own balance between growing the business and enjoying her time with family.

So whether you’re interested in learning about how Kate leveraged her organizational and CRM expertise to start her business, how Kate utilizes Redtail as her operational hub to build and incorporate systems, or why Kate feels it is more important to appreciate the journey in building a business than worrying about the destination, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Kate Guillen.

Not All Equity Owners Will Act Like Owners: 3 Pathways To Create Psychological Ownership

March 14, 2022 07:08 am 0 Comments CATEGORY: Practice Management

When financial advisors help clients with issues related to ‘ownership’, most often it is in the context of the portion of company shares that the client may own, which gives them certain financial and voting rights. But the concept of ownership is not limited to its physical and legal aspects; there is also a psychological dimension as well. For example, individuals often enjoy the sense of ownership of things such as an organization, idea, brand, or object when certain conditions are in place, and even define their identities in relation to those things that they own. The phenomenon of psychological ownership gives rise to ideas about empowering employees to feel and act like owners – because when someone feels like they actually own a part of the business, they become more vested in taking care of the business and ensuring its success.

In order to develop psychological ownership among employees, Finnish management scientist Antti Talonen proposed a three-path framework that can be applied directly to an advisory firm. Under this framework, employees are more likely to feel like owners, particularly over the part of the business they control (e.g., an advisor might feel a sense of ownership for work on their particular clients) if one of three ‘pathways’ to psychological ownership applies to them: 1) they have controlled some part of the business for an extended period; 2) they have generated an intimate knowledge of the business; or 3) they have invested their personal resources or effort into the business. At the same time, the absence of these attributes can lead to a reduced sense of psychological ownership, even among those who might have legal ownership in the firm.

Accordingly, when it comes to advisory firm owners, creating a sense of psychological ownership can arise from having a sense of at least some level of control over the firm, being intimately familiar with and involved in the firm’s operations, or investing significant amounts of energy, time, and effort to the firm. Team members who meet at least one of these preconditions are likely to feel (and behave!) like owners, whether or not they have legal ownership in the firm as well.

While it might be tempting for firms to err on the side of inclusivity and broaden legal ownership in the firm, there are costs involved in doing so. For example, not only can extending ownership to employees increase the legal, administrative, and tax burdens for both the firm and its owners, but it can also raise the risk to employee morale, as high-performing employees may be disheartened if they feel they are being treated the same as those with poor performance. Accordingly, it is important to consider offering actual ownership to those with a strong sense of psychological ownership in the firm, as those employees are likely to be the top performers who deserve ownership the most.

Ultimately, the key point for advisors is that the concept of ownership is multifaceted and goes beyond legal ownership in a firm. Developing a sense of psychological ownership among employees can make them feel more vested in taking care of the business and ensuring its success, even in the absence of legal ownership of shares in the business. And given the costs of expanding legal ownership of a firm, firms that are contemplating doing so might first ensure that the prospective new shareholders demonstrate not just good performance, but also psychological ownership in the firm, that will make them valuable owners in the future!

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Kitces Webinar

End-of-Year And 2025 Tax Planning

Presented by Jeff Levine, CPA/PFS, CFP®, CWS®, AIF®, MSA, Lead Financial Planning Nerd for Kitces.com & Chief Planning Officer at Buckingham Wealth Partners

#FA Success Ep 273: Scaling Yourself As An Advisor: Tucking In Or Institutionalizing Your Own IP, With Penny Phillips

Creating A Financial Planning Residency Program To Develop The Next Generation Of Advisors

Weekend Reading for Financial Planners (Mar 19-20)

Want CE Credit for reading articles like this?

Asking ‘Have You Worked With An Advisor Before?’ To Uncover What Prospects Really Value Most

#FA Success Ep 272: Streamlining Operations And Workflows With The Advisor CRM As The Centralized Hub, With Kate Guillen

Not All Equity Owners Will Act Like Owners: 3 Pathways To Create Psychological Ownership

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Kitces Webinar

End-of-Year And 2025 Tax Planning

Presented by Jeff Levine, CPA/PFS, CFP®, CWS®, AIF®, MSA, Lead Financial Planning Nerd for Kitces.com & Chief Planning Officer at Buckingham Wealth Partners

Want CE Credit for reading articles like this?

Nerd’s Eye View Praise

Showcase YOUR Expertise

Stay In Touch

Questions?

Presented by Jeff Levine, CPA/PFS, CFP®, CWS®, AIF®, MSA, Lead Financial Planning Nerd for Kitces.com & Chief Planning Officer at Buckingham Wealth Partners  