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#FA Success Ep 268: Centralizing Departments To Systematize And Scale A $2B AUM Advisory Business, With Patti Brennan

February 15, 2022 07:07 am 1 Comment CATEGORY: Financial Advisor Success Podcast

Patti Brennan Podcast Featured Image FAS

Welcome back to the 268th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Patti Brennan. Patti is the CEO of Key Financial, an independent RIA based in the Greater Philadelphia area that oversees more than $2 billion in assets under management for nearly 800 client households.

What's unique about Patti, though, is how she has scaled her firm by centralizing her departments into a unique team structure, and systematizing processes amongst her client service team – not lead financial advisors – to create a high-touch experience for her clients.

In this episode, we talk in depth about how Patti adopts the “Starbucks” model where her advisors create tailor-made plans for each client by utilizing customizable templates, how Patti has designed a concierge-style client services department that she refers to as ‘key’ client services (a play on the name of her firm, and because she wants her clients to feel like they are key), and how Patti has, in the vision of KFC’s Colonel Sanders, leveraged her personal image and reputation as a symbol of her brand and marketing, even if she is not the forerunner of each client’s relationship with the firm anymore.

We also talk about how The 4 Disciplines of Execution by Sean Covey motivated Patti to form systems to get past just visualizing her business goals and move toward actualizing them, how Patti was inspired to increase her firm’s yearly goal after hearing an advisor describe bringing in $50 million in AUM in one year when she wasn’t growing at even half that rate, and how she focuses on optimizing her team’s individual talents to create a well-oiled organization.

And be certain to listen to the end, where Patti shares how she realized that to truly scale her business, she needed to let go of fear and learn to trust her team to implement her plans and vision, how Patti feels newer advisors would benefit most from working at a firm that is growing and has potential to keep growing, and why it is important as a leader to show vulnerability, admit mistakes, and master the art of apology.

So whether you’re interested in learning about how Patti organizes the departments in her firm to create an efficient workflow, why Patti places importance on cultivating deep, long-lasting relationships with both her employees and her clients, and how Patti stays inspired to continue setting and achieving goals, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Patti Brennan.

Financial Advisor Office Hours: A Step-By-Step Guide To Maximizing Your Time

February 14, 2022 07:03 am 2 Comments CATEGORY: Practice Management

For financial advisors in the early phases of starting their own practice, especially in the fee-only part of the industry, being successful often comes down to the resources and advice available to the advisor. A call with a mentor or peer to ask something as simple as, “Was this hard for you, too?” or “Is this a good choice?”, or even just to ask for references and resources can provide not only monumental comfort but also affirm an entrepreneur’s choices, thus allowing them to take the next step forward – and hopefully to become a successful advicer in the meantime! However, the advisors on the other end of the call, who are eager to give back to the community that originally gave them support and mentorship, often face their own challenges as they look to provide support to up-and-coming advisors without overwhelming their own calendars and potentially stalling the growth of their own firms.

In this article, Meg Bartelt, founder of Flow Financial Planning, explains how (and why) she developed her own “Office Hours/Ask Me Anything” system, how she prevents time creep, and how advisors can develop their own systems of mentorship and trust.

From an overarching perspective, Meg’s Office Hours structure – 45 minutes, every Friday, with up to three people – starts from a time management perspective. Many advisors looking to give back begin with a very open structure. For example, Meg started by setting aside 30 minutes each Friday to have one-on-one discussions with whoever wanted to talk to her. However, more advisors began to reach out, and more slots were added – plus, conversations occasionally went over 30 minutes and ate into even more time! Designating a set block of time for Office Hours for multiple people at the same time helps manage both expectations and time for advisors on the call. And, of course, advisors are not obligated to hold weekly Office Hours. Biweekly or even just monthly meetings can be more than sufficient.

Once an advisor has decided how frequently to hold Office Hours, all that’s left is to get started. Initial set-up doesn’t have to be complex: a sign-up system, such as ScheduleOnce (which Meg uses) or Calendly, and a social media post or email broadcasting the service may be sufficient depending on how much of a following the advisor already has. Preparation can also be minimal; Meg asks participants for their contact information only, and often enters Office Hours without having done any research or advance preparation for the session.

Ultimately, the key point is that giving back to the advisor community doesn’t have to be hard, complicated, or time-consuming. Sometimes, it’s as simple as lending expertise, empathy, and community when an advisor needs it most. One connection, insight, or aid can be all it takes to help transform a young advisor’s career – but first, one has to start by opening the door!

Weekend Reading for Financial Planners (Feb 12-13)

February 11, 2022 02:14 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 that the Financial Planning Association, under new Executive leadership and a renewed Board focus, is now explicitly stating that its ‘core member’ will be a CFP professional. In addition, leaders of the organization reiterated the importance of the FPA’s local chapters, which had come under threat in a proposed 2018 restructuring plan. Together, these measures signal a return to the organization’s roots as a ‘home’ for CFP professionals with strong local chapters, as the beleaguered membership association tries to reignite its growth against a backdrop of strong and steady growth of CFP professionals themselves.

Also in industry news this week:

The SEC has proposed a new rule that, if it comes to pass, would require investment advisers to significantly beef up their cybersecurity planning and reporting
More than a year after Regulation Best Interest was implemented, a FINRA report has found that many broker-dealers are failing to live up to many of its requirements designed to protect consumers

From there, we have several articles on broker-dealers:

How FINRA will start to identify “high-risk” broker-dealers under its new Rule 4111 after June 1, 2022, providing the first significant test of whether it will truly incentivize firms to rid themselves of their problem brokers
How major independent broker-dealers like LPL Financial and Commonwealth Financial Network have changed their recruiting incentives to align with the industry’s broader shift to advisory services over product sales (by providing forgivable loans based on AUM, not the advisor’s trailing-12 GDC)
How the headline payout rate offered by many independent broker-dealers often obscures hidden costs paid by both advisors and clients, and can frustrate advisors who want to offer more fee transparency and keep a higher percentage of the revenue they earn

We also have a number of articles on investing:

Why investors are pouring money into ultra-short-duration bond funds in anticipation of the Federal Reserve’s expected interest rate hike
How ETFs in model portfolios that are affiliated with the model portfolio provider themselves are likely to have higher fees and lower performance than those that are not similarly conflicted
How Legos as an asset class outperformed the S&P 500 over a nearly 30-year period (at least for those who managed to hold on to their original, unopened sets!)

We wrap up with three final articles, all about attracting and retaining talent:

How the current tight labor market has led to a ‘Great Upgrade’ in which many employees are leaving their current jobs… for new ones that offer better pay and work-life balance
Why the recipe for happiness on the job goes beyond quantitative measures such as compensation and into qualitative aspects, including a feeling of earned success and being able to serve others
How to identify the ‘Non-Fungible People’ in a company, and why these employees are the most important to retain

Enjoy the ‘light’ reading!

Kitces & Carl Ep 79: Finding Your Future Specialization By Interviewing Your Current Clients

February 10, 2022 07:03 am 0 Comments CATEGORY: Kitces & Carl Podcast

Traditionally, financial advisors built their clientele by working with anyone who had the financial wherewithal to buy whatever products or services they had to offer. And as advisor platforms have become increasingly open architecture, advisors have had an increasing number of offerings available to work with an ever-widening range of clientele. However, at the same time, the fact that ‘any’ advisor can offer almost ‘any’ product has made it more difficult for a particular advisor to differentiate themselves from other advisors. For many advisors, the solution to this challenge is to get more focused – which means choosing a specific niche or a specialization and differentiating themselves by offering an even more specific offering for their particular clientele. The idea may seem simple in concept, but implementation of a niche or specialization can feel daunting, risky, and even downright scary!

In our 79th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to begin the process of finding a niche, ways advisors can conduct research to decide if a chosen niche is a good fit for their firm, and, once a niche is chosen, how to begin attracting new clients.

As a starting point, it’s important for advisors to understand the types of clients they already serve. Compiling a list of existing clients and differentiating them through qualifiers such as occupation (and whether they have enough revenue to be financially viable) can give clarity as to whether a potential niche already exists. From that list, advisors can then choose 5-10 (reasonably remunerative) clients they like working with and decide if they would like to work with more of that same type of client. A good way to approach this is to consider whether there is a common problem these clients face, and if the problem would be interesting for the advisor to solve for more prospective clients who face the same challenges.

Once a set of clients has been chosen, advisors can set up meetings over coffee or lunch with the intention of learning more about the types of issues these clients face, and what it would take to attract more clients like them. By interviewing these clients and asking a predesigned set of questions, advisors can gain an understanding of the viability of the proposed niche. Taking this a step further, information gathered can be used to write a white paper that can serve as both a reference for market research, and as a handout back to the interviewed clients so that they may share it with others potentially within the same niche to help attract future clients.

Ultimately, the key point is that financial advisors considering a change in their business focus may not have to look far to find their niche or specialization. Communicating with current clients gives an opportunity for advisors to discover how they can not only help them, but future clients with similar financial planning issues. Which means choosing a niche doesn’t have to be a grandiose declaration that feels foreboding and irrevocable; it can be as simple as just taking a renewed focus on a segment of clients that are already “working” for the business and pursuing more clients just like them!

The Power Of Follow-Up Questions: How Advisors Can Build Rapport With Prospects And Clients

February 9, 2022 07:09 am 2 Comments CATEGORY: Client Trust & Communication

Asking good questions is an essential tool for financial advisors. From building rapport with prospects, to gathering information needed to create a plan, and to offering support for nervous clients during market downturns, effective conversation skills – including asking good follow-up questions – can enhance not only an advisor’s value but also the client’s experience. But while advisors are used to asking questions of prospects and clients to get a conversation started, they might think less often about crafting follow-up questions once they receive a response. Which is potentially the most important part of the data-gathering process, as it turns out that effective follow-up questions can not only lead to more productive client conversations but also help make the advisor more likable!

One of the distinguishing features of a true follow-up question is that the question is asked with the singular goal of learning more about the speaker – there are no hidden agendas (intentional or subconscious) to talk about oneself or anything else, as tempting as that can sometimes be. For advisors, that means that good follow-up questions solicit information about the client’s experience from the client’s own point of view.

Another way to characterize a good follow-up question is to think of data-gathering questions. Advisors very commonly get surface answers from clients when they ask initial questions to open a conversation, but good follow-up questions can draw out the client’s deeper concerns. For example, an advisor working with a client who says they are worried about being able to afford retirement could ask a series of follow-up questions exploring issues such as when the client plans to retire and what plans they have for retirement that might be unaffordable. These follow-up questions dig deeper into the retirement picture and aim to understand the fear the client has expressed.

Not only can good follow-up questions help an advisor gather data, but they also demonstrate responsiveness to prospects and clients. In fact, a 2017 Harvard Business School study found that follow-up questions that are more responsive to the person being asked questions are generally more valued than other questions and statements that fail to focus on the person individually. So for advisors, follow-up questions can be an effective way to validate a client’s concern and show understanding without judging (positively or negatively) what the client has said. In other words, great follow-up questions allow advisors to connect with clients, gather information without placing judgment, and can create more likability even during tough conversations, regardless of whether the advisor agrees with the client.

Ultimately, the key point is that follow-up questions can be just as important as the questions used to kick off a conversation. Effective follow-up questions not only help advisors gather better client data, but also demonstrate responsiveness to prospects and clients alike. And because asking good follow-up questions is a skill that can be developed, it can be helpful for advisors to practice frequently, both inside and outside of the office!

#FA Success Ep 267: Making The Business ‘Fun’ Again By Focusing On Your Core And Outsourcing The Rest, With Jared Siegel

February 8, 2022 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 267th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jared Siegel. Jared is a partner of Delap Wealth Advisory, a fee-only RIA based in Portland, Oregon, that oversees nearly $260 million of assets under management for more than 70 client households.

What's unique about Jared, though, is how he outsources middle- and back-office operations to help his firm concentrate on creating a high-quality, high-touch financial planning experience for its clientele of affluent business owners and real estate investors.

In this episode, we talk in-depth about how Jared expanded his firm’s offerings beyond accounting services and into financial planning and asset management to do more work for their existing accounting clients, the way Jared leverages Jay Hughes’ “Qualitative Capital” framework to have better non-financial conversations with new clients, and how Jared focuses his financial planning conversations to help his clients use their money to delegate household tasks and leverage their wealth to create more time for themselves.

We also talk about how Jared was reaching a point of unhappiness when he realized he was spending far too much of his own time on tasks he didn’t enjoy (and wasn’t very good at), how Jared’s self-awareness motivated him to center his career on doing the client-facing financial planning he loves rather than dealing with the everyday back-office minutiae, and how Jared was inspired by the outsourcing success of other financial advisory firms to hire a TAMP for himself and outsource his own investment operations.

And be certain to listen to the end, where Jared shares how he was inspired by Angela Duckworth’s book on “Grit” when he was faced with his own challenges in the early days of his business, how Jared eventually got comfortable with the good that comes from adversity and gained an appreciation for how the early failures in his life ultimately shaped him for the better, and the metaphor that Jared learned from a tech entrepreneur about the importance of “finding your tennis ball”… a recognition that like the Labrador that loves to retrieve a tennis ball, when you find the work that truly fits you, it just comes naturally and feels more like play.

So whether you’re interested in learning about how Jared refocused his firm to center his efforts on his financial planning strengths, how Jared concentrates on why money matters to his clients to develop deeper relationships and better outcomes, or how he uses the lessons he learned to motivate him to spend more time on the work he loves, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jared Siegel.