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#FA Success Ep 263: Building A High-Touch Boutique Firm Serving Tech Executives As Their Personal CFO, With Joyce Franklin

January 11, 2022 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 263rd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Joyce Franklin. Joyce is the founder of JL Franklin Wealth Planning, an independent RIA based in the San Francisco Bay Area that oversees about $200 million of assets for 40 client families.

What's unique about Joyce, though, is how she built a true boutique financial advisory firm by serving as a personal CFO for high-profile tech executives, creating loyal relationships by not only helping them leverage their equity awards and stock options and positioning herself as a steward of their wealth with her firm averaging of 71 hours of service work provided to each client every year.

In this episode, we talk in depth about how Joyce started out as a CPA preparing tax returns at Big 4 accounting firms during the tech bubble in the 90s (where she developed her expertise in stock option and equity award planning), how Joyce has intentionally maintained a smaller boutique-style client base to ensure she can provide all of her clients with a deep personal touch (but has recently turned her sights on growing her staff to create a succession plan), and how Joyce continues to execute high-touch comprehensive planning services for her clients while still only charging an Assets Under Management fee.

We also talk about Joyce’s desire to stay away from commission-based products from the very start of her career and how she instead focused on building client trust through expertise-based service (and writing two books in her niche to demonstrate that expertise), how Joyce turned a side business of preparing tax returns in her early days into an independent advisory firm (after realizing her entrepreneurial spirit and passion for financial planning), and how Joyce implements her core values by focusing on every last little planning detail for her clients.

And be certain to listen to the end, where Joyce shares how she realized that, by having a trusted team, she was able to let go of time-consuming tasks and hone in on the bigger picture of her firm, how Joyce motivated herself to become a go-to expert for entrepreneurs and executives building wealth with startups, and how Joyce uses the years of information she gathered through interviewing other advisors to help educate future advisors.

So whether you’re interested in learning about how Joyce provides high-touch CFO services to tech executives, how she helps her clients leverage their equity awards and stock options, or how writing books on her specialty attracts new clients in her niche, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Joyce Franklin.

Four Financial Advisor Trends Reshaping #AdvisorTech

January 10, 2022 07:07 am 10 Comments CATEGORY: Technology & Advisor FinTech

Despite the reality that change is inevitable, it’s remarkably difficult to identify in real-time which new innovations will stick around and change the world, and which will never manage to gain traction (or turn into a fad that is quickly adopted but just as quickly forgotten). In some cases, the reality is that the idea was good but its execution was poor, and couldn’t stand up to reality. In other cases, the idea was ‘right’ but was before its time. In the end, it takes the right execution of the right idea, and the right environment that fosters the demand, to make innovation happen.

The past year witnessed an immense amount of change in the AdvisorTech landscape, driven by a combination of new innovations that came to market, and some ‘old’ ideas whose time has seemingly come. All of which is driven by broader structural trends that are slowly but steadily reshaping the financial advisor landscape… and formulating the conditions that allow new technology to take hold.

In the current environment, the four trends reshaping #AdvisorTech include: 1) an ongoing transition From Products To Advice as advisors increasingly sell advice (not products); 2) a growing hunger to Automate The Back Office, as the shift to recurring revenue business models is driving a push to better scale the back office (to service that recurring revenue more efficiently); 3) Scaling New Revenue Growth, as advisory firms increasingly separate the advisors who service clients, and the (non-advisor-driven) marketing systems that bring them in; and 4) Evolving Investment Demand, as anticipated low returns for both stocks and bonds lead to a growing desire to invest in… almost anything else (from alternatives to structured notes and annuities to cryptoassets).

In last week’s discussion, we explored the first two trends – the shift from products to advice, and the growing demand for solutions to automate the advisor’s back office – while this week, we delve further into the #AdvisorTech trends that are driving some of the biggest investments: scaling new revenue growth, and platforms to meet the evolving investment demands of advisors (and their clients). As the reality is that advisors pay substantially more for #AdvisorTech solutions that power revenue growth – either directly in the form of marketing solutions, or indirectly by powering the portfolios of advisors still primarily operating on an Assets Under Management (AUM) model. Which means trends that impact the ways advisors generate (new) revenue are especially lucrative (as reflected in some eye-popping capital raises in 2021!).

In the end, though, it’s important to recognize that trends persist (which is what makes them trends, and not fads!), which means the trends that drove AdvisorTech innovation in 2021 are likely to continue well into 2022 and beyond. So hopefully this discussion provides some helpful perspective in not only looking back at where AdvisorTech has come over the past year… but where it will continue to go in the year to come!?

Weekend Reading for Financial Planners (Jan 8-9)

January 7, 2022 02:03 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with a study showing that private equity firms are targeting financial advisory firms with relatively clean disciplinary records for acquisitions, but that once acquired, advisor misconduct at these firms skyrockets an average of 147%! The reason for this jump is unclear, but potential explanations include heightened pressure from private equity owners to increase profits, or pushing too hard to cross-sell their other portfolio companies’ products and underestimating the compliance requirements of the advisory business. Either way, the study suggests that firm owners considering a sale who want to ensure that their clients remain in good hands could increase their due diligence of potential acquirers and their business practices!

Also in industry news this week:

A new FINRA rule went into effect on January 1 that will attempt to reduce the risk to consumers from brokerages with poor disciplinary records by requiring these firms to fund a segregated account to pay potential arbitration awards (and increase their cost of doing business as long as they insist on keeping problematic brokers onboard)
RIA M&A activity is expected to continue to surge in the coming year, according to a recent survey, with lofty firm valuations expected to sustain as well

From there, we have several articles on advisor communications and marketing:

How to respond when clients object to their advisor’s recommendations (and why asking more questions might be a better approach than more aggressive persuasion to get them to implement)
Why the best-performing types of pages on financial advisors’ websites include not only the basic “Who” and “What” of the advisors, but also show why a prospective client could be the right fit for the advisor and how the advisor helps their clients reach their goals
Why advisors should focus less on client referrals and more on Google Reviews as a one-to-many client referral platform in light of the SEC’s marketing and testimonial rule

We also have a number of articles on being an effective manager and leader:

Why sales training programs for financial advisors can prove ineffective if they use a “one-size-fits-all” approach without considering the personalities and needs of the advisors themselves
How leaders can thread the needle between micromanaging their team and being too hands-off by timing their help for when it’s needed most (and backing off when it isn’t)
Why most advisory firms need at least one person tasked with having a vision for the firm and a strategy to get there – which, as firms grow, may be someone other than the firm’s owner who is hired strictly for their “professional” leadership

We wrap up with three final articles, all about New Year’s Resolutions:

Why one advisor shifted from making New Year’s Resolutions to focusing on the habits that make it more likely he will achieve his goals (and letting the results fall where they may)
Ways individuals can make their financial lives happier in 2022, including by focusing internally rather than externally, simplifying their finances, and getting on the same page financially with a spouse
Why failing at New Year’s Resolutions can actually lead to better personal and professional growth in the future

Enjoy the ‘light’ reading!

Credit Card Rewards Strategies: How To Maximize Benefits And Add Client Value

January 5, 2022 07:04 am 6 Comments CATEGORY: Debt & Liabilities

Credit cards are ubiquitous in the United States, and financial advisory clients are likely to have at least one in their wallet. And while many consumers may know about the rewards they earn on the credit cards they hold, they might not be aware of the opportunities that maximizing their rewards could offer. In fact, through a combination of credit card sign-ups and regular spending, individuals can earn thousands of dollars in cash back rewards or travel benefits each year. Accordingly, financial advisors have an opportunity to provide significant ongoing value to clients by investing the effort into helping clients find the best card(s) to maximize rewards based on their personal spending habits.

Credit card rewards come in three types: cash back, travel points/miles, and transferrable points that can typically be used for either cash or travel. Each of these can be appropriate for different types of clients. For example, clients who crave simplicity or have little interest in travel might find cash back rewards most useful. Other clients who are accustomed to economy-class airfare and only dream of flying in business or first class may want to maximize travel credit card rewards instead, to get an experience that they would not be able to have otherwise!

Rewards can be earned through sign-up bonuses and regular spending with the card. Credit card sign-up bonuses (which can be worth more than $1,000 in cash or travel expenses per card) are the fastest way to earn rewards, typically offering a bonus for spending a certain amount of money in a given period of time. For regular spending, credit cards either offer a fixed rate for spending on the card (e.g., 2% cash back for all categories of spending) or a variable rate based on the particular category of spending (e.g., 4% cash back for every dollar spent on travel, or 3% cash back for every dollar spent at restaurants).

For advisors, cash flow discussions with clients can be a good opportunity to broach suitable credit card reward programs. Advisors can discuss not only what clients are purchasing, but also how they are paying for those purchases. This can reveal important information to help advisors craft a sensible rewards strategy for clients, including the client’s regular credit card spending (to gauge their ability to meet spending requirements for sign-up bonuses), which categories of purchases (e.g., groceries, gas) they make most often (to find cards that offer bonus rewards in these categories), and whether they are planning any large one-time expenses (that could be used to meet sign-up bonus spending requirements by themselves).

In addition to understanding a client’s spending patterns, it is also important to gauge their interest in managing credit card rewards on an ongoing basis. While some clients might be interested in applying for multiple new cards each year to build up points and miles through sign-up bonuses, others might be less interested in applying for cards and would instead prefer earning rewards on a single card. Either option can be profitable for the client, so it is important that they are comfortable with the process (so that it will be easier for them to stick to the strategy in the first place!).

Ultimately, the key point is that working with clients to devise a credit card spending strategy that maximizes available rewards can help advisors demonstrate ongoing value to attract and retain clients. Because, at the end of the day, what client wouldn’t want to work with an advisor who can help send them on a ‘free’ vacation each year?

#FA Success Ep 262: Asking More Questions In The Discovery Process To Deepen Client Relationships, With Melanie Milam

January 4, 2022 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 262nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Melanie Milam. Melanie is an advisor with Gateway Financial Partners, a super-OSJ affiliated with LPL Financial located in Texas, where she oversees $150M of assets under management for her 110 client households

What's unique about Melanie, though, is her approach to connecting with clients, mostly in the oil and gas industry, through a tried-and-true list of 34 questions she’s built specifically geared toward maximizing the amount of time clients talk about themselves, to not only gain a better perspective on their goals, but to create deeper, longer-lasting relationships.   

In this episode, we talk in-depth about how Melanie and her husband began her firm by leveraging her knowledge as a CPA and his managerial experience and personal connections in the oil and gas industry (which lead them to find her niche market), the way Melanie’s firm segments clients into tiers to align their services and provide specialized gifts and experiences for her top clients, and how Melanie’s faith drove her to obtain her Certified Kingdom Advisor (CKA) designation so that she can connect with her faith-based clients and give back to her community.  

We also talk about how Melanie managed to begin her firm while homeschooling 6 children, why Melanie believes it’s so important to create stability in your own financial life before launching a business to help advise clients in theirs, and how it was the realization that Melanie does her best work when she’s in front of her clients that helped her build the courage to begin hiring a team that helps ensure she’s maximizing her time in front of her clients. 

And be certain to listen to the end, where Melanie shares her “can have it all” (just not all at the same time) mindset about the women in the financial services industry, the way Melanie weaves her faith into her advice and her own life and business decisions, how Melanie’s passion for helping others inspired her sons to join the firm and further built client trust. 

So whether you’re interested in learning about Melanie’s unique CKA designation and how she translates faith into financial advice, what inspires Melanie to create deeper relationships with her clients, or how she built her firm as a busy but attentive mother of 6, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Melanie Milam.

The Latest In Financial #AdvisorTech (January 2022)

January 3, 2022 07:02 am 1 Comment CATEGORY: Technology & Advisor FinTech

Welcome to the January 2022 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!

In this month’s edition, we look back at the four major trends underway in the financial advisor ecosystem that shaped the big AdvisorTech events that occurred in 2021, and what the trends portend for the year(s) to come.

The first driving trend is the ongoing shift of the financial advisor value proposition itself – from the sale of financial services products, to the sale of financial advice itself – which in turn is slowly but steadily reshaping the entire advisor technology stack. Starting with a growing pressure on financial planning software to go deeper – not simpler – and an expansion of various ‘advice-support’ and plan monitoring tools that augment planning software. Which is leading advisor CRM systems to increasingly become the hub, as new startup planning tools build first to CRM systems (not brokerage platforms or portfolio management tools). And an expansion of tools to support more advice models beyond ‘just’ the traditional AUM model (from Assets Under Advisement [AUA] to subscription and retainer models).

The second trend reshaping advisor technology is the growing focus on back-office automation, as it becomes increasingly clear that “robo-advisors” were never a threat to real financial advisors… but the efficiencies they bring are highly relevant to enhancing the productivity of human advisory firms! Which is driving a new wave of investments into both business process automation systems, and more generally anything that can improve the expediency of back-office workflows (from ‘simple’ client note-taking to more complex multi-system workflows), along with greater automation of compliance technology (“RegTech”) in particular. And the need for more integration across platforms – to achieve those efficiencies – is spawning a new wave of solutions that make it possible for advisors to either begin to warehouse their own data (to facilitate their own integrations), or be able to accomplish everything in a single “all-in-one” system that houses all the data and provides all the necessary services (so advisors can just focus on the business itself!).

In next week’s continuation of our 2022 recap, we’ll look at the remaining two AdvisorTech trends – the hunger for (re-)igniting organic growth as advisory firms scale, and how evolving investment trends (given high market valuations and low bond yields) are fueling some of the biggest opportunities in AdvisorTech (as advisors historically will pay even more for solutions that help to create revenue!).

In the meantime, be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” as well!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit to [email protected]!