FP+Careers - Part 14

#FA Success Ep 255: Using An Advice-Only Approach To Quickly Grow With DIY Validators, With Cody Garrett

November 16, 2021 07:04 am 3 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 255th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Cody Garrett. Cody is the founder of Measure Twice Financial, an independent RIA based in Houston, Texas, who has managed to quickly grow to nearly $150,000/year in annualized financial planning fees in barely more than 6 months since launching.

What's unique about Cody, though, is his “Advice-Only” approach to financial planning, where clients don’t have the obligation, expectation, or even the option to have their investment managed by Cody’s firm… which has allowed him to quickly attract a waiting list of clients who may be Do-It-Yourselfers when it comes to implementation but are not Learn-It-Yourselfers and are happy to pay Cody for more personalized education.

In this episode, we talk in depth about how Cody first came to the Advice-Only model after talking to a frustrated prospect who had interviewed 10 fee-only advisors looking for someone who would just charge him for financial advice and couldn’t find anyone who would do the plan without an expectation of also managing his money, how Cody has managed to find a niche with a certain segment of Do-It-Yourself consumers who are quite ready and willing to pay financial planning fees for advice and education, and how Cody has been able to quickly generate a steady pipeline of new clients by immersing himself into Facebook Do-It-Yourself FIRE communities of extreme early retirees.

We also talk about what Cody actually does in his financial planning process for DIY clients, the 3-month 3-meeting process for which he charges a $6,400 planning fee, why Cody eschews using traditional financial planning software in order to earn his planning fees, and the 25-plus ‘one-pagers’ that Cody provides as his educational financial planning deliverables to clients.

And be certain to listen to the end, where Cody shares how building an Advice-Only model has allowed him to build the ideal practice for his own lifestyle, the way he’s quickly systematized his process to the point that he doesn’t need to work any more than 10 hours per week to generate nearly $150,000/year in financial planning fees, how his lean approach to building his practice with high-value clients means he’s able to take home more than 90% of his gross revenue after all business expenses, and what he’s looking to do with the rest of his time in giving back to the advisor and consumer communities he’s involved with now that he’s been able to achieve his lifestyle goals.

So whether you are interested in learning how Cody provides advice-only services to DIY investors, how he gains referrals by "giving it all away", or why he charges all of his clients the same amount, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Cody Garrett.

#FA Success Ep 252: Navigating The (Non-Linear) Growth Path To $100M Of AUM In Under 5 Years, With Kyle Moore

October 26, 2021 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 252nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Kyle Moore. Kyle is the founder of Quarry Hill Advisors, an RIA in St. Paul, Minnesota, that oversees $165 million of assets under management for 137 households.

What's unique about Kyle, though, is that, while he’s been able to generate very strong growth for his advisory firm in just 5 years since launching it in 2017, the path hasn’t exactly been a linear straight line of growth, as Kyle has navigated a plethora of the all-too-common challenges and experiences that advisory firm owners face as they build their practices in the early years.

In this episode, we talk in depth about Kyle’s three main channels for growth, including local search on Google, his personal network, and digital marketing through blogging, how one of Kyle’s first clients ended up being a super-referrer that gave Kyle’s firm a big initial boost that he was then able to compound as he continued to grow, and the specific steps Kyle took to become findable online, including building backlinks from directories like the FPA, asking clients for Google reviews, and buying keyword-rich domain names that redirect back to his main website.

We also talk about how Kyle’s first entry-level job as an associate planner gave him the opportunity to learn as much as he could without the pressure to accumulate assets or sell products, how Kyle’s desire to be his own boss led him to turn down an offer to be a lead planner with the advisor who first hired him and instead launch his own planning firm, and the decision-making process that Kyle went through when he finally got to the point where he needed to make his first hire to help absorb the growth in his business.

And be certain to listen to the end, where Kyle shares why, despite building a business that was growing well, he decided to onboard a partner who ultimately had a different (but complementary) skill set, the process that Kyle and his (new) partner went through when determining ownership and valuing their merging practices, and the benefits that Kyle has gained from participating in practice management coaching programs like Limitless Advisor (along with some of the business-owner pitfalls that he’s been able to avoid as a result).

So whether you're interested in learning about how Kyle became 'findable' using local SEO, how he merged his firm to form a partnership, or how he grew his firm to $100M of AUM in less than 5 years, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Kyle Moore.

The One-Page Financial Plan: Focusing Advice On What Matters Most

October 18, 2021 07:05 am 10 Comments CATEGORY: General Planning

In the delivery of “the financial plan,” advisors have traditionally presented the thick, leather-bound, firm logo-embossed, three-inch binder to clients. On top of being a tool to present “the plan” to clients, this also was an outward demonstration of the sheer depth of analysis the advisor completed to compile this plan; a physical manifestation of the advisor’s “value”. Yet while that depth of meticulously compiled information can be helpful, it also comes with drawbacks. As, in practice, the especially thorough financial plan can be overwhelming to clients, if they open it at all. And at the end of the day, in-depth financial planning analyses can also quickly become out-of-date. To address this challenge, several years ago financial advisor and client communication guru Carl Richards made the alternative case – in his book The One-Page Financial Plan – that all of a client’s “need to know” information ought to be distilled into just a single page instead. In other words, the advisor would simply deliver a One-Page Financial Plan.

It’s worth noting that a One-Page Financial Plan (OPFP) doesn’t mean that the three-inch binder’s worth of information doesn’t exist; the OPFP is an alternative for a deliverable, not an alternative to the work itself. It’s about making a distinction between what advisors could share with a client, versus what a client needs (and really wants?) to know. Which means the creation of an OPFP is all about focusing that limited space to hone in on what each client truly needs to see and wants to talk about.

Beyond the sheer time savings of not producing such a lengthy physical financial plan deliverable, one of the major advantages of the OPFP is its ability to be a “living plan”. Because the traditional financial plan is often so long and time-consuming to produce, most firms only update it once every several years. By contrast, the OPFP can easily be updated on an ongoing basis every year, or even at every check-in meeting with the client throughout the year – which makes it easier for an advisor to pivot in unforeseen circumstances and disruptions (such as, for example, a pandemic!). Rather than reacting to a few years’ worth of changes, advisors can proactively adjust and update the plan as life happens.

Because the OPFP is a living document, a first draft can be constructed as soon as an advisor begins meeting with a new client, simply using standard Document and Spreadsheet tools (e.g., Word and Excel in Microsoft, or Docs and Sheets in Google). As while the Plan will shift a lot over the first few weeks, it nonetheless provides a framework that advisors and clients can work through together to reach mutual clarity. And once an OPFP has been refined and has buy-in from both an advisor and client, it can even become the centerpiece of meetings, because both parties agree that the OPFP has the most important information in order to make informed decisions.

Simmering down a financial plan to one page may be a hard adjustment at first, but it is certainly worth pursuing as a time- and information-efficient option to show clients what they need to know. Many advisors also refine their OPFP strategies over time, opting for more graphics (built from templates to ensure they’re easy to update), or building in automations to make the Plan even easier to compile and comprehend. But ultimately, the OPFP is useful as a tool to drill down to a client’s two biggest questions: “Am I doing OK?” and “What should I do next?” Providing a one-stop-shop to answer these two questions nudges clients (and advisors!) to stay focused on the right things—and work together to keep heading in the right direction!

Weekend Reading for Financial Planners (Oct 9-10)

October 8, 2021 02:25 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the global financial services industry buzz of the “Pandora Papers”, the latest leak of the so-called “shadow financial system” used by certain ultra-high-net-worth households (including world leaders, other politicians, celebrities, and more), highlighting the ways the system is used to hide assets (sometimes legally, and sometimes not), and the surprising extent to which the US has actually become the ‘offshore’ haven for those in other countries looking to hide assets in US trusts… which in turn has already spawned proposed legislation in Congress this week to crack down on the unreported flows of assets through certain US trusts and the lawyers and accountants who facilitate them.

Also in the industry news this week:

As social media becomes increasingly popular for financial services – from meme stocks to testimonials, and the rise of “Finfluencers” – FINRA is taking an increasingly hard look at how social media is used within broker-dealers
Regulators are focused more and more on advisors getting ‘trusted contacts’ for all their clients to serve as the first line of defense to spot diminishing capacity and financial elder abuse

From there, we have several articles on the ongoing rise of (fee-based) annuities, including:

A new Stand-Alone Living Benefit (SALB) offering from RetireOne that allows RIAs to wrap annuity guarantees around their existing managed accounts (without actually being required to liquidate and transfer the assets into an annuity)
A survey from DPL showing that advisors are increasingly looking to use annuities as a bond substitute
A research study from David Blanchett highlighting the risks of using Fixed Indexed Annuities in particular as a bond substitute, and the hazards of comparing historical FIA returns to those that would be purchased today at current (much-lower-than-historical) interest rates.

We've also included a number of marketing-related articles:

Tools that advisors can use to expedite email communication with clients, from recording quick personalized videos to easily catching grammatical errors
The rise of “Local Service Ads” on Google and why they may be better suited than traditional Google Ads for advisors that have a geographic reach beyond their local zip code
A study highlighting how more and more consumers are vetting their advisors on social media before engaging, with 1-in-5 stating that an advisor’s social media presence was the deciding factor in who to work with!

We wrap up with three final articles, all around the theme of investing in ourselves:

Why believing in yourself and building your own self-confidence is foundational to career success
The benefits of hiring a coach, not only when you’re struggling, but whenever you’re trying to get to the next level
Why it’s better to think of your career as a “call option” than simply a stock, because of the significant upside potential that can come from switching careers, launching a business, or simply reinvesting in yourself to make a stretch for that next job (and the outsized rewards that can come if that leap goes well)!

Enjoy the 'light' reading!

Weekend Reading for Financial Planners (Sept 25-26)

September 24, 2021 02:24 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at the recently filed "Petitions For Rulemaking" that XY Planning Network submitted to the SEC regarding the separation of brokers and advisors, which would require brokers offering financial planning services (or delivering financial plans to their clients) to become fiduciary RIAs, along with any brokers who marketed to the public that they offer ongoing (investment) advice to their clients. Though, ultimately, it remains to be seen whether the SEC will act with new rulemaking (or continue to focus on more stringent enforcement of Regulation Best Interest itself) in the coming year.

Also in the industry news this week:

As the American Families Plan (and separate infrastructure legislation) winds its way through Congress, all eyes are on what provisions are likely to make it through, and which may still end out on the cutting room floor
Schwab is launching a new "Moneywise America" financial literacy program that aims to provide free financial literacy education to every (!) high school in the country by 2025

From there, we have several investment management-related articles:

Why risk tolerance questionnaires may be less effective when working with decumulation clients (at least until it's clear whether they want an investment-style or guaranteed-income-style approach to begin with)
How not in danger Social Security actually is for most future retirees, both because the Social Security trust fund only funds roughly a quarter of benefits in the first place... and in the coming years, the pressure on the government to implement a policy fix will only grow further
Strategies for Social Security "do-overs" for those who change their mind and want to start earlier, or later, than they originally chose to begin their benefits

We've also included a number of articles on financial psychology and helping clients to implement their plans:

Why most clients don't actually implement their financial plans (because they didn't really have buy-in to the recommendations in the first place?)
Consumer research showing that most clients really are comfortable with virtual meetings, and many even prefer them (though some will always still want the face-to-face in-person approach)
Why framing a lack of savings as a "self-control" problem may be amplifying Americans' low savings habits, and the alternative approaches to help clients save more

We wrap up with three final articles, all around the theme of the power of asking (good) questions:

Why turning questions inward to yourself can be one of the most powerful ways to gain new perspective
How leaders asking questions of their teams can promote a culture of greater collaboration and trustworthiness
A list of 25 "icebreaker" questions for those who want to start more conversations with (good) questions... but just aren't sure what questions to ask!

Enjoy the 'light' reading!

#FA Success Ep 246: Finding The Right (Valuation) Formula To Give Everyone Buy-In For An Employee-Owned Advisory Firm, With Jessica Hovis Smith

September 14, 2021 07:04 am 1 Comment CATEGORY: Financial Advisor Success Podcast

Welcome back to the 246th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jessica Hovis Smith. Jessica is the President of Longview Financial Advisors, an RIA with offices in Gadsden and Huntsville, Alabama that manages $194M for 199 clients.

What's unique about Jessica, though, is that she oversaw a succession plan that sought to transition ownership of two merged lifestyle practices into a single employee-owned, multigenerational firm, navigating multiple transitions along the way to eventually arrive at a valuation that both internal buyers, and the founders who were selling, felt was fair.

In this episode, we talk in depth about how Jessica's firm structured their purchase to ensure that new owners both understood the company culture and had a better chance of remaining with the firm throughout their careers, how Jessica and her firm were able to find local banks to finance smaller buy-ins from employees for shorter durations, versus industry banks that were only interested in larger, one-time transactions, and why the actual process used to arrive at Jessica's firm valuation turned out to be a bigger contributing factor to getting everyone's buy-in rather than the final valuation number itself.

We also talk about why Jessica's firm makes a clear distinction between the firm's financial planning and wealth management services, with each department having their own separate teams even though most clients receive both services, how Jessica incorporates philanthropic planning into her practice (and why she decided she wanted to work with clients with a "giver's heart" in the first place), and the realization Jessica had that, although the firm operates, markets, and hires to serve a philanthropic niche, it’s still OK that not every client who walks through the door absolutely must fit her ideal client avatar perfectly.

And be certain to listen to the end, where Jessica shares her own journey through Longview, starting off as an unpaid intern while in an undergraduate financial planning program, and then progressing from being an associate planner, to eventually becoming the Director of Financial Planning, before assuming the role of President, the challenges Jessica surmounted as she took over as the leader of the firm, transitioning from a boots-on-the-ground implementor to a visionary and ultimate decision-maker, and how Jessica has communicated with her own clients that, while she will continue to serve them, another planner on her team will assume the day-to-day activities for their accounts as Jessica takes on more of her leadership duties to guide the firm into the future.

So whether you’re interested in learning about how Jessica and Longview transitioned to an employee-owned firm, how the sellers and buyers arrived at a valuation they could both agree on, or how Jessica integrates philanthropic planning in her practice, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jessica Hovis Smith.

Weekend Reading for Financial Planners (Sept 11-12)

September 10, 2021 02:30 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at the latest SEC initiative on the 'gamification' of investing (e.g., Robinhood) to the use of behavioral nudges (e.g., certain robo-advisors), with a new warning that it will be delving deeper into the "digital engagement practices" of broker-dealers and investment advisers that use technology to entice investors to roll over assets and/or trade on their digital platforms... with a particular eye on when a technology-driven investment 'nudge' may turn into investment advice (with the higher fiduciary duty that would attach to such advice).

Also in the industry news this week are a number of other interesting industry headlines:

A recent survey shows that more than 9-in-10 CFP certificants are strongly satisfied with their choice of career, and that the majority of advisors have seen more prospects and had more communication with existing clients since the pandemic
FINRA's new Rule 4111 is taking effect, which will make it more onerous for broker-dealers to take on brokers with multiple dings on their on their regulatory record (in the hopes of curtailing the number of brokers that get re-hired after engaging in 'problematic' behavior)

From there, we have several articles on spending and saving, including:

How to think about the allocation of financial duties within couples (and ways for couples to structure their spending accounts for marital harmony)
Challenges in home affordability are being driven in part by the reduction in builders constructing "starter" homes, as the number of new homes costing <$200,000 has dropped from 60% in 2002 to <2% today
Tips on simple "money-saving" phone calls (from cable providers to property tax assessors), and potential services that can make those calls for you

We've also included a number of marketing-related articles:

The desire of advisory firm marketers to begin using testimonials is creating friction with compliance departments that are still figuring out how exactly to implement the new rules in their own practices
13 marketing KPIs that advisory firms should track to monitor the health of their advisory firm's growth path
The problems with marketing "service" as an advisory firm differentiator

We wrap up with three final articles, all around the theme of maximizing business efficiency and productivity:

Why it's problematic to simply look at "hours worked" because it rewards the high-hours inefficient worker over the more efficient employee who gets the work done in less time
The difference between efficiency (doing the same, with less) and productivity (doing more, with the same), and why efficiency drives profits but productivity drives growth
How companies historically showed their size by their employee counts and why a growing focus on productivity means "revenue per employee" may be a better metric for success

Enjoy the 'light' reading!

#FA Success Ep 245: Leveraging The Entrepreneurial Operating System (EOS) To Scale An Ensemble Practice, With John Kennedy

September 7, 2021 07:05 am 2 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 245th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is John Kennedy. John is a founding partner of CandorPath Financial, a hybrid-RIA in Orlando, Florida that manages $110m for 162 client households.

What's unique about John, though, is that he and his partner have implemented Gino Wickman's Entrepreneurial Operating System (or "EOS", for short) as a framework to rapidly scale up their ensemble practice in a deliberate and intentional manner.

In this episode, we talk in depth about how John uses EOS in order to run his financial planning practice as a business, and how it helps him to not only make clearer business decisions, but make them faster as well, why John feels that the quarterly objectives defined in the EOS system, called "rocks", allows him to stay focused on the activities that help him move his practice forward (even if only a portion of the quarterly rocks are actually completed on time), and how John leverages EOS's Vision/Traction Organizer document to define his practice's core values and ensure that all of their business activities and goals align with those core values.

We also talk about how, by setting a three-year picture and big ten-year goals, John and his partner were able to stop being focused solely on growth for growth's sake and instead to start intentionally managing towards their long-term vision of what they wanted their lives to look like further down the road, how defining CandorPath's core values helped John lay the foundation for a well-defined company culture and also gives him a way to clearly communicate with clients just how important their relationship is, and the key business statistics and metrics that John tracks on his EOS scorecard, including data around their net profit margin, sales funnel, and client satisfaction.

And be certain to listen to the end, where John shares his strategy around creating videos to share on social media and how those have helped prospective clients get to know CandorPath even before sitting down in a first meeting, how CandorPath developed their own Alexa Skill as a means of fostering daily touchpoints with clients between their regular quarterly (or semi-annual) meetings, and the advice that John has for other advisors considering launching a new firm as an ensemble practice with a partner of their own.

And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast, with John Kennedy.

Why Making Retirement (Or Other Financial) Decisions Based On Happiness Studies May Not Be A Good Idea

September 1, 2021 07:04 am 5 Comments CATEGORY: Retirement Planning

“Happiness” is highly valued in our society, and the “pursuit of Happiness” as an ideal is even embedded within the U.S. Declaration of Independence. However, “happiness” can mean different things in different contexts. In a very broad sense, the term may align with something along the lines of Aristotle’s “eudaimonia” that was meant to refer to the ultimate aim of humans to live a good life. However, in recent years, a narrower conception of “happiness” has emerged – particularly within psychology and economics research. Based on a desire to evaluate how factors such as income are related to “happiness”, researchers have come up with survey questions such as “How happy are you on a scale of 1 to 3” that are then used to test all sorts of hypotheses regarding the relationships between life circumstances and happiness.

There’s nothing intrinsically wrong with such research; however, studies based on this narrow conception of happiness tend to make for good headlines and often get widely cited in the media (e.g., “People who drink coffee are happier!”). As a result, such studies can gain traction to the point that they could actually influence life decisions, and that can be problematic.

First, there’s the issue that personality is actually one of the strongest predictors of “happiness” (as reported in such studies). For instance, all else being equal, extraverted individuals simply tend to report they are “happier” than introverted individuals when presented with such survey questions. Moreover, extraversion is associated with all sorts of life decisions (e.g., living in cities), which means that we can’t make much of research findings that don’t consider how personality factors influence results. For instance, if survey respondents who live in cities report that they are happier than those who don’t, are they “happier” because city life makes people happier? Or is it simply the case that more extraverted people live in cities and are also more likely to report they are happy no matter what their life circumstances? And beyond that, even if it’s true that city living makes some people happier, it does not necessarily follow that an introvert who likes to live in the mountains would be happier if they were forced to relocate to a city.

More fundamentally, however, is the issue that this narrow conception of happiness (i.e., happiness that can be rated through shallow inquiries such as, “How happy are you on a scale from 1 to 3?”) is not an effective way to choose life goals that will actually bring a person long-lasting feelings of fulfillment. Researchers have criticized the notion that people should chase these narrower forms of happiness, rather than orienting one’s life toward the pursuit of meaning and purpose – which often comes from accomplishments that take work and are not easy.

A common example of how media has hyped happiness studies within a personal finance context comes from Michael Finke’s oft-cited finding that parents who live near their children in retirement are less happy than those who don’t. Notably, the relationships between living near children and happiness in retirement are often tiny, and even Finke and his coauthors found that they were non-existent when controlling for other factors. Such studies also generally can’t control for other factors such as personality or the possibility that factors such as declining health (and therefore children moving to parents rather than vice-versa) are the actual factors driving the observed (tiny/non-existent) relationships.

But more fundamentally, no one lies on their death bed wishing they’d averaged 2.5 rather than 2.4 on their lifetime happiness score when measured on a scale from 1 to 3. However, many people do lie on their death beds wishing they’d spent more time with family, built better relationships, or otherwise engaged in pursuits that brought a sense of purpose and meaning. That’s even true – and perhaps particularly so – when pursuits that brought purpose and meaning were challenging and required sacrifice. Ultimately, unless we’re truly indifferent between two alternatives or realize we’ve made some life decisions without giving much conscious thought, happiness studies are simply not a great way to make life decisions. Instead, we are generally better served thinking about what we know about ourselves, and relying on that to guide our important decisions in life.

#FA Success Ep 242: Navigating A Family Succession Plan As The Successor To Build Your Own Future Vision, With Charlotte Geletka

August 17, 2021 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 242nd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Charlotte Geletka. Charlotte is the owner and managing partner of Silver Penny Financial, where Charlotte personally manages $140 million for 150 families.

What's unique about Charlotte, though, is that she purchased her father’s financial advisory firm, at a time when the firm’s existing business model was no longer really viable, in order to build her own vision for the next stage in the firm’s future.

In this episode, we talk in depth about the lessons Charlotte learned from the experience of buying the business from her father, understanding that, while she would have to make some substantive changes, she was still buying, as she puts it, “someone’s business child that they built from nothing”, the process Charlotte went through to determine a fair price for an advisory business with a number of different business segments (each requiring their own multiple), and how she deliberately structured the seller-financed deal with an accelerated payback in order to put pressure on herself to grow revenue quickly.

We also talk about Charlotte’s mindset shift away from viewing financial planning as simply a means of generating business and to offering financial planning as a stand-alone service as a way to serve clients who aren’t a good fit for the AUM model, why Charlotte leverages TAMPs for portfolio management (and how she integrates the TAMP fees with her own AUM fee structure), and how Charlotte created a one-page deliverable for clients explaining all the value-added services she provides beyond “just” managing their investments.

And be certain to listen to the end, where Charlotte shares her own pathway into the industry, from being vehemently opposed to working in financial services to realizing that a career as an advisor would offer her the opportunity to receive compensation that was directly correlated with how hard she worked, Charlotte’s growing appreciation for just how important leadership qualities are when it comes to the success of her business, and the important lesson Charlotte learned about the benefits (both professional and personal) of surrounding herself with other like-minded advisors.

So whether you’re interested in learning about Charlotte’s experience buying her father’s practice, about the valuation process she used to settle on a price for the business, or how she integrates TAMPs into her fee structure, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Charlotte Geletka.