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#FASuccess Ep 207: Building A High-Touch Practice Starting From Scratch Straight Out Of School, With Lindsay Elwood-Goetz

December 15, 2020 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 207th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Lindsay Elwood-Goetz. Lindsay is the founder of Elwood & Goetz, an independent RIA based in Athens, Georgia that oversees nearly $365 million in assets under management for 375 affluent clients. What's unique about Lindsay, though, is the way she launched her advisory firm within a year of graduating from the Texas Tech Financial Planning Program as an undergrad, and has been able to steadily build over the past 15 years to a successful multi-advisor firm.

In this episode, we talk in-depth about how Lindsay first launched her advisory firm. The pain of only getting two or three new clients in her entire first year of launching in a new city where she had no prior connections while relying on a spouse's stable income to make ends meet. How the firm generated early opportunities by building a relationship with an estate planning attorney as a center of influence, who was ultimately able to refer some initial clients. And the way Lindsay was able to leverage being fee-only into not only a value proposition for clients but also as a niche to differentiate herself from other advisory firms in her local market.

We also talk about the way Elwood & Goetz has been able to build over the years with a heavy reliance on referrals, the proactive gift-giving that Lindsay has built into the culture of the firm to truly distinguish its depth of connection with clients, the client reference program that Lindsay developed to help support word-of-mouth discussion of her services among clients and prospects, and how Lindsay is focused on the details of the experience of coming to their office as a way to show their attention to detail. Because as Lindsay puts it, when clients can see how much you're focused on the details of even how their drinks are presented or the office space is conducted, they'll be more confident in your taking care of the details in their financial plan too.

And be certain to listen till the end, where Lindsay shares how the firm evolved from an individual advisor to a team structure, accelerated after Lindsay became a mother and experienced firsthand the squeeze of trying to be a lead advisor and a new parent at the same time, how the firm is built with a heavy focus on hiring young talent that grows from interns to full-time advisors, and why, even as someone who launched her own firm as a twenty-something, Lindsay still emphasizes the importance of "paying your dues and taking the time to get some experience in your early years."

So whether you’re interested in learning about how Lindsay creates an "experience" for clients who visit their office, how she differentiates her firm's service with her attention to detail, or how she shows her appreciation to her clients through personalized gifts, then we hope you enjoy this episode of the Financial Advisor Success podcast.

Your Input Requested – Reader Survey For Nerd’s Eye View

December 14, 2020 07:08 am 0 Comments CATEGORY: Nerd's Eye View

2020 has not turned out the way that any of us expected. For so many financial advisors, the coronavirus pandemic has turned our world upside down, from how we meet with clients, to how we run our businesses, the turbulence in markets, and the turbulence in our personal and family lives. For Kitces.com, 2020 was incredibly disruptive as well, as in-person financial advisor conferences ground to an abrupt and total halt in March (and the longest stint that I’ve been home in more than 15 years!), and the advisor community shifted to a world of virtual continuing education… leading our Nerd’s Eye View Members Section to grow more in the past 12 months than it did cumulatively in its first 9 years!

Every year, we ask you – our readers – for feedback about what you want to make this website even better for you, to ensure we stay on the right track in adding value to the advisor community and making financial advisors better and more successful. And especially in a year with so much change, we’re more eager than ever for your feedback about how we’re doing, where we can improve, your thoughts about some new ideas we’re considering, and your feedback about what else we could be doing to help.

Because we really do take your feedback seriously. Over the years, Nerd’s Eye View reader feedback has shaped everything from the visual design of the blog (from its original dense small font!) to the Comment system we use, to the expansion of our Members section to offer CFP and IMCA/IWI CE credits, and now CPE credits for accountants as well for Nerd's Eye View blog posts, the launch of the Financial Advisor Success podcast, our popular Advisor #FinTech Map, and our newest “Master List” of all the major Financial Advisor conferences in the industry.

So regardless of what kind of reader you are: an advisor, an individual consumer who reads this blog for your own benefit, a related professional that works with financial advisors, or you're associated with a vendor who serves advisors... I hope you'll participate in this year's survey. It's only 12 questions, should take no more than a few minutes, and will remain open until the end of next week.

Thanks in advance for taking a few minutes to access our Reader Survey below and share your feedback! 🙂

Weekend Reading for Financial Planners (Dec 12-13)

December 11, 2020 02:52 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with the industry news that the Financial Planning Association has hired its interim CEO Patrick Mahoney (who took over after prior CEO Lauren Schadle departed earlier this year) to become its new permanent CEO, the first to be hired from outside the organization since the FPA's creation more than 20 years ago, but with a depth of executive experience that can hopefully engage a successful turnaround of the beleaguered membership association as the number of CFP certificants continues to grow?

From there, we have several articles around the theme of succession planning, including a 'Letter from a Successor' to help founding firm owners better understand the mindset of a prospective successor, a discussion of why a good succession plan should be both 'concrete' (to be executable if unfortunate circumstances dictate) and also 'flexible' (to be able to adapt and be changed as circumstances change), a look at why shifting valuations of RIAs versus broker-dealers is causing a growing number of brokers to convert to an RIA as part of a future succession/exit plan, and some tips on how to manage the transition process as a successor when taking over a retiring advisor's clientele.

We've also included some articles on client communication, from a look at how to better communicate the advisor's fiduciary obligation to clients, why it's problematic for financial advisors to market by saying they provide "Peace Of Mind" to their clients, the importance of getting clear on your target audience of prospects and who you're really trying to reach and communicate with, and a look at how to bring together a Client Avatar profile to better understand who exactly the firm is trying to communicate with in the first place.

We wrap up with three interesting articles, all around the theme of getting more efficient in handling the 'administrative tasks of life' that can weigh us down after an already-busy workday: the first looks at the rise of virtual assistants, not just for work tasks but to use in our home lives as well; the second provides some tips on how to be more efficient and productive in handling our "Life Admin" tasks; and the last provides a good reminder of all the reasons why delegating and outsourcing are valuable not only in the workplace, but also and especially in our personal lives because it allows us not only to potentially be even more financially successful (by freeing up time for lower-expense tasks to do higher-earning work), but also to better enjoy the limited time we all have with your friends and family and take care of our own mental health!

Enjoy the 'light' reading!

How Overconfidence Can Aid Entrepreneurs And The Challenges Of Advising Those Who Can’t See The Risks They’re Taking

December 9, 2020 07:04 am 0 Comments CATEGORY: Client Trust & Communication

While entrepreneurs are often renowned and celebrated for their willingness to take risks – to the point that encouraging someone to “be more entrepreneurial” is an analogy for taking more risks – the reality is that research shows entrepreneurs often consider themselves otherwise. From the entrepreneur’s perspective, though, what they do doesn’t necessarily seem risky – at least to themselves – because of the confidence they have in their own abilities (i.e., a belief that they will be able to navigate whatever challenges arise). Yet if entrepreneurs aren’t actually necessarily risk-takers – just very confident, or perhaps even overconfident – the question arises: what’s the best way to counsel an entrepreneur through the risks of their financial decisions if they don’t recognize those risks in the first place?

The large scope of what it actually means to be an ‘entrepreneur’ (e.g., from a goat farmer in a tiny third-world-country village to a solo divorce attorney in a large metropolitan city), and the variability in risk tolerance measurement methodologies that are used to evaluate them, makes it difficult to definitively substantiate the idea that entrepreneurs, by nature, are high-risk seekers. As some studies suggest, entrepreneurs do not necessarily take on more risk than non-entrepreneurs; rather, they may simply have a relatively high confidence (often to the point of overconfidence) level in their own capabilities… such that they don’t perceive what they’re doing to be risky in the first place. For financial advisors, this means that for some of their clients who are business owners (and for some advisors themselves!), the challenge may not be so much about dealing with high risk-takers, but instead about how to work with clients who can be overconfident (and fail to recognize the risks they actually are taking).

In turn, there are three aspects of overconfidence: overestimation (when someone believes they are better at something they actually are), overplacement (when someone believes they are better than a targeted person or group, even though they are not), and overprecision (when someone believes their expertise or ability is based on facts or past experiences, but the facts and/or experiences have been incorrectly recalled). And while exaggeration of any of these facets of overconfidence can lead to potentially disastrous results, attenuating the overexpression of these behaviors can actually be beneficial for individuals facing difficult challenges.

Financial advisors can help overconfident clients by ensuring their clients understand their financial situation clearly and accurately. This reduces the risk of clients taking action on wrong information, and can help ensure that the client has a clear understanding of ‘normal’ parameters pertinent to their financial situation, whether that relates to a business venture or simply a personal checking account balance.

Another tool that the advisor can use to help clients recalibrate potentially skewed (i.e., overconfident) beliefs they may have about their own abilities or resources is an adaptation of Subjective Probability Interval Estimates (SPIES), a methodology developed by psychology researchers to study overconfidence. By helping the client identify all possible outcomes of a decision being considered, advisors can help the client gain a clear, objective perspective of accurate and realistic information.

Ultimately, the key point is that financial advisors working with entrepreneurial clients shouldn’t necessarily assume that they are risk-takers, and instead recognize that their confidence (or overconfidence) may instead be blinding them to their risks. Yet at the same time, advisors with overconfident clients don’t necessarily need to encourage these clients to abandon their overconfidence (which really can help them to overcome the real-world daunting challenges of entrepreneurship). Instead, presenting clients with enough knowledge to help them understand how the actual risks they may be facing can impact their situation (and how those risks may pose very real threats to them, which can arise through the actions of other, potentially less skilled/knowledgeable individuals over whom the client has no control – no matter how lucky they may feel) can be the cornerstone for creating a sound financial plan, that still takes prudent risks… but with all the appropriate safeguards in place!

#FASuccess Ep 206: (Re-)Building The Practice You Want After Your Former Firm Tries To Stop You From Breaking Away, With Drew Stotler

December 8, 2020 07:03 am 1 Comment CATEGORY: Financial Advisor Success Podcast

Welcome back to the 206th episode of Financial Advisor Success Podcast!

My guest on today's podcast is Drew Stotler. Drew is the founder of Stotler Wealth Management, a hybrid advisory firm based in the suburbs of St. Louis serving 100 middle-income clients. What's unique about Drew, though, is his path to building his own advisory firm. Having started his career in the employee advisor model at Edward Jones, deciding to break away to an independent broker-dealer only to get hit with a temporary restraining order after leaving despite having tried to do everything he could by the book, but ultimately overcoming the challenge as he can now build his advisory firm the way he always wanted to.

In this episode, we talk in-depth about how Drew built his career as a financial advisor from starting out in the Edward Jones' operations division focused on anti-money laundering reviews before requesting an internal transfer to become an advisor, how Drew built his early client base, literally knocking from door to door in local neighborhoods, what he did to build early rapport and connections while cold-knocking, and the books that gave him the inspiration to keep powering forward despite the challenging early years.

We also talk about why and how Drew ultimately decided to make a change. Why the transition was less about the difference in payouts between employee and independent channels and more about the ability to control his own marketing and be able to actually own the business he was building to someday bring his children in. The independent broker-dealers he evaluated during this path to independence and why he chose LPL. And how Drew has been rebuilding his practice while navigating Edward Jones' stringent non-solicit provisions.

And be certain to listen to the end where Drew shares what makes the advisory business such a unique and appealing career path, the pride of ownership that comes from being able to serve clients the way you think they should be served, and how the transition to independence has made it easier for him to tune out the industry pressures to grow, grow, grow and focus on what's most important to him instead.

So whether you’re interested in learning about how Drew transitioned from Edward Jones's Anti-Money Laundering department to an advisor role, how he evaluated his options around going independent, or how he built his firm after receiving a temporary restraining order, then we hope you enjoy this episode of the Financial Advisor Success podcast.

The Latest In Financial #AdvisorTech (December 2020)

December 7, 2020 07:02 am 0 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the December 2020 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!

This month's edition kicks off with the big news that Blackrock is making a “billion-dollar bet” on the future of Direct Indexing, acquiring #2 player, Aperio, just weeks after Morgan Stanley acquired #1 Direct Indexing provider, Parametric… which given Blackrock’s sheer mass and distribution capabilities, could quickly turn 2021 into the year that Direct Indexing really hits the map with financial advisors, either for its inherent tax advantages (of being able to tax-loss-harvest the individual stocks in the index, rather than just the index fund itself) or the potential to morph into a form of “customized indexing” where advisors adapt “index” funds for each client based on anything from factor bets (e.g., overweighting small-cap and value) or ESG preferences (e.g., underweighting tobacco and overweighting renewable energy). Though from Blackrock’s perspective, it’s still not clear whether it really sees Direct Indexing as the great disruptor of ETFs… or simply wants to hedge against the risk that it might be (in light of its own multi-trillion-dollar iShares ETF business).

From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:

Fidelity launches a new model marketplace, dubbed FMAX, in what appears to be an attempt to convert the custody business into an upfront basis point charge (at least for advisors who use third-party managers?)
Addepar raises a $117M Series E round as it expands into the (alternatives) Marketplace business as well
CAIS raises $50M for its own alternatives Marketplace solution
Oranj announces that it is (abruptly) shutting down as its own Model Marketplace adoption fails to gain traction (even when its core software was free!?)

Read the analysis about these announcements in this month's column, and a discussion of more trends in advisor technology, including former LPL CEO Mark Casady’s launch of Lefteris (the first SPAC specifically targeting Advisor FinTech companies for a potential IPO?), Commonwealth launches a new “Connect” platform to facilitate virtual networking for its advisor community, Bill.com launches a new bill-paying solution for wealth management firms to offer concierge bill-payments for their own clients, and ForwardLane launches a new “personalization at scale” Next Best Action solution for RIAs (but do advice-centric RIAs with reasonable client/professional ratios actually need such solutions in the first place?).

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

I hope you're continuing to find this column on financial advisor technology to be helpful! Please share your comments at the end and let me know what you think!

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