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#FASuccess Ep 203: Adapting Financial Advisor Marketing To The Pandemic By Sticking With What (Virtually) Works, With Maribeth Kuzmeski

November 17, 2020 07:08 am 1 Comment CATEGORY: Financial Advisor Success Podcast

Welcome back to the 203rd episode of Financial Advisor Success Podcast!

My guest on today's podcast is Maribeth Kuzmeski. Maribeth is the founder of Red Zone Marketing, a marketing consulting firm with a focus on independent financial advisors that are looking to implement actionable marketing strategies. What's unique about Maribeth though, is the particular research-based, evidence-based focus she takes to financial advisor marketing, and the principle that marketing success doesn't have to be about doing something completely innovative and new and never seen before, but simply looking at what already works in the world of financial advisors and just adapting what is necessary to the specifics of your own business, so you can get started and getting results more quickly.

In this episode, we talk in depth about what Maribeth's research shows that financial advisors are actually doing now, in the midst of the ongoing pandemic environment, to adapt their marketing to a virtual and digital world. From conducting hyper-targeted email marketing campaigns to using third-party email services, and suggesting some of the providers so that advisors are actually using to do it successfully, to conducting virtual educational events with webinars and how to adapt your presentations to get better marketing results when you're delivering in a virtual format, to the rise of virtual client appreciation events, that are less about conducting a celebratory event for clients and more about simply creating meaningful social opportunities in a pandemic environment where we've all been closed off from each other. Whether it's virtual cooking events, virtual team meetup, or for one advisor, weekly virtual Bingo for their clients and prospects.

We also talk about how the pandemic has changed the nature of generating referrals in a world of virtual meetings. Why it's so crucial to turn the video on and ensure that virtual meetings are still face-to-face with tips on how to get reluctant clients, who in the past have preferred phone calls, to actually start meeting with you via video. How video meetings make it possible to connect with clients more frequently in smaller bites in a way that can actually help keep the advisor more top-of-mind for referral opportunities, and how to get opportunities to meet with prospects virtually by offering second opinion meetings to encourage them to meet with you for the first time.

Be certain to listen to the end where Maribeth shares her own journey of finding financial advisors as her niche as a marketing consultant, the way her first financial advisor client grew his business from 10 million to 200 million of AUM in just five years by focusing on a niche of his own, and how, in the end, many of the most successful niches for marketing purposes don't come about by trying to mastermind the ideal perfect niche upfront, but instead by simply finding a segment of clients you're already having some success with and going deeper and deeper and deeper until you look back and realize that what you've created is far more specialized and differentiated than you ever realized it could be.

So whether you’re interested in learning what other financial advisors are doing to adapt to the pandemic, how to adapt your virtual presentations to get better marketing results, or why video calls are crucial to making the face-to-face connection with clients and prospects alike, then we hope you enjoy this episode of the Financial Advisor Success podcast.

Teaching Financial Planning As A Part- Or Full-Time Career Opportunity

November 16, 2020 07:03 am 2 Comments CATEGORY: Personal/Career Development

The traditional role of a financial advisor is to provide financial planning services to their clients, or at least to support the financial planning process in an advisory firm. However, with the growing number of programs that provide the educational foundation required by the CFP Board for rising certificants to earn their CFP designations, there is an increasing demand for qualified teachers of financial planning. This growing opportunity has appealed to many advisors – not only has it offered new career options for financial planning professionals as an alternative to client-facing work, it can also be a unique marketing opportunity that increases the credibility of an advisor as a well-qualified financial planning expert in their work with clients, and gives firms an opportunity to see first-hand the top students in a local program that might be future hires (at least within the limits of what university conflicts-of-interest policies will allow for their instructors).

However, there are many different types of teaching roles that a financial advisor can consider. A position as a part-time instructor may make the most sense for advisors who want to continue serving financial planning clients. Compensation typically ranges from $3,000 to $7,000 per semester course, though part-time instructors at the undergraduate level are generally required to have earned a Master’s degree in a related field in order to get the paid teaching opportunity. For those who are interested, aside from the time commitment of actually teaching courses (which typically involves approximately 45 hours per semester per course), advisors should be aware of the time commitment involved in preparing for the course (for the first-time instructor, this can involve several hours per lecture given). Accordingly, given the relatively low salary range and high time commitment, financial advisors who choose to teach in these roles generally do so out of a love for teaching and as a way to give back to the industry by helping to prepare new advisors.

Full-Time instructors, on the other hand, tend to have a regular assignment of courses with some certainty of when and which subjects will be offered throughout the year. The job security of a full-time instructor is much more stable than that of a part-time instructor and, for non-tenure track positions (i.e., less permanent appointments with little or no research commitments), annual compensation levels generally start in the $50,000 to $80,000 range. However, full-time positions will make it more difficult for an advisor to continue working outside the classroom (though it may still be possible); thus, advisors will typically need to be willing to give up work in their financial planning practices, and should be prepared for an academic career (and academic compensation levels). In addition, advisors again will generally be required to have earned a Master’s degree and have some relevant professional experience for a full-time instructor role.

Individuals interested in pursuing tenure-track professor roles will find opportunities at research and/or teaching universities with financial planning PhD programs (and occasionally PhD programs in other fields, such as Family and Consumer Sciences), though the requirements to qualify for an appointment are much more stringent than for other types of teaching roles. New “assistant professors” can expect starting salaries to range widely from $60,000 to $130,000. While maintaining a financial planning practice may be very difficult for a tenure-track professor because of the work involved in both teaching and research, advisors can find ways to stay connected to their firm, potentially through occasional ad hoc planning work, relying on other firm partners, or by outsourcing work to others.

For those in a tenure-track position, earning tenure involves a long process unto itself, but their positions become very secure as tenured faculty positions are permanent, lifetime appointments (where it’s very difficult to get fired short of very substantive failures to do the core job). However, research universities will generally require a significant amount of research to be done by their faculty in a tenured professor role. For example, some popular CFP Board Registered PhD programs expect their faculty to publish an annual average of three articles in peer-reviewed academic journals every year, though the actual expectation varies greatly and can be gauged by determining what tenured professors published during their own probationary (tenure-track) period. In addition to research requirements, some institutions (e.g., those that are accredited by the Accreditation Council for Business Schools and Programs, or ACBSP) require individuals to have 15 finance graduate credits in order to teach in their programs, though other institutions (accredited by the Association to Advance Collegiate Schools of Businesses, or AACSB) don’t necessarily share this 15-credit requirement, but may have their own standards (which vary by institution, and could still include a 15-credit requirement) that define requirements for teaching eligibility.

Ultimately, the key point is that there are many financial planning teaching opportunities, some of which have relatively low education and experience requirements that can be managed by a financial advisor without having to give up their practice of financial planning itself. On the other hand, for those who actually wish to pursue a financial-planning-based career in academia on a full-time basis, there are also growing opportunities for full-time instructors and even tenure-track faculty positions at a research university. Regardless of the role, though, teaching opportunities in the financial planning field can serve as a great way for advisors to enhance their current job roles (or even switch careers altogether!) and to contribute to the profession by supporting the education of aspiring financial planners!

Weekend Reading for Financial Planners (Nov 14-15)

November 13, 2020 02:58 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of "Weekend Reading For Financial Planners" – this week's edition kicks off with a look at what a Biden administration may mean given the increasing odds that the Senate will remain Republican (by winning just one of the two Georgia Senate run-offs), which could stymie major tax legislation from the White House but leaves the way clear for potential new fiduciary regulatory reforms for financial advisors (as a new SEC Chair or Department of Labor Secretary from the White House is all it takes to potentially queue up a new rulemaking process in the coming years).

Also in the news this week is a fresh Risk Alert from the SEC's Office of Compliance Inspections and Examinations highlighting that, as RIAs increasingly expand into multiple locations, they're not always implementing appropriate 'branch office' compliance oversight programs, and the CFP Board has published a new set of "sample" (consumer-tested) Engagement Letters that CFP certificants can use both to describe their services in plain language and also to meet the CFP Board's own new "Duty to Provide Information" obligation that took effect on June 30th.

From there, we have several practice management articles, from a look at how, despite the industry buzz of "consolidate or perish", that small independent advisory firms continue to thrive, and it's some of the largest advisor platforms that appear to be struggling to maintain their size (despite their scale!), to a reminder of the key areas of an advisory business that must be balanced in order to drive (sustainable) growth, and a good discussion of what a COO actually does in a growing advisory firm that has more than 10 employees (and requires an additional level of infrastructure and management to keep the firm organized).

We've also included some articles on client communication this week, from some suggestions on questions to ask new (or prospective) clients to help deepen the relationship, tips on how to make virtual client meetings more collaborative (by not just screen-sharing but creating visuals that the advisor and client can collaboratively fill out and complete), and a good reminder that even though the work-from-home environment may feel more casual it's still important to remember that clients can see you (at least when the video is on!) and that putting together a professional look still matters in a professional services business.

We wrap up with three interesting articles, all around the theme of the ongoing challenges for both teams, businesses, and individuals continuing to work from home: the first explores how effective team communication in a virtual environment is all about "bursty" communication (with concentrated groups of meetings, followed by blocks of focus time); the second explores the ongoing challenge of loneliness when working from home for extended periods of time; and the last looks at what some businesses are starting to do now to head off the growing concern of work-from-home burnout, from 'spontaneous' 3-day weekends to allowing team members the option for 30-hour work weeks or simply having "self-care" days where it's required to turn the computer/laptop off, step away, and unplug from the home office that is otherwise so hard to disconnect from when it's right there in the house!

Enjoy the 'light' reading!

How Virtual Financial Planning Meetings Can Actually Enhance Client Intimacy (And How To Make It Happen)

November 11, 2020 10:27 am 5 Comments CATEGORY: Client Trust & Communication

In recent years, technological advances in remote communication have allowed all sorts of professionals to expand beyond having clients just in the towns and cities where they live and meeting those clients in just one location. Financial advisors have been taking advantage of that trend as well, as the internet and video and other collaborative meeting tools have increasingly made it feasible to serve clients across the country (or even around the world), start practices on a shoestring budget, or simply to keep clients when they relocate themselves (resulting in a more and more geographically diverse clientele over time). Still, financial advisors who adopted a fully virtual “location-independent” practice were in the minority... until this past March, when suddenly, those who were fortunate enough to have jobs that lent themselves to remote work, found themselves having to navigate the world of virtual work literally overnight, including financial advisors.

The transition wasn’t always smooth, and many advisors still lament what’s been lost by not being able to meet with clients in person. But the good news is that it turns out that there are some rather favorable aspects to meeting clients virtually, and engaging with professionals in a virtual environment is something that psychologists have been studying in their domain for many years now. In fact, a recent literature review in the Journal of Financial Planning suggests that virtual financial planning may be just as good (or perhaps even better) as advisors address their clients’ emotional concerns!

Specifically, the research shows that virtual client meetings create a lower barrier to entry for otherwise-nervous clients who want to meet, and provide more flexibility in how and when meetings happen, as they offer increased logistical convenience and reduce any stress around actually going to the meeting itself. And as it turns out, having the option to meet from a more comfortable and familiar (i.e., home) location may even have a therapeutic benefit in and of itself! Meanwhile, that same flexibility increases the advisor’s availability, which can be particularly valuable in times of need.

Beyond that, virtual financial planning can potentially help clients adhere to their plans as well. In a more ‘normal’ environment, where in-person meetings typically take an hour or so and happen only once or twice a year, it is very easy for tasks to fall through the proverbial cracks. Instead, shorter and more frequent virtual meetings can help both clients and advisors focus on a few of the most important tasks… and the supporting follow-through necessary to ensure they actually get done. This can be especially helpful for clients who are stressed about their finances, as might be more inclined to keep their virtual meeting and actually talk to their planner, instead of canceling or putting their meeting off.

That’s not to say that virtual meetings aren’t without their challenges, though, but the good news is that there are some simple strategies advisors can use to deal with those challenges effectively. At this point, it’s no mystery that “Zoom Fatigue” is a very real thing, as our brains simply aren’t wired to deal effectively in a (prolonged) virtual environment. Not only do they hinder our ability to read body language and receive subtle (but extremely important) nonverbal cues, but they also reduce the amount of feedback that participants provide, as it’s natural for our brains to zone out in such situations. To combat “Zoom Fatigue” and stay focused on the task at hand, advisors can try having only the video conferencing system open on their computer, shutting off notifications from their phones and other communication applications, avoid using a virtual background, keep microphone and cameras ‘on’, and use all the reduced distractions to focus themselves on being more active listeners.

Ultimately, the key point is that, although financial advisors have had to manage a plethora of changes in a post-pandemic world, the good news is that there are several benefits that clients (and advisors) can enjoy as a result, including offering lower barriers to entry and greater flexibility and convenience, as well as an increased likelihood that clients will adhere to their advisor’s recommendations. And while there are various challenges inherent in remote settings, there are a few easy-to-implement strategies that advisors can employ to not only harness the utility of virtual meetings, but in many cases, provide even better outcomes for clients!

#FASuccess Ep 202: Improving Client Follow-Thru On Advice By Scaling A Quick-Touch Monthly Meeting Model, With Pamela Capalad

November 10, 2020 07:02 am 2 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 202nd episode of Financial Advisor Success Podcast!

My guest on today's podcast is Pam Capalad. Pam is the founder of Brunch & Budget, a financial planning and coaching firm based in New York City that serves nearly 200 clients with a particular focus on first-generation immigrants and serving communities of color.

What's unique about Pam and her Brunch & Budget business though, is the way she's built her clientele by – literally – having brunch with prospects to talk about budgeting and other cash flow planning issues, and how she figured out how to turn that into ongoing financial coaching relationships paying as much as $300 to $900 per month on an ongoing basis for Pam's structured financial coaching accountability system, coupled with 20-minute monthly check-in meetings.

In this episode, we talk in-depth about how Pam structures her ongoing monthly advice process, the upfront four meetings that she uses to onboard and start every client relationship, how she uses MeisterTask as the center of her client relationship to hold clients accountable for what they're working on, the reason Pam decided to ditch eMoney advisor and now uses MX as her account aggregation client portal to help them through their budgets and track their monthly spending, and why Pam found that a higher frequency of shorter monthly meetings – quick touches with clients – was more effective than longer quarterly or semi-annual meetings when it came to helping clients actually make progress towards their goals.

We also talk about how Pam's model itself has evolved from starting out with one-time engagement for providing budget and other financial advice to a monthly model that began at just $20 to $60 per month, and then increased to $100 a month, and then up to her current minimum of $300 a month as she built out her service model for clients. Why Pam's model is built on a sliding scale that can amount to as much as 3% to 4% of a client's household income, and how Pam justifies that advice fee to clients. And the group financial planning model that Pam is now beginning to test to expand the reach of her services to serve more people of color.

And be sure to listen to the end where Pam shares how hiring for scale became the biggest challenge in her business as it grew beyond her personal capacity to serve clients, how different it is to provide financial planning advice to clients who are the first generation of their family to accumulate wealth, and why she now frames her business niche as serving people who are afraid to talk about money and the ways that Pam has adopted her financial planning process to get them comfortable with working with her.

So whether you’re interested in learning how Pam uses MeisterTask to hold clients accountable, what made her decide to ditch eMoney Advisor and what she uses now, or how she is expanding the reach of her services to people of color through a group financial planning model, then we hope you enjoy this episode of the Financial Advisor Success podcast.

Designing (Better) Compensation Models That Motivate Employees And Support Advisory Firm Culture

November 9, 2020 07:03 am 0 Comments CATEGORY: Practice Management

Human beings respond to incentives, and as a result, compensation is one of the most influential drivers of employee motivation and is often used by employers as a way to guide their team’s behaviors. For example, some employers design their compensation structures to reward employees for experience gained and/or length of service provided to the company, or by adjusting an employee’s pay to compensate for certain benefits (e.g., paying extra to cover health insurance costs when the company has no group insurance plan, or by reducing pay to compensate for retirement plan contributions the company makes on behalf of the employee). Very frequently, though, employers overlook the fact that it is not actually the money itself that influences their employees but, rather, it is what the money offers to or makes possible for the employee that matters most. And it’s those emotional connections to money that ultimately must be tapped effectively in order for compensation incentives to actually create the desired business outcomes.

In this guest post, Angie Herbers – Chief Executive and Senior Consultant at Herbers & Company, an independent management and growth consultancy for financial advisory firms – identifies the common mistakes that many financial advisory firms make in developing their compensation models, and also discusses four key drivers behind the money that actually motivate employees. And that by understanding the different types of compensation that address the needs of specific motivational drivers, advisory firms can design better compensation models that will not only save time, but will also enhance the firm’s culture!

There are four common mistakes that advisory firms tend to make when creating their compensation structures. The first is designing an incentive structure without a clear focus – or with a focus on too many objectives – as many firm owners try to tie too many metrics to compensation (e.g., revenue, and profit, and client service) rather than on prioritizing one main objective with a clear focus (and a better chance of meeting that objective) for all. A second mistake is using compensation as a way to adjust for benefits; either increasing pay to make up for benefits the company does not offer (e.g., higher pay for no health insurance… but then what happens if the firm adds health insurance later?) or reducing pay to compensate for benefits the company does offer (e.g., reduced pay in exchange for employer contributions to an employee’s retirement plan… that the employer was probably going to make anyway for their own benefit!?). A third mistake that firm owners make is offering partnership rights as a form of compensation (i.e., not paying partners a salary for their active role in the business, and letting net partnership distributions be the primary or sole compensation), as the income a partner receives for ownership and what an employee receives for work in the business reflect two very different functions. And the last common mistake is neglecting to update the compensation structure over time, which should be reviewed and updated often to respond to the behaviors that the firm wants to influence (as the needs and demands of the business itself do tend to evolve over time as well).

When it comes to the actual drivers that make employees want to earn compensation, there are four basic feelings that serve as central motivators, and certain types of compensation offered can generally serve to satisfy these feelings for employees: 1) control (regular base salaries that employees can rely on receiving for the role they play in the company), 2) advancement (incentive-based pay that gives employees a sense that what they do is helping them advance through the ranks), 3) assurance (benefits offered to convey that employers care about their employees and are taking measures to provide care for them), and 4) achievement (compensation tied to a career-track plan). And for employees to develop trust in their employers, they need to have at least some of these feelings satisfied by the compensation they receive for the work that they do.

Ultimately, the key point is that if employers take the time to analyze their teams’ compensation needs, and decide which of the four motivational drivers are most important to their employees (and it may be the case that all four are important to a firm), firm owners can better understand which compensation structures would be most beneficial to implement, and why. And when effective compensation structures are in place that satisfy employees’ motivational needs, the result often produces more streamlined employee management… not to mention inevitably enhancing the firm’s culture and overall morale, as well!