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#FASuccess Ep 152: Getting Comfortable With Sales By Simply Seeking To Find Qualified Prospects To Inform, With Beverly Flaxington

November 26, 2019 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 152nd episode of Financial Advisor Success Podcast!

My guest on today's podcast is Beverly Flaxington. Bev is the founder of The Collaborative, which provides sales training and organizational development support to financial services firms.

What's unique about Bev, though, is the human behavioral coaching approach that she takes to teach sales and business development skills. Recognizing that, in the end, with financial advisors (as with our own clients) it's not just about knowing what to do, but figuring out how to change your behavior to actually do it.

In this episode, we talk in depth about Bev's approach to sales training and how to conduct a meeting with a prospective new client. Why it's so important to set upfront for the prospect an expected outcome for the meeting, the importance of figuring out whether someone is a qualified prospect by determining if they're suited for your firm services, willing to pay and really ready to make a decision, how to get permission to ask deeper questions to the prospect to get to know them further, and why it's ultimately a kindness to a prospect to ask for their business when that moment comes, instead of just waiting and praying for them to volunteer that they're ready to sign up with you.

We also talk about the challenge of differentiating in today's crowded advisor marketplace, the value of having a niche, at least for your outbound marketing efforts, why getting more specific about exactly who you serve makes it both easier to generate referrals from existing clients and reduces that awkwardness of talking about what you do in social settings, and the importance of defining clear triggers so those who might refer to you know exactly what situations to watch out for that might be a good opportunity to refer.

And be certain to listen to the end, where Bev talks about how advisors who find the sales process icky or uncomfortable can reframe it in their own minds to understand that in the end, settling is simply about letting people know what you do, how you can help them, that you genuinely want to work with them and do good work, and that your job is simply to help them make a decision they're confident about, which hopefully will end out being to hire you to do the work!

Nerd’s Eye View 2019 Reader Survey – Your Input Is Requested!

November 25, 2019 07:01 am 0 Comments CATEGORY: Nerd's Eye View

The past year has been one of major reinvestments back into the Kitces.com platform and the Nerd’s Eye View blog, with a significant expansion to “Team Kitces”, in our ongoing attempt to make this site an ever-more-valuable resource for the financial advisor community, and especially all of you, our readers. But to make sure that we’re staying on track with the right focus, we ask all of you, every year, for feedback about what you want to make this website even better for you!

Over the years, your reader feedback has shaped everything from the visual design of the blog (from its original dense small font!) 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.

But we’re not done. There’s always more we can do. Which is why, every year, we conduct a reader feedback survey of all of you who read this blog, to get your thoughts and feedback about everything we currently offer, your perspective on some new ideas we're considering, and to take in whatever other input you're willing to share (good or bad!) about what we could do to make this a more valuable site (and a better user experience) for you.

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 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 (Nov 23-24)

November 22, 2019 02:57 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" – this week's edition kicks off with the mega-news that Charles Schwab is apparently in talks to acquire TD Ameritrade, in what would create an absolute juggernaut in the brokerage industry with nearly $5 trillion in assets and as much as a 70% market share of RIA custody... which in turn is already raising concerns about whether, at least when it comes to RIAs, creating "Schwabitrade" might actually go too far in reducing competition and industry innovation (not to mention the challenges of integration and managing advisor service at such scale).

Also in the news this week is an indication of the growing "turf war" emerging as everyone from private banks (e.g., Goldman Sachs) to robo-advisors converge on serving the mass affluent that historically were the bread-and-butter client of the independent RIA but are now increasingly hard to attract in a more competitive landscape, and an indication that the SEC may be preparing new Proposed Regulations on both the definition of an Accredited Investor and the RIA Custody Rule (both of which are badly in need of updating for the modern era).

From there, we have several articles on behavioral finance, from a look at the value of a financial advisor as one who helps to minimize potential regret of the few big irreversible financial decisions in life (where it's crucial to have the right advice to ensure the right decision is made in the moment), the emerging rise of "financial therapy" as a complementary value-add for financial advisors (or possibly even the future of the financial advisor's value proposition), and a look at how thus far Artificial Intelligence is still struggling with the sheer breadth and complexity of interpreting human emotions (and suggesting that AI may still be a very long ways off from really being able to replace human-to-human interactions on emotional topics and issues).

We also have several marketing-related articles this week, from exploring why RIAs often have difficulty getting clients to read their email newsletters (and what are realistic stats to expect for client open and click-through rates), the importance of storytelling to both convey a financial advisor's value proposition to prospects and their recommendations to clients through a financial plan (which arguably should be more of a 'storytelling aid' than an analytical document), and the key pages that prospects actually focus on (and therefore every financial advisor should have) on their financial advisor website.

We wrap up with three interesting articles, all around the theme of making good career decisions: the first looks at how most people seek out the wrong kind of career advice (asking people in similar roles or other 'successful' people who tend to give advice from their perspective, instead of asking people who know you well personally or are in the company/role in question already who can really validate whether you understand the role and how good of a fit it really is, or not); the second explores how to find the right community of peers to help get that professional sounding board and support; and the last looks at how, because the best firms end out being exponentially (1,000X) more successful, the key to career success is less about finding the right dream job and simply about finding the right company ("rocket ship") to get on board with... and figure out later how to get into the best role/seat on the rocket ship!

Enjoy the 'light' reading!

Kitces & Carl Ep 21: Do You Have To Build Confidence Before Taking Action, Or Take Action To Build Confidence?

November 21, 2019 07:08 am 0 Comments CATEGORY: Kitces & Carl Podcast

Confidence is a critical component of success for financial advisors, as those who lack confidence about their knowledge and abilities will struggle to persuade clients to listen to their advice, or even to find and persuasively convince clients to hire them in the first place. But how do financial advisors develop more and better self-confidence to begin with? And is it really necessary to build self-confidence first in order to take action with clients… or is the reality that taking action and having some success is actually what it takes to best builds self-confidence at all? In other words, is it better to just try to go get clients and service them until you feel confident that you do it well? Or to first study and gain the knowledge necessary to feel confident enough to go get clients and service them instead?

In our 21st episode of Kitces & Carl, Michael Kitces and financial advisor communication expert Carl Richards explore these ideas as they talk about the results of a recent Twitter poll conducted by Carl, which posed the compelling question, “Which one of these is true for you? Having confidence leads to action; or taking action leads to confidence.” Surprisingly, respondents were equally divided, with 51% identifying themselves as “confidence first” individuals, and 49% as “action first” individuals.

Each of these ‘camps’ faces its own set of unique obstacles, where “confidence first” people must first study and invest in themselves but might then struggle with getting to a stage where they are ever comfortable taking action, as the hurdle for them is finding enough confidence to get going in the first place (in essence, having a very high “self-permission” threshold to ever take the leap and try). On the other hand, “action first” individuals have a lower permission threshold, realizing that they need to practice the action first using more of a trial-and-error approach, and perhaps even relying on ‘fake-it-‘til-you-make-it’ strategies before they can build the confidence they need to flourish… but might then struggle with undesirable outcomes arising from impulsive behavior, or at worst, undermine their confidence with the failures that result as impulsively gained clients turn around and fire them.

Furthermore, while it might be true that some individuals are hardwired with an affinity for either one side or the other, it’s also possible that some individuals may identify with both sides in a chicken-and-egg circular manner of thinking, where that person may not feel confident without taking some action and having some success, but cannot take that initial action without the upfront confidence that they can even do the action successfully!

Ultimately, the key point is that both paths to confidence work – whether a person needs to build confidence in order to take action, or if they need to take action in order to build confidence – and that both paths depend on individual style and arguably on one’s own self-granted permission threshold.

Regardless of which side a person may identify with (or even if they identify with both), though, a universal strategy to effectively develop confidence involves identifying the smallest doable next step that helps them on the path they are trying to follow (whether that be to take a particular action that will eventually lead to some level of confidence, or to figure out what it would take to build up confidence in the first place, which would facilitate carrying out some particular action), followed by a frequent reassessment of one’s situation to discover any new information or opportunities leading to a new smallest doable next step.

Navigating Social Security’s Windfall Elimination Provision (WEP) With A (Non-Covered) Government Pension

November 20, 2019 07:02 am 12 Comments CATEGORY: Retirement Planning

In the midst of America’s Great Depression (which spanned from the October 1929 “Black Tuesday” stock market crash to the end of the 1930’s), President Franklin D. Roosevelt enacted several “New Deal” programs to provide the country with relief (and to encourage recovery) from the poverty and high rates of unemployment facing Americans at the time. Social Security was (and remains) one of the most significant programs created as part of the New Deal, and was intended to protect Americans from the “hazards and vicissitudes of life”, offering them “general welfare” and “social insurance” through retirement income for those over age 65.

However, Social Security benefits were not initially available for state or local government employees because the institutions they worked for often managed their own retirement (pension) programs for employees. To address the concern that state/local government employees were ‘missing out’ on Social Security, and in part to allow states to shift a portion of the retirement burden to the Federal government, Congress passed Section 218 of the Social Security Act in 1951, providing Social Security benefits to public employees in states that entered into a voluntary (but irrevocable) agreement with the Social Security Administration to coordinate state/Federal government benefits.

But the original Social Security retirement benefit formula did not account for workers who had retirement income from both their pension plans through “non-covered” employers (i.e., state or local government employers who did not pay into Social Security), and Social Security benefits through employers who did pay into Social Security. Which was problematic, because Social Security is designed to provide higher replacement rates for lower income workers, but couldn’t distinguish between those who actually had a lifetime of low income, and those who had high lifetime earnings but whose income from “non-covered” state or local government jobs (with its own pension instead) was excluded from the Social Security benefit calculation. Accordingly, policymakers felt that these workers eligible for both Social Security and a non-covered pension benefit were being awarded a higher Social Security replacement rate than they should have been. Thus, in 1983, Congress established the Windfall Elimination Provision (WEP) to more fairly adjust the Social Security benefit for these “non-covered” workers who appeared, based only on their Social-Security-covered earnings, to be lower-income than they actually had been in their working years.

While the number of workers in the United States who are subject to the WEP is relatively small, it’s becoming more common for advisors to run across clients who are affected by WEP as a greater number of public sector employees who started their careers in non-covered jobs are now approaching retirement.

Fortunately, while the WEP can significantly alter an individual’s total retirement income, there are several strategies that an advisor can employ to minimize that impact, including increasing the number of years with “substantial” earnings from a “covered” employer, or taking a lump-sum distribution of a non-covered pension before becoming eligible for the benefit (thus reducing the length of time the WEP penalty is applied to the Social Security benefit).

Ultimately, the key point is that advisors should be aware of the circumstances under which the Windfall Elimination Provision applies to a retiree’s benefits, and the various rules around how their client’s total retirement benefit (as well as any family/auxiliary Social Security benefits based on the client’s own record) may be impacted by the WEP. At a minimum, it’s crucial to be aware of the WEP to ensure that assumed Social Security benefits are adjusted properly for planning purposes (especially since the WEP adjustment is typically not reflected on the worker’s Social Security statement). And while not all of the WEP penalty can always be unwound even with proactive planning (as might be the case for someone who had a non-covered position early in their career), at the very least, there are a few strategies that advisors have at their disposal to help reduce its overall impact.

#FASuccess Ep 151: Expanding Your Advisory Firm’s Reach With A Retail Prosperity Pie Shoppe, with Luna Jaffe

November 19, 2019 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 151st episode of Financial Advisor Success Podcast!

My guest on today's podcast is Luna Jaffe. Luna is the founder of Lunaria Financial, an advisory firm in Portland, Oregon that oversees nearly $55 million of assets under management for 100 client households.

What's unique about Luna, though, is that in an effort to solve the challenge of building an advisory practice that ends out with minimums too high to work with everyone, she launched the Sacred Money Studios & Prosperity Pie Shoppe, an actual pie shop across the street from her advisory firm office that offers low-cost financial education programs on budgeting and what Luna calls her Wild Money process.

In this episode, we talk in-depth about what Luna has learned in trying to expand the reach of financial education through a retail store. Why she ultimately decided to charge a standalone fee for each money class instead of an ongoing membership fee, the budgeting philosophy in the Wild Money process she teaches that she has found resonates with those seeking help with their finances, and the real-world challenges that come with opening up a retail store that has to manage retail employees.

We also talk about Luna's own advisory firm. Her unique year-long financial planning process that can run up to 18 meetings by incrementally helping clients implement changes step by step along the way, the exercises she uses from mind mapping to vision cards she created to having clients write a love letter to their money, how Luna integrates the eMoney Advisor portal into her somewhat non-traditional process, why the firm uses the You Need a Budget, YNAB tool to help clients actually change their spending behaviors and the flat fee structure that Luna adopted to ensure she is properly compensated for her time-intensive planning process.

And be certain to listen to the end, where Luna shares why despite the retail challenges, she hopes to ultimately take on investors and expand the reach of Sacred Money Studios, the additional challenge she faced when she decided to break away from Edward Jones to start her own independent firm, and why her biggest tip to other advisors is the importance of finding a mentor, not just one who will listen to you, but one who will pull you forward into what you can really become.