Download Ben Henry-Moreland's "2022 Rental Property Worksheet" below, and check out "Offering Tax Preparation As A Solo Advisor: How To Attain Designations And Create A Schedule By Next Tax Season" for tips on how solo advisors can use their existing tools and expertise to offer tax preparation and enhance the year-round value they provide.
Rental Property Worksheet
Business Income and Expenses Worksheets
Download Ben Henry-Moreland's "2022 Business Income and Expenses Worksheets" below, and check out "Offering Tax Preparation As A Solo Advisor: How To Attain Designations And Create A Schedule By Next Tax Season" for tips on how solo advisors can use their existing tools and expertise to offer tax preparation and enhance the year-round value they provide.
![Kitces Carl Ep Who To Hire First As Your Advisory Firm Grows And Why Do You Even Want To](https://www.kitces.com/wp-content/uploads/2023/05/Kitces-Carl-Ep-111-Who-To-Hire-First-As-Your-Advisory-Firm-Grows-And-Why-Do-You-Even-Want-To-150x150.png)
One of the biggest challenges faced by solo financial advisory firm owners as their firms grow and encounter capacity issues is deciding whether (and when) to hire an employee. While hiring staff members can offer a helpful lift in reducing capacity constraints for the firm owner, it also comes with its own burdens such as managing, training, and supervising employees, which many firm owners may have never considered when first launching their firms. Furthermore, determining the right time to hire an employee and which role to hire first can also be challenging decisions for solo firm owners.
In our 111th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how getting clarity on the reasons why hiring someone is necessary for the firm can help advisory firm owners determine what role to fill first, which business metrics to examine to understand when to hire, and which attributes to look for in a candidate.
Before making the commitment to hire a staff member, it’s important for advisory firm owners to understand if doing so is really necessary in the first place. By listing out what the advisor does on a daily basis and sorting the list in order of what the advisor enjoys most, the advisor can decide if the tasks they don’t enjoy can be eliminated to relieve capacity constraints (e.g., getting rid of multi-step tasks, rightsizing clients, or slowing growth by saying "no" to prospects), or if they are tasks that can be delegated. If there are enough delegable tasks to justify hiring an employee, it may be a signal that hiring additional support makes sense.
Once the reasons for hiring a new employee are clear, the next step is determining if doing so is affordable for the firm (for many advisory firms, hiring the first staff member tends to occur between $150,000–$250,000 of revenue and 40–50 clients). If revenue can support a new hire, the firm owner can then refer back to their least enjoyable tasks as a starting point to create a job description. This will help the advisor be more specific in defining the role they need to fill. By seeking candidates with complementary (not necessarily similar) working styles to the advisor, well-rounded teams can be established that are more likely to excel at problem-solving and developing functional processes.
Ultimately, the key point is that hiring, when done thoughtfully, can benefit advisory firms and their future growth. And by understanding the reasons for hiring someone and how they can support the firm before beginning the hiring process, firm owners can create job descriptions that will keep the search for a candidate much more focused on what will actually benefit the firm the most. And finding the right candidate who enjoys their role helping with the tasks that firm owner least enjoys will inevitably create a better work environment for both the employee and the owner – providing a sustainable role for the employee and a more enjoyable task list for the firm owner!
While interruptions within conversations occur frequently, the type of interruption can affect the content and flow of the dialogue that follows. For instance, if an interlocutor interrupts a speaker with a totally unrelated question or line of thought, the interruption not only has the potential to frustrate the speaker but can also cause them to lose their train of thought. Interestingly, different people have been found to have unique conversational 'intensity levels', where a 'high-intensity' speaker perceives interruptions in the form of simultaneous talking as a natural way of showing interest in what the speaker has to say, and a 'low-intensity' speaker might find such an interruption rude and distracting, even if it wasn't the interrupter’s intention to disrupt the conversation. Further, these dynamics can be even more challenging when speaking in a virtual environment, as it can be harder to tell when one person is finished speaking. And by understanding these varying levels of conversational 'intensity', advisors can hold more productive client conversations by taking measures to reduce or mitigate the impact of interruptions during client meetings.
In financial planning relationships, interruptions by an advisor can be exponentially more impactful due to the fact that prospects and clients tend to be uncomfortable with jargon and feelings of being judged. When a person is interrupted, even when the interruption is made with no ill intent (e.g., because a client’s comment sparks a potential planning opportunity in the advisor's mind), the conversation can come to a sudden end. Notably, this can work the other way as well, as an advisor might be interrupted by a curious client who is a high-intensity speaker seeking clarification (and not trying to be a jerk!).
One way for advisors to minimize unnecessarily interrupting prospects or clients during meetings is to take notes while their interlocutor is speaking. Using this tactic, the advisor can ensure they remember key facts and potential follow-up questions without interrupting the speaker (another helpful practice is to first ask the client's permission to take notes before doing so, which can enhance the client's confidence by giving them some degree of power and control over the meeting). Yet interruptions are sometimes inevitable – whether they are deliberate or not. For inadvertent interruptions, advisors can 'recover' simply by apologizing and letting the client know they want them to continue speaking (which also potentially reduces the chances that the advisor comes off as rude to the client). For interruptions that need to be made (e.g., to correct a wrong assumption), advisors can phrase their interjection using "Yes, and…" thinking, which conveys acceptance and agreement instead of contradiction and judgment. Alternatively, simply asking for permission or using body language cues can also buffer the impact of interruptions.
Ultimately, the key point is that given the sensitive and personal nature of conversations related to financial planning, advisors can help prospects and clients feel more understood by avoiding and mitigating interruptions during meetings. And by taking measures to reduce the number of interruptions and conveying they didn't mean to be rude when interruptions do happen, advisors not only foster more productive conversations but also make their prospects and clients feel more empowered in the process!
Marginal Tax Rates Chart For 2023
The chart below details some of the various factors that can impact a taxpayer’s marginal tax rate, including both ordinary income tax brackets and the Alternative Minimum Tax (AMT), the tax treatment of long-term capital gains and qualified dividends, the payroll taxes that apply to earned income for wage employees and the self-employed, the new 0.9% (on earned income) and 3.8% (on net investment income) Medicare surtaxes, the benefits of the pass-through business deduction on qualified business income, and the impact of various phaseouts including the QBI deduction and the AMT exemption phaseout.
This chart was originally produced for the November/December 2012 issue of The Kitces Report newsletter for subscribers, and has been updated for 2023.
![Jake Northrup Podcast Featured Image FAS](https://www.kitces.com/wp-content/uploads/2023/04/Jake-Northrup-Podcast-Featured-Image-FAS-331-150x150.png)
Welcome back to the 331st episode of the Financial Advisor Success Podcast!
My guest on today's podcast is Jake Northrup. Jake is the Founder of Experience Your Wealth, an independent RIA based in Bristol, Rhode Island, that advises 78 client households with a 3-person team supporting more than $550,000 of ongoing revenue.
What's unique about Jake, though, is how he’s been able to grow to over $550,000 of revenue in just 4 years since launching from scratch, and how he realized that because of how his rapid growth was going to impact future capacity and time constraints, he would need to hire employees sooner rather than later… and decided to hire an associate advisor in the 2nd year after launching his firm before he even had $200,000 of annual revenue.
In this episode, we talk in-depth about why Jake decided to hire an associate and then a lead advisor within the first few years of what was originally intended to be a solo practice because he felt his practice was too completely dependent on him, how Jake and his team implement a 4-meeting financial planning process that includes creating a life planning timeline, using MindMeister to develop a mind map to visualize a client’s goals, and creating a client dashboard in MeisterTask where clients can track their progress as well as mark off tasks that need to be completed to move them along their financial journey. We also talk about why despite being a CFA charterholder Jake outsources investment management to First Ascent – for which clients pay an entirely separate additional fee – because it both allows him to simplify compliance to not manage investments in-house, and takes away the cost pressure of having to hire a separate employee to just manage clients' investment portfolios.
We discuss how Jake attributes much of his fast-growth success to launching with an $8,000 website that focuses on his values-based niche of "travel-loving young families that don’t buy into the traditional '9-5, work-until-you-are-65' concept" and then leveraging on Google reviews to enhance his SEO, the way Jake stuck to and didn't compromise his niche from the very start when he launched but was more flexible about the financial criteria early on and only started setting higher fee minimums after his 1st year in the business. We also discuss why Jake and his team not only create long-term financial plans for their clients, but also focus on a 10-year vision to help his younger, travel-loving clientele start achieving more of their immediate goals so they're more likely to retain as clients by feeling like they're making near-term financial planning progress.
And be certain to listen to the end, where Jake shares how he's struggled over the years with perfectionism, control, and a fear of failure that led him to remain a solo advisor, yet realized that by focusing on those issues, he was potentially missing out on more, how Jake invested heavily to get his CFA early in his career and in retrospect wishes he spent more time learning about life planning and money scripts. He also shares why he feels fulfilled in how he consciously built and staffed his practice because it allows him to have more flexibility and time to spend with his wife and start a family, while also creating an environment for his employees to thrive and be present for their families, lives, and helps his clients enjoy their money and pursue their passions now instead of waiting for retirement.
So, whether you're interested in learning about the business metrics Jake relied upon to know when to hire, why Jake charges a flat annual a fee so clients don't have to deal with constant fee changes, or why Jake decided to niche-focus from the launch of his firm, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jake Northrup.
Jake Northrup’s Client Task Dashboard
Download Jake Northrup's "Client Task Dashboard" below, and check out "#FA Success Ep 331: Getting Comfortable Hiring Advisors ‘Early’ As The Advisory Business Revenue Grows, With Jake Northrup" for more tools, tips, and strategies on outsourcing and hiring, driving firm growth, and mapping a client's journey.
Jake Northrup’s Account Structure, Asset Allocation And Cash Flow Visual, And Client One Pager
Download Jake Northrup's "Account Structure, Asset Allocation And Cash Flow Visual" and "Client One Pager" below, and check out "#FA Success Ep 331: Getting Comfortable Hiring Advisors ‘Early’ As The Advisory Business Revenue Grows, With Jake Northrup" for more tools, tips, and strategies on outsourcing and hiring, driving firm growth, and mapping a client's journey.
Jake Northrup’s Financial DNA Behavioral Comparison
Download Jake Northrup's "EYW Financial DNA Behavioral Comparison (Jake and Kay)" below, and check out "#FA Success Ep 331: Getting Comfortable Hiring Advisors ‘Early’ As The Advisory Business Revenue Grows, With Jake Northrup" for more tools, tips, and strategies on outsourcing and hiring, driving firm growth, and mapping a client's journey.
Jake Northrup’s Client Mind Map And Life Planning Timeline
Download Jake Northrup's "Client Mind Map" and "Life Planning Timeline" below, and check out "#FA Success Ep 331: Getting Comfortable Hiring Advisors 'Early' As The Advisory Business Revenue Grows, With Jake Northrup" for more tools, tips, and strategies on outsourcing and hiring, driving firm growth, and mapping a client's journey.
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