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#FA Success Ep 325: Building Success In The Financial Advice Business From A Financially Challenged Upbringing, With Brenda Hiscock

March 21, 2023 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 325th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Brenda Hiscock. Brenda is a financial planner with Objective Financial Partners, an advice-only advisory firm based in Ontario, Canada, that works with clients on project-based financial plans, and also offers outsourced paraplanning to other Canadian advisory firms.

What's unique about Brenda, though, is how she not only came to the financial services industry without any financial background, but did so despite a very financially challenging upbringing, and while navigating challenges of homelessness, bankruptcy, and alcoholism in her 20s, through which she not only persevered and rose through the ranks as a financial advisor, but has been able to leverage those real-world experiences and challenges to provide an even deeper more meaningful level of engagement with her current clients and how their financial pasts can impact their financial behaviors in the present and future, too.

In this episode, we talk in-depth about how, while Brenda was still in high school, her mother died suddenly and she was left with the responsibility of caring for her younger sibling which created a large financial burden that Brenda couldn’t handle despite working 2 jobs and eventually led to her becoming homeless and beginning a cycle of alcohol addiction as a coping mechanism, how Brenda learned after her early struggle with alcoholism and 2 failed stints in rehab before finally getting sober 19 years ago that being able to work from home with a flexible schedule wasn’t just a nice-to-have for work/life balance but essential for her to have the space she needed for her mental health, and how Brenda’s perspectives on financial planning and especially the benefits of insurance were so deeply shaped by both her financial struggles as a teenager after her mother died without life insurance, and her financial stability after disability insurance kept her from falling back into homelessness when she was diagnosed with cancer just 1 year after getting sober and had to take a year off from work to get the care she needed.

We also talk about how, when Brenda realized she would have to take care of her younger sibling, she asked for help and her high school placed her in a cooperative education program that got her a job as a teller at a credit union which began her career in the financial services industry, how, later in her career, Brenda began a job in insurance (because she knew how important having insurance can be) but ultimately found that her first-hand experiences in the benefit of insurance didn’t make it any easier to sell insurance and prospect for new clients, and how Brenda’s effort to find the right position for her in the financial services industry ultimately led her to financial planning where she realized that she could have a greater impact in the lives of clients as she could use her personal experiences and life lessons to educate them on how to properly handle their finances and break through their emotional issues with money.

And be certain to listen to the end, where Brenda shares how she found she enjoys financial planning because she can combine her intuitive math skills with her love of working with people, educating, and having deep conversations that can impact the future of clients’ lives, how Brenda is continually working on making peace with the struggles she has endured through her life but feels that they were necessary to get her where she is today and to become a living life lesson to others in the importance of having insurance, support from others, and a good financial plan of your own, and why Brenda believes it is important for younger, newer advisors to not only find mentors but be ready to proactively ask their mentors for help in achieving their career goals to ensure they get the support and wisdom they want and need.

So, whether you’re interested in learning about why Brenda feels it is vital and beneficial to have life and medical insurance, how Brenda overcame her addiction and cancer diagnosis, or how Brenda helps her clients get past their emotional connections with money, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Brenda Hiscock.

How Listing Fees On Advisory Firm Websites Can Clearly Communicate The Cost (And Value) Of Planning

March 20, 2023 07:06 am 0 Comments CATEGORY: Marketing

When a prospect is looking for a financial advisor, understanding how much they will need to pay can often be a tricky proposition. In part, this is due to the many commission-based advisors whose compensation depends on the sale of insurance or investment products, where the price that a client pays is baked into the price of the product or is included in (often opaque) fees associated with buying, selling, and/or holding the investment. But even as fee-only financial planning has gained in popularity and advisory firm websites have become ubiquitous, it can still sometimes be hard for prospective clients to determine how much they would pay for advice before actually reaching out to the firm. But by listing fees on the firms' websites in a transparent manner (no matter their fee model) and linking their fees to the value they offer, advisors can provide prospects with a better idea of whether the firm is a good fit, potentially leading to a higher conversion rate of prospects into clients.

Financial advisory firms have a wide range of options when it comes to displaying their fees on their website. For instance, firms charging on an Assets Under Management (AUM) basis can provide a chart (or even a calculator!) that connects a prospect’s assets with the percentage fee they would pay as a client. A firm with a retainer fee model might show what a prospect’s expected fee would be based on their individual circumstances and the criteria the firm uses to determine its fee (e.g., the complexity of the prospect’s financial situation). And firms that charge on an hourly basis can provide their hourly fee(s) and the estimated number of hours it will take to work with a client based on their particular circumstances.

Given that comprehensive financial planning is not a commodity service where consumers might make a choice on price alone, advisors also have the opportunity to use their website to demonstrate the unique value they provide to clients. And by showing prospects in advance of the initial discovery call how their specific financial planning needs will be met, advisors enable them to come to the call with a better understanding of the firm and what it offers, allowing them to prepare more specific and relevant questions about the planning process. This can be accomplished in a variety of graphical means, from a table comparing the firm’s service offerings with those of other types of advisors to a client service calendar that shows prospects the work the firm will be doing on their behalf once they become clients.

Ultimately, the key point is that because an advisor’s website often serves as the first touchpoint for prospective clients, it is an important tool to help explain the types of clients with whom the firm works and the value the firm provides. And by using the website to clearly communicate the information needed to help visitors understand the value the advisor provides as well as the fees charged, advisors can attract prospects who would be ideal clients for their firm!

Weekend Reading For Financial Planners (March 18-19)

March 17, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that just weeks after introducing its own self-clearing platform, RIA custodian Altruist announced this week that it is acquiring fellow custodial platform Shareholder Services Group (SSG), a move that will make the combined RIA custodial platform the third-largest in terms of RIAs served. This is significant, as most ‘upstart’ RIA custodians have struggled to gain material traction in a hyper-competitive RIA custodial landscape, but Altruist appears to be winning small-to-mid-sized firms in particular by cutting down on their outside technology costs with its unique ‘all-in-one’ that has the core portfolio management and performance reporting components built in directly to the platform.

Also in industry news this week:

How the collapse of Silicon Valley Bank could impact Federal Reserve policy and market performance going forward
Why advisors could soon be an important access point for consumers looking to add private investments to their portfolio

From there, we have several articles on the collapse of Silicon Valley Bank (SVB):

A play-by-play of how SVB went from a rapidly growing regional bank to a failed one in mere months
How banking practices could change for consumers in the wake of the SVB collapse
How government officials have attempted to balance the stability of the banking system while avoiding ‘moral hazard’

We also have a number of articles on cash flow and spending:

How advisors can help clients create a cash management plan that keeps their bank deposits within FDIC limits and earns them a relatively strong return
Why being ‘rich’ goes well beyond where one stands in the national income distribution
A new study suggests that while happiness increases with income on the whole, unhappy people are less likely to see happiness gains once they reach higher income levels

We wrap up with 3 final articles, all about living a healthy lifestyle:

Recent research upends previous assumptions about how one’s metabolism changes over time
Why walking can bring many of the health benefits of more strenuous exercise routines
How short bursts of exercise throughout the day can lead to significant health benefits

Enjoy the ‘light’ reading!

Cyber Threats To Client Wealth And Well-Being: Why And How Wealth Managers Will Soon Play A Key Role In Managing These Risks

March 15, 2023 07:02 am 0 Comments CATEGORY: Client Trust & Communication

Risk management is a key part of many financial advisors’ value propositions. For instance, ensuring clients maintain the proper insurance coverage based on their needs is an important part of the financial planning process. At the same time, clients face another class of risks that advisors often do not consider: cyber.

In this article, guest authors Mark Hurley, Carmin Cicalese, Bryce Washum, and Douglas Garbutt discuss how financial advisory clients face a range of cyber risks, including cybertheft (i.e., stealing a client’s financial assets that are accessible online), identity theft (i.e., using a client’s personal information for financial gain or other purposes), reputational risk (i.e., the release of potentially embarrassing personal information), and physical danger (e.g., when tagged online pictures can be used to identify an individual’s location). Notably, taking steps to protect from these threats not only benefits the client, but can also benefit the advisor as well. Equally important, it is relatively easy and inexpensive to do so. Moreover, given the closeness of advisor-client relationships and the financial implications of many cyber threats, clients often look to their advisors to help them recover from a cyberattack (whether or not the advisor is prepared!); therefore, advisors who help their clients take preventive steps can save both the clients and the advisors themselves significant amounts of time and cost.

While advisory clients are potentially exposed to a variety of cyberthreats, operating online with basic cyber hygiene can reduce and manage them by making the client a more hardened – and therefore, a less attractive – target and preparing them to identify breaches, enabling them to quickly respond and mitigate the damage. Basic cyber hygiene comprises 2 general categories – creating a layered digital security structure (e.g., a combination of technology and series of steps) and overseeing risk management on an ongoing basis (e.g., monitoring the dark web and corporate data breaches, reviewing credit reports annually, and regularly updating protection).

Given the higher financial stakes of cyberthreats, many family offices and advisors working with UHNW clients already offer these and other cybersecurity services to their clients. But when taking into account the ubiquity of cyberthreats and the recognition by clients of potential cyber risks, offering these services to advisory clients further down the wealth spectrum can be an important value-add for advisors to implement. Of course, advisors themselves do not have to be experts in cybersecurity or in implementing a cyber-hygiene program; instead, many advisors will likely choose to work with outside vendors that provide cybersecurity services commensurate with their clients’ needs.

Ultimately, the key point is that even though cyberthreats are more prevalent than ever, cyber-risk management for clients still remains off the radar screens of many financial advisory firms. Which means that many firms have growing opportunities to provide services to their clients that can protect their assets and personal information and, at the same time, potentially improve client growth and retention in the process!

#FA Success Ep 324: Managing Revenue And Income Volatility Through The Scaling Phase Of Growth, With Nancy Knous

March 14, 2023 07:06 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 324th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Nancy Knous. Nancy is the CEO and Founder for Benchmark Wealth Management, an independent RIA affiliated with LPL Financial based in Memphis, Tennessee, that oversees nearly $340 million in assets under management for almost 1000 client households.

What's unique about Nancy, though, is how, after reaching a moment of business crisis during the market volatility of the 2008-2009 Financial Crisis, the market decline and associated decline in her AUM fees led to a cash flow squeeze and resulted in Nancy having to ask her assistant and best friend for a loan just to make payroll for her staff… which, fortunately, led to substantive changes in how Nancy now manages the profit margins of the firm, allowing her to scale up the business to more than 20 team members and not having any business cash flow problems during the 1,pandemic.

In this episode, we talk in-depth about how, during the Great Recession, Nancy (like many other advisory firm owners at the time) were facing the challenges of a 30-40% market drop and its subsequent effect on her firm’s revenue but because she took for granted that she was a CFP professional with a ‘good’ income she didn’t need to monitor it that closely (until the month she discovered she was coming up $5,000 short on her staff payroll obligations!), how, after struggling with her firm’s and her own personal finances, Nancy asked her business partner for help and he suggested she read Dave Ramsey’s “Total Money Makeover” which helped her transform her own money habits, pay off her accumulated debt over 7 years, and inspired her to become a SmartVestor Pro and even use the book to help her clients engage in deeper conversations about their money habits and savings, and how Nancy has been able leverage Ramsey’s SmartVestor lead generation program to grow her firm to 5 referrals per week (where 2-3 of those referrals became clients), and over a couple of years, gain more than 100 new clients per year.

We also talk about how Nancy and a few other advisors from her previous firm decided to follow one of their well-respected advisor colleagues to start an independent firm with LPL, but it wasn’t until later that she suddenly realized that she had now become not just an advisor but an advisory firm business owner as an independent but that becoming a business owner also meant she now had an opportunity to manage her business and treat her employees the way she felt was best (and steer away from some of the negative experiences she had previously as employee), how, as her firm has grown, Nancy has begun stepping away from client-facing duties and transitioning her clients to another advisor in her firm so that she can focus more on becoming the firm’s visionary and leading it forward to the next stage of growth, and how Nancy realized through trial and error the importance of having employees that are not like her and the need to find the types of employees that complement her strengths and weaknesses which has led to her now using personality tests (like Working Genius by Patrick Lencioni) and developing a 4-8 week hiring process that includes several meetings with team members and even a group dinner comprising of the candidate and their spouse along with firm members and their spouses to really ensure a good fit for the firm.

And be certain to listen to the end, where Nancy shares how she coped with failing her Series 7 exam 5 times in the span of a year before she realized she may have a learning disability and then after consulting with her doctor, she was able to find the right medication for her that improved her focus so much, that years later she got the highest grade in her class on her Series 24 exam, how Nancy spent the better part of 30 years of her career feeling inadequate about her abilities as an advisor because she feared she wasn’t as technical or analytical as other advisors but through supportive friends and colleagues realized that she can have great confidence in the success she’s created through her strength in relating to clients, and why Nancy has recently become a certified Dream Manager to develop her team and inspire them to go beyond traditional goal-setting as she feels that dreams have a deeper financial planning meaning than mere ‘goals’ and hopes to one day translate her training into workshops for her clients so that they create better connections with their dreams… and as a result, achieve more of their financial objectives.

So, whether you’re interested in learning about how Nancy overcame her debt challenges to help her firm scale and grow, why Nancy employs a stringent hiring process and personality tests to find the right employees, or how Nancy uses the lessons she learned to help her clients avoid financial pitfalls, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Nancy Knous.

The Future Of Advisor Platforms: Reducing Overhead Costs With Services (Not Technology)

March 13, 2023 07:03 am 0 Comments CATEGORY: Practice Management

For the past several decades, platforms for advisors have differentiated with the quality of their technology. The focus on ‘tech’ was a natural evolution for advisor platforms away from their roots – which was originally to differentiate by the quality of their proprietary product shelf, the primary means that brokerage firms and insurance companies attracted advisors to them in the 1960s, 70s, and 80s. As product shelves became increasingly open architecture in the 1990s and 2000s, what mattered wasn’t the particular products made available to advisors (because the answer increasingly was “anything you’d want is already there”), but the technology that the advisor platform made available to implement those products and help the advisor better run their business.

However, the reality is that it’s very expensive to build and maintain technology, especially when considering the full range of CRM, portfolio management, financial planning, and more than a dozen other sub-categories of technology that financial advisors use in their firms. Consequently, the technology that most of today’s advisor platforms (e.g., broker-dealers, RIA aggregators, TAMPs, etc.) are touting is not actually their own proprietary technology… it’s a selection of third-party technology tools they’ve woven together to become the ‘tech stack’ they offer to their advisors. Which is usually one from a list of just 3 leading providers in any particular category. Such that, in the end, advisor platforms are increasingly all offering the exact same technology tools… and signaling an end to differentiating advisor platforms with technology altogether!

So what’s the alternative for advisor platforms to differentiate in the future? In a word: Services. Because advisory firms still – and will always – continue to need team members to provide service and handle the tasks that go beyond what technology alone can automate.

In practice, support services from advisor platforms might include a wide range of consulting services – from compliance to an advanced planning team, operations to technology – that advisors could engage for a fee as needed. Though arguably the even bigger opportunity is for advisor platforms that provide ongoing staff support services in the key areas where advisory firms need ongoing support – from (virtual) assistants for administrative tasks to ongoing compliance support, bookkeeping, and financial reporting to paraplanning, trading and investment research, and more. Staffing needs that already consume 15% or more of the typical advisory firm’s revenue today… as compared to the barely 4% of revenue that the typical advisory firm spends on technology. Which means that providing services is actually far more of an economic opportunity to serve advisors than it is to ‘just’ solve their technology needs!

In the long run, the growth of advisor platforms as service providers – not ‘tech’ platforms – will also create more opportunities for differentiation, as some will inevitably be better at delivering services than others and/or will be better at the needed services for particular types of advisors with whom they can specialize. Which also gives the most successful service-providing advisor platforms more pricing power in what has become an increasingly commoditized payout-centric competitive environment. As well as the opportunity to drive greater margins for themselves by reinvesting into technology – not for their advisors, per se, but for themselves – to better deliver their services to advisors as ‘tech-enabled service providers’.

The key point, though, is simply to recognize that advisor platforms are not large enough to build all of their own technology from scratch, and cannot sustainably differentiate themselves by offering the same suite of technology solutions that more and more other advisor platforms are offering as well. The opportunity comes in the gaps between technology – the service work that humans must still accomplish – that drive most of the costs of advisory firms as service businesses in the first place. Which means the most successful advisor platforms in the future will be those that best deliver services that allow advisors to run the human parts of their businesses more efficiently!

Weekend Reading For Financial Planners (March 11-12)

March 10, 2023 02:21 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that President Biden released his latest budget proposal this week, which calls for a range of tax increases on higher-income and wealthier taxpayers to fund deficit reduction and the president’s spending priorities. While the budget almost certainly will face stiff resistance in a divided Congress, proposals that could affect financial advisors and their clients include increasing the top income and capital gains tax rates, raising the Net Investment Income Tax rate and applying it to pass-through income, and increasing the amount of the child tax credit.

Also in industry news this week:

Altruist’s self-clearing custodial platform has gone live, offering RIAs of all sizes an alternative to larger, legacy custodians
While the SEC is planning to increase the number of on-site examinations it conducts, the odds that a firm will experience an exam in a given year appear to be remaining steady

From there, we have several articles on tax planning:

How advisors can add value to clients by helping them maximize the benefits of their Health Savings Accounts
How the IRS could be preparing to finalize regulations that would require some beneficiaries with inherited IRAs to take RMDs this year
Why higher interest rates affect the utility of a range of trusts used for estate and tax planning, from GRATs to QPRTs

We also have a number of articles on practice management:

How competitive pressures and growth challenges could drive RIA M&A activity in the coming year
A process that can help advisory firm owners craft a succession plan that matches their goals for their firm and for their own retirement
The major role that emotions play in an advisor’s decision to sell their firm and how to prevent them from scuttling a deal

We wrap up with three final articles, all about the uses of Artificial Intelligence (AI)-enabled tools for advisors:

How a new tool embedded in Microsoft Word can help advisors craft and edit content
How advisors can use AI-enabled tools to more efficiently generate content ideas, proofread text, and create marketing videos
Why ChatGPT could be a valuable tool to support advisor marketing, from creating ad copy to drafting prospect emails

Enjoy the ‘light’ reading!

Kitces & Carl Ep 107: The Strategic Planning Process And Coming Up With (New) Ideas To Try

March 9, 2023 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

For many financial advisors, annual strategic planning is an essential process that establishes clear and specific business goals for the year, along with the steps necessary to achieve those goals. Additionally, it helps advisors make informed decisions about the future direction of their business. As important as strategic planning is to the evolution of the business, coming up with new ideas to implement as part of the strategic plan can be difficult, and choosing which ideas to develop and implement can be even more challenging.

In our 107th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss ways for advisors to find new ideas, the process of narrowing down their options and choosing the best ones, and how advisors can vet and test the viability of their ideas before implementing them on a larger scale.

Generating new ideas is essential for individuals looking to innovate and grow their businesses, but the reality is that good ideas don’t always come easily or quickly. A good way for advisors to stimulate the ideation process is to increase their exposure to new information – whether it be through reading books, engaging in more conversation, attending conferences, or joining study or mastermind groups, experiencing new perspectives can give advisors a fresh outlook and help them come up with their own new ideas. And as a collective of new ideas is gathered, identifying the 2 or 3 ideas that resonate the most with the advisor can help them narrow down their options to those that will most likely help them progress toward their goals.

Once the advisor has chosen 2 or 3 of their best ideas, vetting the ideas with trusted – and unbiased! – mentors, coaches, colleagues, and/or friends can help the advisor gain useful feedback and insight, which can help them develop a better sense of whether they have a sensible, fully formed idea worth pursuing. Next, analyzing the required steps to implement each idea and the potential outcomes can help narrow down their options further, determining which of the ideas is best to pursue on a long-term basis. While making a long-term commitment to an untested idea can feel scary, figuring out how to break the idea into smaller, testable steps can make the process easier and less risky.

Ultimately, the key point is that implementing new ideas is an important and exciting part of strategic planning, and while finding the right ideas to implement can be challenging, it can be facilitated by following a systematic idea-gathering framework. Such a process can involve multiple steps that focus on information gathering, brainstorming and gut-checking, asking for feedback from various sources, and devising ways to test drive ideas on a smaller scale to evaluate their viability and to save time, money, and resources. This process allows advisors to pivot and course correct when necessary, relieving the pressure of having the ‘right’ idea right away and avoiding ideas with less chance of success, which, in the end, creates opportunities for the advisor to investigate and pursue even more worthwhile ideas!

Factor Investing And Its (Behavioral) Persistence: Facts and Fiction About The Zoo Of Factors

March 8, 2023 07:07 am 0 Comments CATEGORY: Investments

In the early days of investing, stocks were often evaluated in a vacuum: Investors assessed the plusses and minuses of each company’s stock based on its own merits, with little consideration of the relationship between one stock’s performance and that of the market as a whole. Then, in the 1960s, with the advent of the Capital Asset Pricing Model (CAPM), investors began to look at stocks (and by extension, pooled investments like mutual funds as well as entire portfolios) through the lens of a stock’s risk compared to the entire market (and concurrently, the expected return that investors demanded to compensate for that risk). A stock’s ‘beta’ – generally speaking, its riskiness compared to the overall market – was considered a key driver of its future performance.

In the early 1990s, however, the release of a landmark study by Eugene Fama and Kenneth French introduced the concept of “factors” beyond beta that could influence a stock’s performance. Though Fama and French’s study focused on 2 factors (size and value), investment research in the subsequent 30 years has identified hundreds of additional factors that investors can use to adjust their return opportunities and expectations in constructing diversified portfolios.

Although the rise of factor-based investing has created many possibilities for advisors to add value by optimizing the risk and return profiles of their clients’ portfolios, the explosion in the number of potential factors creates its own new challenge for investors, from determining how to evaluate the factors themselves to deciding which ones are really useful in making investment decisions. As it turns out, when filtering the “zoo of factors” down to only those that have had explanatory power to predict above-market returns (as well as that meet a series of tests for persistence, pervasiveness, robustness, investability, and the logic of how they operate), there are really only a handful of factors that are truly worthy of investment (including size, value, momentum, quality, profitability, and quality for equity; as well as term and credit quality for fixed income), which make it much more manageable for investors to implement a factor-investing strategy.

Furthermore, focusing on just the most salient factors can allow investors to avoid some of the criticisms of factor investing raised over the years, including that factors are overly risky compared to the market, that factor investing is prone to failing at inopportune times, and that factors have become irrelevant (or perhaps too well-known and ‘overcrowded’ to produce excess return) for investors going forward. In reality, the body of evidence that supports factor-based investing has only grown larger with time – as long as one focuses on just the factors that have actually proven to be effective.

The key point is that while investment risk is impossible to eliminate, factor-based investment strategies have been shown by a wide body of data to create excess returns without adding to a portfolio’s overall risk. While factor investing isn’t a panacea and can itself be prone to long periods of underperformance, the evidence has shown that it can reward investors who are willing to stick with it. Ultimately, factor investing can be almost as much about behavioral factors as economic ones: The fact that so many investors aren’t willing to endure the risk of underperformance creates potential rewards for the ones who are!

#FA Success Ep 323: Sustaining A $5B Advisory Firm To The Third Generation Of Leaders, With Yonhee Choi Gordon

March 7, 2023 07:05 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 323rd episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Yonhee Choi Gordon. Yonhee is a Principal and the Chief Operating Officer of JMG Financial Group, an independent RIA based in Chicago, Illinois, that oversees nearly $5 billion in assets under management for close to 1,500 client households.

What's unique about Yonhee, though, is how, through her nearly 4 decades with JMG Financial Group, Yonhee has been a part of not only the firm’s succession plan to its second generation of owners but now to its third generation of leaders… and along the way, has personally recruited, trained, and retained the majority of the firm’s employees, by implementing stringent assessments in her hiring process to ensure that new employees are in alignment with the firm’s expectations and values to be able to succeed and grow with the firm for the long run.

In this episode, we talk in-depth about how during Yonhee’s 36 years with JMG, she has not only seen the evolution of the firm and its three generations of ownership and leadership, but has been integral in building the hiring, training, and development systems that has allowed the firm to transition to its current generation of partners and owners (most of whom have been with the company for over 20 years, after first being hired and trained by Yonhee herself), why Yonhee creates and implements a unique kind of work sample assessment for all prospective employees based on the actual duties of the position she’s hiring for so that she can evaluate how the candidates think, process information, and approach problem-solving with the actual tasks of the job, and how JMG structures its leadership roles, where Yonhee not only oversees the training and development of newer advisors, but also coordinates and supervises the Accounting, Operations, Human Resources, and IT departments as well as working with the firm’s Chief Talent Officer.

We also talk about how JMG developed their own proprietary CRM internally more than 25 years ago because they realized they would need better capabilities to input tax preparation data than CRM systems had at the time, and in the years since have been able to further customize the software to their precise needs as the firm grew, why JMG implements strict criteria for who can own shares of the firm, including a limit on ownership size with a cap of 20% of shares, and a rule that requires owners over the age of 70 to sell back their shares to keep ownership fresh and more closely connected to the current state of the firm, and why JMG implements a client capacity of 50-80 clients per advisor and how it keeps detailed track of the time it takes for employees to complete clients tasks to both avoid burnout and continually develop better and more efficient processes.

And be certain to listen to the end, where Yonhee shares why she believes that a portion of the industry’s rising level of M&A deals is really a result of inconsistent definitions of advisor titles and insufficient career paths that are failing to nurture newer advisors into the next generation of owners, why Yonhee advises younger, newer advisors to first understand the culture and values they feel are most important to them personally, and then use those standards to find their ideal role at a firm (to ensure it’s a firm that will take the time to support them and help them grow), and why Yonhee’s own definition of success has changed over time, where at this stage it's less about her personal career growth and more about the impact and value she can provide in the lives of the employees that she leads and the pride she feels knowing she is developing the next generation of leaders in the financial services industry.

So, whether you’re interested in learning about how Yonhee and her firm have remained successful through 3 generations of leaders, the unique way Yonhee thinks about finding the right employees and training them for success, or how Yonhee navigated being a Korean women in a male-dominated field and rose into a partnership role, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Yonhee Choi Gordon.

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#FA Success Ep 325: Building Success In The Financial Advice Business From A Financially Challenged Upbringing, With Brenda Hiscock

How Listing Fees On Advisory Firm Websites Can Clearly Communicate The Cost (And Value) Of Planning

Weekend Reading For Financial Planners (March 18-19)

Cyber Threats To Client Wealth And Well-Being: Why And How Wealth Managers Will Soon Play A Key Role In Managing These Risks

#FA Success Ep 324: Managing Revenue And Income Volatility Through The Scaling Phase Of Growth, With Nancy Knous

The Future Of Advisor Platforms: Reducing Overhead Costs With Services (Not Technology)

Weekend Reading For Financial Planners (March 11-12)

Kitces & Carl Ep 107: The Strategic Planning Process And Coming Up With (New) Ideas To Try

Want CE Credit for reading articles like this?

Factor Investing And Its (Behavioral) Persistence: Facts and Fiction About The Zoo Of Factors

#FA Success Ep 323: Sustaining A $5B Advisory Firm To The Third Generation Of Leaders, With Yonhee Choi Gordon

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