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#FA Success Ep 357: Building A High-Tech High-Touch Advisory Firm With The Modern Advisor Tech Stack, With Jon Henderson

October 31, 2023 07:04 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Jon Henderson Podcast Featured Image FAS

Welcome back to the 357th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jon Henderson. Jon is the Founder and CIO for Echo45 Advisors, an independent RIA based in Walnut Creek, California, that oversees $163 million in assets under management for more than 180 client households.

What's unique about Jon, though, is how he has carefully vetted and curated his advisor tech stack of third-party software to provide a strong "high-tech" client experience… and has paired the technology with what he calls a "Client Concierge" staff member who leverages a series of internal checklists they've developed to ensure that every client is receiving a high-touch service as well.

In this episode, we talk in-depth about how Jon evolved his "high tech and high touch" mindset to serving clients by regularly iterating upon and updating his advisor tech stack while also elevating his long-time client service administrator into a more holistic client concierge (because the future isn't about tech or human service, it's tech and human service, each doing what they're best at), why Jon pursued a Certificate in Blockchain and Digital Assets from the Digital Assets Council of Financial Professionals and now uses a digital TAMP, Eaglebrook Advisors, to hold a 1% allocation to cryptocurrencies for his clients, and why after 19 years at Merrill Lynch, Jon left his more-than-$1 billion AUM team serving 420 clients so that he could launch his own firm the way he saw fit which meant including cryptocurrency investing and tax and estate planning, and to work with a more manageable number of clients to prevent his own possible burn-out.

We also talk about the tools and services that Jon has incorporated into his own modern advisor tech stack, including why Jon utilizes a service called Advisor Referral Boost to gain better vetted introductory meetings with Centers of Influence like CPAs and estate planning attorneys to develop a steady flow of referrals, why Jon uses Asset-Map to help clients visualize their finances (and even has prospects fill out their financial information so that their own Asset-Map can be populated prior to an initial discovery meeting), and how Jon has integrated an annual tax review into every client's service offering (and then completes the tax reviews efficiently by leveraging Holistiplan).

And be certain to listen to the end, where Jon shares how he went through the breakaway process to launch his firm just as the pandemic hit and had to deal with the pressures of paying employees and having invested a lot of money into an office space and tools even as the stock market plummeted, why Jon credits listening to podcasts about financial advisors and the struggles they faced as they were launching their firms as a major source of education and inspiration for him to launch his own firm (because it's easier to gain perspective on what's really possible by hearing the journeys that others have taken), and how Jon's own definition of success has evolved as his career has evolved, from what was initially about simply bringing in clients and generating revenue but now increasingly is about being a job creator who's providing opportunities for his team to be growing and expanding as more and more clients are served.

So, whether you're interested in learning about how Jon built a truly collaborative team of experts, how he balances crowded meetings with work demands, and why Jon believes that leveraging technology to connect teams and educate people can help everyone make the most of their talents, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jon Henderson.

The 10 Best Financial Advisor Conferences To Attend In 2024

October 30, 2023 07:01 am 0 Comments CATEGORY: Conferences

After several years of turmoil caused by the pandemic, financial advisor conferences seem to have found a "new [post-pandemic] normal", with events once again growing (some already surpassing their pre-pandemic highs). But that's not to say that the conference landscape was not altered by the pandemic; instead, the pandemic appears to have served as a catalyst that accelerated trends that were already underway, such that financial advisor conferences today look substantively different than they did just a decade ago.

Most notable is the fact that industry associations are not the drivers of advisor conferences that they once were; while a decade ago, 75%+ of this "Best Conferences" list consisted of various events run by industry associations, now it numbers less than 25%. On the other hand, the past decade has seen an explosion of 'vendor conferences', as more and more companies have discovered it's more economical to simply run their own conferences (at a breakeven or even a small loss) than to heavily sponsor the conferences of industry associations.

Some of these vendor conferences are built to bring out their existing advisor users to get feedback about and share the latest regarding their software, but a growing number of specialized conferences unto themselves have industry-leading content in the particular domain of the vendor's expertise, from Snappy Kraken and Nitrogen's advisor marketing conferences to DeVoe and Company's Elevate conference for managing the complex financial advisor enterprise.

At the same time, new conference organizers have emerged as well – entities that see gaps between what conferences vendors host (based on the software or services they sell) and what associations provide – leading to new niche conferences like Advisor2X's "Shift" conference on behavioral finance, to AdvisorCircle's "Future Proof" conference (or as some are calling it, the Future Proof Festival Experience!).

The end result from the advisor perspective, though, is not dissimilar to what it was in the past: an overwhelming number of conferences to choose from, and a great challenge for advisors in figuring out which ones are really worth attending and sinking what is often more than $2,000 (in registration fees, hotels, and airfare), plus several days out of the office, in the hopes that it will prove to be a good use of time.

As someone who has been speaking at 50–70 conferences a year for 18 years myself, I've seen the good and bad of our wide range of industry events, from the industry associations to the broker-dealers and insurance companies and RIA custodians, the rise of vendor conferences and media-driven events, private company events, and more. As a result, I am often asked for my own suggestions of what, really, are the industry's 'best' conferences to attend.

Accordingly, back in 2012, I started to craft my own annual list of 'best-in-class' top conferences for financial advisors, allocated across a range of different categories (as what's best for solo advisors isn't the same as what's best for larger advisor enterprises, what's best for fee-for-service advisors isn't the same as what's best for AUM firms, more technically-oriented advisors will prefer different conferences than those seeking practice management or marketing ideas, etc.).

Having updated our annual conference list every year since, I'm excited now to present my newest list of "Top Financial Advisor Conferences" for the upcoming 2024 year, with a particular focus on parsing through both the industry association events, the growing number of vendor and standalone conference providers… with our usual approach of parsing out the 'best' conference for a wide range of advisors with unique needs, from those who are looking for a conference on marketing or practice management (which varies depending on whether you're a mid-sized firm or larger enterprise), or who want to see the latest in advisor technology, need help in how to price financial planning fees and systematize their advice offering, are simply looking for a good overall conference or particular advanced tax and technical conference… or just want an entirely different conference experience (for which Future Proof stands alone!).

In addition, we've also updated our popular "Master Conference List" of all financial advisor conferences in 2024, both for advisors looking for a wider range of events to attend (if you want to delve deeper into a particular topical area), and for vendors looking for more conferences to exhibit at!

So I hope you'll find this year's 2024 top conferences list (and our updated Master Conference List) to be helpful as a guide in planning your own conference budget and schedule for next year, and be certain to take advantage of the special discount codes that several conferences have offered to all of you as Nerd's Eye View readers!

Weekend Reading For Financial Planners (October 28-29)

October 27, 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 the shift in financial advice from pure investment management to comprehensive financial planning continues, with more individuals becoming CFP professionals than CFAs in the past few years as consumers increasing the diversity of their financial goals.

Also in industry news this week:

A survey indicates that while financial advisors remain the most trusted source of financial advice, they might increasingly encounter client questions and ideas that originated from social media
Following the transition of advisors and clients from TD Ameritrade and amid competition from competing RIA custodians, Charles Schwab executives this week highlighted tech investments the custodian has made to improve the advisor experience on the platform

From there, we have several articles on tax planning:

Why business-owner clients could come under increasing scrutiny from a beefed-up IRS
The unique tax issues facing freelancers and how advisors can both help them maintain proper records and take advantage of tax-related opportunities
How advisors can help wealthy clients with certain alternative investments avoid an IRS audit

We also have a number of articles on the value of advice:

How advisors can use an iterative process to develop high-value services for their clients
The unique needs of clients in the "sandwich generation" and how advisors can serve them without burning out themselves
How financial advisors are similar to general practitioners in their ability to make clients feel cared for

We wrap up with 3 final articles, all about wealth:

Profiles of individuals who retired with $5 million, who have often leveraged this wealth for flexibility rather than luxury
Recently published data from the Federal Reserve shows that the median net worth of Americans across the range of ages and wealth levels has increased significantly since 2019
Why clients expecting to receive large inheritances from their Baby Boomer parents or grandparents might receive less than they expect and how advisors can support them

Enjoy the 'light' reading!

Extracting Actionable Takeaways From The SEC’s Staff Bulletin Regarding An RIA’s Standard Of Care

October 25, 2023 07:02 am 0 Comments CATEGORY: Regulation & Compliance

There is a general understanding that investment advisers have a fiduciary relationship with their clients – in other words, that they are required to act in the client's best interests. But although this concept makes sense in the abstract, it isn't always clear what an adviser needs to do to fulfill their fiduciary duty in real-life situations.

In 2019, the SEC released a Commission Interpretation that separated the obligation of RIAs to act in their clients' best interests into separate duties of care (to provide investment advice in the best interest of the client) and loyalty (to eliminate or disclose all potential conflicts of interest with the client). But while that interpretation clarified at a high level the SEC's view on what constitutes an adviser's fiduciary duty, it didn't provide many actionable takeaways for RIAs to shape their conduct.

So in April 2023, SEC staff released a Staff Bulletin (which, although not an 'official' pronouncement of the SEC, does represent the views of the staff who actually conduct adviser examinations and pursue enforcement of the SEC's regulations) to further explain the investment adviser's duty of care, particularly as it regards to working with retail investor clients.

According to the Staff Bulletin, there are 3 overarching components involved in performing an adviser's duty of care: 1) An understanding of the potential risks, rewards, and costs of a recommended investment; 2) an understanding of the client's overall financial picture as it relates to the investment; and 3) a reasonable basis for concluding that the recommendation is in the client's best interest. These 3 components in practice make up a core part of the adviser's fiduciary duty to their clients.

The Staff Bulletin also includes some best practices to help advisers show that they followed the standard of care, such as inventorying all investment products deployed in client accounts and performing a reasonable investigation into how each product works; analyzing the total cost of each investment (including fees, commissions, and taxes); creating an 'investment profile' of relevant information for each client (for which the bulletin provides a list of specific items to consider); and considering a range of possible alternatives to each investment in order to have a reasonable basis to believe the one chosen is indeed in the client's best interests.

Additionally, the Staff Bulletin includes details for registered broker-dealer representatives subject to the SEC's Regulation Best Interest (Reg BI) rule. Most notably, while the bulletin states that the fiduciary obligations are generally the same between RIAs and broker-dealers whose fiduciary obligations are triggered under Reg BI, dually registered broker-dealer representatives are also obliged to disclose the capacity in which they are acting (i.e., as a broker-dealer representative or an investment adviser representative) and to consider whether a brokerage account or an advisory account is better suited for a client (depending on whether the client is just looking to purchase a product, or whether they're seeking ongoing advice and management).

Ultimately, although many advisers may find the numerous requirements for ongoing due diligence and documentation daunting, the reality is that the Staff Bulletin simply seeks to enumerate how advisers can fulfill their already existing fiduciary responsibilities, many of which were previously left open to interpretation (and often only clarified when the SEC decided to pursue an enforcement action against a firm for breaching those duties). Which hopefully means that it will be easier for firms to understand how specifically to serve as fiduciaries for their clients, since they now have a clear (or at least clearer) path for doing so!

#FA Success Ep 356: Scaling To (Nearly) $2M Of Revenue As A Flat-Fee, Advice-Only Firm, With Sarah-Catherine Gutierrez

October 24, 2023 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Sarah Catherine Gutierrez Podcast Featured Image FAS

Welcome everyone! Welcome to the 356th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Sarah-Catherine Gutierrez. Sarah-Catherine is the founder of Aptus Financial, a fee-only financial planning firm based in Little Rock, Arkansas, that is approaching $2M in revenue and works with over 480 client households.

What's unique about Sarah-Catherine, though, is that despite the common industry belief that the only way to build and scale a firm is through AUM, she has built a multi-advisor firm serving hundreds of clients while operating as a flat-fee advice-only firm … which is expedited by Sarah-Catherine's focus on building sustainable marketing systems that keep her advisors from being 'distracted' by the time-consuming task of prospecting for clients and solely focused on efficiently delivering financial planning to their clients instead.

In this episode, we talk in-depth about how, despite some false starts and initially problematic underpricing, Sarah-Catherine intentionally built her financial planning fee to transparently communicate her value and the work she does as a financial advisor while also pricing within a range for her originally accidental (but now fully embraced) niche of recently graduated physicians, how Sarah-Catherine built a trust-based Center-of-Influence and referrals system that is so strong that she no longer has to worry about where the next prospect will come from, and how Sarah-Catherine uses her onboarding process to convert ready-to-act from prospects to fully informed clients with action plans in only 2 calls.

We also talk about why Sarah-Catherine has segmented her planning fees by charging an initial upfront fee for the first year financial plan, decreasing to a lower year-over-year fee for ongoing client service, coupled with a consistent additional end-of-year annual review fee, how the unique challenges of Sarah-Catherine's niche clientele caused her to build a completely custom financial planning spreadsheet to do her planning work efficiently, and how Sarah-Catherine builds customized cashflow management plans for new physicians planning to understand their current financial situation and their trajectory towards early retirement.

And be certain to listen to the end, where Sarah-Catherine shares how, as a founder, she has learned to get comfortable simply leaning into her instincts, even when she can't fully back up a decision with numbers, finding her own compass for determining what will best for her clients and the company at large, how Sarah-Catherine's determination to remain neutral in her marketing, rather than 'salesy', has ultimately opened up speaking opportunities and created new prospect pipelines, and why, despite the grueling intensity of deciding to scale her planning business with all the hiring and systems-building it entails, Sarah-Catherine finds it all worthwhile now that she's on the other side, with a healthy marketing system that means she is no longer worried about where the next new client will come from to cover her growing payroll obligation.

So whether you're interested in learning how Sarah-Catherine utilizes her touchpoints to help her "guided DIY" clients continue to act, how she manages both the hard dollars of budgeting and soft dollars of future ambitions to help clients both live the lives they want today while also ensuring they can enjoy their future, or why she muscled through the grueling intensity of the early years of scaling a business in order to deliver affordable financial planning to over 30,000 people who wouldn't be eligible to work with a 'standard' financial advisor, then I hope you enjoy this episode of the Financial Advisor Success podcast, with Sarah-Catherine Gutierrez.

Are Financial Plans Getting Too Comprehensive: How The “Sledgehammer Of Value” Isn’t Actually Paying Off

October 23, 2023 07:02 am 0 Comments CATEGORY: Practice Management

Many financial advisors take pride in the comprehensive nature of the advice they provide to clients and use the variety of services offered as a point of differentiation between themselves and other types of advisors. Though, at some point, covering a large number of financial planning topics can eat into an advisor's time, which is problematic if clients won't pay substantially more to receive that more comprehensive advice. For advisors who are feeling a time crunch from producing extensive comprehensive plans, but having trouble commanding a premium fee from clients for their additional work, there are a variety of ways to reduce this burden (from getting outside help, to changing the way plans are developed) while continuing to meet the planning needs that their clients are willing to pay for.

The results of the 2022 Kitces Research study on "How Financial Planners Actually Do Financial Planning" show that financial plan comprehensiveness has increased over time as advisors try to do more and more for clients to validate their fees, hitting them with a proverbial "sledgehammer of value". In the research data, this is reflected in a big uptick in advisors doing the most comprehensive plans: 54% of respondents offered "Extensive" plans (with at least 13 planning components) in 2022, up from 35% in the 2020 edition of the study and 39% in 2018. At the same time, the percentage of advisors offering "Broad" plans ('only' 10–12 components, less than the most Extensive plans) fell to 23% in 2022, from 35% in 2020 and 31% in 2018, and those offering "Narrow" plans (6–9 components) dropped to 18% from 23% in both 2020 and 2018. Further, the study found that client age was a key variable driving plan breadth, with a younger median client age being associated not with 'simpler' plans but instead with more extensive plans for their uniquely complex needs.

Unsurprisingly, service teams producing plans covering the widest breadth of topics tend to spend more time preparing them, according to the Kitces Research data, and this appears to come at a financial cost for these advisors, as those producing Extensive plans had lower median revenue per advisor and take-home income compared to those producing less-comprehensive plans. Which implies that advisors who are providing such "premium" financial plans – as measured by their breadth and comprehensiveness – are struggling to charge a "premium" fee for that work, resulting in a decrease in productivity and profitability.

However, this doesn't mean that advisors need to sacrifice the quality of service they provide their clients in order to reduce the time they spend producing plans. For instance, rather than trying to be an expert in the full range of planning areas, advisors could focus on 1 or 2 narrow but especially relevant service areas to 'go deep' for their ideal target clients, which not only would reduce the time spent developing plans on a broader number of topics but also could attract clients whose more specialized planning needs reflect the specific topics chosen. In addition, advisors could reduce the amount of time they spend on plan development by bringing on staff assistance (e.g., in the form of an associate planner or paraplanner) or engaging outsourced planning service providers. Finally, Kitces Research data indicate that developing plans in collaboration with clients (i.e., putting the planning software on a big screen to walk through together, rather than preparing a custom pre-written plan for each) could reduce the time advisors spend preparing plans.

Ultimately, the key point is that as advisors increasingly provide comprehensive plans that examine a wider range of planning topics for their clients, the question of whether using the "sledgehammer of value" meets both the specific needs of clients as well as supporting a healthy advisory business (by being able to charge effectively for the time it takes to produce such lengthy plans) becomes more important. And for advisors who do feel overwhelmed, there are a variety of ways to reduce the burden of providing the most comprehensive plans, from focusing on the advisor's unique value proposition to outsourcing financial plan preparation tasks to changing their approach to plan delivery, which can all help advisors reduce the time they spend on plan preparation while still providing a high level of service to their clients!