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#FA Success Ep 313: Finding Rollover Opportunities By Specializing In Transitions After Layoffs, With John Stokes

December 27, 2022 07:01 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 313th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is John Stokes. John is the founder and CEO of John Stokes Financial, a hybrid advisory firm based in Irvine, California that oversees more than $400 million in assets under management*, for 1,800 client households.

What's unique about John, though, is how he has built an expertise in layoff transitions and leveraged corporate layoff workshops – that large firms hire him to come in and deliver to their soon-to-be-laid-off employees – to build a niche focus in helping employees go through their layoff transition… and capture the inevitable rollover and other financial planning opportunities that arise along the way.

In this episode, we talk in-depth about how, as an expert in layoff transitions, John has leveraged relationships with a number of large companies in California (that are required to meet a California state law mandate to notify and prepare employees for a layoff 60 days in advance) to create a niche focus counseling employees through layoffs, how John established and built his relationships with large companies by pitching the importance of understanding the rules for navigating unemployment insurance (not focusing on employee 401(k) rollovers directly) so that he could offer a truly needed value for the companies seeking to make their layoff transitions go as smoothly as possible, and how despite what is traditionally a cyclicality to layoffs the reality is that there are so many large companies in the US going through change and competition that that layoffs are inevitable… which has allowed John to achieve a steady stream of over 100 in-person workshops a year and a steady flow of new clients in both bull and bear markets.

We also talk about how during the early years of John’s career at a broker-dealer, he was inspired to work solely with those going through various stages of layoffs after he realized that he could entirely avoid cold-calling and consistently meet with hundreds of people at a time during workshops to generate a high referral rate, why John insists on not being compensated for his workshops as he feels it is his duty to provide goodwill and help people through trying times and uncertainty (knowing that, inevitably, some of the people he helps will want to engage him further), and why John takes the time to ensure he hires advisors that are motivated by their willingness to help people and greeting clients with deep empathy in order to maintain firm culture and the skillset necessary to help clients through their difficult and stressful layoff transitions.

And be certain to listen to the end, where John shares how witnessing his father go through a layoff in New Zealand after a multi-decade career at a single company, and experiencing two layoffs himself early in his career, helped John see the value in focusing on people going through layoffs because he could connect more deeply with his clients based on his own personal experiences, why the effects of the pandemic on John’s in-person meeting cadence gave him time to realize that he had an opportunity to further deepen his client relationships by providing financial planning as a value add at no additional cost (as prior to the pandemic, his client relationships had been more transactional), and why John feels it’s important for advisors entering the financial services industry to find their inner passion as soon as possible as it not only helps to develop a more specialized focus (which John feels is invaluable to surviving in the industry), but it also creates better opportunities for advisors to use their knowledge and skills for the betterment of society… and themselves.

So, whether you’re interested in learning about how John has grown and scaled his firm through a niche focus of layoff transitions, how John has leveraged virtual workshops to engage with even more companies across the U.S., or how the limiting of in-person workshops during the pandemic has inspired John to offer financial planning and has increased opportunities for his firm to grow and scale even further, then we hope you enjoy this episode of the Financial Advisor Success podcast, with John Stokes.

2022 Highlights — The Top 22 Nerd’s Eye View Blog Posts You Might Have Missed

December 26, 2022 07:07 am 0 Comments CATEGORY: Nerd's Eye View

As 2022 comes to a close, I am once again so thankful to all of you, the ever-growing number of readers who continue to regularly visit this Nerd’s Eye View Blog (and share the content with your friends and colleagues, which we greatly appreciate!). This year has been challenging for many financial advisors as they help their clients (and their own firms!) navigate a volatile market environment (in both stocks and bonds – oof!) and inflation levels not seen in several decades. Personally, it has been a big year of change as well, with the Kitces.com platform adding new team members, rolling out a new IAR CE offering and our latest Estate Planning course, and introducing the AdvisorTech Directory, among other additions, to fulfill our own mission of “Making Financial Advicers Better and More Successful”.

We recognize (and appreciate!) that this blog – its articles and podcasts – is a regular habit for tens of thousands of advisors, but that not everyone has the time or opportunity to read every blog post or listen to every podcast that is released from Nerd’s Eye View throughout the year. As many of you noted in response to our Reader Surveys, most choose which content to read or listen to based on headlines and topics that are of interest (and skip the rest). Yet in practice, this means that an article once missed is often never seen again, ‘overwritten’ (or at least bumped out of your Inbox!) by the next day’s, week’s, and month’s worth of content that comes along.

Accordingly, just as I did last year, and in 2020, 2019, 2018, 2017, 2016, 2015, and 2014, I've compiled for you this Highlights List of our top 20 articles in 2022 that you might have missed, along with a few of our most popular episodes of ‘Kitces & Carl’ and the ‘Financial Advisor Success’ podcasts. So whether you’re new to the blog and #FASuccess (and Kitces & Carl) podcasts and haven’t searched through the Archives yet, or simply haven’t had the time to keep up with everything, I hope that some of these will (still) be useful for you! And as always, I hope you’ll take a moment to share podcast episodes and articles of interest with your friends and colleagues as well!

Don’t miss our Annual Guides as well – including our list of the “9 'Best' Financial Advisor Conferences (For Scaling Up) In 2023”, the ever-popular annual “2022 Reading List of Best Books For Financial Advisors”, and our increasingly popular Financial Advisor “FinTech” Solutions Map and AdvisorTech Directory!

In the meantime, I hope you're having a safe and happy holiday season. Thanks again for the opportunity to serve you in 2022, and I’m excited to share more soon about some new initiatives we’re planning to do to support the Financial Advicer community even more in 2023 and beyond!

Weekend Reading For Financial Planners (Dec 24-25)

December 23, 2022 01:07 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 Congress appears poised to pass “SECURE Act 2.0”, a series of measures that will have significant impacts on the world of retirement planning. From gradually raising the RMD age to 75 to expanding opportunities to make Roth-style contributions, to increasing the annual limit for Qualified Charitable Distributions, this legislation will likely impact nearly all financial planning clients!

Also in industry news this week:

How a recent survey shows that financial advisors are increasingly attracted to independent affiliation models, with greater autonomy, higher potential pay, and the ability to build value in a business cited as key factors driving this preference
While RIA M&A activity has been red hot during the past couple of years, a survey suggests that advisors are expecting lower valuations in 2023

From there, we have several articles on advisor marketing:

Five tactics advisors can use to make the most of the online referrals they receive
How advisors can structure introductory prospect meetings to build trust and increase the chances of moving the relationship forward
Why advisors crafting their marketing message might first want to consider whether their target client needs a ‘life raft’ or a ‘sailboat’

We also have a number of articles on spending and budgeting:

Why advisors might want to consider using a client service calendar to organize the wide range of services they provide for clients throughout the year
A review of financial planning actions, from tax-loss harvesting to charitable giving, that have a December 31 deadline
How the holiday season presents an opportunity to have important money-related conversations with family members

We wrap up with three final articles, all about gift giving:

The do’s and don’ts of holiday gift giving in the workplace
How ‘regifting’ can help save money and reduce waste
Why being present during gatherings with friends and family members can be the best gift of all during the holiday season

Enjoy the ‘light’ reading!

How “Probability Of Success” Differs Between One-Time And Ongoing Financial Plans

December 21, 2022 07:06 am 0 Comments CATEGORY: Retirement Planning

Monte Carlo simulations have become the dominant method for conducting financial planning analyses for clients and are a feature of most comprehensive financial planning software programs. By distilling hundreds of pieces of information into a single number that purports to show the percentage chance that a portfolio will not be depleted over the course of a client’s life, advisors often use this data point as the centerpiece when they present a financial plan. However, a Monte Carlo simulation entails major statistical and philosophical nuances, many of which might be underappreciated by advisors and their clients.

One key nuance to the use of Monte Carlo simulations is whether they are being used as part of a one-time plan versus an ongoing planning process. For example, a Monte Carlo simulation resulting in a 90% probability of success will mean very different things depending on whether a client will take fixed portfolio withdrawals throughout retirement based on the initial probability of success or whether they plan to run additional simulations over time and are willing to adjust their spending based on market performance. For the former client, because a 90% probability of success means that there is a 10% chance they will deplete their portfolio (though the magnitude of the failure is unknown), they might choose to aim for an even higher probability of success to decrease the likelihood that they will run out of money in retirement. But for the latter client, to suggest they have a 10% chance of depleting their portfolio is overstating the risk, as they are willing to adjust their spending in response to future simulations that show a reduced probability of success.

An alternative way to use Monte Carlo simulations for clients who are willing to be flexible with their spending is to consider how spending would change when using a fixed probability of success. For instance, Monte Carlo simulations show that, for any selected fixed probability of success, the maximum and minimum annual spending for a client during the course of their lifetime is remarkably similar. While initial spending levels will be different depending on the target probability of success (as a higher selected probability of success will call for a reduced initial spending amount), adjusted spending levels will track each other closely no matter the initial probability of success chosen. What is different is that those who use a higher constant probability of success will likely have a larger portfolio balance at their death than do clients who choose a lower probability of success at the start of retirement.

This suggests that, in contrast to the view that probability-of-success levels are indicative of the risk of depleting a portfolio, the probability-of-success level used when adjustment is planned for in advance is essentially akin to putting your thumb on the scale to slightly favor either maintaining current income (lower probability of success) or preserving estate balance (higher probability of success). In other words, if an advisor is going to use Monte Carlo on an ongoing basis, then the probability of success threshold targeted is more akin to a slider that adjusts the degree of preference for current income or legacy rather than a meaningful measure of the likelihood of depleting a portfolio.

Ultimately, the key point is that because the results of Monte Carlo simulations contain a significant amount of nuance, particularly if being utilized as part of an ongoing planning relationship, advisors can consider using them as an internal analytical tool but communicating the results through the use of risk-based guardrails or as a tradeoff between current income or legacy interests to help clients better understand what the results actually mean for their financial plan!

#FA Success Ep 312: Resetting Your Work/Life Balance By Getting Paid For Expertise Instead Of (Just) Effort, With Emily Rassam

December 20, 2022 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 312th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Emily Rassam. Emily is the Senior Financial Planner for Archer Investment Management, a virtual Independent RIA based in Austin, Texas, that oversees $170 million of assets under management for nearly 170 families.

What's unique about Emily, though, is how after struggling for years at a position where responsibilities and pressure kept building (and kept deterring her from being present in her family life), she realized that she had built enough expertise that she didn’t need to settle anymore, and made it a priority to find her ideal position that not only appreciated her expertise… but would also help her build a better work/life balance.

In this episode, we talk in-depth about how, as Emily progressed in her career from working on 401(k) plans to focusing on financial planning, she faced challenges and eventual burnout while building a successful financial planning offering in a firm that was still primarily focused on 401(k) plans first and foremost and didn’t want to allocate resources away from its core 401(k) business, how, by what Emily describes as a stroke of luck in the midst of her burnout struggles, she took a chance in applying for a financial advisor position that she found at 3 a.m., which led her to her current role that pleasantly surprised her as their work culture and work/life balance priorities perfectly aligned with what she was seeking and desperately needed, and how exactly Emily determined that the firm would have such a positive work/life balance – when it didn’t advertise itself that way – by asking key questions of the firm owner during her interview process to understand their systems and processes and how invested the firm really was in its financial planning offering .

We also talk about how, in the very early stages of her career and immediately after finishing an internship for an insurance agency, Emily realized that even though the agency was already creating flyers and literature promoting her as a “financial advisor”, she was too young and inexperienced to truly take on that role, and decided to find a different more service-oriented job where she could gain more financial planning knowledge and expertise at a pace that was comfortable for her, the way that Emily eventually overcame her career-long struggles with imposter syndrome by getting better perspective on the expertise that she had built for 15 years in managing and educating 401(k) plan participants, and how Emily ultimately was able to shed the perceived notion she gleaned early in her career that advisors needed to be cold and calculated in selling their services, and realized that by focusing on the human aspects of financial planning, she could be successful and fulfill her own passion and purpose.

And be certain to listen to the end, where Emily shares how she admittedly struggled for years with saying “no” to clients and “yes” to too many opportunities and found that by advocating for herself and finding the right position that could support her (and help her set limitations for herself), she could finally create a space where she could not only thrive in her career, but at home as a wife and mother as well, why Emily believes it’s important for newer advisors to understand from the beginning of their careers that bringing value to clients does not have to be predicated on doing an overwhelming amount of work and instead can be focused on building more targeted expertise and knowledge that offers true value to their specific clientele, and how, even though Emily went through many years of struggling to find the right work/life balance, she feels it was important for her to have had those experiences because without them, she could not have the knowledge she gained and the appreciation for where she is today.

So, whether you’re interested in learning about how Emily eventually learned how to say ‘no’ to more work and ‘yes’ to a better work/life balance, how Emily leveraged 401(k) educational seminars and webinars to gain rollover opportunities, or how, by finally advocating for herself, Emily found the ideal position for her, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Emily Rassam.

Title Protection For (CFP) Financial Planners And The FPA’s Two About-Faces

December 19, 2022 07:01 am 0 Comments CATEGORY: Planning Profession

This summer, the Financial Planning Association (FPA) announced a new multi-year advocacy goal to pursue legal recognition for the title of "Financial Planner", as a means for bona fide financial planners to distinguish themselves and their services from others (who may use the title but don't actually do financial planning), to help consumers understand who is qualified to provide financial planning advice, and to raise standards for the financial planning profession by tying competency and ethics standards directly to the determination of who can hold out to the public using the title in the first place.

Yet the irony of FPA's new initiative for Title Protection is that "Financial Planner" actually did have protected status as a title all the way back in 2005, when the SEC issued a rule that would allow broker-dealers to offer fee-based brokerage accounts without being required to register as investment advisers and be a fiduciary… and as a part of the rule, stipulated that anyone who held out to the public as a financial planner, delivered a financial plan to a client, or represented that they were providing financial planning advice, would still have to be an RIA fiduciary. But a lawsuit to block the rule ultimately led to it (and the associated Title Protection for "financial planner") being vacated… by the FPA.

In fact, the reality is that in the 15 years since this Title Protection was struck down in the FPA's lawsuit, the organization has actively pursued the opposite strategy of advocating for a uniform fiduciary standard – one that would not separate "financial planners" from others who don't meet the standards to use the title, but instead would simply subject all RIAs and broker-dealers to a single standard. Except in practice, there are many important functions that broker-dealers fulfill that truly are not fiduciary or advice-oriented, such that a uniform standard just isn't feasible. Which has led to both the Department of Labor and Massachusetts implementing uniform fiduciary standards that were both ultimately struck down in court, and the SEC simply refusing to implement a uniform standard at all. Making the FPA's shift to now suddenly advocate for Title Protection a logical – albeit head-spinning – about-face from its position for the past two decades.

At the same time, questions abound as to how the FPA realistically plans to pursue Title Protection, and its noticeable abstention from mentioning the CFP marks anywhere in its discussion of its new advocacy agency, despite the fact that the FPA is the membership association for CFP professionals. The organization's own Bylaws even state that its messaging to the public and the industry should be that "when seeking the advice of a financial planner, the planner should be a CFP professional", and that "anyone holding themselves out as a financial planner should seek the attainment of the CFP mark." Raising the question of whether the FPA is also considering an about-face on its CFP-centricity, too... even as the CFP Board has announced its own Competency Standards Commission to raise their own standards regarding who can use the Certified Financial Planner title?

Ultimately, the FPA has stated that it intentionally has only set a high-level strategic advocacy goal to pursue Title Protection, and that it will spend the next 12-18 months engaging with stakeholders to determine a specific course of action, with no expectation of any legislative efforts earlier than 2024. Which means there is still ample time for the FPA to clarify its intentions and any further swings in its advocacy views. Yet at the same time, the organization's withdrawal from the Financial Planning Coalition, its noticeable exclusion of the CFP marks from its initial positioning statement on Title Protection, its unwillingness to support XY Planning Network's 2021 petition for Title Protection (ironically to reinstate the Title Protection rule that FPA vacated), and its declaration that it intends to enact Title Protection without licensing or regulation (raising the question of how the title could be protected, if no regulator or licensing agency is granted the authority to protect the title?), all suggest that the FPA may already have some plans in place… that it just isn't ready to share yet?

In the end, Title Protection is clearly a laudable goal – one that has been pursued by many industry organizations for years, even if the FPA has only recently arrived at a similar conclusion – and the FPA's willingness to take up the issue is a positive sign, serving as a potential fulfillment of P. Kemp Fain, Jr.'s famous "One Profession, One Designation" call to action. Still, though, the question remains: What exactly is the FPA's plan to pursue Title Protection, will it be able to effectively engage with stakeholders and other organizations that already have established efforts and a vested interest in the outcome, and will it be able to maintain the effort through to fruition in the midst of making 1 and perhaps 2 major about-faces in its advocacy approach?

Weekend Reading For Financial Planners (Dec 17-18)

December 16, 2022 02:00 pm 1 Comment CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that CFP Board is forming a Competency Standards Commission in 2023 to review and evaluate its competency requirements for Education, Examination, Experience, and CE, which represents an opportunity for CFP Board to adjust its requirements, in alignment with the desires of the CFP community itself, to build confidence among the public that those with the CFP marks really will provide them with a consistently high level of financial planning advice!

Also in industry news this week:

While the FPA is going full steam ahead on its federal and state lobbying efforts to regulate the title “financial planner”, CFP Board is more focused on increasing recognition of the CFP marks
A recent survey suggests that Americans who use a financial advisor are less stressed than those who do not, but that the perceived price of advice is a deterrent to many (even those with significant assets)

From there, we have several articles on practice management:

Why it is important for advisors charging on a fee-for-service basis to regularly reassess their pricing, and best practices for letting current clients know about a fee increase
How advisors can benefit from reviewing their list of clients and letting go those who are no longer good fits for the firm
How firms can best leverage their internal data to improve the number of client referrals they receive

We also have a number of articles on retirement planning:

While weak stock and bond market performance has challenged advisors and their clients this year, these trends have likely increased the ‘safe’ withdrawal rate for new retirees
How the tontine, a centuries-old financial product has made a comeback this year as a way to mediate longevity risk
A recent survey indicates that Americans broadly feel like they are behind on their retirement saving, with those closest to retirement age most likely to think they need to catch up

We wrap up with three final articles, all about personal growth:

The lessons entrepreneurs and investors can take from the life and career of Warren Buffett
How individuals can best harness their willpower to achieve their biggest goals
While financial advisors regularly give advice to clients, more care is needed when giving unsolicited advice to friends and family

Enjoy the ‘light’ reading!

Kitces & Carl Ep 101: Where Are All The Proudly Premium-Fee Advisors?

December 15, 2022 07:09 am 0 Comments CATEGORY: Kitces & Carl Podcast

For the better part of a decade, the financial services industry has anticipated the coming of fee compression, mainly due to the rise of robo-advisors offering low-cost automated wealth management services. Yet even though fee compression has not been fully realized to the extent the industry has generally expected, lower cost robo-advisor services have still compelled financial advisors to maintain relatively low fees. But when advisors continually add services as a means to differentiate themselves from other advisors, keeping fees low can prevent those advisors from maintaining high-quality talent and services, not to mention being able to reinvest in the business to grow and scale.

In our 101st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the challenges advisors face in setting fees commensurate to their service offerings and the importance of charging sustainable fees to help businesses flourish.

As a starting point, it’s important to understand that staying competitive doesn’t necessarily mean advisors need to have the lowest fees. Many advisors have focused on obtaining deeper levels of expertise in broader areas and offering more in-house planning services in those areas (e.g., tax and estate planning) to differentiate themselves. Yet, in order to sustain these value-added services, advisors need to be able to offer competitive salaries to retain the talent responsible for providing them! Which is important, as salaries have become more transparent, enabling employees to find positions that will offer them the salary compensation they feel they deserve. However, advisors who feel obligated to keep their fees low but who also feel the need to continually add services to justify their fees often risk losing employees (especially the ones that are most talented!) and create more challenges for themselves to maintain ongoing success.

Importantly, reflecting on the quality and types of services they offer can help advisors identify the right (i.e., accurately comparable) industry benchmarks to compare themselves with, so that the fees they charge for the services they provide are in alignment with what they are actually worth. And advisors who offer premium services can justifiably ask for premium fees, which means it can be completely appropriate for firms that go above and beyond to adjust fees higher than what they may have been originally charging!

Ultimately, the key point is that advisors who offer above-average services should be compensated accordingly, which may require charging above-average fees. And while raising fees may feel scary for advisors who fear they may be asking for unreasonable prices, it can be worthwhile to consider that a small step increase of just 10% (e.g., asking for 1.1% AUM instead of 1.0%) can still yield a significant rise in revenue that would provide capacity for better services, talent, and tools. Many advisors join the industry to help clients achieve their financial goals, and by charging the right fees that are commensurate with their expertise and value, they not only position themselves to remain competitive, but they also ensure that they have the means to sustainably grow their businesses!

Simplify Decision-Making For Clients By Shifting The Perspective To Their Future Selves

December 14, 2022 07:05 am 0 Comments CATEGORY: Client Trust & Communication

Change is difficult, and when faced with the prospect of a change, many people opt to stick with the status quo. This is even true in the case of positive changes, such as a new job opportunity or relationship: Even though it might be very likely to make the person’s life better, it represents a departure from life as usual, and there is always the risk that the change won’t work out the way it was expected to. As a result, people are often reluctant to make decisions when doing so would result in a significant change; this can result in ambivalence about taking action to make improvements in one’s life – including the types of financial decisions that advisors work with their clients to make.

Advisors encounter this ‘status quo bias’ with clients who resist taking action on recommendations. Even though the client may agree with the advisor on the action they should take and understand the steps they need to follow, they might still hesitate to follow through on the strategy. And while it can be tempting to chalk this up to forgetfulness, disorganization, or a failure of the client to be fully convinced that the strategy is right for them, the client’s hesitation to act is often the result of their ambivalence and fear around change.

What’s often challenging for advisors in helping a client overcome their ambivalence is that the client is often already aware that their feelings may be irrational, so simply trying to convince them via numbers and logic might be counterproductive: the client doesn’t need to be persuaded that the strategy might be in their best interests; rather, it’s helping them come to terms with the emotional aspect of the decision. And so spurring the client to take action often requires the advisor to focus on helping the client work through their emotional response to the prospect of change.

While discussions around emotional topics can be difficult because of the likelihood of triggering a strong emotional reaction, one method that advisors can use to help their clients overcome their resistance is to ask them what their ‘future self’ would think about the decision. This reframing invites the client to imagine themselves after they have already made the change under consideration – effectively shifting the ‘status quo’ from the client’s current state to their hypothetical future self. And once the client is in that future frame of mind, they can view the decision as if it were in hindsight rather than as a change yet to come – allowing them to temporarily bypass the emotions tied to the change and helping them focus more objectively on the features of their life that are truly meaningful to them!

The key point is that, when entertaining and planning for a new idea or opportunity (e.g., a new job, house, or phase of life), it is common to just keep doing what we are already doing – and when what we are currently doing is working well enough, the emotional ‘cost’ of change often outweighs the potential benefits, even if the new opportunity is truly better. Asking the client what their future self would think can bring in a new perspective, helping to overcome emotional ambivalence in a non-invasive way.

#FA Success Ep 311: Unlocking Growth By Asking For A Referral Commitment And Then Showing Value, With Terry Parham Jr.

December 13, 2022 07:08 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 311th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Terry Parham Jr. Terry is the CFO and Co-Founder of Innovative Wealth Building, an independent RIA based in California, Maryland that oversees nearly $330 million in assets under management for almost 900 client households.

What's unique about Terry, though, is how, after nearly ‘failing’ out of the business because he was struggling to get new enough clients in his first 2 years, he changed his approach to asking for referrals by asking prospects upfront to commit to making a referral only after he showed them real financial planning value… and within 18 months his new approach had turned around his entire career to become one of the fastest-growing advisors at his entire company.

In this episode, we talk in-depth about Terry’s approach to gaining more referrals (and minimizing any need for other prospecting efforts) by asking clients to commit in their initial introductory meeting that they would provide him a referral in the future if they found his financial planning recommendations to be valuable… and then followed up after the financial plan was delivered, and the value was provided, with the referral request for them to follow through on their part. We also talk about how, after leaving a former firm (and his referral sources), Terry decided to rebuild his practice through hosting dinner seminars on Social Security and Medicare with a third-party marketing solution that would send out the mailers, provided the presentation materials, and was able to consistently get $3M to $5M of new AUM from each event at a net marketing cost of less than $2,000 per event, and why Terry took a lot of time to confer with colleagues and conduct research on what makes an advisory business successful before ultimately going independent to create the value he really wanted to be able to provide to his clients.

We also talk about how, early on in his career and on the verge of being fired, Terry realized he suffered from a lack of confidence and found that drawing for clients on a white board not only enhanced his ability to relay information and connect with his clients but also built his own confidence, why, despite winning multiple awards as a top producer, Terry decided to part ways with his former firm on principle and start over again because he didn’t like some of their corporate policies, and why Terry equates his transition to independence to the experience gained through dating, as by working for multiple firms over the first decade of his career he was able to learn what he liked and didn’t like, and was eventually able to realize when it was time for the next level of commitment (like moving from dating to marriage).

And be certain to listen to the end, where Terry shares the tension he felt when working at a large firm where he was expected to recommend “good enough” products and strategies when he really wanted to be in a position where he could truly say he was performing due diligence across all products to find the best solutions for his clients, why Terry believes that even though the financial services industry can be intimidating for newer advisors, it’s important to not focus on what others are doing and instead, leverage resources and put in the hard work necessary to earn your experience and learn what works for you, and why Terry believes that simply being a founder of an advisory business doesn’t mean he’s successful, as like raising a child, it is in continual hard work, mentorship, and improvement (even if it’s just incremental) that helps the business grow up to its full potential that really defines its success.

So, whether you’re interested in learning about why Terry never settled at his previous firms and eventually decided to launch his own firm, how Terry presented his value to prospective clients to gain referral commitments, or how Terry leveraged dinner seminars and third-party marketing teams to help him connect with more of the right types of clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Terry Parham Jr.