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#FA Success Ep 321: Navigating The Financial Advisor Career Track In An Unfamiliar Culture, With Danqin Fang

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

Welcome back to the 321st episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Danqin Fang. Danqin is a Lead Advisor for Austin Asset, an independent RIA based in Austin, Texas that oversees more than $1.3 billion in assets under management for nearly 400 client households.

What's unique about Danqin, though, is how she planned and executed a very intentional career path in the financial services industry that involved her leaving her homeland China, embracing a new language and culture in the United States while achieving her Master’s degree in Financial Planning, and proactively creating opportunities for herself by getting involved with industry associations and networking to advance in her career.

In this episode, we talk in-depth about how after a few mentors in China suggested that Danqin look into private banking and wealth management (as they felt it better suited her than her initial accounting major), she began Googling potential career paths in China but instead came across the CFP Board website and immediately connected with the description of a CFP professional, how Danqin realized that to get her CFP marks, she would need to leave China and pursue her education at an accredited institution in the U.S. but saw it as an opportunity to satisfy her desire to explore other cities and different cultures, and to follow a clearer career path (as in China, career paths in finance are much more ambiguous), and how Danqin ultimately navigated the complexities of relocating to another country and acclimating to a new culture and language so that she could take advantage of better opportunities to marry together her love of math and talking to people to become a financial planner.

We also talk about how, to maximize her time and the number of opportunities she could gain in her education and career in the US, Danqin created a plan that worked backwards from her ultimate goal of becoming a lead financial advisor and was intentional about everything from the school she selected to the internships she took to eventually achieve that goal, how Danqin proactively looked for opportunities to network, attend industry conferences, and be involved in local chapters of industry organizations, so that she could increase her probability of making connections with the right people in the industry to find better jobs (and those that would be willing to sponsor her work visa), and how, even though Danqin was already somewhat familiar with the English language, she took advantage of every chance to immerse herself in American culture and better her English with the intention that she could improve her relatability and communication, giving her greater success with future clients.

And be certain to listen to the end, where Danqin shares how she was surprised that despite feeling like she needed to blend into American culture, it was in embracing her authentic self that allowed her to truly connect and cross-cultural barriers with her clients, why, even though Danqin admits that she would have benefitted from more confidence earlier in her career journey, she is appreciative for the experiences she gained as without them, she would not have attained the knowledge she has and gotten to where she is in life and her career, and why Danqin feels it’s important for younger, newer advisors to get clear on their vision of where they see themselves in the future… so that they can figure out what they can control between here and there and work backwards to find the next step forward.

So, whether you’re interested in learning about why Danqin was so adamant about becoming a financial advisor that she uprooted her life to move to a foreign country, how being intentional about what steps to take in her career helped Danqin achieve her goal of becoming a financial advisor, or how, through professional and social groups, Danqin found a sense of community and never truly felt like an outsider, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Danqin Fang.

Abandoning Surge Meetings To Better Meet Client Needs And Promote Advisor Well-Being

February 20, 2023 07:03 am 0 Comments CATEGORY: Practice Management

One of the most important parts of a financial advisor’s value proposition is time spent meeting with their clients. These meetings allow advisors to listen to their clients’ concerns, make planning recommendations, and chart a course for the coming months. And while advisors recognize the importance of holding regular client meetings, there is no consensus about the ‘best’ cadence for them. For instance, some firms spread these meetings out throughout the year while others bunch them into a limited number of months, or even weeks.

This latter approach, sometimes called Surge meetings, has gained increasing popularity among advisory firms in the past few years. Advisors who have implemented a Surge meeting approach have cited a range of benefits from doing so, including boosted productivity, a more systematic client experience, increased efficiency of client reviews and onboarding, and an overall smoother financial planning process for advisors and clients. At the same time, implementing a Surge approach can come with a range of challenges, such as the high level of endurance required of advisors to hold several client meetings every day for prolonged periods, the scheduling logistics needed to accommodate both the advisor’s agenda as well as the items on a client’s mind, and the capacity to preserve a meaningful and personal client experience throughout the process.

In this guest post, Meg Bartelt, Founder and Lead Planner at Flow Financial Planning, discusses how her firm implemented a Surge meeting schedule, and ultimately decided to use a different approach for their client meetings after 3 Surge seasons.

There were several issues with implementing Surge seasons for the firm, including challenges around many of their clients needing to reschedule meetings (resulting in a need to extend Surge seasons). Advisors often had insufficient time during the meetings to cover items on both the firm’s proposed agenda as well as those that the clients brought up, and there was an overall level of exhaustion from holding a concentrated set of meetings while maintaining the high level of personal connection and quick turnaround that the firm’s clients expect (and that the advisors enjoy providing!). Even after making some adjustments (from lengthening the time of meetings to 75 minutes to reducing the scope of technical work on the agenda), the need to meet with clients throughout the year to address high-stakes life changes as they arose (a common theme for many of the firm’s clients), and the desire to go deeper and broader with clients in a more freely structured format led the firm to transition away from the surge approach.

Now, the firm holds 2-hour Annual Renewal Meetings with clients while scheduling additional meetings as needed during the year. Though notably, non-emergency meetings are limited to certain days of the week and weeks of the month, and there are certain months of the year when no meetings are formally scheduled. The firm has also implemented a limited client service calendar, supporting clients on key issues when they occur during the year (e.g., tax letters in January and open enrollment period support in the Fall).

Ultimately, the key point is that just as no single planning strategy is applicable for every client, no single practice management technique is appropriate for every financial planning firm. And regardless of how successfully advisors may claim their particular meeting approach has worked for them, it’s far more important for advisors to experiment with what works best for their firm and how they choose to do business. As while all firms have unique needs and unique clients, finding the right balance between the desire for flexibility to focus holistically on each client and the need to streamline processes and procedures can be the key to identifying the best approach for the firm!

Weekend Reading For Financial Planners (Feb 18-19)

February 17, 2023 01:12 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 SEC is proposing to expand the adviser custody rule beyond securities and funds to cover all assets in a client’s portfolio, including private securities, real estate, derivatives, and cryptoassets. Further, an investment adviser who can make trades on behalf of a client would be deemed to have custody of the client’s assets, which could substantively shift a very sizable portion of the wealth management RIA community under the custody rule, though it remains to be seen whether or what exact custody rule compliance requirements would be introduced for advisers who have custody through discretion but are still otherwise using third-party qualified custodians.

Also in industry news this week:

A court ruling this week vacated Department of Labor guidance that a one-time rollover recommendation from a company plan to an IRA would trigger fiduciary duty requirements under ERISA
Vanguard’s CEO this week indicated the firm plans to invest heavily in direct indexing amid the growing use cases for the strategy

From there, we have several articles on practice management:

The tactics the most successful RIAs are using to attract and retain talent in the current tight labor market
The practice management techniques that can help firms improve their long-term health rather than just short-term profits
Recent advisor surveys suggest that while AUM remains the most commonly used advisor fee structure, an increasing number of firms are offering more than one fee model

We also have a number of articles on retirement planning:

Survey data indicates that retirees are willing to be flexible with their spending, creating implications for retirement income planning
How advisors can add value for clients by helping them make better Medicare decisions
Why an advisor decided to buy an indexed universal life insurance policy for himself

We wrap up with three final articles, all about daily living:

Why practicing gratitude can help one from overlooking some of the key influences of a happy life
At a time when optimizing every minute of the day is in vogue, why focusing on just having “one good day” can be a more successful path
How advisors can help clients avoid falling into a “deferred life plan” and make the most of their lives today

Enjoy the ‘light’ reading!

The HSA ‘Deathbed Drawdown’: Making Tax-Efficient Distributions Of Large Balances (When There Isn’t Much Time)

February 15, 2023 07:04 am 1 Comment CATEGORY: Taxes

Health Savings Accounts (HSAs) feature useful tax advantages that make them a popular savings vehicle. In addition to allowing for tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses (the so-called ‘triple tax benefit’), HSA funds can be invested and allowed to grow for the long term – which has led many people to treat their HSA as a de facto retirement account by saving and investing the funds to be used for healthcare costs in retirement.

One possible outcome of ‘superfunding’ an HSA, however, is that the account owner may not actually use up all of their HSA funds over their lifetime, which can have significant tax consequences. Namely, if the HSA's beneficiary is anyone other than the owner’s spouse, the account loses its HSA status and the entire account value becomes taxable income to the beneficiary in the year of the original owner’s death.

For advisors who recommend HSA-maximizing strategies, then, it’s important to consider the risks of the account owner being unable to use up their funds and to plan for potential ways to quickly draw down the account in the event the HSA owner will not outlive their HSA funds.

One such strategy is to advise clients to keep track of any qualified medical expenses they incur after establishing the HSA – even those that are paid for from funds outside the HSA. Because if the owner ever needs to quickly withdraw funds from the HSA, they will be able to do so tax-free to the extent that they have any previously unreimbursed medical expenses from any point after the HSA was established – which could allow the HSA owner to make a tax-free ‘deathbed drawdown’ of a large amount (or even all) of their account, which would otherwise become taxable income if inherited by the account beneficiary. It’s also important for other parties involved in the owner’s estate plan to be aware of their roles, and to ensure that any funds withdrawn from the HSA are still distributed according to the HSA owner’s wishes.

The key point is that the more that advisors (and their clients) can plan in advance for the contingency of needing to quickly withdraw HSA funds, the more likely they will actually be able to do so. Because although it (hopefully) isn’t likely that any one person will need to do a deathbed HSA drawdown, as more people establish HSAs and accumulate large balances, the odds are that the need to quickly withdraw those funds will become increasingly common – making it all the more valuable for advisors (particularly those recommending HSA maximization strategies) to have tools for doing so while still maximizing the tax advantage of the HSA!

#FA Success Ep 320: Navigating Hyper-Growth To Achieve Platform Scale For Independent Advisors, With Jim Dickson

February 14, 2023 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 320th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Jim Dickson. Jim is the CEO and Founder of Sanctuary Wealth, an RIA platform with 80 partner firms in 29 states that collectively oversee nearly $25 billion in assets under management.

What's unique about Jim, though, is how he has built an RIA platform approaching $25B in AUM in just 5 years, and the way he’s managed everything from hiring and staffing to raising outside investor capital in order to make the investments necessary to achieve scale as a middle and back-office support platform for independent advisors.

In this episode, we talk in-depth about how Jim built Sanctuary’s “Partnered Independence” platform for advisors who want to run their own practices serving HNW clients while leveraging Sanctuary Wealth’s support system that offers technology, compliance, practice management and training groups, digital marketing, and even ultra-HNW family office support, how Jim created Sanctuary’s unique partnership structure where the advisor practices are their own LLCs but are also IARs under the corporate RIA of Sanctuary Wealth so that the practices can maintain their independence for ownership and tax efficiency but rely on Sanctuary for their compliance needs, and how, because many wirehouse advisors were used to having access to all their data and systems from 1 centralized workstation, Jim and Sanctuary built their own centralized data warehouse called Haven and then layered a third-party business intelligence tool called Domo on top so each advisor could get their own level of business intelligence and benchmark how their practices are doing.

We also talk about why, after 25 years, Jim left the wirehouse world and, due to a non-compete and non-solicit agreement, took a yearlong trip around the world and along the way had the realization of the Sanctuary opportunity to launch his own advisor platform to offer the independence and partnership he thought wirehouse advisors really wanted and needed, why Sanctuary owns a stake in some of the firms they partner with as Jim found there were some advisors who wanted to take at least a few chips off the table or were interested in an “equity swap” so they could grow with a small piece of a much-larger pie instead of being solely dependent on growing their own, and how, now that Sanctuary Wealth has transformed into a nationwide partnership, Jim is working through the challenges of rapid growth when an advisor platform has to hire dozens of people every year and needs to ensure the teams are not only diverse with experience but have the right people to move the company forward at its current stage of growth and evolution.

And be certain to listen to the end, where Jim shares how, despite working in the wirehouse world for over 2 decades, he was surprised by how large the demand for independence is from advisors as more and more are seeking the autonomy to control their client, investment, and platform experience, and most importantly, their own destinies, why Jim credits his highly structured daily schedule as the way he stays disciplined in conducting daily calls with partners, staying in touch with what is happening within the platform, and reaching out to advisors who potentially could join Sanctuary’s network… while still making the time to be present in his kids’ lives and never missing one of their events, and why Jim feels the key to success is the relationships he has built on the Sanctuary platform as it is one thing to build a large firm, but it is another to build it with people you like and trust who all enjoy what they do and truly care about the people the business was built to serve.

So, whether you’re interested in learning about how Sanctuary differs from other advisor platforms and creates ‘partnered independence’ for its advisors, how Jim has handled rapid growth and scaling in the past 5 years, or how Sanctuary structures platform fees and advisor compensation, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Jim Dickson.

Creating Client Service Calendars That Demonstrate Ongoing Advisor Value

February 13, 2023 07:04 am 0 Comments CATEGORY: Practice Management

While it can be easy for financial advisors to recognize the wide range of ways they add value for clients throughout the year, clients themselves might not be aware of what their advisors do for them behind the scenes outside of their annual meetings (e.g., rebalancing their investment accounts or reviewing their insurance policies). Without knowledge of this ‘shadow work’, clients might not recognize the full breadth of responsibilities their advisor (and the firm’s back-office staff) are handling on their behalf to justify their fee.

One of the ways advisory firms can help solve this dilemma is to implement a client service calendar, which outlines key services being provided to clients during each month of the year. This not only gives clients a better idea of the actual work involved in financial planning that goes on outside of meetings but also helps them understand when the work happens during the year. Additionally, client service calendars can help manage client expectations while allowing advisors to adhere to their preferred service cadence (recognizing that some client issues will likely need to be handled on an ad hoc basis). Furthermore, by outlining the actual scope of work the advisor performs for clients, client service calendars can be helpful when it comes to dealing with regulators, who may need to assess the specific services provided by advisors to ensure that these services justify client fees.

When creating a client service calendar, advisory firms have many styles to choose from to meet their specific needs. For example, firms can opt for a monthly, bi-monthly, or even daily calendar, depending on what they want to display for their clients. And client service calendars can be implemented in a variety of ways, from a single-page calendar that serves as a useful handout during prospect and client meetings to a daily calendar with important dates that clients actually want to hang on their refrigerators and reminds them of the value their advisor is providing!

Once an advisory firm identifies what they want its service calendar to do (e.g., demonstrate ongoing value and serve as a client engagement tool) and chooses an appropriate style that supports its calendar’s function, it can then consider how to actually create its client service calendar by deciding what to include in the calendar and which tools they want to use to produce the calendar. These decisions will depend on several factors, from the type of calendar and the amount of detail included, to whether the calendar is meant to be used as an in-meeting resource or to be kept by the client for their regular reference. And with a variety of technology tools and outsourced solutions available to help them create and implement their client service calendar, advisory firms can easily select the option that best meets their needs.

Ultimately, the key point is that client service calendars not only can allow firms to better organize and display their service offerings but can also show clients (and regulators) the full range of services being provided throughout the year. And by clarifying when planning services will be offered and when events relevant to clients will take place, advisory firm owners make the financial planning experience more tangible and create structure in their processes, all while giving advisors time to go deeper in serving their clients!