mind genius - Part 8

#FASuccess Ep 011: How Launching An Advisory Business Can Be Safer Than Working In One with Alan Moore

March 14, 2017 07:00 am 3 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the eleventh episode of the Financial Advisor Success podcast!

My guest this week is Alan Moore. Alan and I co-founded the XY Planning Network in 2014, but the reason I invited him to the podcast has little to do with XYPN itself, and everything to do with his own fascinating path as a financial advisor, business owner, and successful entrepreneur.

Because Alan started out his career as most of us are taught from the days we’re young – to go out and try to find a stable job with a steady income, and move up the ladder over time. Except Alan realized barely 6 months into his first job that it wasn’t going to be the right fit. Only to change to another job… from which he got fired in another 6 months. And so, realizing that perhaps being an employee just wasn’t the right fit, Alan decided to launch his own advisory firm. From scratch. At age 25.

These early experiences led Alan to the counter-intuitive conclusion that perhaps the traditional view of trying to find a job with a steady income is wrong, and that it can actually be more stable (at least in the long run) to build a business from scratch. Because as a business owner, even your best client firing you might only cost you a 2% to 5% of revenue… which is a lot “safer” than relying on a single boss who can take away 100% of your income in a heartbeat by firing you!

In this podcast episode, we talk about Alan’s journey from financial planning college student, to getting involved as a volunteer with NAPFA and its young-advisor group Genesis, to his path from employee to (young) entrepreneur of his own advisory firm, how he later launched a second business (XY Planning Network) as well, and how and why he ultimately made the decision that he couldn’t keep both a B2B and B2C business and would have to wind one down to fully focus on the other.

And be certain to listen to the end, where Alan talks about the rut he got into that almost led him to leave his rapidly-growing business entirely after a particularly bad month, and what it took to turn everything around and re-energize him in the business again.

So if you’re thinking about making the switch from employee to entrepreneur, or perhaps are an advisory firm business owner wondering how to better keep your young entrepreneurial employees, I hope you enjoy this latest episode of the Financial Advisor Success podcast!

#FASuccess Ep 010: From Unpaid Intern to Advisory Firm CEO and Successful Succession Planning With Eric Hehman

March 7, 2017 07:00 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the tenth episode of the Financial Advisor Success podcast!

My guest this week is Eric Hehman of Austin Asset, who over the past 20 years has completed an incredible journey from being an unpaid intern for the founder John Henry McDonald when he was still a solo practitioner, to now becoming the successor owner and CEO of what is today a successful independent RIA with $750M of AUM.

In this podcast episode, Eric gives us some background about Austin Asset today and its incredible growth since he started working for the founder in 1997, from how the firm established itself as an early fee-only pioneer in the Austin area, to how it adapted its business model from standalone financial planning fees to charging on AUM (and why the firm still often charges separately for a financial plan as well), the way the firm develops its younger financial planner by having them work with smaller clients to gain experience and confidence, and the firm’s current structure today with 16 staff (including 12 CFPs) serving about 300 affluent clients.

What’s fascinating about this interview with Eric, though, is not simply the story of Austin Asset’s growth, but how its succession plan unfolded over time, as told from the perspective of the successor. Eric details why the founder was willing to sell him a 10% stake at just 1X revenue, how the founder transitioned his own role away from client relationships and out of management over time, and the way ownership and salary was transitioned to maintain the founder’s income at a steady level for a period of time.

And be certain to listen to the end, where Eric discusses what led him to ultimately write a book about his succession planning experience – aptly called Success and Succession – and why it is that notwithstanding the industry’s focus on the crucial financial and management transitions of a succession plan, it’s the emotional issues that ultimately drive (or can ruin) the outcome.

So whether you’re simply looking for ideas on how to grow a large financial planning firm, or are specifically looking for perspective on succession planning – as the founder, or the successor – I hope you enjoy this latest episode of the Financial Advisor Success podcast!

The Latest In Financial Advisor #FinTech (March 2017): Takeaways From The T3 Advisor Tech Conference

March 6, 2017 07:00 am 7 Comments CATEGORY: Technology & Advisor FinTech

Welcome to the March issue of the latest news in Financial Advisor #FinTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors and wealth management!

In this month’s edition, we recap the recent Technology Tools for Today (T3) Advisor Technology conference – the best dedicated FinTech conference specifically for financial advisors. Overall, the major themes of the conference – most of which were highlighted in the opening keynote session by Riskalyze CEO Aaron Klein talking about the “Advisor of the Future” – include the ongoing shift of “robo” tools to serve as the technology automation infrastructure of an advisory firm’s back office (allowing the advisor themselves to spend more client-facing time than ever!), to the opportunities in using technology for lead generation and a prospect engagement tool (though it remains unclear whether most advisory firms have the marketing savvy and resources to use them effectively!). And Riskalyze’s own rapid growth in recent years seems to have boosted “risk tolerance assessment tools” into a highly competitive category of its own, with almost half a dozen competing tools represented at T3 Advisor (whereas 6 years ago, Riskalyze was one of only two!).

Other major conference highlights included:

Riskalyze debuted a new Riskalyze “Premier” solution (with a new client dashboard and more digital account opening and onboarding tools)
MoneyGuidePro highlighted the recent growth of its MyMoneyGuide Lead Gen solution, and a new study suggesting that clients may find virtual financial planning meetings less stressful
eMoney Advisor announced its own new Lead Gen capture tool and more Advisor-Branded Marketing coming in Q2
Schwab announces it will be integrating eMoney Advisor into OpenView Gateway, alleviating concerns eMoney would become a Fidelity proprietary product
AdvisorEngine (fresh off its $20M round of capital and rebrand from Vanare) acquired advisor prospecting tool Wealthminder
New client engagement tools, including a safe withdrawal rate illustrator (Big Picture App), and an advisor-specific solution to facilitate mind mapping in the data gathering meeting (Asset Map)
The debut of two new risk tolerance assessment tools, Tolerisk and FinMason
A software developer called Chetu that can work with financial advisors to build their own software solutions
And the T3 Advisor Conference itself released the results of a major new survey of advisor software adoption (including both what’s popular, and how advisors actually rate the use of the software itself!).

You can view the analysis of these announcements, and more trends in advisor technology, in this month’s column, including highlights of the other T3 Advisor conference newcomers (from new robo tools, to software that helps clients maximize the yield on their “idle” bank accounts), how major custodians are responding with their own technology initiatives, and the emergence of new technology consults who can work with financial advisors to help them evaluate their own tech stack.

I hope you’re continuing to find this new column on financial advisor technology to be helpful! Please share your comments at the end and let me know what you think!

*And for #AdvisorTech companies who want to submit their tech announcements for consideration in future issues, please submit directly to [email protected]!

#FASuccess Ep 009: Carolyn McClanahan On Using A Complexity-Based Retainer Model To Deliver Holistic Financial Planning

February 28, 2017 07:02 am 11 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the ninth episode of the Financial Advisor Success podcast!

This week, I’m excited to host Dr. Carolyn McClanahan, of Life Planning Partners. Carolyn is an emergency medicine physician turned comprehensive financial planner in Jacksonville, Florida, where she maintains a practice serving 80 clients and nearly $1 million of stable recurring revenue from financial planning retainer fees.

What makes Carolyn’s firm especially unique is the way she has applied the principles of a professional medical practice, into her advisory practice. Each of Carolyn and her three advisors all communicate and support clients directly – akin to a doctor with nurses and other support staff who all interact with patients directly – with each working in their respective area of expertise. And their holistic services are covered by a single “complexity-based” retainer fee, including both financial planning and asset management services.

In this podcast episode, Carolyn shares her journey from wanting to be an actuary, to becoming a physical therapist, and then an ER physician, and finally transitioning into financial planning. She also discusses why her plan is never to grow beyond 100 client families, the hard lessons she has learned about hiring, and the parallels she sees between professional medicine and the emerging professionalization of financial planning.

And be certain to listen to the end, where Carolyn talks about exactly how she prices and adjusts her complexity-based retainer fee for each client, and the “client engagement standards” document that she requires every client to sign to ensure she only works with considerate, responsive, and all-around “good” clients!

So whether you’ve been thinking about adopting some kind of retainer fee structure, or simply want insight on a unique kind of holistic financial planning lifestyle practice, I hope you enjoy this latest episode of the Financial Advisor Success podcast!

#FASuccess Ep 008: David Grau On Maximizing The Valuation Of A Financial Advisor’s Book, Practice, Or Business

February 21, 2017 07:00 am 3 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back for the eighth episode of the Financial Advisor Success podcast!

This week’s guest is David Grau Sr. David is not a financial advisor himself, but over the past 20 years his business, FP Transitions, has facilitated the sale of nearly 1,500 advisory firms, and valued almost 9,000 of them. Which means David brings an incredibly unique perspective to the evolution of buying and selling independent advisory firms, having had a front-row seat over the past two decades.

In this podcast episode, David shares the four different types of advisor ownership structures – books, practices, businesses, and firms – what characterizes each, how they’re typically valued, and what kinds of acquirers are interested in one type versus another. We also explore how to grow ownership from one stage to the next, and the classic pitfalls along the way – for instance, why the industry-standard revenue-based compensation is actually prohibitive of transforming a practice into a true business.

You’ll also hear about how advisory firm deals are typically structured today (and how it’s changed from 10 and 20 years ago), valuation trends with the looming seller wave of Baby Boomer advisors, the best way to find the right prospective buyer if you’re looking to sell now (or soon), and how the growing availability of bank financing is changing the way advisory firms are bought, sold, and valued.

And be certain to listen to the end, where David talks about why most advisors should be very wary of relying on their broker-dealer or custodian platforms to facilitate a sale, and how to spot the “predatory buyers” that are often lurking within those platforms.

So whether you’re a financial advisor getting ready to sell your advisory firm, just thinking about how to maximize the value for the future, or are a newer advisor who wants perspective on the dynamics of buying into an advisory firm, I hope you enjoy this latest episode of the Financial Advisor Success podcast!

Weekend Reading for Financial Planners (Nov 22-23)

November 21, 2014 03:02 pm 3 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with coverage of the newly shortened computer-based CFP exam that was administered for the first time this week, and also an announcement by the CFP Board in its recent business webinar that the public awareness campaign, and the additional $145/year fee that funds it, is expected to continue "indefinitely" (as long as the campaign results continue to be positive). In addition, the FPA also released this week a new study about advisors and growth, finding that advisory firms are struggling to achieved their growth goals, with only 9% of all firms reporting that their business development efforts are "very effective" in achieving their goals.

From there, we have a number of technical articles this week, including: a discussion of the current status on Social Security benefits for same-sex married couples; how early retirees can maximize premium assistance tax credits for getting health insurance during the "gap" years from retirement until Medicare eligibility; some key details to know about how non-transparent "active" ETFs will work; a discussion of what kinds of assumptions are (and are not) reasonable when clients are pitched on equity-indexed universal life strategies; a new court case in Pennsylvania on "filial support" that raises the question of whether long-term care facilities may become more aggressive in pursuing adult children for the unpaid expenses of their indigent elderly parents; and a summary of the current state of dependent care accounts, and the opportunities they provide, even though they are not often utilized.

We wrap up with three interesting articles: the first provides a good overview of some of the latest research on whether money really can buy happiness or not (hint: it's not just about having wealth, but about how it is spent); the second explores some new research on the behavioral biases that impact not only investors, but also advisors and even fund managers; and the last is a (not entirely positive) review of the recent Tony Robbins book that finds the book may not have as clear of a fiduciary message in practice as it purports in theory.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end, including the launch of a new financial planning software solution called Advizr, a new "robo-planning" solution iQuantifi, and more! Enjoy the reading!

Weekend Reading for Financial Planners (May 3-4)

May 2, 2014 02:52 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition kicks off with the latest research from the CFP Board on the gender imbalance in financial planning, which appears to be driven not only by a general lack of awareness of financial planning opportunities amongst women, but also a whopping $32k/year pay gap between similarly experienced male and female advisors. The research is part of a broader new "Women's Initiative" from the CFP Board to support the growth of female CFP professionals.

This week's articles also include a number of practice management topics, from the latest in how firms are being valued for mergers and acquisitions (the 2X revenue model is increasingly being replaced by more focused multiple-of-free-cash-flow measures), to a discussion of whether professional advisors should be paid based on the revenue they produce (or not) the way that brokers traditionally have been, to a look at how for many advisors the way to "break through" to the next level of the business is to recognize that things may need to be done differently in the past (i.e., sometimes it's crucial to "let go" of the way things have always been done in the business!). There are also a pair of social-media-marketing articles: the first is a primer on popular third-party review sites Yelp and Angie's list, which may be increasingly relevant for financial advisors now that the SEC has cleared the way for their use with its recent guidance; and the second is on the power of using YouTube for marketing your advisory practice (and how to easily get started).

We also have a few financial planning articles that are more technical in focus, including the latest research on "low vol(atility)" investing, whether advisors should focus more on establishing reverse mortgages earlier (even if only as a standby line of credit) rather than as a last resort, and how advisors can pair together large amounts of CDs and a modest allocation to equities to create the equivalent of various types of annuity guarantees at a far lower cost.

We wrap up with three interesting articles: the first is a summary of this past week's Finovate (financial innovation) conference, which has been typically focused on banking or direct-to-consumer technology solutions but is increasingly featuring platforms that are targeting financial advisors as well; the second dives into the growing Schwab "franchise" model, which is now up to 24 independent owner-operated branches, and in the judgment of the author (noted industry commentator Mark Hurley) may represent one of the best opportunities in the advisory landscape right now, as firms become increasingly squeezed around marketing (a challenge that Schwab is uniquely positioned to address thanks to the strength of its brand); and the last is an interesting discussion of how BMW is completing rebuilding the car-buying experience, using "product geniuses" and interactive car-buying presentations, with some striking parallels to the transition within financial services from salespeople to advisors and the adopting of interactive and collaborative financial planning experiences.

And be certain to check out Bill Winterberg's "Bits & Bytes" video on the latest in advisor tech news at the end! Enjoy the reading!

Weekend Reading for Financial Planners (Dec 31-Jan 1)

December 30, 2011 08:55 pm 2 Comments CATEGORY: Weekend Reading

Enjoy the current installment of "weekend reading for financial planners" - this week's edition highlights a few articles on advisor use of social media, an interesting look at whether promoting financial literacy is a red herring for real consumer protection in financial services, and a good technical article on planning issues for unmarried couples. Also included is a controversial discussion of how TIPS may not be quite as "safe" as we make them out to be, and a look at a new series of mutual funds that may attract increasing client attention in the coming years. We finish with a quick look at a Forbes article discussing the decision by a major firm with 80,000 employees to completely phase out email over the next 18 months in lieu of meetings, telephone calls, text messaging, and social media for communication; will this be a failed experiment, or a glimpse into the future of business communication? Enjoy the reading!