On this week's episode of the Financial Planning Podcast, Preston Cherry and Tom Rieman tell advisors that they don't have to be afraid of knowing the unknowns when it comes to the experience they deliver.
The dynamic wealth management duo stops by the podcast this week with a pair of fresh titles added to their decades of experience and a new startup still in the building stages.
The rest of the leadership team includes Kathy Cottrell, another co-founder who will serve as chief of staff; Larry Shumbres as president; Nicholas Gudz as chief growth officer; and Andrew J. Evans as chief experience officer.
The company is dedicated to delivering what Rieman calls the "ideal advice experience," and it will do so by actually quantifying how clients feel about the work their advisor is doing for them.
During their conversation with FP Podcast host and lead editorial producer Justin L. Mack, Rieman and Cherry explain the "why" behind the new offering, the impact well delivered financial advice can have on a client's life and why true wealth has nothing to do with money.
Listen to the new episode — as well as to all future and past episodes — by subscribing to the FP Podcast on
Transcript:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Justin L. Mack (00:02):
Good morning, good afternoon and good evening. Welcome to the Financial Planning Podcast. I'm your host, Justin L. Mack, and it is my pleasure to introduce this week's guests, Tom Rieman and Dr. Preston Cherry. Gentlemen, thank you both so much for joining us this week. And this is a conversation I've been looking forward to because we had a chance to connect quickly at Future Proof 2023, but to get you here in the room or rather on the Zoom for a proper episode, it should be a great experience. So thank you both for coming again.
Tom Rieman (00:34):
Yeah, thanks so much, Justin.
Justin L. Mack (00:36):
Absolutely. And experience — that's something we're going to dig into today on this week's podcast. Chiefly the ideal advice experience and how my two guests this week are working to help advisors deliver just that through a new wealthtech startup called Practice Intel, where Tom is CEO and founding partner and Preston is chief evangelist. It's fresh, it's new. I'm not in the same room, but I can tell these guys got that new firm smell all over 'em. It's a good look. But prior to launching all of this, there's a lot of veteran experience in the room as well. Before Practice Intel, Tom was director and head of wealth solutions for J.D. Power. Meanwhile, Preston, one of the hardest working men in the biz, is also founder and president of Concurrent Financial Planning and director of the Charles Schwab Center for Personal Financial Planning at University of Wisconsin Green Bay.
(01:24):
So, Practice Intel. That's where we're headed. But first, let's spend some time on where we've been. As newcomers to the Financial Planning Podcast, you both have to pay the first-timers' toll, which is your origin story. I'm a big superhero guy. I love the origin story. Peter Parker with the spider, Bruce Wayne in the alley. Tell me how you got here, what turned you into the you that we know? What's your why? And I'll let whoever wants to go first, kick it off. Tell us how you got into the world of financial services. Was it something you always wanted to do or did you have a different path?
Tom Rieman (01:57):
So I got in the typical way as a very young guy because I was promised to be able to work for myself with an unlimited income. Remember those days? So I was actually working as a salesman for a human resource consulting firm in Miami. I won't say how many decades ago, and I did a lot of work civically. I was very active fundraising, particularly for the Dade County Economic Development Council, which had some big high-flying people on it. And in the process of that, I was recruited by the head of the agency for Equitable. And he said, we believe in civic marketing, you need to come on board, you're going to be great. And that's how it all started. Now, it kind of morphed from there. After a couple and a half years of doing that, I realized that I wanted more than just being a salesperson. And so it took me back to graduate school where I got a master's in organizational learning. I came out of that, got back into the industry almost immediately. And that's a longer story than I'll share right now, but that's how it all started. And my why is to help advisors not be that salesperson I was hired to be, but instead to actually be an advice professional.
Justin L. Mack (03:13):
For sure, for sure. Preston, what about you?
Preston Cherry (03:15):
Well, man, I wish my story was as cool as Tom's, I guess. But to admit it, I only wanted "PhD" on my license plate when I walked around. [laughs] But no, just kidding. Actually I got into personal finance through mentorship, and I had a mentor call me into his office in my undergrad school years, and he said, Preston, I think you're going to like this personal finance stuff. It seems like you're liking it in class. And the reason why I liked it in class is because I had class at home. And we had a lot of money talks. Life is about ebb and flows. We roll and adapt, as our famous line inside of the Cherry household. And so we talked about money often, the emotionality about money and the dollars and cents about money. And quick fact, I actually had my first introduction to a 401(k) matching program in junior high school. We actually had a bank book. We put up money in our allowance there, and then our parents put cash money in there to match it. And we had an old school bank ledger.
Justin L. Mack (04:26):
Oh my gosh, in junior high? That's amazing. I was in junior high in the '90s and I was collecting … what was hot in the '90s at the time? POGS and 1992 Dream Team cards. [laughs] That was pretty much it. So you had me beat. That's incredible. But I love hearing that. That very family-oriented focus. The fact that you had that class at home, that interest rooted into something that propelled you forward all these years and now into this new endeavor with Practice Intel, which is all about relationships, all about understanding that "why" in a very real, tangible way. But I want you guys to take the lead here. Give me the full scoop on Practice Intel. What's the mission, the message, what's the response so far? And I guess, why now? With all the experience you're bringing into this new endeavor and the other members of the team …
Tom Rieman (05:27):
Yeah, I mean, I'll start with the "why now?" And if you think about the power of financial advice, it's really quite profound. When you have great financial advice, it can make a dramatic impact on you, your family, the community, your legacy. And I think we know that not enough advisors are necessarily delivering on that full promise. So I've actually been after this for a couple of decades, this idea of how do we create a better advisor? How do we model and replicate the best advisors out there? I think experientially, we know that there are always a handful of great advisors. We see them. There's probably a bunch of advisors that are hardworking, and then there's probably a bunch of advisors. Well, maybe we wouldn't want to necessarily be around. And it was my time at J.D. Power that actually brought it full circle or maybe closed the loop is a better way to say it, because I was able to use consumer data to model that experiential perspective.
(06:28):
So really, the reason why now is because we finally completed this story. We completed the narrative that allows us to go out to the marketplace and say, it's not just us saying we can get better. It's the end client saying clearly and directly that we can get better and how. So that's really where that started. So our mission is to help advisors deliver on an ideal advice experience, which is just simply delivering on the core attributes that make advice, advice. You have a great latte, a great office experience, seamless tech, all good stuff. But without delivering on that core experience, all that is kind of for naught. And so that's really our mission
Justin L. Mack (07:13):
For sure, for sure. And then Preston, have to ask, what drew you to this mission to be a part of this? And I love hearing, Tom, you mention that this startup, it's a new idea, but this is the result of years and years of chasing this. Trying to figure out how do we put our hands on this? How do we quantify this if that's something we can do? When you saw this, what about it spoke to you the most?
Preston Cherry (07:37):
Well, what spoke to me the most is that people want something from their advisors that they can feel. My grandfather told me, one time I sent him a card and it had some nice words in it. And he said, son, these are some nice words, but you're going to have to put something in this envelope that I can feel. So he wanted some money up in the envelope. [laughs] So that's both qualitative and quantitative. It is being connected as a human being with your advisor, connecting life and money and seeing some advancement in your journey. So you have the emotionality of it, and you also have the dollars and numbers of it as well, and joining those together. So what do people want? They want both. They want to be educated, they want to be informed, they want to make better decisions. They want better confidence and clarity, and they also want to feel connected with whom they're speaking with in an authentic manner.
(08:34):
So how do you measure all these? Being out on the circuit, whether it be speaking or talking to my clients or whatnot, folks love the human reality of it. They like that, but they also want, hey, tell me what to do with X, Y and Z, and what's the next move, this, that, and the other. So they want a whole experience. And I think with the transfer of wealth coming down the pike, you're going to have to have another, like Tom was talking about, ideal advice experience. So there's a gap, and that's what drew me in. To help people with their life and money journey.
Justin L. Mack (09:15):
For sure, for sure. And that ideal advice experience, I want to talk about that concept. So what are some of the things that advisors need to be doing to deliver an ideal advice experience? Especially now. And how can we turn clients into advocates? People who really love the experience that you're providing from an advice standpoint and are wanting to not only tell people about you, but really champion the work that you're doing for them. How do we do that?
Tom Rieman (09:43):
Yeah. So first, let's start with that word advocate. We believe in that word deeply. And there's a difference between an advocate and getting a referral. So if we think of that word, advocate, advocacy is really just an external manifestation, an external representation of what you believe deeply. So it's powerful. You're not only advocating, but you're advocating for a really high value experience. And when you combine those two things together, great things happen. Now there's a very direct line, very direct line, and research shows this between delivering on these attributes and there are seven of them and high levels of advocacy. So it's a straight line. So those attributes, and I love to use food analogies, I use the analogy of you go to a restaurant and there's what I'll call client experience related things. You walk in, the people are nice, they're friendly, it's a warm environment, nice tablecloth, good setting, they're responsive.
(10:43):
It's a really feel-good experience. But then when the food comes, if that food is not prepared properly and it's not hot and it's not right, the client experience doesn't matter. So if your steak shows up and it's burnt, it's overcooked, everything else doesn't matter. Really the core experience in our business is the advice experience, and those attributes are very fundamental. So they are: Is the advice comprehensive? Does the client believe you have their best interests in mind? Does the client believe you understand them? Do they know the fees they're paying? Are they connected to your life? Is there a financial plan? Right? So these are basic fundamental things, and I'd argue you ask an advisor, are you delivering on these things? Do your clients think you're getting comprehensive advice or delivering comprehensive advice? I'd argue many advisors would go, well, of course, yeah. But the question is how do you know? And so what Practice Intel does is we help advisors know with certainty what their clients think about the advice experience.
Justin L. Mack (11:48):
Definitely. And "how do you know?" That's the question. Because you feel like, yeah, this is fine. Until you get some bad news and all of a sudden, oh no, it's not fine anymore. But that connectivity, and that's one of the things I've loved about having the chance to report on this business. It's just seeing the really human aspect of all these money matters, right? And Preston, before we go into the break, I'd love to get your thoughts on it. We always talk about real relationships, not transactional. We hear that all the time. But for you, it's probably exciting to see more people at least talking about it. Even if they don't know how to get there yet, they're trying to get there to that real connection, whatever it might be for you. Thoughts on that trend? How do we keep that going and keep people understanding that it's about the people, not the paper?
Preston Cherry (12:47):
I like how you did that there. Nice. I'm an alliteration fan myself. We need connective glue. We need the Gorilla Glue. Justin, back in the day, they had the Elmer's Glue and I think they still got it. And you put it on construction paper and you moved it all together and it didn't stick, right? So now we've got the Gorilla Glue, and what is that? It's the attributes that Tom was talking about. And people not only can feel that it's meaningful, but what about measurable? So meaningful and measurable. And so the advisor should ask, they should want to know the stickiness of their client relationship, not just simply because you want to grow in numbers. I mean, that will take care of itself if you are taking care of the client and the quality of your relationship is good. So if folks are receiving that, then yes, they're going to go out and advocate because they're not just going to refer. And they'll speak for you. And this is where the growth comes from, not only in quality, but in number.
Justin L. Mack (13:58):
Very cool. And with that, we're actually going to take a quick break and enjoy a word from our sponsors. But when we return, we'll have more with this week's episode and this week's discussion with Tom Rieman and Dr. Preston Cherry. Stay locked. We'll be right back.
And welcome back to the Financial Planning Podcast. I'm your host, Justin Mack, and we're diving back into our conversation this week with Tom Rieman and Dr. Preston Cherry, representing the Practice Intel team on this week's edition of the Financial Planning Podcast. And gentlemen, you both mentioned that when delivered well, when delivered properly, the impact that financial advice can have is massive. Let's get into that a little bit more. Whoever wants to lead off, give me an example. What kind of impact are you talking about? What are some of those things we can see when we do this the way we know it can be done?
Tom Rieman (14:46):
So I am a big fan of, and have been for years,
(15:41):
That's not wealth. Wealth can be whatever you have. It's the life that you want. That's the important thing. So translating that, and by the way, with Practice Intel, it's so critical to know that yes, we are measuring where you are today. But the real purpose of Practice Intel is for you to actually grow and improve. And that's why a critical part of our offering is curriculum and learning content that's focused on the advice process and not the sales process. So the ultimate goal is to move people on that continuum so more people can deliver on that ideal.
Justin L. Mack (16:16):
Definitely. And that continuum, here's how you can improve some actionable steps, that journey of getting better as an advisor and as someone who is delivering advice. Preston, I'd love to get your thoughts, too. Especially as an advisor who has been doing this for as long as you have, and I know you've probably gone through that over your own career of wanting to get better. Taking that feedback. And we see it in all the work that you're doing at such a high level. It's why I listed off in the show all the things you're doing. I can't keep track of it, but you put that work in. Talk to me just quickly about that journey of, all right, say you work with Practice Intel. You get this feedback as an advisor, what am I supposed to do with this? Where do I start? You know what I mean? The first step to getting better. Any tips for folks who are going to have to get better after getting the lowdown on what you guys give to them?
Preston Cherry (17:01):
Well, the curiosity to want to know. I remember watching Donald Rumsfeld one time, fan or not, but he had some stuff at the press podium. I used to watch his press stuff. He said, there are known knowns, known unknowns and unknown unknowns. And they were like, hey, Rumsfeld, you going to answer the question? But there's a lot of unknown unknowns, but folks, if you want to know the knowns, then you're going to have to ask. So you have to be curious, generally curious, of who you're serving and ask for feedback. Be open. And then that's the first step. And then receive it. Well, prepare yourself to know the unknowns, and then what are the solutions here? I mean, not only just here, but listen to the people that you're serving. And then that's where education comes into play. I say all the time, you open up the heart, you open up the mind. You start with compassion first, and you leave with education and then you make better decisions. And it's how you get better financial wellness as a whole. So going through that continuum. It applies not only to clients, but advisors. So the advisors lead with the willingness to understand who they're serving. Then that opens them up for more education, which is inside the portal too. And then they get to increase that quality quotient. So that RQI that we're going to get to a little bit.
Justin L. Mack (18:33):
For sure. And like you said, receiving it. Well, when you get that feedback, whatever that is, receiving it is hard to do. And I know it can probably be a little personal, especially if you get some feedback that maybe some of your clients don't think you're doing that. And obviously if you work with people, you start to develop that bond and you're like, oh, I thought I was taking care of you. You know what I mean? And you can respond to that incorrectly because we're all human. You might take it a little personal, whatever, but like you said, accept it. Well roll with it. And then the last part of Practice Intel I want to talk about is RQI. That number. What are those three letters? Why should advisors get familiar with them in the future with what you guys are doing over there?
Tom Rieman (19:12):
Well, so we measure a couple different things. One is where you fall on this advice dispersion. Are you delivering ideal, average or poor advice for the eyes of your clients by measuring those seven attributes. We already talked about RQI, it adds another layer of sort of rigor to the process. And I call it NPS plus or NPS on steroids. And it measures the quality and value of the client relationships. So we do measure NPS, we measure loyalty, trust, value for fees and overall experience in that. And then bring it through an algorithm. Bring out a number called RQI. Or relationship quality index. Now here's the cool thing. Clearly, the higher the RQI, the better, right? The more people are sending you, they're loyal, they have a great experience, they trust you, they're going to advocate for you. The better, more embedded growth there is in your practice.
(20:04):
The lower the RQI is the more embedded risk. Regulatory and attrition risk. There's a tremendous amount of attrition risk sitting out in the industry today. I often hear advisors say, well I have a retention rate of like 95%. And my response is, that's great. And that could absolutely be indicative of a great experience or an ideal experience. Or it just means you have a huge amount of attrition risk baked into your book. Now we take that RQI and we actually plug it into our practice valuation portal as well. So we try to bring it all the way around.
Justin L. Mack (20:48):
Very cool. And I want to have people keeping an eye on the work you're doing. And especially launching at the end of the year, there is a full year to look forward to with the new company. So I imagine a lot of goals to set considering this whole thing is about measuring experience. I'm sure you have your own metrics and goals you would like to see in year one. So what are some of your priorities? What should we keep an eye out for as far as updates? Just what's on deck for 2024 and the team over at Practice Intel?
Tom Rieman (21:18):
Yeah, Justin, I mean, you're right. We are launching in a time of year where we want to let people know we're here. We're already starting to create a buzz. We're having conversations with individual advisors, we're getting requests for demos. And probably not surprising, we've already been having conversations at the enterprise level, going back arguably to the beginning of the year and getting really wonderful interest and feedback from them. As we hit the beginning of the year, we'll obviously be that much more present at the conferences. We will continue to update the application, the portals, one in the context of the learning content. That's going to be so important to continue to build on that, we're already working on some very interesting things. We'll actually be adding additional surveys as well. So right now we're measuring providing research on the advice experience, which is critical.
(22:09):
But there's two others in the wings. One is around the efficacy of financial planning. There's actually a huge gap there. And a third around the human digital balance. Are you delivering what clients actually want? So that is also … that's maybe a little further down the path, but we're just excited about continuing to rock out. To use a Preston phrase, there you go, Preston, to rock out in the industry and having Preston as a co-founder and a chief evangelist. And the rest of the team as well, that we're going to be making some serious waves and we want to make a real difference in this industry. And Preston, please add to that.
Preston Cherry (22:50):
Yes, yes. Y'all can't see, but rock out is fitting because I got the albums in the back. But yes, we want to put the needle on the record and play the sound for folks. And so you can hear the music and not only hear the music, but listen to it and feel it. It is dollars and sense, and sense with an "S." And so we are delivering, when I say we, because I'm an advisor too, is delivering what people want. And I think that clients are hungry and so are advisors. They don't want to disconnect. The clients don't want to disconnect. Any advisors don't want to disconnect. So for the genuinely curious advisor that says, I want to help people's life and money advance, then they're asking, well, give me something that could help me do that. And then they're growing in value, they're growing in relationship quality and they're growing their practice.
Justin L. Mack (23:53):
Right on. Right on. Alright, well as we transition here to the end of the Financial Planning Podcast this week, we're going to transition into something that's become customary here on the show, which is ending with some good vibes. And I always like to take a look at everything we've discussed. We talked about your whys, what got you into the business, the new endeavor that you're just launching with Practice Intel, a mission to deliver financial advice at the highest level and create that impact in our lives, in the lives of the clients and the lives of advisors. That mutually beneficial thing we get when this is done well and people's minds and their money are right. So with all that considered, I have to ask you both, what do you love most about your jobs? What gets you coming in every day, getting up on another Monday, whether the weather's good or the weather sucks, you still love what you're doing? Tom, I'll have you start first.
Tom Rieman (24:45):
It's not a job, it's an advocation. I remember I said that when I worked at J.P. Morgan. And I said that to, she's now actually the head of Pershing, and forgive me for her name is escaping me. And she said, save the word advocation for your wife. Don't use it here. And I thought, well, oh well. But this is an advocation, the opportunity to have such a big impact. Think about it. We're able to, let's say impact 10% of the industry. I'm going to rough it. Let's say 30,000 advisors. Those 30,000 advisors touch on average 200 clients each. That's 6 million lives we can change, let alone the ripple effect outside of those relationships. And that is, I used the word profound earlier. That is profound. And that's driven us creating a startup. And I'll share this to anybody that's done it. They know, but anybody who hasn't, it's not easy.
(25:40):
It's not for the faint of heart. You have to have that drive and the mission of the mission. And we believe what we're doing is very important. And the great thing is it's important for the clients. Yes. But the wonderful thing is that it's connected to the entire value chain. That means advisors are succeeding that much more. And it means the broker, dealers and firms and RIAs are succeeding that much more. It may mean someday the regulators get off our back because we're actually doing the right thing all the time just by our natural course of business. So that's what gets me fired up. And you can hear it in my voice. So let's go. That's our phrase. Last week when we launched the emails that went around our firm were "let's go."
Justin L. Mack (26:22):
You can feel that. You can feel that. Preston what is it for you? What's that thing?
Preston Cherry (26:26):
That thing for me is the life and money journeys, the human condition. Are we advancing it? Because life and money put together is a public good and this is why we have to do our jobs well, and this is where that genuinely curious, genuine willingness comes from a genuine authenticity to serve. Those are the qualities that advisors have to have inside of them. So with the public good, we are bringing wellbeing. Wealth and wellbeing. There are two things that we need to be able to push forward. And you can do that through financial advice and good financial advice. If it sucks, then you ain't going nowhere. We got something to measure that. So we want everybody asking, Hey, what's your RQI?
Justin L. Mack (27:25):
Yeah, don't be afraid. If you don't want to know, don't hide from it.
Preston Cherry (27:30):
Be a Rumsfeld in the press box, talking about unknown unknowns. Get you some knowns in your life.
Justin L. Mack (27:36):
Exactly. And I don't think good vibes get any better than that as a closing. So I want to thank you both, Tom, Preston, thank you for sharing your time, your passion and your energy with us this week on the Financial Planning Podcast. It's been a pleasure.
Preston Cherry (27:54):
Thank you, Justin.
Justin L. Mack (27:57):
And I want to thank everyone for listening to the Financial Planning Podcast. This episode was produced by Arizent with audio production by Kevin Parise. Special thanks again to our guest, Tom Rieman and Dr. Preston Cherry, the CEO and chief evangelist of Practice Intel. Rate Us, review us and subscribe to all of our content at