Key Takeaways:
- Create capacity for primary revenue generator by developing lead advisors
- Introducing "objectives and key results" as a way to track team success in a flexible work environment
- Aligning marketing initiatives to clients' psychographic profiles
Toby (00:07):
Yes. So we are very excited about this session that Penny will be hosting right now. So Journey Strategic Wealth, that's an RIA with $3 billion in assets under management that's built for advisors seeking independence and has full-fledged practice management support. I know that'll be coming up a lot in this discussion. Right now. Penny has spent her entire career coaching Financial Advisors. Prior to launching Journey. She founded Thrive O'S Consulting, a practice management coaching company. Last year, penny was nominated as Innovator of the Year by wealth management.com and for luminary award by Think advisor, a couple of other publications in our industry. For our publication financial planning, penny was named one of 23 people who will change wealth management. In 2023, she runs a monthly YouTube series called Practice Management with Penny. Everyone please give a welcome, a warm welcome to Penny Phillips.
Penny Phillips (01:18):
Thank you. So I have six months to change the industry, right? 2023, it's June. Okay. Yeah, there we go. That's it. What a buzzy room. Thank you for sitting in the front, by the way, and filling up the front couple rows, everybody. Okay? Okay. Tough crowd today. I'm so excited to be here. I always give a disclaimer before all of my presentations. This is an advisor focused practice management, content oriented presentation, which means I'm going to give you a lot of ideas and it's going to feel like you're drinking from a fire hose, probably not the first time you've heard that. You've been to probably hundreds of conferences where you've heard someone like me talk about practice management and you're taking notes and you're writing on your computer and you're filling out your notebooks and you go back to your office with all the ideas to implement and what happens? Nothing. You jump right back on the hamster wheel, right? And so what I always tell advisors before a presentation like this is practice management is 15% content and concept and 85% behavioral change. So I give you permission to not listen to every single thing I share with you and implement every single to do, but rather focus on the behaviors and belief systems that you want to work on shifting and changing after this presentation. If you can change the way in which you make decisions as an advisor and business owner, everything else will follow. Fair? Okay, so I'm going to start this presentation. The way I've started every single presentation the last two years. We are in a time of great change and uncertainty in our business. Everywhere we turn, it seems like someone is talking to us about the threats to the profession. But the reality is, and my message to advisors is whether you've been in the business for four years or 40 years, how many folks been in the business more than 20 years? The only one more than 30 years. Anybody? Any? Is everybody in the business more than a couple years? Okay. Okay, good. Whether you've been in the business four years or 40 years, we're always in a time of great change and uncertainty. And actually as an industry, we do a really good job scaring the heck out of advisors. Two decades ago, we were telling advisors, you are going to be replaced by robots. The robo advice craze is going to replace the human advisor. And then a couple years later, we were telling advisors this why I use the grim reaper sign here. Advisors are aging out of the business and there's not enough advisors coming to replace you. How many times have we heard those statistics about advisors retiring and not enough young advisors to replace them?
(04:05)
And then we started telling advisors, if you don't focus on marketing to millennials and bringing in millennials into the business, you're going to be out of the business soon. How many times have we heard those statistics about needing to market to the millennials? And by the way, whenever we talk about millennials in our industry, we always use these emojis, right? It's always somebody with a skateboard and facial hair. And we talk about millennials like their 22 year olds taking pictures and posting them on social media. Millennials are 35 to 40 years old. They're still posting selfies on social media, but they have kids and families and businesses. And so my message is it's really important to ground yourself as an how many folks are advisors in the room? Really important as an advisor to focus on what's actually happening. What's the reality of what's happening in our industry? So a couple things. Number one, we know that every investor and client didn't just automatically go to work with a Robo Advisor, right? In fact, what we learned, especially post pandemic, is that people need and want advisors more than ever, but people don't know what advisors do. 72% of millennials don't know where to get trustworthy advice. We saw an increase. It's a little bit more, almost 20% in search for financial advisors during the pandemic. People wanted to go to and to a professional to get advice. But the reality is, we talk to the consumer the way we talk to each other in our business, the average person doesn't wake up thinking, I want holistic wealth management services today, or I need fee-based financial planning, right? Somebody's Googling something that they need. What are they Googling? How do I pay less in taxes? Am I saving enough? Should I rent or buy? Right? And so people need and want advisors and advice, they just don't know what advisors do. The second thing we know to be true is that while we thought advisor fees would compress as a result of the robo-advice craze, what actually happened? Advisor fees held investment management costs compressed. But the average advisor in our business delivering wealth management services, meaning they're not just delivering an investment management experience, are still charging 1%, one to one and a quarter percent on a million dollar account.
(06:42)
And are actually charging more than they did a couple years ago. The other thing we know to be true is that the industry's consolidating, right? How many of us know that right? In the business, especially in the RA space, the space that we are in, that I am in, 75% of top wealth management firms as ranked by Barron's are backed by private equity. 75% of organic growth in our business is isolated to the larger firms. So the larger firms have scale and infrastructure and operational support. And so advisors of those firms are able to grow faster. So what does that tell us? That tells us that the industry has naturally solved for this. The succession gap, meaning if you're an advisor who's got three years left in the business and you don't have a succession plan, guess what? You can join a firm and their advisors there that are going to be able to service your business or there's somebody externally who's going to buy your business. And I share this with advisors because it's very easy, based on what a lot of consultants, and I'm a former consultant, say to advisors about God, you have to have a succession plan. While I agree with that, the reality is that the industry consolidating is going to solve for a lot of those gaps that we've been talking to advisors about. The final thing I'll say is while we talk a lot about millennials, the reality is Gen X is actually first. And it's funny because Gen X is often called the forgotten generations. Everybody know that, right? It's that it's really the 45 to 55 year olds. And here's another example of us totally forgetting about them. They're actually almost as big as the millennial generation, and by the way, need an advisor more because they're also the sandwich generation. A lot of names for these people, by the way, a lot of weird names, but it's the Gen Xers. They have to take care of parents. They're taking care of kids. They're also called the latchkey generation, right? They've dumped things really on their own. They're perfect candidates for advice, by the way. And by the year 20, 36, 90 7% of wealth transferred from baby boomers and silent generation clients are actually going to be owned by clients age 37 to 52 right now. So it's important to market to millennials, but guess what? It's arguably more important to market to Gen Xers.
(09:02)
The last thing I'll say, and this is the most important piece of information as we talk about things that are changing and what advisors need to be cognizant of, because there's a lot of noise. And what I always talk about is what does the advisor actually need to be worried about and thinking about that informs the way in which they make decisions within their practice. And it's this right here. It's that all the information out about robo-advisors and digital advisors and how the industry's changing has caused one thing to happen. It's caused the consumer to make a choice between lowest cost or highest value. The advisors that are not just going to sustain but thrive in our business, are the advisors doing what? Delivering highest value. And so when I talk to advisors about the practice management initiatives that they need to be focused on year to year as practice owners and operators, these are the only two things advisors need to worry about. Number one, if you want to be on the highest value side of the equation, you have to deliver highest value. And by the way, that just doesn't just mean delivering a full fledged wealth management experience. That means delivering it using emotional intelligence, right? Because we're in the wealth management business, but in reality, we're in the people business. We just happen to deliver wealth management services. And then the second thing is most important thing an advisor can do right now is create capacity for themselves. And this presentation's going to assume, of course that you're not, that you're advisors are running their own solo. I call them the solopreneur independent practices. And so in that structure, only two things you can control, delivering highest value and creating capacity for yourself. And so I'm going to talk through six themes today.
(10:59)
Everybody with me by the way? Everybody awake? Okay, good. Six themes. I call it the checklist. These themes underpin the decisions that you should make as an advisor, as an advisor operator over the course of the next couple years to not just stay relevant in our business, but sustain as a practice. So I'm going to start with the first one, and I just alluded to it. Create capacity for your most talented rainmaker on your team. Guess who the most talented rainmaker is? In most advisory organizations? It's the advisor. The reason solopreneur practices plateau and growth is concentrated among the largest firms is because the solopreneur advisor runs out of time. We expect advisors to be advisors, to be CEOs, right? That's something that's came up like 20 years ago. We're telling advisors transition to become CEO of a business. We also expect advisors to be technicians creating financial plans, marketers, heads of human resources advisors simply run out of time. But the reality is, if you want to grow a business, if you're running an individual advisory practice and you want to grow it, there's only three options that you have other than joining a firm like Journey Strategic Wealth, by the way, the first is you double down on being the rainmaker. Usually I'm talking to an audience of older advisors who've been in the business a long time, who've built the business themselves through their own revenue generating skillset. And so the options for an advisor going their business is you continue to do what you do best, grow the business. The other option is hire and or develop other advisors on your team. The third option and an option that many advisors are taking who simply say, I don't want to build this myself, is you got to join a firm where revenue generation, lead generation and growth is being done for you. Assuming that's not what you're going to do, right? Assuming you want to build it yourself, you really have the only two options. And so my message to advisors, and this is right, the first part of the checklist is the most powerful decision you can make as a business owner. And this is relevant for if you're an advisor or not anyone in a service oriented business, what role do you want to play in the business moving forward? Because if you don't enjoy marketing, you don't enjoy growing the business you don't enjoy operating the business, but you enjoy being an advisor, you probably shouldn't be building and running your own practice. And there's nothing wrong with that, by the way. So my message to advisors is, your easiest option is not the second one. It's not to hire and develop young talent. You know how difficult it is to hire and develop a rainmaker advisor. Most of the young advisors coming into the business today, and I could say it by the way, I don't like when anyone else says it, but I could say it as a millennial.
(14:00)
They don't necessarily want to be salespeople. They didn't come into the advice business with a CFP to be a salesperson. And so the likelihood that we're going to find young talent that is going to be able to hunt and rain, make and cold call cold dmm. Now on LinkedIn, by the way, that's the newer thing, and all these firms are talking about that. It's their new sales tactic at some of the wirehouses, no offense, and this is recorded, but anyway, it's like it's the same as cold calling. The likelihood that we're going to find people that are going to be able to do that effectively off the bat, really, really difficult. And so what I share with advisors is create capacity for yourselves. Double down on your talent as a rainmaker. In order to do that, you have to build a team around you obviously. And so for me as a former consultant and coach, and now someone running an RIA, the optimal structure is one in which operations and investment management, the two biggest time and capacity killers in any advisory business are outsourced and centralized, meaning you are not responsible for it, you're not opening accounts, you're not putting together bespoke portfolios unless it's a unique sort of opportunity. You're not deciding tech stack. These things are table stakes. In our business. We don't want advisors making these decisions because an advisor's best use of time is working with top tier clients and business developing. And so the optimal structure is one in which the main advisor in the organization, the one that's built the business that runs the business, is only managing between 30 to 40 high tier relationships, meaning these clients are getting a full fledged financial planning engagement. They generate the most revenue for the business. You as the advisor is responsible for managing those relationships, delivering the advice, being the statesman for those relationships. The second hire on your team, usually the first hire on the team is the admin person. And by the way, advisors have been taught to build in a very, anyone who agrees with this, feel free to nod. So I know you guys are, what I'm saying is resonating with you, but most of the time we've taught advisors, you get in the business, you generate a little bit of revenue, and your first hire is the cheapest labor possible to handle paperwork and process things, right? That's the admin person. And then the next hire is also another person you can get for cheap to hire to process more paperwork. There's always going to be more paperwork to process. And so what's happened in our business for the solopreneur individual advisory practices is they're structured and built like pyramid, not pyramid schemes by the way, but pyramids where the advisor sits at the top and he or she has a bunch of processors underneath him or her, what's the problem with that structure? There's only one person generating revenue. There's only one person delivering advice. Both of those things can't sustain. So the admin person and the client service person is responsible for creating capacity for the advisor. They're responsible for managing the firm calendar, responsible for prepping the advisor, responsible for sending the review, meeting agendas out before the meeting, kicking off the workflows in the CRM, which I'll talk about. And then we have this, what's called the service advisor, somebody responsible for creating the plan, managing some of the lower tier relationships. And by managing lower tier relationships, I mean actually delivering advice, handling the review meeting, giving the plan update. And then we have arguably what is the most important role on a team and in our industry now, it's when the industry calls the lead advisor, what I call the in-house advisor, the advisor who we can teach to hunt in the zoo and not in the wild, as they say, right? They cultivate the book of business. This is an advisor who doesn't ever have to develop rainmaking skills, but they need to be able to manage relationships. And 60 is a little bit low, but assuming these are all financial planning clients, we want this person handling 80 relationships. And this is a person, by the way, that's on a salary plus bonus. Most of the time I have people in the room thinking, I'd love to hire this person. Where the heck do you find this person? And anyone who is hiring a lead advisor, somebody to come in as an in-house advisor, I always say to them, look at advisors who failed out of, I can't say the firm name. I wish this wasn't recorded, Toby, but think of a firm where you got to sell a lot to make it for the first couple years, right? Whether that's a specific product in the insurance BD space, or it's a training program at a wirehouse. A lot of these folks fail out of the business because they can't prospect, they don't want to prospect, but they're really good at delivering advice, managing relationships. So I always tell advisors, look for those people who didn't necessarily make it as advisors, because we still define success in our space as those who can produce and generate revenue. And I challenge advisors in the industry to think differently about how we define success for the advisor. Success for an advisor should be tied to outcomes that clients seek to achieve. So this is the optimal structure. And the one thing that's really important in any organization when you hire somebody is that they don't just get hired and start in your organization looking at a job description that lists out tasks. We're a very tactical industry, we hire somebody in a job description. These are the things that you got to do. We need everybody in an organization thinking about what they need to achieve for themselves and for the practice. Has anyone ever read traction or any of the traction books?
(19:51)
Very tough crowd today, okay? We're a big objectives and key results company. So as long as everybody's hired understanding what they aim to achieve and how they know they're achieving it, those people can work from anywhere. They don't have to come into the office, they don't have to have set times. They don't have to talk the same way as everybody else. They know what they aim to achieve. So what's really important if you run a team, whether you're in this business or any business, is set OKRs for that lead advisor I talked about. They know theoretically that their job is going to be to manage relationships and deliver advice, but it's really hard to track that. The success of that an ongoing basis. What we want them thinking about is the end of every month, did I create more capacity for the senior advisor who's a rainmaker this month than I did last month? And how are they going to know they did that? Well, very specific things. The advisor can take on more A plus relationships. They're handling all prep and follow up work for meetings, creating capacity. So giving everybody a friend is, this isn't just for advisors, by the way, anybody on your team, giving them a framework for how to think about success is really important, especially for the next generation of employee. So my takeaway for you from this first section is, in order to create capacity for yourself, you need to make a definitive decision about that associate advisor or lead advisor role. Are you hiring for that? Do you have somebody on your team already who fits that description, who maybe needs to evolve into a lead advisor, but making a definitive decision on this critical? And that's why it's number one on the list. Okay, number two, simplify client segmentation. We talk a lot about segmentation. Sorry, guys. We talk a lot about segmentation in our business, and this is one of those things that we tend to, I think, overcomplicate for advisors, right? We've always talked about segmentation in terms of four tiers, A plus, A, B, C, platinum, gold, silver, bronze. I know you have Lori. We've all been in those workshops where we're doing the segmentation exercise and there's a formula. How much revenue does the client produce? Are they a referrer? The reality is is that you really have your top clients and you have everybody else, yes or no. Anybody who's segmented a book of business. In reality, the service differentiation between a C client and a B client is what? Nothing. The number of calls you make to them in a year. In reality, nobody follows that anyway. Supposed to call the A clients 12 times the C clients, six. Nobody does that. And so let's simplify it. We have the best clients who generate the most revenue. And by the way, it's okay to say that you run a business, you have clients that generate a lot of revenue to the business and some that don't. We have to scale the ones that don't, otherwise the business cannot sustain. It's really that simple. So we have our top clients and everybody else, and so what I share with advisors is the most important thing you could do is identify who the everyone else is and make sure you're focusing the majority of your attention on the top. And so this is a really good exercise to do at the end of every year. And again, whether you're in this business or not, it's translatable because the 80 20 rule applies in every service oriented industry. But let's just talk about the top clients, right? The top clients are getting, and by the way, the service is really differentiated between the amount of review meetings that you give as the advisor or the planner, right? The top get more, the lower, get less. So your top clients get two or three meetings a year. Those meetings are on your calendar. By the way, a new rule to implement, this is one of the biggest practice management misses I see. When a client starts with you, they should already have in their minds, when they are coming in for review meetings for the rest of their lifecycle with your firm, no surprises. Your onboarding communication to them is every six months from the anniversary of you becoming a client, we're going to have a conversation about your plan in a very formal way. We're going to talk to you a bunch of times throughout the year. We're going to talk to your attorney around tax season or your accountant rather, but every six months, you're going to come in. No surprises. Now, when you really get fancy with practice management stuff, that is just an automated workflow. Every six months, they get the email, whether it's through wealth, we use wealthbox, or whether you're using Calendly or whatever. They get the alert, they get the review meeting agenda, they get the reminder, and maybe it starts two weeks out and so on and so forth. So that's your top clients. By the way. Top clients also get the annual coordination meeting with the CPA. Anybody using Holistic plan, that is another tech piece that we've just started using. Lori, thank you so much. Lori's an advisor at Journey. Great, A great way to say to top clients, we're maybe the next gen of top clients. We have this new tool that we're using. It's going to provide tax insights, it's going to make things really easy for you and your CPA. We're going to hold one meeting a year with all of us together and provide some insights on where you can save more in taxes this year. So that's happening with your top clients. The other thing that differentiates service for top clients, that's a really simple thing that I don't see enough advisors doing, is what I call the annual summary of wins. Every time you meet with a client, every time you have a conversation, you're noting the updates in the CRM, right? Theoretically.
(25:41)
And so the client is telling you like they were able to buy the second house and they hit a savings goal and they paid down their debt, and maybe they're sharing other things with you. Their kid got into Clemson for a school that came to mind, wherever, keeping track of this, the end of the year, you're taking all that. That's in your CRM, right? In the notes section, copying and pasting it into a Word document, turning it into a PDF and saying, we want to share with you all the things we've achieved together this year. You should be so proud of yourself and do that for your top 20 families, right? So you have a scheduled alert in your calendar for the first week of December where somebody on your team is putting together the annual summary of wins for the top 20 households. That feels different. And by the way, you can add things like we've rebalanced your accounts. These are things that technology's doing for you, tax loss harvested, but you're adding it to the wins. Now, how do you scale this? That's the critical piece, right? Well, we also already talked about the CRM. Having a good CRM arguably is the most important. People will disagree with me, but would say having a good CRM and using it effectively is the most important piece of a tech stack. It's the golden source of truth for all information. It's also what drives processes in your business. I see a lot of advisors, and again, if you're not in this business exactly, I want you to think about how this translates to your role. Assigning tasks to people in a CRM is no different than emailing or making a phone call and asking somebody to do something, not scalable, having workflows in a CRM. So workflows kick off a series of tasks automatically, and the next task gets assigned as one is completed. Having workflows that underpin client onboarding, client review meetings, I'll talk about this later, and ongoing client service is really critical. Every day that you come into the office and open your CRM, your tasks for the day or your team's tasks are already there based on the workflows for each client. And I'll share a screenshot with you later about how we do that. The other thing from for scaling, allowing IT clients to self-select when they're going to do review meetings so they know what's going to happen every six months, but one of the things I often hear is scheduling and rescheduling meetings is a pain in the butt. How many folks agree with that? Who are in the advisor role? I'm going to stop asking if you agree, by the way, because no one seems to agree with me today, so I'll assume you do. Allowing people to self-select, they know this is the week the review meeting's happening. Here's the date and times we're available. Pick your time. Easy way to scale and stop your admin from spending so much time trying to schedule meetings. The other thing is using a special inbox, whether it's service at XYZ Financial or concierge at XYZ Financial, allows people to feel like they're getting an elevated experience, right? When in reality we're doing it so that we can scale, we can have multiple people on that inbox. Handling requests, oh, here's an example of our workflows. We think about the client experience across the spectrum, lead generation, prospect nurturing, client onboarding, client service, client reviews. Every single one of the key areas along the client experience spectrum should have a workflow. Happy to share these slides with everybody. Then we've got our everyone else, and what did we say about the everyone else? They get the automated monthly newsletter. No one really cares about the newsletter. Let's be honest. Sometimes it's good, but most of the time it's not. But with doing it anyway, right? Top of mind, they're getting the newsletter and then they're getting one review meeting a year. By the way, they're also getting their inbox, their service at XYZ Financial automatically. They feel like they're an A client. And by the way, when we're talking to the lower tier, we're not ever telling somebody you're a lower tier client, but we're talking about the services that we offer to this new client coming on board. And we know, gosh, this is going to fall on my everyone else bucket, but I don't want them to think that we're telling them, here are all the things we do with, we're going to have an annual meeting a year to go over your plan. We're going to rebalance your accounts, we're going to tax loss harvest, we're going to do a financial plan review and update cash, all the things that you are doing using technology, using the e money's, Riskalyze and holistic plans of the world. We're spelling it out for them. As advisors in our industry, we don't do a good enough job explaining what we do and reinforcing value proposition constantly.
(30:11)
I would ask this question, how many times have you had a client say to you, I didn't know you did that, right? I didn't know you guys could sell insurance, or, I didn't know you did X, Y, Z. You see advisor's responsibility as a service provider and as a steward of the financial advice industry to remind people of what it is they do. So that's the second thing. So my takeaway for you is identify your, if you do nothing else, identify your top clients and systematize review meetings for them. Just doing that alone. We'll start to change the workflow in your organization and we'll create a consistent experience for top clients, which is really what we're trying to do. That's the second thing. The third thing is maximize the opportunity with current clients. The biggest opportunity that exists for most advisors in this business exists organically in the book of business in three ways. Introductions to other clients, assets held, held away, and obviously wealth transfer. We know the statistics around number of clients who will leave their mother or father's advisor. Obviously building relationships with the next gen or critically important, but continue to remind people that you are in business is arguably more important because the truth is, not every next gen client is going to want to stay with the advisor their parents worked with, and sometimes there's nothing we could do about that. You can hear a million presentations from consultants at every single firm telling you how to talk to X, Y, Z, and some of it is out of our control. What's not out of our control is reestablishing our value proposition and telling our story relentlessly. As advisors. One of the things, and you can't really see this that well, but one of the things that's really important is defining wealth management for people. I talked a second ago about how we're obsessed in our industry with using jargon and impressing one another rather than talking to the client the way the client wants to be spoken to about what we do. And so even something as simple as explaining what wealth management is, it's financial planning, it's investment management, it's risk management, it's planning for your retirement. It's emotion management. So when we go through a pandemic, you have somebody to call when the market tanks, you have somebody who could say to you, you're still on track to achieve your goals, even in a doomsday scenario, here are the levers we can pull to make sure you're still going to achieve your goals. That's emotion management. It's life management. These are things people can understand far above and beyond holistic wealth management. And so having this conversation with clients is really important. The other thing that's important is sending out what I call the state of the Union email. I want you to think about the pandemic, how many emails and communications you got from companies that you do business with, whether it's Delta or Amex or Verizon. The CEOs of these company people we will never meet by the way, and who have no idea who we are, are sending us emails signed by them and what are they saying? They're saying, here's the value we provide to clients. We know we're in a tough time. We know it's impacting you in these ways, and here's what we're doing to ensure that your experience is not disrupted. The only industry that really didn't do that relentlessly, I wouldn't not say didn't do that, but the folks who sometimes hesitate to do that are advisors, arguably the most important person in a family's life other than a medical professional, the person actually making sure you're going to sustain your lifestyle. And so sending an email and saying, or a letter or whatever it is, and saying, we've done a lot of reflecting the last couple years. It's important to us to remind you of why we're here, what we do for you, and the things we're changing and adjusting within our firm to make sure that we are consistently relevant for you. Making that up. And by the way, here's your opportunity to introduce whatever it is you want to introduce. I have a lot of advisors who've said to me, I got to probably launch this. I got to start doing the social media thing, and I'm going to start a YouTube. I don't want to do it, but I'm going to do it. I dunno what my clients are going to think. That State of the Union email is a perfect opportunity to say, we recognize how important it's for us to continue to spread our message. You're going to start seeing us on social media before something we've never done, interact with us, share our stuff, et cetera.
(34:42)
So it gives you permission to introduce new services or initiatives and validate value proposition. The other thing I'd say that's really important is there's a lot of, there's been a of talk in our business years ago about asking for referrals, right? Years ago, advisors were trained to say, I get paid one of three ways. Has anyone heard that before? Or it's in their signature, like a referral is the best compliment. I get advisors all the time saying, do you think clients feel like that's uncomfortable? And my answer is yes. It's uncomfortable for most people. Imagine going to your therapist and you talk about your mom all the time, and the therapist says, you talk about your mom a lot. Do you think your mom could benefit from what I, it's the most vulnerable relationship you could have with somebody. However, there is subset of people in the world. Has anyone ever read Tip the Tipping Point or any of Malcolm Gladwell's work? Yes. He talks about what the influencers, it's the person that's always got, they've got a guy for everything. They've got the best roofer and the best dentist and the best this. They've also got the best advisor. Those are the people who are on Facebook sharing every experience they have, good or bad, they're on Yelp leaving reviews. These are people who, if you go to them and say, we've had a tremendous year. The work we're doing is more important than ever. We have space to take on five more households. That's it. This year, we only want them to come from people who we consider our very best. We're building a community here. We want you to be part of that. These people get excited about that, but it only works with 20% of people in the world. And so my message to advisors is you ask for introductions from those people because they don't get weirded out by it. Everybody else allow them to just be a client. So number four, so just to recap, creating capacity as a rainmaker. If you are the one who's grown the business and you're good at that, hire around you, simplify client segmentation, you focus on your top relationships, systematize reviews, it'll be a game changer for you this year. Be comfortable re-establishing value proposition. Send the state of the Union email. Perfect. Time to send it. By the way, six months, six months left in the year. Halfway. Mark, here's our reflection points on 2023. A lot of stuff happened with Silicon Valley, but you can say whatever you want. And by the way, that's another thing. If clients aren't talking to you about current events, because a lot of advisors say to me, clients don't want to hear from me. They're not worried. Clients are talking to somebody, they're talking to a neighbor, they're talking to a coworker. They're on Reddit, on wall bet's, threads, giving each other terrible advice.
(37:37)
11 million people, by the way, on the wall street, Betts, everybody know what Reddit is? Yeah. Okay. So talking to somebody. So we're communicating with them as stewards of the industry and saying, here's what's happening. We're evolving our platform. We're here for you, blah, blah, blah. Okay? Number four, we're driving organic growth by knowing the client better than anybody else. The reality is that we cannot fight the algorithms. And you can understand or search engine optimization, right? It's the reason why you're thinking about something or you're on a website and then you're on another website and all of a sudden you get an ad for something. How many times does that happen to us? And you're literally like the government is listening, right? But in reality, it's algorithms working to ensure that as the consumer, you're being driven towards goods and services that you're likely to engage with. We can't beat that. And the bigger firms, by the way, have millions of dollars to pour into this. But what we can do on an individual basis is know the client better than anyone else. And this is one of those things like segmentation exercises where the ideal client profile exercise is another really popular one in our industry. And you're in the workshop and you're saying, my client's 55 years old, they're about to retire. They have two kids. And then you take that ideal client profile and do what with it? Nothing. And so step one is making sure not just that you understand the demographics of the client, but the psychographics. Here's a really easy way to start to derive that information, which informs, by the way, the entire client experience and your marketing, and I'll talk about that, make a list, great exercise to do with your team. And by the way, relevant to our industry and any industry of all of the questions that theoretically your client would ask themselves on a daily basis relating to money or their life, guess what? The questions aren't, should I convert my term policy to whole life? The question isn't what is the sharp ratio, I mean, these are not the questions people ask themselves. What do they ask themselves? A Gen X female executive who's divorced? What kids is asking herself, I need more work life balance, or are the kids okay?
(39:58)
One of the best client events I've ever heard of during the pandemic, an advisor had a client psychologist on a Zoom talking to parents about how to identify whether behavior was normal or not for kids. These are things that people are actually dealing with. Gen X clients worried about whether they can take care of their parents and afford their kids private school. And so list out all of the questions that this client may have. Everything bold by the way here, and you can have these slides informs either a piece of content that you write, a post that you make on social media or a client event that you hold. You don't have to look much further than what your clients are actually dealing with and experiencing. By the way, a great video clip to watch on YouTube, NerdWallet, everybody know NerdWallet. They have a commercial. It was one of the most successful marketing campaigns of two years ago. It's called Questions, just type in NerdWallet questions. It's a 32nd clip, and it's their target client at it was a millennial client and it was just a millennial person. And the voiceover was all of the questions that this person has in their day to day. It's like their side hustle isn't making money, and can they afford the avocado? And it's sort of tongue in cheek, but it's the reality of what we deal with, the things we actually are asking ourselves. They built their entire marketing campaign, their content campaign around those questions. And so you have your questions and you're using those questions to make decisions about marketing. And what I say to advisors with this is another thing we overcomplicate. We need the 70 page marketing plan, PDF, and we need to get the right this and we need the video because camera, because we're going to do videos. The reality is, or organic growth for advisors is only going to happen in a couple ways. You're asking for introductions from current clients or centers of influence, still the leading way, by the way, organically to generate new business. You're creating content that is relevant to the people you serve and putting it on your website and putting it on a blog that you email out to all your clients and ask them to share.
(42:11)
It's traditional branding. You're finding opportunities to host a table at the charity function and the country club and the golf clinic, and that's really sort of it. And I'll say it's the web stuff, the digital stuff, it's search engine optimization. It's making sure that you're consistently pumping out relevant content. By the way, that's really, really important for advisors. A lot of times I'll get advisors say, well, I tried the social media thing and it didn't work. And I say, well, what did you do? I post it on LinkedIn. All my friends are advisors and nobody connected with me. Okay? Imagine posting something relevant to the Gen X dentist that you serve every single day, five days a week for a year. What starts to happen? And by the way, you're only connecting with people who are related to the dental profession or dentists. The algorithms start to like your content more. They're boosting your posts more. They're putting you in front of more people because you're seen as a thought leader. The point is you got to be in it to win it. And so there's only a couple ways in which you can generate organic growth. I just listed them out. Most important thing though is understanding those questions. Practice posting a piece of content, your thoughts or a short form blog meaning a couple of sentences once a week to your ideal clients answering one of those questions. And that's how you start creating a content funnel and community within your organization. So my takeaway for you here, identify your prospect critical, critical questions and use it to inform your marketing decisions. Speaking of posting, by the way, I've alluded to this a lot in this presentation, speak directly to the consumer. If you serve tech professionals, bless you, you can say We serve tech professionals. If you want to say, talk about the services you provide, you're not saying wealth management. You're saying, we manage your investments. We set your budget, we plan your legacy. We make sure you save enough to retire comfortably. That's right from our website, by the way, because those are the things people are Googling. So we want what we're saying to match what they're thinking. Speaking of posting and creating content consistently, a lot of advisors say, well, I don't even know where to start. Again, you're answering one of the questions. What are the money questions your clients or prospects have? Right? Let's get a little bit more general now, not just specific to that ideal client. Am I invested in the right stuff? Should I buy Apple? Should I sell Tesla? These are the things when people know you're in this business, why, by the way, what do they tend to ask? Should I buy crypto? And so our job is to answer that question by redirecting them and educating them about what wealth management means. And so maybe your first post is about, as an advisor, a lot of people ask me about individual stocks, Tesla games, stock, whatever. Here is how I answer that question. That's your first post by the way, and so on and so forth.
(45:23)
If you want to start a blog, and by the way, you don't have to be a TikTok YouTube star to be successful in this business, although that's what everybody seems to be saying right now. What you need to do is just get comfortable articulating a very specific message and start with the people that already consider you an influencer. You already have the attention of people who know and trust you. It's your clients. So you can start by simply sending a weekly email to them saying, there's so much noise right now on tv, on social media about this business. I'm going to send you my thoughts once a week. Every piece of information is going to be a quick tidbit that as you think about your wealth and get distracted, like this is going to help you stay centered. There's your block, call it Wednesday. Wisdom keeps you accountable to doing it every Wednesday. The fifth thing I'll say, and this is really important, but I only have a couple minutes, is build referable experiences across each stage of the client engagement process. I talked about this process earlier. The reality is despite what the industry statistics tell us, if you talk to, and I don't want to say regular advisors, but if you talk to individual advisors running practices, forget the statistics for a second, and you say to them, how was the pandemic? How did the business do during the pandemic? What do most advisors say? We had our best year ever. And most of the time they'll tell you, we grew without even trying, right? We grew without asking for people, refer business to us, and we don't even ask for it. And so what's unique about those advisors, it's two things. Number one, the experience of working with them is simply referable. And so what I ask advisors to do is think of all the ways in which you create referable experiences. Every time you talk to somebody, and I forgot the second thing, but I'll think about it. Think about the, oh, and the second thing is how does your value proposition tangibly in your practice? Meaning if your value proposition, which is usually on a website, is we're advisors and our differentiator is that we listen to the client better than anyone else, we will understand you as the client better than any other firm. What are you actually doing to manifest that? Meaning? If that's your value proposition, then you better make sure that you speak less than the client in every single meeting. By the way, there's something funny about list active listening. There's why there's so much training on, in our business, if somebody is speaking about themselves, it produces dopamine in their brains. They feel good. It's why you can have a conversation with somebody. You're trying to help you say nothing on the call. They talk for 40 minutes and they say, this was so great. Thank you so much. Does that ever happen? Because they're feeling good. If you're listening to somebody and actively showing them that they're listening to them talking about themselves, it produces twice the amount of dopamine. So can you imagine how I feel speaking all the time in front of people who are looking at me hyped up? Yeah. My point is, you can create a referable experience simply by listening to somebody, by asking open-ended questions like, what's one thing you want to achieve today? We have an hour together. What outcome would feel the best to you as a result of this meeting? What's the one thing you found really valuable about our time together today that serves two purposes?
(48:56)
You're getting them talking about themselves. You're also getting them to verbalize your value proposition, so you're tethering them to you without them even knowing. If anybody's just studied NLP Neuro Linguistic Programming, a lot of this is getting somebody to sort of do things without them even realizing they're doing it. It's not manipulative at all. It's just basic EQ training. But so here's what we're doing. We're doing really simple things really well, like having standards in our organization. Every single person gets a resp. If somebody emails us, emails our firm, they get a response the same day. Doesn't matter if we don't have the answer, they get a response. And we're cc'ing the concierge at Philips financial inbox so that they get an acknowledgement that we heard them and recognize, and then their needs go into the queue. We're sending communications within 24 hours. One of the best things I've heard that really brings us to the next level top clients, they get a disc assessment when they become a client of the firm. If your value proposition is that you understand people better than anybody else, what better way to show that than to actually give them an assessment of their communication and behavioral style and say to them, this is how seriously we take our value proposition. We want to understand the way you process information, the way you communicate, so that we make sure we're tailoring all of our messages to you in a way that resonates. That's nobody's doing that. And so that's a differentiator. And across the client engagement spectrum, we're doing this right for review meetings, we're allowing them to co-create the agenda. So this is built into our workflow. 14 days in advance of the meeting, they get an email saying, you're going to be in two weeks.
(50:42)
We're so excited. We're building out our agenda. We're going to give you a plan update, but we want you to answer these three questions. What's one thing you're really happy about right now? What's one thing that really makes you nervous right now? And what's one thing that's keeping you up? I'm making it up. That's really what you need to know when a client is coming in. And then finally, for ongoing client service, one of the things we like the most is the surprise and delights. So every month, picking a couple of households and doing something special for them, and it's not everybody, but it's your very best relationships, whether it's a child is getting married or again, their kid or grandkid got into the school of their choice, or they hit a savings goal or one of my favorite ones, is when somebody's retiring, doing something special for them, sending a bottle of champagne, whatever it is, but being systematic about it.
(51:36)
So every single month you pull your list of top clients, you're brainstorming with somebody on your team or a coach or whomever, and you're picking two to three people to do something for. And by the way, build relationships with Etsy vendors and you can start sending out stuff really in a really inexpensively. Now, yes, this is all we're assuming it's compliance approved video camera, don't worry. But we're making, we're forming relationships with people that can help us scale this. Every time a client comes on board, we send a note, the client gets the succulent with the logo on it with a welcome letter, right? Scaling whatever we're doing, making everybody feel like we're doing it just for them, but being able to mass produce it. Critically important. The last thing I'll say before I wrap is, and this is important. When you talk about the best advisors in the business, they all share a characteristics. And it doesn't matter if it's somebody who's new in the business or been in the business forever. They have what I call the relentless prospector mindset. They believe so deeply in the value of what they do, of what they provide to people, that they feel it's their obligation to talk to more people about it. They don't get shy talking about their business, talking about what they're building, asking for the business, because it's their obligation to serve more families. And so as you build your relentless prospect or mindset, I ask advisors to end every week thinking about this. Did I talk about what we're building and the value we provide to as many people as I possibly could this week? All right, folks. I know that was a lot, but thank you for your attention. I hope this was helpful.