Leveraging Educational YouTube Videos To Drive Hundreds Of New Clients Per Year: #FASuccess Ep 445 With James Conole

Resources Featured In This Episode:

• James Conole: Website | LinkedIn | YouTube
• Ready For Retirement Podcast
• Ready For Retirement YouTube
• Root Talks on YouTube
• Root Ready Podcast
• The Root Collective
• The Sequoia System
• Kitces Report: How Financial Planners Actually Market Their Services
• Do Business. Do Life. Podcast
• Ari Taublieb YouTube
• Blanchard
• Calendly
• Monday.com
• Loom
• Root Financial on LinkedIn

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Full Transcript:

 Michael: Welcome, James Conole to the "Financial Advisor Success" Podcast.

James: Thanks for having me, Michael.

Michael: I'm really excited to have you on today, just to get to talk about, as I would frame it, real organic growth in an industry where a lot of firms are really struggling with organic growth. In particular, as we'll delve on soon, the ways that you have done this through nominally, social media and YouTube and video in particular. Because I still think back to ten to 15 years ago when social media first hit the scene, as LinkedIn and Facebook and Twitter really all started going mainstream. And there was this discussion of, "All traditional marketing is dead. The future is social media. We all find our advisors online in this environment." And it really largely has not played out. We do a lot of research on this from the Kitces Research end.

At the end of the day, we still find about two-thirds of clients meet their advisors through a referral, either from a client, or a center of influence, or some other trusted source. And almost two-thirds of the remainder meet their advisor because they actually meet them in person at a seminar or a networking meeting or something similar. And a remarkably small percentage of clients are actually finding their advisor through any kind of social media channel. But I feel like some of it does depend on the nature of the medium. I've certainly lived this, building a lot of business on a lot of social media channels as well. The written social media stuff, Twitter and the like is a little bit different than the visual elements of Instagram or Facebook, is a little bit different than audio when you're actually doing a podcast and you're in someone's ear, is different than video when they can really see how you talk and communicate and interact because you're in a full-frame video.

And that it seems like the deepest connections come from video. And the hardest way to make a connection comes from video because you're either good or someone clicks on in relatively few seconds because attention spans for video are pretty short unless it's really good. And I know you have found a formula that seems to work and have had some truly extraordinary growth that we'll get into soon. To start, I'm just excited to talk about these different growth channels, and I guess really just hearing your perspective of, is it really different when we start thinking about marketing through video versus all of the other social media channels and mediums? .

James: Happy to explore all that. My answer is, I think so, but I also have really only explored one or two of these, so I can't speak to all of them. But what I can speak to, happy to share everything.

What Root Financial Looks Like Today [06:03]

Michael: So, we'll get more into the actual marketing channels in a moment. But I think as a starting point, just so we can set context for everyone, tell us about the advisory firm itself as it exists today. And then we'll start diving in a little bit deeper into how growth has worked for you.

James: The firm name is Root Financial. Root started at the very end of 2017, so we're about seven and a half years old. We are growing almost exclusively through YouTube, podcast, other social stuff, online media. And today, the team size is 46 team members, and we're serving about 630 clients, and our assets today are $1.3 billion.

Michael: Okay. And can I ask what revenue is relative to that?

James: Revenue for this year will probably be somewhere in the realm of $10 million to $12 million. Last year, it was $4.6 million, $4.7 million.

Michael: That's a lot of growth from last year, thus the conversation about growth rates we'll get into more in a moment. And so, typical clientele, I can do the napkin math, $1.3 billion, 600-something clients, you get an average of roughly $2 million. I don't know if that's really representative or how you would describe target clientele for the firm.

James: Yeah. The median client is probably 60 years old with somewhere between $3 million, $3.5 million or so in their portfolio. Obviously, some with a lot more. Right now, our investment minimum is $2 million, not from the standpoint of, we're trying to grow that thing and increase that and become more and more exclusive. Just, that's probably the easiest way to control for inbound lead flow. So, that's our easy lever to pull. If things are getting too much, we just can't service everyone that's coming in, we can play with that number a bit. But today, the $2 million AUM threshold is the minimum. And so, you get a median client somewhere in the $3 million to $3.5 million range, someone approaching retirement.

Michael: So, I think that's striking just how you framed it. So, minimums aren't at $2 million for you because I need to be at $2 million in order to generate enough revenue to be profitable relative to the services I'm providing for clients. It sounds like a part of a $2 million minimum for you is, because we're already growing so fast, if we cut it down to $1 million and we got more new clients, we actually would have a problem handling them.

James: Yeah. And we didn't start that way. When I started, it was exactly what you said of, yeah, someone's got $100,000 rollover, $200,000. That's awesome. That's 1,000 bucks a year of revenue, that's 2,000 bucks a year of revenue. I think that's how probably most people started, myself included. And then once it got to this point of, "Okay, now we have to make some decisions of we just cannot serve everyone, but how do we reconcile that with the fact that we do have this desire to be more than just a profitable financial services firm, but we do have this desire to have a true impact upon the clients that we can serve and the number of clients that we can serve?" You then have to start prioritizing making those decisions of, how do you do this in the most effective way? And this was the way that seemed to be the clearest path to where we ultimately want to go. I didn't start with saying, "Okay, I'm going to have this minimum." I would not be in business. I would've just not had enough clients to do that. So, it was only once we got to this point of having an abundance of prospective clients coming in that it was obviously much easier to make that decision at that point because there were enough people above that threshold to make it work.

Michael: I guess that's a good context and point to make that you make one set of decisions when your prospects, opportunities are scarce, and we're just trying to get what we can survive, when your problem is prospects aren't scarce, we actually have a really good marketing machine that's working in generating a healthy, steady flow, again, relative to most firms. "Nice problem to have," I did air quotes. But it's still a real problem. Especially in a service business, if you take on too many people too quickly that you can't serve well, you can actually blow up your business quite quickly. So, when your problem really is, I'm actually getting a lot more opportunity flow than I have capacity to serve, the decisions start to change. The decision framework, I guess, starts to change.

Creating A Podcast And YouTube Channel Aimed At His Ideal Target Client [10:39]

Michael: So with that as some context and lead in, to me, the eye-popping thing that slipped in there was, we project revenue at $10 million to $12 million this year. It was $4.6 million last year. That's a whole lot of growth. So, tell us about the growth. So, where does all of this new business flow opportunity come from for you?

James: Primarily YouTube and... well, almost entirely YouTube and podcast. And I could tell that story if that'd be helpful, just the genesis of that.

Michael: Yeah, please.

James: 2019, I think it was. 2019 I started the first podcast. So, myself and Scott Frank, who's an advisor that has an office about five blocks from me, we got together one day and said, "Hey, everyone's doing a podcast. Why don't we do a podcast?" And we just did a joint podcast. And it got traction, it picked up some steam. We were getting viewers, downloads, all the fun metrics. It's like "Oh, cool. People are actually listening. This is fun." But it wasn't necessarily translating into a ton of inbound demand or leads, but I could tell that there was something behind the whole, "People listen to quality content if you put the time and effort into creating quality content." And that then transformed into, 2020 hit, COVID hit, shutdowns went into effect, and it was, "Ah, I would really wish I had a similar platform, but to reach more of the target market that I personally am working with," which is not dissimilar from most other advisors, which is people entering and in retirement.

And this podcast that Scott and I were doing, it was called, "Real Personal Finance." It was great, but it was very broad. We would answer questions from listeners, everyone from, "I'm 22 years old, I'm in the military. What should I do with my TSP?" We'd address that. Versus, "I'm 68 years old and I'm retired. How do I think about my RMDs and how to approach that?" So, it was helpful to people. It was good information. But it wasn't making it super clear of, "Here's who I serve at Root," or, "Here's who Scott serves," or, "Here's who," whatever the case might be. And so, in 2020, I launched "Ready For Retirement," which was a different podcast specifically targeted towards people approaching retirement, as the name suggests. And so, that was something where it didn't do as large of numbers. I don't know what the numbers exactly were, but I remember my podcast with Scott was doing better in terms of downloads.

Michael: Do you remember any numbers, just approximate? I don't know what the scale of good or not good was for you at the time.

James: Today it's 30-something thousand downloads a month on the "Ready For Retirement Podcast." At the time, it was maybe 1,000. It was not as much. It was obviously much lower. This was in the initial days. But what I remember thinking was, "Wow, this is a lot less in terms of downloads." "Real Personal Finance" might have been 2,000 or 3,000. I could be way off. This is five, six years ago now.

Michael: Okay. Sure. All right. Again, just neighborhood. I get it.

James: Somewhere in that neighborhood. But the "Ready For Retirement Podcast" started generating leads. And so, it was, "Okay, there's this sense that it's not just having helpful content, but ideally targeted content to where you are holding yourself out as, "This is who I work with, and this is a specific expertise that I have." And so, that started getting some traction. And that was working. And then 2021, I want to say it was. I forget the exact timeframe. But I was doing the podcast, and one of my friends who's actually now working at Root, he's our head of brand culture, his name is Josh. He was working as a creative director at GoPro at the time. And he said, "You need to just take the podcast stuff that you're doing and just record yourself doing it and post it on YouTube. People are finding a lot more of their content on YouTube than podcasts right now."

And so, I did that. I did five episodes on YouTube, and by episodes, I just mean literally stuck my iPhone in front of me and recorded what I was doing in the podcast, and then uploaded that to YouTube. And nothing happened. It was two views, three views, four views. But what was tough about it was I was doing all the editing. I just set everything up really poorly in terms of, I'm recording audio into GarageBand, I'm recording video into my iPhone. I'm trying to sync them. I'm trying to edit them. It would literally take me an entire day to edit a 25-minute YouTube video that was getting three views or four views.

Michael: That doesn't feel good.

James: It was just a waste of time. So, I said, "Okay, thanks for the idea, Josh, but this is dumb. I'm not going to do this anymore." So, I stopped doing that. I did five episodes and then stopped. And nothing came of it for probably six, seven, eight months. And I remember one day I literally remember getting emails, "So-and-so commented on your YouTube video." I don't even remember what the YouTube video was. I was like, "Maybe this is one of my announcement videos that, 'Hey, I'm starting "Root Financial," and I threw it on YouTube or something." But they kept coming in. And it was, "So-and-so subscribed to your YouTube video. So-and-so commented on your YouTube video." And it wasn't crazy numbers, but one of those videos that I had uploaded eight months ago, all of a sudden was getting a few hundred views and then 1,000 views, and then 3000 views. And it showed me that there's something really unique about YouTube, and that YouTube is almost like this Sherpa with your message of how can we help guide it to the people that need it most, or need to hear it most. And that clicked that, "Okay. Maybe this is something that I should invest in." So, from the end of 2021, I committed to doing at least one show on YouTube in addition to the podcast. And that's really when things started to pick up. And it's just been a progression since then.

Michael: So, the podcast, I guess this was "Ready For Retirement Podcast", which then morphed into the YouTube channel. Even back to the original podcast, what was the format? Are you bringing on guests, interviewing guests? Is this just monologue style, I just turn on the mic and I...

James: Yeah, just monologue style.

Michael: ... talk and share my expertise, "So, today we're going to talk about such and such, and I'm going to teach you about it"?

James: It was that. It was a monologue. The one with Scott was obviously the two of us. It was a dialogue, which was much easier. But the "Ready For Retirement" was just me talking. I brought in maybe two guests over the course of time, but it was very rare.

Michael: Okay. I think you said it was 25 minutes, was the length that you were doing, at least back then, because that's what you tried to make into a video in GarageBand plus video editing. So what were you talking about? What were you covering for 20, 25 minutes at a time?

James: Anything and everything retirement related. It got to the point where once enough people start listening, they start submitting questions. And then you could take that question and obviously preface it as, "This is not advice." But you could start saying, "Here's how I would think about this." Someone's asking questions about conversions, which is obviously a big topic for retirees. What are the other things that you need to be mindful of? How does that tie into your withdrawal strategy? How does that tie into what you should do with your investments? How does that tie into anything and everything? Being aware of IRMAA [Income-Related Monthly Adjustment Amount] surcharges, should you prioritize Roth conversions or tax gain harvesting? What about if you're doing...probably the best thing it did for me was it actually really sharpened my thinking as an advisor.

And then if Michael's asking me a question and Michael's my client, I know you and I can give you a response that's directly to you, and I understand the context. But when you're trying to answer a question or when you're trying to explain a topic and have to think of it more through like a decision tree or first principles of, "What is the most important thing to start with with this question? And then what? And then what? And then what? And how do you explain that in a way that can be helpful to people regardless of their situation?" It really does sharpen your thinking as an advisor and makes you a better advisor. And so, that was actually one of the best things I would say upfront is how effective it makes you as the actual person providing the advice to clients. But it would be investment stuff, it would be withdrawal stuff. It would be just general retirement, "Hey, here's my situation. Can I retire?" And again, you can't give specific advice, but you could generally walk through, "Here's your Social Security income floor. What might you be able to create with investments that you have? What other things might you want to be thinking about?" So, it was a whole bunch of different things.

Michael: Interesting. And very much in an I'm-answering-questions format. It sounds like that's a guiding theme for you all this...

James: Not every episode was just easier. Sometimes you get the, whatever the equivalent of writer's block is, "What do I record today?" Of, "There's a question. I can just pull that up and answer that."

Michael: I've had the same thing over the years. I used to get questions like, "How do we keep putting out the content on Nerd's Eye View and not run out of things to write about?" I'm like, "Well, I just go to a lot of conferences. I've talked to a lot of advisors, and they ask questions. If I hear it several times, then I write an article. People don't run out of questions to ask, so I don't run out of things to create content on.

James: Yeah, same principle.

Michael: So, I'm going to ask more questions about video in a moment, but I want to understand a little bit more. I was struck by your comment. You went from the "Real Personal Finance Podcast" with Scott to "Ready For Retirement" that you were doing on your own. You were getting half the downloads, but "Ready For Retirement" was actually generating leads. And I'm always fascinated by, a lot of the time we spend a lot of effort trying to make the main number bigger, the downloads, the followers, the subscribers, whatever it is depending on what channel you're on. And sometimes the thing that generates the actual business results isn't necessarily what gets the biggest top-line numbers. The thing that gets the best business results is the thing that gets the best business results. So, I'm curious, at least as you reflect and look back, what was different about what you were doing or how you were executing "Ready For Retirement" that "Ready For Retirement" with half the listenership was getting more actual client opportunities?

James: Packaging's not the right word. I forget who said this. If you've got an ant problem and you walk into the store and it says bug spray on one container, and the other one says ant spray, even if they're the exact same thing, you're going to buy the ant spray because it seems more targeted towards the exact problem that you have. And so, even though I would be talking about similar things on certain episodes with Scott, it was the generic bug spray. It wasn't that this is the ant spray that's specific to your problem. So, I think that that's probably the biggest thing. It was that every single episode was geared directly towards a problem or a challenge that someone in that phase of life would be facing. So, I think it's just that, of, if I'm listening to a podcast and it's, "Oh, that's an interesting topic." That's a lot different than I'm listening to a podcast and every single one of these topics is applicable to me. I'm more apt to reach out to the person that talks to me every time as opposed to the person that knows about me and I'm part of their audience, but I'm not their single audience.

The Business Processes Needed To Handle Rapid Client Growth [22:03]

Michael: Were you actually inviting people to reach out?

James: Yeah, I think so.

Michael: Was there a call to action to prompt people. What did you queue them up to do? How did you try to get them to cross the audio-to-in-person divide or the listener-to-prospect-meeting divide?

James: If I remember correctly, it was just a standard outro at the end of every episode, which was something along the lines of, "If you need help with your retirement, reach out to us at www.rootfinancial.com." Hopefully said a little bit better than that, I don't remember. But it was just that. It was just a standard outro that we'd put at the end of every episode before the disclaimer, and that was it.

Michael: Okay. And it started to make some people reach out.

James: Yeah. It started to make some people reach out. YouTube really started making some people reach out. The reach-out is only step one. I think that I thought, "Oh, if I could just get leads, problem solved. Everything's good." For example, when YouTube really started going off, I remember I was on a little mini vacation with my wife as a three-day weekend, and we were out in Colorado, and I had blocked off--- I didn't block off. I had very few meetings scheduled for the following week when we returned, because I just wanted to be able to get back and catch up on some stuff that I had been working on. So, this was late 2021, a little bit after, maybe two months, three months after I started really committing to weekly YouTube stuff. I wasn't checking my phone a whole lot because we're out, we're hiking, we're doing all this stuff. And I remember coming back to our hotel room and my inbox had just blown up. It was like 25 lead calls that had been booked the following week. And I looked at this, and I...

Michael: That's a lot of leads.

James: It was. And so, at the time I said, "Okay, problem solved. I'm the next, whatever. Solved. Whatever problems exist in growth, they've all just been handled. And I feel pretty good. I'm just done."

Michael: I've solved the magic growth problem. I now have lead flow.

James: Exactly. And then I took all those lead calls, and I'm not exaggerating, I think 24 of the 25 were just like, "Hey, we really like your stuff. Can we pay you an hourly fee to take a look at what we're doing and give us some advice?" Which is fine if that's your business model, but it was, that is not ours. We're AUM, and that's the only way that we work." So, this was not the outcome that I was looking for, that I thought. It was not, oh, great, I'm going to have 25 clients. They're going to work with me on an ongoing basis. It was the first of many helpful lessons of what seemed like total excitement ended up being, I won't say a total bust, but it felt like a total bust. It felt like a total letdown of, "Oh geez. Maybe YouTube is great, but it's just not attracting the right people." What it led us to do is say, "How can we be very clear about setting the right expectations and screening for the types of clients that we do want to be able to serve?" So, it magnified the real problem.

The first problem is leads. How do you get them? Okay. That problem solved. Then that magnified the next problem, or the next opportunity, which is, "How do we set expectations? How do we create the right screens so that people are aware of how we charge, of how we work, of what type of people we work with?" So, then we did a lot of work on that, of setting the expectations. And then we did start getting the right leads in the door. Then I became the next problem of, okay, the right leads are coming in the door, but I'm taking all the calls and I'm the one now saying, "You're going to work with so-and-so," or, "You're going to work with so-and-so," or, "You're going to work with me," whatever the case might be. So, I was becoming the bottleneck. And so, we now need to say, "Okay. How do we create a routing system that connects our leads, our prospects, to the right advisors?" So, we figured out that problem.

And then all of a sudden, it's, okay, the leads are going to the right advisors, but our sales process isn't totally standardized. How much time are advisors spending chasing down prospects, looking for an answer, asking for statements, following up, checking in. And there's just this context switching of they're doing client work, to doing prospecting work, to trying to close clients. It just wasn't great for advisors who then weren't able to spend their time advising. So, we fixed that. We introduced to what we called the one-meeting-close process where everything would flow through one advisor. He would do that explore meeting, close the client on that call or not. And once the client was closed, then essentially, pair them with the advisor we felt would be the best fit to do that. And so, that was fixed.

But then it was like, "Okay. Well, how do we have a standardized, consistent experience for each of these clients?" So, that led to us... And I can slow down at any time if you want to dive into this, Michael. But we created what we call Sequoia system. So, it's not just, "Cool. A great lead comes in and they're going to be connected with an advisor." If we have five advisors, or ten advisors, or 20 advisors, or whatever it is, and every single experience is different, that's not good. That's not how you build a sustainable, scalable organization. That's just essentially a whole bunch of one-off advisors under the same roof. But there's no consistency here. That's not a true business, or at least not the way we want to build it." So, we created our Sequoia system, which is, "Okay, what is the exact onboarding flow? Someone goes from the explore meeting with a sales team, to the kickoff meeting, to the income meeting, to the investment meeting, to the tax meeting, to the security meeting. How do we train for each of those? How do we prep for each of those? How do we follow up for each of those? How do we run each of those? How do we create resources and agendas and materials for each of those?"

So, we created that, and said, "Okay. Well, how do we train on this?" Well, we created Root University. "How do we provide resources? How do we provide just the ability for advisors to be able to run these?" Because I think our advisors are just, maybe everyone says this, but just the most insanely talented people I know, but how do we create these standardized templates and processes to be able to create a really unique client experience? And then you get all that stuff and say, "Okay. Well, now how do we make sure advisors and team members want to stay here for the rest of their careers?" Which is, how do you develop career paths? How do you develop compensation standards? How do you develop culture? It's almost like there's a waterfall of problems or opportunities depending on how you want to look at it.

And YouTube just kind of became the top of the waterfall, of, I felt like, "Okay, this solved everything," but really from the top, we have, I think, pretty great growth numbers, but to me that's not even close to what's most impressive about... That pales in comparison to what I believe is the true, most impressive thing about Root, which is the service that clients are getting, the advisors that we have, the way in which we deliver it. That's actually the cool part to me and the exciting part to me. The YouTube stuff's almost whatever. I shouldn't say whatever. Obviously, that enables all this stuff, but it's only cool to the extent that it enables our ability to do the work we're able to do internally with the team that we have and the systems we're building.

Michael: I'm fascinated by this. Waterfall is a good analogy. The cascade of things of the one abundance creates the next scarcity. Like, "Congratulations, you have high lead flow. Now, we don't have good screening processes." "Great. Now we have good screening processes, but it's working and we just have too many leads to close." "Now we're closing the leads, but who serves them?" "Okay. Now we're serving them, but are we doing it consistently?" "Okay. Now we're serving them consistently, but how do you train the next people and do it consistently?" "Okay. Now that you've trained them, how do you make sure they actually stay?" You have so lived each of those steps. So, I would love to just, at least like take a few moments now to go into each of these of, you've really done and lived it and solved some of these problems real-time as the business has grown quickly in the past couple of years. I'm really interested to see and to hear how you tackled some of these. I guess just starting with, "Okay. We're getting lead flow, but not all of them are qualified leads. We're getting leads and some of them are people who want to buy hourly services, and we don't do hourly here."

Root Financial's Process For Screening Leads [30:11]

Michael: So, how did you start solving for expectations and screening leads? What did you do to try to get this filtering to work better?

James: Yeah. That one's probably the simplest. I think when you start, you want as little friction as possible for people to be able to reach out to you. So, stick your Calendly link anywhere and everywhere and hope people book calls. That's what you need to do. You need to get a whole bunch of reps, and it's maybe more of a volume game, but you're willing to play that game because you have the time to commit to it. Once that's not working, then it's, "We do need to create more friction. And that friction is simply instead of just embedding a Calendly link in our website or show notes or whatever, it's more of a ‘Start here flow." And it's maybe an embedded jot form or type form or some type of a tool that essentially collects a little bit of information about the client.

But most importantly, it's, "If you go through our flow, here is exactly how we charge. Here's our exact fee schedule. Here is how that works out. Let's do you a favor and us a favor. If that's not what you're looking for, let's not waste 30 minutes of time to figure that out on the back end, at the end of our call when they ask, 'Well, how do you charge?'" So, that's just putting that bit of friction up there, putting the bit of friction of asking for certain information, whether it's income or asset level, "What are you looking for?" So, you can ideally get to that sales call and have some relevant information, "Now, is this actually someone we can work with, or is this someone that's a completely different demographic with completely different advising needs that maybe we're not the best equipped to work with?" So, that's pretty simple. It's just removing the direct access to your calendar with some type of a friction-creating tool like a jot form or type form that then on the backend has a link to your Calendly if the right steps are taken or if they acknowledge or agree to the way you do things.

Michael: So, I was going to ask in that regard, and even there, there's questions like, do I just put a thing that outright says you have to check a button that says, "I can meet your $2 million minimums," or it rejects you. Or do we just acknowledge, "Hey, we typically work with clients that have at least $2 million. Please share some more information about your financial situation here." I'll still take the call. If you're scared off by $2 million, you'll opt out. But I'm not going to force you to pass a thing on the form that says it. I might still be willing to have the conversation because maybe you're close in their circumstances to make this work. So, I guess I'm curious, where was your balance between, "I'm going to tell people and set the expectation. I'm going to let them choose whether to schedule the meeting anyways," versus, "No you just literally have to answer these things or satisfy these checkboxes or requests or whatever it is, or you're just not allowed to schedule the meeting with us."

James: It depends upon bandwidth. We were at the point where it's pretty binary for us. It's either you do or you don't. As we mentioned before, there's not a problem of scarcity, there's a problem of abundance. And so, we do have to prioritize. That being said, we're super open. Last summer, I think it was last July, we had a webinar called "Here's Roots Master Plan." And we talked about our minimums, and we talked about our vision. We talked about why do we exist? And we talked about profitability. And this was something that clients were invited to, prospects were invited to, the industry was invited. It's living on YouTube if anyone wants to go see. It was essentially us saying, "Here is why Root exists, and this is why we have this minimum. And this means that a lot of you listening who have been reaching out, we want to be open about why we can't work with you although we hope to be able to in the future. We have a Root Collective, which is our community. We have, I think, 2,700, 2,800 members in it, completely free. We're open about that.

We tell people exactly why we have that minimum and the reason for it. There have been some cases where people just, for lack of a better word, have fallen in love with the service or the brand or the company. It's like, "Hey, we watch every single thing you guys put out. We watch the master plan. We know all of your advisors. We watch your YouTube lives. So, Ari, your chief growth officer, has a lot of our advisors on and just talks about them and highlights them." And so, they know everything about what we're doing. And then, "Can we please work with you? We got $1.8 million or $1.5 million," or, "Hey, look, we're going to be there." I'm not going to say we've never made exceptions, but we do have a pretty hard stance. And it's not because of an exclusivity thing. It's because of having that hard stance enables us to get to where we want to go faster, to be able to drop that minimum down and to be able to serve more people.

So, it's, it is a pretty binary thing. I think the way the Typeform works is, one of the questions is, "What is your portfolio balance?" And it's like, "Under $2 million, $2 million to $5 million, $5 million to $10 million, $10 million to $20 million," whatever the thresholds are. And if you're answering under the $2 million, it gives you a message. And I think it even redirects, or at least it used to, I don't know what it does anymore, to a video of, "Hey, our mission is to drive this down. Unfortunately, today, we do have this pretty hard minimum. We hope to be able to serve you in the future." So, it wasn't like just a hard cold, "We don't want you." It was a, "We do want to serve you, but this is why we're doing the way we're doing things. Please stay in touch. And as we grow, maybe we can work together in the future."

Michael: Okay. So, this ideally makes sales calls, approach calls, prospect calls more efficient because we're, at least generally, only talking to people who really are pretty qualified and actually understand how we charge and what we do and what our minimums are.

Creating A Standardized System For Converting Prospects Into Clients [35:52]

Michael: So, you said like that was working, except now, as the volume continues, at some point, the bottleneck is still you because even as after you filter them, you, James, are still the one that's answering all the phone calls and trying to figure out whether people are the right fit.

James: Yeah. So that was bottleneck.

Michael: So, what do you do next? So, what do you do?

James: This was one that I just had to wrestle with, like, "Oh, they watched my YouTube video or my podcast. I feel like I have to be the one on the initial call." And this is where Brad Johnson, who has the "Do Business Do Life Podcast", formerly had the "Elite Advisor Blueprint Podcast." He talked about the importance... And Brad's great. We actually have a monthly call where we talk about a lot of stuff. I don't know when this was, this was maybe six, seven years ago, he had an episode that stuck with me about the importance of standardizing and naming. And then he even said, I think trademarking, your process. And I never got that when I was just a solo advisor. Why does that actually matter? People are buying me, they're not that buying the process. And I think that as a solo advisor, the corporate brand is the personal brand. There's not really a differentiation. But as you grow, if you want to grow, what I realized is, we need to start elevating the corporate brand, the company brand. The process that people go through is what needs to be special, not James going through it with them.

And so, that's where we rolled out our Sequoia system. It's not, "Hey, you're going to have a call with James, or you're going to have a call with Chris, or you're going to have a call with Ari." It was the three of us in the early days. It was, "You're going to have a call, and we're going to walk through our Sequoia system." And we put a lot of time and effort into what should be the order in which we do things? Because I think for the most part, it used to be, "Okay. Client calls. Cool," or a prospect. Let's just say, "What questions do you have? Where do you want to start?" And it was very much driven by the prospect and what their pain points were. And I think to an extent, it needs to be that. But you also need to be able to say, "We've worked with hundreds of people with similar problems and similar challenges just like you. And in our experience, we have found that there is a right way of doing this to make sure that the question you're asking, we have the proper context, and everything in your plan is foundationally built on top of the right thing first, then a progression of the way you go through things."

And so, we put a lot of time and energy into saying, "How do we, first, create the Sequoia system? What do we want the prospect-to-client process to look like to feel like we're talking about just the core planning domains, but in the appropriate order to make sense of it all and so that each meeting should be building upon the last, not feeling like a one-off or a disconnected, disjointed, singular thing?" We put a lot of time into doing that and a lot of time into, "How do we brand that? How do we promote that and elevate that and really highlight that as the thing that people are buying or getting, not a call with James or a call with Ari or call with Chris." And so, that took some time, but we were able to figure that out.

And also, as we grew, that became easier. When the website was me, Ari, Chris, Dan, that we were the first four, people were just expecting that I was going to be the one they were talking to and meeting with. And at that time, I was. I was still serving as advisor to a lot of them. As we grew, I think that helped people just say, "Okay. I recognize that's not James or Ari." Ari also has a podcast and a YouTube channel that's done really well. They started to just, I think, assume, "I'm not probably working with James or Ari" We have insanely talented advisors who are so good at what they do that this just helped to reinforce that and to show, whether you're working with Chris, or Jordan, or Chelsea, or whoever it is, you're going to get the same experience.

The personality of the advisor that you're doing this with is going to be different. Obviously, maybe their unique experience is going to be different. But when you standardize that process, it was actually a very compelling thing to a lot of people that this isn't just a roof with a bunch of one-off disjointed advisors underneath it. This is actually a business that has a way of doing things, a way of training on these things, a way of standardizing these things that actually provides confidence to a lot of clients that it's not advisor-dependent. Your experience is not advisor-dependent. You're going to get that same thing across the board.

Michael: I'm struck by this. So, there are elements in what you're saying that are I feel like antithetical, opposite to the way a lot of us are trained. You embodied part of it well earlier, I'll call it the traditional approach. A prospect calls, and the conversation is very centered on the prospect, "What questions do you have? What problems do you have? Tell me about the pain points you have." And basically, my goal is to hear their pain points, make them feel heard about their pain points, and then connect and explain how my solutions can help solve their pain points. And if I do that well, I get to win another meeting. And at least for what I'm hearing you saying and describing, when you get a higher volume lead flow and have a reasonable process to qualify them and content that's really targeted, and make sure that most of them who are showing up really are in your sweet spot, then the conversation is not so much like, "Thank you for calling. Tell me about your pain points, the problems you have."

It's, "I'm so glad you contacted us because we work with people just like you. We're very familiar with the problems that are just like you. In fact, we probably know more about the problems you have that you didn't even realize that you have, but we know that you have them. We'll point out how you have them, and then we'll have the solution all ready for you because this is what we do here." Suddenly, the conversation's a little bit less, "Mr. and Mrs. Client tell me about all the things that you're dealing with." It's a little bit more, "I know what you're dealing with. Let me show you how we've got the depth of expertise in people just like you," because that builds confidence in them to say, "Well, yeah, it looks like these people really do know exactly how to help us. They know our problems better than we can articulate our problems."

James: Yes. I think the business side of that too is you... I've heard you talk about client acquisition costs before. I hear all these advisors say, "No. It's time. I don't actually spend anything on Facebook marketing or ads or whatever." What they fail to recognize is they've spent 50 collective hours at all their different networking groups and whatever they're doing with their time just to get two leads and maybe one of those two leads convert. It's an enormous client acquisition cost.

Michael: When your time's worth a couple of hundred dollars an hour, it's like, yeah, that was actually a $10,000 to $15,000 lead. It was all time, but that was a $10,000 to $15,000 lead.

James: Exactly. I guess the beauty of YouTube, the beauty of podcasts, the beauty of media in general is it is infinitely scalable. So, not only do we attract prospects with that, but once they schedule a meeting, the automated emails that they're going to get, the common questions that we're going to address, even if you go to our website, "What does this process look like?" It is just really cutting down that client acquisition cost because it's now to a point where by the time they're actually talking to Ari or Jay who are running our initial explore meetings, it's a 30-minute conversation and they either move forward or they don't because so much of what they're going to ask about, "Tell me about yourselves. Tell me about your services." Whatever it is, that has already been addressed.

And so, the client acquisition cost shrinks enormously and just the unit economics of it make way more sense with how can you grow fast when it typically takes a lot of time for just payback of breaking even on what you spend to acquire a client, or what the long-term value of a client is worth, or just any of these different things. That's probably one of the biggest things that's allowed us to grow pretty quickly, is, it's not a super long sales cycle. It's not a super long payback cycle. It's something that a new advisor can do, start today, and within 30 to 60 days, they're onboarding a good number of clients because they've been trained on our process. That's maybe the other thing, is, these videos, at first, it was obviously to say, how do we get in front of prospects? But one of the coolest thing is when we open up a new job it's people who've also been watching our videos applying. They get our process and our system and even how we talk about things and the things we talk about that we feel make us different. So, when a new team member comes on board, it's not the client acquisition cost, but the talent acquisition cost is equally low. So, it just makes for a very seamless experience of onboarding really wonderful people to help us in this mission that we have to do what we're trying to do. And video is that first thing that is because of how leveraged it is, allows us to do that at very low cost.

Evolving Into A "One-Meeting Close" Process [44:51]

Michael: Help me understand more how the sales process evolved. I guess, who's doing the sales process? Because I'm reading between lines, it sounds like there were a couple of different stages. There was a version where it was you, because we're all founder-led at first. Then there was a version where it was multiple advisors who were doing it. It sounded like at one point, that shifted a little bit further because eventually, you were pairing them to the right advisor, which means I'm assuming not all advisors actually end up doing their own sales process at that point. So, can you walk us through how the who of the sales process changed and evolved?

James: It was me at the beginning. I became the bottleneck. That became grossly inefficient, especially when it was like, "Oh, I'm talking to James, cool. This is the guy whose videos I've been watching." Then I'm saying, "Hey, you're going to work with this other advisor who is absolutely every bit as good, the same quality advisor," but they just don't have the relationship. So, to the prospect, it felt like a letdown just because they didn't know that other advisor. They weren't on video or podcast, they had developed that relationship with me. So, we got out of that, we fixed that, and it was, "Okay, now prospects are going to come in. It's just going to be a bit of a round robin of whatever advisor happens to be available at the time that you want to speak, that's who you're going to talk to." That was the second iteration of it.

The problem we found with that was... I guess this is how a lot of people do it, but it was just, now you have advisors, and the way we were running it at that time was there was an intro call just to kind of tell you what we do, how we do it, pitch you essentially like, "Hey, let's set up a discovery meeting where we're going to actually learn more," just standard stuff. So, an intro call, maybe 30 minutes into a discovery meeting, into like a plan presentation meeting. So, it's three full meetings, which is a lot of time. And in between those meetings, advisors are trying to balance, and this is just the industry as a whole, not just us specifically at Root. You're trying to serve clients. You're trying to be responsive, you're trying to be proactive, and at the same time, you're trying to prep for new clients and you're trying to prepare for the kickoff meeting and the discovery meeting, whatever. You're trying to chase them down to get to an answer, "Do you want to move forward? Do you not?"

We had Ari who came to me and said, "Hey, I'm going to test something. I'm going to test..." He said, "I think that people like what we're doing so much that we're wasting our time going through these three meetings. They're getting to the point where they're saying, 'Why are we wasting so much...we want to work with you. What are you taking us through these three meetings for? We've already made up our minds essentially." So, Ari came to me and he said, "I'm going to test a one-meeting close. Essentially, client prospect's going to book. I'm going to walk them through what we do. I'm going to ask what questions they have. I'm going to show them where in the process those questions are going to be addressed and what the outcome's going to look like. Then essentially just say, 'Do you want to move forward or not?'"

He had incredible success with that. So, he said, "Okay, well, why don't we just implement this across the board? How much time would this save advisors if 20%, 30%, 40% of their week sometimes is now freed up because they're not having to do the kickoff or the intro meeting, the discovery meeting, the plan presentation meeting, the chasing down statements back and forth. Now, advisors can just do excellent advisory work." We had a centralized team, which at the time was just one person who was spending 30 minutes to 40 minutes with each prospective client. And in doing so, actually had a higher close rate because that's actually what people were wanting. So, that was the final iteration. We've even expanded that even just a bit more. Even as we're speaking, we're going through that process, but that's kind of where we are/moving even to a more streamlined process. But one call with someone from our client success team, essentially the sales team, to say, "Here's what we do and how we do it, and here's the advisor that we think you'd work well with." And they sign the agreement and they have a kickoff meeting with their advisor.

Michael: So, they don't even find out who they're working with until after they say yes?

James: Correct. That's what we're actually implementing right now. Ari's done a really good job of, on his YouTube channel, he'll highlight a lot of our awesome advisors of, he'll have them on and they'll walk through a case study or they'll take questions or they'll do whatever. So, now it's getting to the point where people are getting to see, "Oh, there's some really amazing people at Root." "You know, I saw Caleb's episode, I really want to work with Caleb," or, "I saw Naomi's episode, I really want to work with Naomi." So, now we have what we're calling the priority path where if you go to our website and you're like, "I'm in, and I already know which advisor I want to work with," you can just select that advisor directly and schedule the kickoff meeting with him, and it even skips the initial sales call, explore call.

Michael: Interesting. I'm fascinated just by that evolution. I guess the asterisk to it all is, it's all predicated on because they're consuming so much of the YouTube content in the first place that they've already gotten familiar with the firm, understand your style and approach, have decided they like you as human beings and believe in the firm and the brand. So, there's a lot of earned credibility and show your expertise layers that often crop up in a sales process that you just don't have to do because the content's already doing it for you, such as, you said by the time they show up with you, they already basically know they want to work with you. They've just got particular questions, they want to understand the process and make sure that they've got buy-in to what they're buying, and then they can move forward.

James: Yeah. The content's evolved a lot where yes, there's the information-based content that is a lot of what I talk about on the YouTube channel, what Ari talks about on his. Ari and I started doing what we call a Root Talks channel, where we have our own personal YouTube pages, and then there's a corporate company page on this, like, "how do we structure teams at Root?" And you would be surprised at how many clients and perspective love that. They love seeing the intentionality behind why we do what we do. Why do we have a head of people, head of brand culture? What's the importance of that and how does that actually serve clients? They love us talking about that. I recently rolled out, I called the "Root Ready Podcast" of, to us, we want it to mean something to work at Root.

The vision is…there's a lot of CFPs, and I think that's cool, and I think that's a good, maybe standard to have of working with an advisor, but there's a lot of CFPs that I wouldn't work with, I wouldn't want at Root. There's a lot that I would. So, how do we turn Root into that standard that if you work at...having a CFP is cool, and the CFP is great, I think we require for all of our lead advisors, but that's good. Knowing that your advisor works at Root, knowing that they've gone through Root's curriculum and are held to Root standards, that actually means a lot to me as a consumer and trying to make it mean something to work at Root. So, we rolled out the "Root Ready Podcast" of, "Here's how we define Root Ready for our advisors. Here's our standards of excellence. Here's what we expect of you," because we expect a lot for our clients, "And here's how we do all this stuff."

So, maybe one of the biggest things in even the last six months, 12 months, is not just the information-based content that shows expertise, but the content that gives people a peek behind the scenes at, "Here's the intention that's gone behind designing career paths, designing training, designing standards, designing this team that ultimately is going to be responsible for serving you as the client." There's a lot of comfort that, I think, that instills when clients see that this isn't just a nice dog and pony show of, "Cool, they talk the big game and then they just funnel clients and assets in the door and don't really care what happens after that. They do really care and they do really want this to be an exceptional experience in the gold standard for what it looks like to have top-notch, top quality financial advice as a consumer."

Root Financials Systems For Standardizing Client Service And Advisor Training [52:48]

Michael: So, then share with us a little bit more about what The Sequoia System is, this process you have standardized that you're training on.

James: So, the Sequoia System, the first meeting, it's all CFP curriculum, how do you organize it? How do you communicate it? How do you connect the dots so that when you're talking about insurance and you're talking about taxes and you're talking about withdrawal strategies, there's the red thread that connects all of them? So, when someone becomes a client, the first meeting is a kickoff meeting. And the kickoff meeting is just, "Of course, before I'm going to talk to you about..." This is nothing different than any other advisor does, but it's just the way it's organized. "Before I talk to you about specifics and recommendations, I need to understand and I need to ask the right types of questions to understand Michael at a really deep level and to actually understand what's important to you and what we're trying to accomplish here."

So, obviously, everyone listening to this podcast probably does that in their own version, but that's the kickoff meeting. From there, it's the income and the cash flow meeting, but now we're going to come back to you. We're using RightCapital who are going to present your actual retirement plan. Can you retire? When can you retire? How much can you spend? What does that look like? We haven't really done a lot of the optimization yet because we're building this progressively. We start with the foundation of you and your vision for what you want to do. Then the first question is, can we do this? Do we have the cash flow to be able to do this? What does that look like? Then from there, it's the progression. Now, we're going to talk about investments because we know what your income from your portfolio needs to look like to support your retirement needs.

Now, we can work backwards into understanding how should we invest your portfolio to support that. Then from there, once we know how your portfolio is allocated, we can run some projections on, where might your different account balances be by the time required minimum distribution age begins. We can run some projections on what might we be expecting in terms of gains realized over the years based upon where we might be withdrawing from first. So, now we can actually get a good sense of what your tax strategy should be, of how should we balance Roth conversions with charitable giving strategies with tax loss or tax gain, harvesting with understanding what tax thresholds, marginal thresholds we expect you to be at over the next number of years. Obviously, this is just the best guess as listeners know of, we can't predict the future, but we can at least have a baseline and start to come up with what tax strategies should we be thinking about in monitoring year by year to minimize your lifetime tax liability.

Then from there is a security meeting of, now, how do we make sure that all this is protected with the right insurance coverages, the right estate documents in place? Then from there, they have completed our onboarding. So, that is The Sequoia System. Root University is what we designed to say, how do we train on each meeting? How do you run each meeting? It's not enough to have a technical expertise of what to do in each of those, how do you open the meeting? How do you connect when you open that investment meeting? "Hey, as a reminder, here's where we left off. Here's what we did in your last meeting with your income planning, your retirement plan. Because of that, here's now what we're going to be talking about X, Y, and Z for you when it comes to your investments." So, how do you frame the conversation? How do you structure the meeting? What do you not talk about in each?

For example, in the kickoff meeting, you're not talking about solutions, you're not talking about recommendations. This is just your chance to ask the right questions and be quiet and really build that trust and understand who your client is. So, there's just a lot of resources there. And then what we're in the process of building out now is what does this look like on an ongoing basis to ensure that once the client is onboarded and we have at least these core areas, obviously every client's going to have the nuanced things, the one-off things that are not going to be totally standardized, but this gives us that structure that we feel like you have a complete plan once you've gone through this. Now, how do we, on an ongoing basis, define what it looks like for us to continue to monitor that and to evaluate that and to ensure that we're always staying on top of that on an ongoing basis? So, Sequoia System is that process.

Root University is our internal structure for how do we train advisors on that process. How do we run each meeting? What does it look like? What's an example of what that outcome should be or how that meeting is run, so we can train advisors to do it really well.

Michael: So, the core process is five meetings if I'm following that, discovery, income, investments, retirement, and tax projections, and then the security layer?

James: At its most simple level, yes. Sometimes those meetings you need a couple of meetings to go over investments or a couple of meetings to go over taxes, or a couple to go over, maybe even three. Yes, at its most simple level, there's things we're making sure we're covering at each step of the way.

Michael: So, how long are meetings, and how long does it take to get clients all the way through this cycle then?

James: Meetings are generally 45 minutes, and to get all the way through that cycle, if you space each one out, one to two weeks. Usually within two months or so, you're fully through that, and obviously, it's dependent upon client availability, advisor availability, but within two months, three months you have that foundational plan built out.

Michael: So, I'm assuming it's intentional to keep the meetings, I guess I would characterize fairly short. A lot of advisory firms end up with an hour to an hour and a half planning meetings. So, 45 minutes feels like some intentionality to say, "We really don't actually want these meetings to be terribly long."

James: Yeah. I think that when meetings run much longer, it's usually a lack of discipline on the advisor side or it's trying to do too much at once. And maybe the advisor likes that because the advisor's in this all day and obviously likes this stuff and can connect the dots really quickly about what's going on, but this is completely, maybe not brand new stuff to clients, but anytime you learn something new, there's only so much of it that you can take before you stop absorbing what's actually being presented. So, it is designed to be very focused on, each meeting has a very specific purpose. I used to do it differently, I think as most advisors did, of, "Yeah, here's your retirement plan, and because of this, let's talk about the way you should be invested within this strategy. Because of these investments that we're going to have, here's what taxes are going to look like, or at least maybe a preliminary look at what the Roth conversion strategy might look like." And that would be an hour and a half and you got it all done.

I remember thinking, "I don't think clients are really walking away feeling like they remembered everything. They liked it all, but I don't think that they've got it." They couldn't tell me what we just did and why it's important to their plan. Whereas the dual benefit of this is, I do think that they walk away with...when you keep the focus tight, it's more impactful for them and it's just easier to train. If I'm going to train a new advisor on, "Yeah, you're going to go in the meeting, you're going to talk about all these things, but you kind of have to use your discretion of when to talk about that and when not to talk about this," that's much more difficult to train than if I say, "Here's there's what we're looking at and here's how we should run it and here's what we are doing and not doing." A big part of what we're trying to do is that training piece, the training and development of making it so that associate advisors have this progression and this ability to train in hyper-specific ways to be able to be the best advisors they can.

Michael: So, then, who builds this out in Root University?

James: Myself and Carly did at the beginning. This was maybe starting a year ago. Carly's our head of internal development now, at the time, she was an advisor. It's all built out in Monday boards right now of, there's just a progression of, as I mentioned, "Here's what each meeting is. Here's agendas, here's resources." I did Loom videos of every single meeting of, "Here's how I'd open the meeting." It's a four-minute video of kind of role playing what that looks like. "Here's what I would do next. Here's what I do next, here's what I do next. Here's how I'd close the meeting. Here's how I would tie what we talked about today and set the stage to say, 'Because of this and because what we looked at today, here's what we're going to spend a lot of time focusing on in the next meeting. Here's the way in which this connects.'" So, it's a lot of Loom videos, text, just meeting structure stuff, but it lives in a Monday.com is the tool, a Monday board right now.

Michael: Oh, interesting. So, this isn't a whole like, "We bought a learning management system and built out all this course material." This sounds a little more just straightforward, like, "We're going fast, we just got to get stuff done." It's like, "I just recorded the things that I do and I put them in a sequence and it's in a Monday board and everybody can learn."

James: Yeah. The Monday board is super well-organized and it serves everything we need right now. Just yesterday even I had a call with a learning management system to see... There's some benefits of that in terms of quizzes, reinforcement, tracking progression, kind of manager oversight to see who's done what and how can we apply certain... So, there's some benefits of that, but right now it's serving its purpose and we're exploring ways to even enhance it further.

Depth And Consistency As Keys To Generating Engagement On YouTube [1:01:40]

Michael: Now take us all the way back to the YouTube journey. When last we heard you made the initial five videos, it took a ton of time. There were like three views. You said, "Forget it, this ain't happening." It sat there for eight months and then suddenly YouTube algorithms started doing their thing and surfaced the video and it started to get some conversation and engagement. So, I'm presuming at this point, you got drawn back into doing YouTube after all because here we are. Take us further into the story again of what started to change, what did you then start doing on YouTube?

James: I feel the answer is sometimes is I just started doing it weekly. There probably is some formula. I don't know what it is. I think we're doing something well, but we just have started doing it at least weekly. There's some times we're even doing it, for a lot of times, actually two videos a week. But since I think fall, maybe July of 2021, just committing to doing at least one video every single week. I think the biggest thing with YouTube is the people that are watching YouTube videos, they're not the type of people that are going to hire you if you are nice to them and call them on their birthdays and think that's your number one job as their advisor. They're some level of depth they're looking for.

A lot of them are do-it-yourselfers. And like I had mentioned that we ran into the, what I thought was the promised land of, "Oh, we just booked 25 calls," and turns out they're all time do-it-yourselfers, just looking for a second opinion. Even the people that are looking for guidance, there's probably some level of depth to what they're looking for. So, I've had other advisors, or I've heard them say, "Oh, YouTube's not really working. What are you doing?" I've watched their channel. This is maybe like two people or three people. It's just almost like, "This is painfully obvious, the stuff that you're talking about." You have to put some level of depth into what you're doing. If they could easily... I was like, "Why should you collect Social Security at 63? Well, it's more than if you had collected at 62."

Well, come on, you do need to put a little bit more effort into what you're going to do to add value to the types of people that are watching that are going to tend to know a little bit at least about financial stuff. So, how can you, I don't know, just spend time saying, "How can I make this video as valuable as possible?" That's where the time should actually be spent, is on the outline and the thinking and the depth that you want to go over that you might spend a couple hours on an outline for a video that only ends up being 10, 12 minutes. It seems like there's a lot of people that think that YouTube's just going to crack the code just by the nature of doing a YouTube video, but if you watch it, there's really nothing, it's just so obvious or the information's just maybe shallow that it's not going to strike anyone as compelling in any way.

Michael: Then, how long do you make your videos? How deep do you go? Is it all still 25 minutes the way that the podcast was or is it different?

James: I think on average, they're between 12 and 18 minutes. A lot of times I'll just do a case study. I'll say, "Hey, here's a sample client. Here's how much they have. They want to retire. Here's actually me sharing my screen and going through in our planning software what that might look like, what things we would look at." I don't have a target. I try to be, and I fail at this a lot, but how do you deliver the most information possible in the most concise way possible? Oh, I know I'm not as concise as I need to be. If I watch a video back, I'll realize I'm saying the same thing five times in a row before I move on. I need to be better about doing it. I think that somewhere maybe in that 10-to-15-minute spot tends to be, not like a target, but just a natural right timeframe for what I'm trying to explain.

Michael: So, notwithstanding all of the...modern society, people have no attention spans. Everything's got to be 30 to 45 seconds and moving on. Your success is coming because, it sounds like, you are specifically going deeper and actually really trying to teach something new to someone that obviously is here to learn, but probably at least knows a few things because they're consuming high volumes of content on YouTube. So, they're probably not looking for simple answers they could just Google. They're looking for something deeper. You're trying to go deeper and they actually do stick with you when you take some time to go deeper.

James: Yeah. Even if they don't understand exactly what you're saying, by at least going into some depth, it's conveying the fact that, "You know what you're talking about. I trust that you know what you're talking about because of the way, once you speak with authority on this subject, I'm going to feel comfortable at least reaching out to you and your firm to see if you could apply that same approach to my situation."

Michael: Can you share a little bit more of what topics do you cover? What do you dig into?

James: Social Security strategies, a lot of case studies, as I mentioned. Let me pull up even what I've done recently. It's withdrawal strategies. How should you think about how much you can withdraw from your portfolio? How do you think about how much you should have in stocks to bonds? The good thing about YouTube is it's public so people can go just check out everything that's on there. A lot of it's not even financial. It's, "Here's retirement regrets that I've heard people say looking back upon their retirement." Or, "Here's the things I wish I had known." Or, "Here's the things that are non-financial that you're going to realize when you do retire." So, it's a mix of technical stuff. Actually, probably very little investment stuff outside of just general asset allocation guidance, and then using maybe, not financial psychology stuff, but overall, "Here's what you're going to wish you had known. Here's some of the things that you're going to feel," whether it's maybe loneliness or lack of purpose or whatever, the things that are real that clients talk about when they retire, that I think a lot of people on the cusp of retirement are wanting to know about.

Michael: I was struck, I remember seeing some of your content a ways back and you often had interesting ways to work in some of the target clientele dynamics. I think I remember one, it was like, "How much can I expect to spend in retirement?" But it wasn't, "How much can I expect to spend in retirement from a $2 million portfolio?" So, it was like a nice subtle way that if you have $2 million, you're probably more likely to check out this video. Because if you only have $200,000, it's probably not going to feel really relevant to see the video about what you do with $2 million because I don't have $2 million. I was a really interesting way to say, "How do I get in front of people who have the dollars that I want to work with without just saying, 'If you have $2 million, please call us.'"

At least as a student of the business, it was noticeable to me. I think there was one like, "What can you spend from a $2 million portfolio?" There was another one that's like, "Here's what a $3 million retirement looks like." And in my mind, it was like, "Okay, so you're trying to get in front of the people that you want by kind of putting some numbers out there, presumably people with those dollar amounts will come check out."

James: Yeah, you could get a lot of views talking about best credit cards, other hacky things. I shouldn't say hacky, but you can get a lot of views, but I don't know if that's going to lead to the types of clients that you want to get. So, how do you balance that? As you mentioned earlier, the subscribers are definitely a part of it, but if those subscribers aren't the types of people that you are...if you're not in it for the actual subscribers, the YouTube revenue, but you're in it for the business development, then tailor your content towards what the actual outcome you want is.

Creating A Strong Company Culture In A Remote Working Environment [1:10:04]

Michael: On the one hand, I'm struck that it's still all you doing it. I mean, you have, you said like a 40 person team, I guess you noted Ari has a podcast, YouTube channel as well, but it still seems to be all you visibly doing this, even though almost no one, or actually no one gets you as their advisor because now you have a team and lots of advisors. I guess I'm curious to hear more about, as you've gone through all this growth evolution, what have you kept, what have you delegated? Even of the podcast and video, which parts do you actually do and what does team do now? How has that role and your time evolved?

James: So, the beginning of 2024 is when we got to the point that I realized it probably just wasn't going to be a good idea to... I had stopped taking on clients at that point, but I realized it's just not going to be the best thing to keep being the advisor to these clients. So, I went through and transitioned almost all. I still maybe have a couple of clients that I wouldn't say I'm the lead advisor on, but I'm still involved in the relationship, but made a really big effort beginning of 2024 to transition, just call it 98% of all clients to other advisors so that my time could be spent on, obviously the content stuff is a big piece of it, but even more so is a lot of my time and attention right now is on how do we develop the systems and the infrastructure to make this the place that the most talented people can come and feel like they have a career here and can be developed and learn and coached and have an amazing career for them, their family, all this stuff.

So, a lot of my time is on just, I guess, the growing the team, but also in building the infrastructure to say, "How do we support the best and the brightest here?" I think the thing that we want...our vision is to say, "How do we make Root the best place in America to work? How do we make this the most fun place in America to work?" I use the word fun, I have to kind of define what I mean by fun, but fun is not just like the ping pong tables and foosball stuff. That's maybe an element of it, but it's fun to feel like we're part of something that's winning. And not winning in terms of competition…like, "Look, there's success happening. This is working." It's fun to be part of the transformation we see with clients. We have a channel in Slack where anytime a new client comes on, the advisor that's working with them gives a little snippet of, "Here's a client, we're so excited to work with them. Here's a bit about how they found us, what they're looking to do." It's really cool to see...these are really amazing people that we get to work with and it's fun to be part of that transformation. It's fun to be part of a high-performing team. It's fun to be part of something that is actually fun. We had our team retreat back in February and it was one of the most fun times a lot of us have had in a very long time. We have very fun people on the team. So, how do we continue...

Michael: Was your team retreat? What did you do for a team retreat?

James: We went to Palm Springs in the desert here out in California, east of Los Angeles. We got a few villas out there and we had 40 people on the team at the time. We got together, it was a catered dinner every night. We had Root Olympics. So, internally, we have team Aspen, Banyan, Canopy, those are our advisory teams, kind of time-zone dependent. So, we had those teams. We have another fourth team that was the people that aren't on advisory team, but we had Root Olympics, and it's everything from Lego building competitions to pickleball, to mini golf, to Jenga, to cornhole, just all these really just fun games. We had a casino night, we went golfing. There was team outings, hiked Joshua Tree. We had a coach come in from Blanchard Company and kind of deliver like coaching standards. How can we continue to develop and invest in each other and be better coaches to each other? We had kind of like, "Where is Root? Why do we exist?" And a reaffirmation of, "Where are we going? And why does what we're doing matter? And what is the unique contribution that every single person in this room is making towards doing that?"

So, that was a legitimately fun thing where everyone was just connecting so well. It was fun to be part of a company event where it wasn't, "Okay, I have to be here and I can't wait to get back home to my family." It was like, "Yeah, I can't wait to get back home to my family, but I love being here. I love being able to connect with these people that truly do feel like friends and do truly feel like people that I feel challenged by in a healthy way. This person's excellent at what they do, so do I want to be as well. But they're also hyper just relational and they're great people and they're people I love connecting with and having fun with." So, we just had tons of fun. People can go to our company page, Root Financial on LinkedIn, and we have a video on that and just kind of highlighting some of the things that we did. It was awesome.

That's an actual example of it was very fun. Now that we're growing, we're working through, "How do we do that at the team level as well so that team Aspen can get together and do these," we call them our petite retreats. These many get-togethers that are more centrally time zone related and Team Aspen can do something, team Banyan can do something. So, we still have that all-team get-together that will continue to grow and evolve over time, but also do other events together because we are fully remote. There is something that can't be replaced by that actual time spent with one another.

Michael: So, all this growth, your team is remote? There's not a central office, the team retreat is when they come together?

James: We have a central office. Well, we have an alpha space in Encinitas, California. It's 900 square feet and two of us work here. That's it. It is entirely remote, but we do have a tiny little office here in California.

What Surprised James The Most Building His Business [1:15:59]

Michael: So, as you look at growth from... I guess even first is, just as you look back, what surprise you the most about this path and trajectory of building a fast-growing advisory business?

James: I think just that it would be fun to do it with a team. I worked at a previous firm before starting Root and it kind of felt like a revolving door of people in and out and it just felt like, "Oh, I'm not a good manager because people aren't staying. I don't want to train them because I know they're not going to be here for that long." And you start to be like, "It would be easier to do this alone." And I remember when I started Root, I just spent a day at a campsite down here, there's this campsite near where I live and just wrote down, "What do I actually want Root to be?" Kind of pros and cons of each. Do you do the hyper-lean, solo advisory firm? There's benefits of that. There's also downsides of that. Do you grow a team? I remember going into that thinking, "Obviously, I don't know what Root is going to become, but I feel pretty good. That's probably just going to be a very lean thing because I don't want to have to manage people."

The team has grown, but I feel like there's zero element of having to manage people because if you have the right structure in place and if you get the right people on the team, it actually is tons of fun. So, if you don't have the right structure, it's a total nightmare. Not good for anyone. Managing people is not fun. But if it's more of, a build the right culture, build the right structure, build the right paths for the right people to operate in, I was really surprised about how much fun just that aspect of the job would be.

Michael: Then, what was the low point for you?

James: The low point was starting. I got fired for my last job and I was about $140,000 in debt with no savings, which is a story for another time, but starting Root with that was definitely a low point.

Michael: So, how long did it take before you figured out if it was even going to survive and work?

James: Well, nine to 12 months probably. I was single, paying very little rent at the time, so I didn't need a ton to survive. I remember, I think at the 12-month mark, I was like, "Okay." Nine months, I could see the light at the end of tunnel. I knew this is going to... I guess I never thought it wasn't going to work, but at nine months I felt like we're about to cross that tipping point that things are going to be okay.

James's Advice For His Younger Self [1:18:25]

Michael: So, what do you know now you wish you could go back and tell you from five, ten years ago, as you were early stages in getting this started?

James: I remember when I was at my previous firm , thinking to be a successful advisor, I would listen to you. I would see people like Omani Carson and think, "Okay, that's what a successful advisor looks like and there's such a big gap between who they are and who I am." So, I remember going to a broker dealer conference in my previous firm, and I don't know how to say it without being condescending, but you meet a lot of people that you just, to put it lightly, they're less impressive than the Michael Kitces and the Omani Carsons of the world. And you start to realize, "Okay, maybe it doesn't take that much to actually be a successful advisor." So, I don't even know if I wish I knew that because I think that seeing that gap kind of pushed me to become, "How can I be better and sharper and more knowledgeable?"

It was a little bit of a driving force to see what excellence looked like, but to experience later on...these are just people doing their jobs, and by definition, most people are just average people. So, if you can be a little bit above average, you're probably going to have some success.

Michael: So, what other advice would you give younger, newer advisors coming into the profession today?

James: I would tell them to join Root and to listen to the "Root Ready Podcast". Obviously, half joking there. I would say listen to the "Root Ready Podcast." I did roll that out and create that too to be a tool for growth minded, specifically kind of the people in that associate advisor role looking to say, "How can I progress beyond just understand the technical components of this job?" So, yeah, listen to the "Root Ready Podcast." I think I share a lot there about how to be a better advisor. I'll share stories about successes and failures along the way, but that would be my number one thing.

What's Next For James And Root Financial [1:20:30]

Michael: So, what comes next for you and Root? You've got this just rip roaring, it's like 100% organic growth rate what you're staring down this year. How do you think about the business over three years, over ten years? Where is this going for you?

James: When we think of growth, it's not just...obviously revenue growth and asset growth is a part of that, but when you see growth as transformation and you see growth as more career paths, and you see growth as opportunity, you want to grow as much as possible, but we do have a very defined growth philosophy in the same way that a car, a vehicle has a governor, and that governor limits its max speed that the car can reach. We feel like we have a growth governor and that governor is, for clients, how do we make sure, the way I'll explain this is, how do we make sure whether we have 100 clients, 1,000 clients, 100,000 clients, how do we make every single client feel like they're one of maybe a couple dozen people that Root works with because of how responsive we are, how proactive we are, how in tune we are to their needs, even maybe when they're not as in tune with those needs themselves. How do we maintain that as one side of our governor?

And then on the other side, it's for the team. How do we make this the place that every single team member wakes up on the balls of their feet? Imagine an athlete just cannot wait to get out on the field, cannot wait for the game to start, the excitement of that, the adrenaline that comes from that sometimes. How do you make this the place where people wake up on the balls of their feet excited to get to do the work that I think all of us who listen to your podcast would agree, is the best work in the world, the best job in the world to be in this industry? So, how do you instill both of those things? We're obviously not perfect with that. We've grown fast, but it's not nearly as fast as we could have grown if we didn't have that governor, if we didn't have either of those growth standards.

So, in many ways, those growth standards have limited how fast we have grown. So, we have those things in place to say, "Yeah, we want to grow as much as possible, but those are our non-negotiables." If either of those things start to falter... And as with anything, Andy Grove had a saying that "You let chaos reign and you reign in the chaos." Meaning, sometimes you just have to pressure the system and see what's working and what's not. A mediocre system, a bad system, it can withstand a very low growth rate. It cannot withstand a high growth rate. So, pressure the system, see what's not working, whether that's culture is breaking or services are breaking, or whatever's breaking. And breaking is the wrong word, but how do you start to see where those fissures are happening, those cracks are happening, and try to be two steps, three steps ahead of addressing them before they become full-fledged problems?

As long as we can do that, we want to grow as much as we possibly can. Going back to growth means more impact for more clients. It means career paths for people here, it means so much more than just the asset growth or the revenue growth. There's a lot of good stuff that comes from that as long as you're not sacrificing those two non-negotiables along the way.

Michael: So, in practice, how do you actually measure or evaluate these governors to figure out, "Are we really serving clients well? Is our team really happy?"

James: Obviously, there's not a single advisor in the world that wouldn't say service is what differentiates them from every other advisor who also says that service is what differentiates them. So, we have some standards. So, we regularly send out NPS [Net Promoter Score] surveys or client satisfaction surveys to clients. We get very, very strong scores. Some of this is just anecdotal. We get so many emails from clients saying... They're so beyond happy, and then they just want to highlight, "Hey, I worked with JT. I worked with Katie. I've been working with Harry." And they just want to say, "I wanted to tell you how awesome of a job they're doing because this has been such a delightful experience for myself or my wife," or whoever it is. So, part of it is very standardized. We have data around it.

Part of it is just trying to keep a pulse on, what are people saying? What are the emails we're receiving? What's the good feedback, the negative feedback? And thankfully, the good significantly outweighs any negative, but it's data-driven in that sense. I think on the team side, that's the one that's hard. You can do like an eNPS [Employee Net Promoter Score], you can do some other stuff, but I think that...we always hire for a lot of roles. I started doing jiujitsu a couple years ago and someone recommended a book to me. I thought that was kind of odd to read a book about it. It seemed like a very experiential thing. Like, you just go do it and learn it. It's not something you read about. And maybe this is not the right analogy, but it stuck with me and the book opened with, "What's the best time to kill a dragon?" And it's not when this dragon is breathing fire and wreaking havoc on all the poor townspeople, like you've seen in the movies, it's when it's still an egg.

The analogy essentially is, "Look, what's the best way to get out of a rear naked choke hold?" Well, don't let yourself get in a rear naked choke hold to start with. So, how can you anticipate what's to come? How can you anticipate the future dragons? And how can you try to, it's a dramatic analogy, but kill that egg before it becomes this full-fledged fire-breathing dragon wreaking havoc on your business? So, how do you anticipate problems with lead generation, with cash flow, with culture? Culture's a huge one. What do you stand for? Why would people want to join you? We talk about this talent shortage. I don't think there's much, sure there is some, but I think most times, why would younger advisors want to join some of these firms? How do you become that firm that people want to join?

So, that's just a philosophy that we've looked at. So, going back to, how do we maintain that sense of, "Let's make sure people wake up on the balls of their feet"? I don't have a great answer for how do we measure that in a very data-driven way, as much as that is probably the thing I obsess about and focus on more than anything else, because to create the best client outcomes, we need to create a place that attracts the best advisors, best team members in the industry, and gives them the tools to continue to develop and learn and be the best advisor they can be, and never want to leave Root ideally. So, I don't have a data answer for that as much as I think it just comes down to an obsession about how do you monitor that the right way.

What Success Means To James [1:26:52]

Michael: So, as we come to the end here, this is a podcast about success and just one of the themes that comes up is that that word success means very different things to different people. Sometimes it changes for us as we go through growth and stage of the business. So, you have this just incredibly successful business as you're crossing a billion dollars with an extraordinary growth rate and solving for the systems problems that it takes to keep growing. So, the business seems to be in a wonderfully successful place. How do you define success for yourself at this point?

James: Just a general sense of doing things on purpose, which is, I think starts being purposeful about taking the time to understand what's important to you to be the best advisor. If you're really leading clients into major life decisions, how do you do the same? How do you spend time alone journaling deep and thought about, "What do I value? What's important to me?" Being purposeful about doing the things that align with that in a consistent way. So, obviously, different times of life, different things are going to be important, but I guess the ability to disconnect from the present state and just think deeply about, "Where am I? Where do I want to be? And how do I want to spend my time, my money, my energy along the way, getting there?" So, just living on purpose.

Michael: How do you define that for yourself right now? How do you define where you want your time and energy to be going?

James: I think right now, just practical. So, I've got a three-year-old daughter and a ten-month-old son. So, presence is a big thing. So, am I home by 5:15 every day and not looking at my phone until kids are asleep, and I've had a chance to connect with my wife after the fact? Am I there every morning from 7:00 when they wake up until about 8:15 they head for work and be present? So, presence is a big part of that today. Obviously, the business is doing a lot of great things, but the family piece too, of making sure that the things that we're doing to grow the business are not in any way infringing upon what I care way more about, which is being a present father, being a present husband. Between family and business right now, those are the two things where I'm trying to be successful probably than anything else.

Michael: I love it. I love it. Well, thank you so much, James, for joining us on the "Financial Advisor Success" Podcast.

James: Thank you for having me, Michael.

Michael: Thank you.