Welcome back to the eighteenth episode of the Financial Advisor Success podcast!
This week’s guest is Angie Herbers, one of the leading practice management consultants for financial advisors, who has published numerous research studies on best practices, and authors a widely read monthly column on practice management for Investment Advisor magazine. Her consulting services are in such demand, that she has a stringent screening process to decide who to work with, and turns away almost 90% of the advisors who contact her, in search of a select group of just 15 advisors she will work with at any one time, who she believes she can best help.
What’s fascinating about Angie, though, isn’t simply that she runs an incredibly successful “lifestyle” business as a practice management consultant, but that she approaches the issue in much the same way that we as advisors approach financial issues with our own clients. In the case of our clients, it’s not just about the technical planning strategies, but the client’s relationship with money, and how that impacts the financial decisions they make. In the case of Angie’s coaching and consulting with advisors, it’s not just about the technical practice management strategies, but the advisor’s relationship with the business itself, and how that impacts their business decisions.
Because in this podcast, we really talk about how the connection between an advisor and his or her advisory firm really is like a relationship. A relationship with a rather selfish entity – the business – that, for the sake of growing itself and maximizing its value, will demand more and more of your time, attention, dollars, and resources. To the point that if you don’t manage and try to control the relationship, then the business controls you.
And be certain to listen to the end, where we talk about the growth barriers that financial advisors often hit as their advisory firms grow, why $350,000, $750,000, and $1.2 million dollars are key revenue thresholds that often cause new breaking points in the business, and what it takes to change the business – and sometimes, yourself – to climb over that wall and get to the other side.
So whether you’ve been feeling like your advisory business is controlling you – and wish it was the other way around – or are on the growth path, and want to prepare for the next inevitable barrier that will come, I hope you enjoy this latest episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- Why Angie’s column in Investment Advisor Magazine is one of my can’t-miss readings each month. [03:01]
- Why most business books tell a false story of heroism, and the unique business book that Angie will someday write about how it all really works! [03:01]
- What Angie’s practice management consulting firm looks like today, and the kinds of unique advisors she works with [11:04]
- Why you have to have strong values if you’re going to keep your business from taking all your time and energy. [11:04]
- How her first internship taught Angie that consulting was a better way for her to help people than being an advisor. [16:34]
- Why Angie only takes on fifteen retainer clients at a time, and the importance of having a clear vision of who you can best serve [20:30]
- How Angie learned to manage her time and energy to create more space for doing what she loves. [33:45]
- How the sudden loss of her mother fundamentally changed Angie’s relationship with money and set her on the path to her career today. [42:30]
- The specific growth milestones – or “breaking points” – that many advisors stumble over as they grow, and Angie’s advice for conquering them. [55:51]
- Why you shouldn’t internalize failure or grief, and how Angie quit holding herself back. [1:18:27]
Resources Featured In This Episode:
- Angie Herbers – Think Advisor | FourPointe Consulting Partners
- Angie’s Advisor Growth Barriers Summary
- Bob Clark – Think Advisor
- Investment Advisor Magazine
- Mark Tibergien
- Stephanie Bogan
- Bob Veres
- Abacus Wealth Partners
- Ep 001: Rick Kahler on Entrepreneurial Persistence & Building a $200M AUM Practice
- Ep 002: Love-Affair Marketing and Amplifying Your Successful Business with Ron Carson
- Finding Absolute Engagement to Get Unstuck In Your Advisory Firm from Nerd’s Eye View
- Essentialism: The Disciplined Pursuit of Less by Greg McKeown
- Rick Kahler’s “Becoming Consumers Of The Profession We Practice”
Full Transcript: Taking Control Of Your Advisory Business So The Business Doesn’t Control You
Michael: Welcome, everyone. Welcome to the 18th episode of the Financial Advisor Success Podcast. My guest on today’s podcast is Angie Herbers. Angie is a practice management consultant who’s worked with financial advisors for 15 years now, has published numerous research studies on best practices for advisors, and authors a widely read monthly column on practice management for “Investment Advisor Magazine.” Her consulting services are in such demand now that she has a stringent screening process to decide who she’ll work with, and turns away almost 90% of the advisors who contact her in search of the few that she believes that she can help best.
But what’s fascinating about Angie though isn’t just that she runs an incredibly successful practice management firm for advisors, but that she approaches the issue much the same way that we as advisors often have to approach financial issues with our own clients. So in the case of clients, it’s not just about the technical planning strategies, but the client’s relationship with money and how that impacts the financial decisions that they make. Or in the case of Angie’s coaching and consulting with advisors, it’s not just about technical practice management strategies, but the advisor’s relationship with the business itself and how that impacts their business decisions.
Because in this podcast, we really talk about how the connection between an advisor and his or her advisory firm really is like a relationship, and it’s a relationship with a rather selfish entity, the business, that for the sake of growing itself and maximizing its own value will demand more and more of your time, and your attention, and your dollars, and your resources. To the point that if you don’t proactively manage and try to control that relationship, then the business controls you. And be certain to listen to the end when we talk about the growth periods that financial advisors often hit as our advisory firms grow, why $350,000, $750,000, and $1.2 million are key revenue thresholds that often cause breaking points in the business, and what it takes to change the business and sometimes even ourselves as advisors and that relationship we have to the business, to climb over the wall and get to the other side.
Angie also shares some great reading material in today’s podcast, including several book suggestions and a one-page resource on the key growth barriers that advisors have to be prepared to break through if they want to continue to grow, all of which you can find in our show notes at kitces.com/18, for episode 18. And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast with Angie Herbers. Welcome, Angie Herbers to the Financial Advisor Success Podcast.
Angie: Hi, Michael. Nice to be here, thanks.
Why Angie’s Column In Investment Advisor Magazine Is Can’t-Miss Reading [03:01]
Michael: Thank you. I’m really excited to have you on the podcast, because your columns on practice management for advisors in “Investment Advisor Magazine” is honestly, like, one of my few can’t-miss articles every month. You know, we always highlight your columns in “Weekend Reading,” and to me, the power of your articles isn’t just that you give some very good advice, which you do, but that a lot of your articles delve into the real-world human challenges that come up. Like I find it’s, no offense to some of the other practice management writers out there, but I feel like there’s a lot of business management advice out there that’s kind of just the generic business management advice.
And then when I read your stuff it feels much more like, okay, this is what real wisdom looks like when someone’s actually done it with other human being financial advisors, and gone through all of the real-world challenges that come up when you’re trying to build a business and deal with other human beings that are your partners and your employees, and all those dynamics where it doesn’t always work in business the way that we often write it up in business books. And so I love that about what you write in your columns.
Angie: Well, thank you. I really appreciate that. I tell you, I started, you know, my career…a lot of people believe I started in consulting, but I started my career writing. I mean, what launched my career was luckily a cover article in “Investment Advisor,” and from there my writing bloomed into my consulting business. But when I write, you know, for nearly as long as I can remember I wanted to write a business book. And the reason why I’ve never done it is because in general I do not like business books. I read all of them, but I don’t like them.
And the reason why I don’t like them is because what a lot of business books want to do is they want to take one very complex topic, and they want to simple it down and dumb it down into what is called “The Hero’s Journey.” And the Hero Journey is a business owner starts at the bottom of the mountain. They start to climb the mountain, they go through all of these great things. They come up with all of these great ideas. They keep climbing, they keep climbing. They reach the top, and all of a sudden they’re at the summit, and this is the best thing that they’ve ever done and they’ve accomplished it.
And then what they do is they run down that mountain to the surface and they tell everybody else about all of their great accomplishments, and how they are the hero in this journey. But what they forget when they get to the top of success, what they forget is that that’s not the path. Their retrospect has been tainted by their ego. And what happens…
Michael: You kind of forget all those crags and things you had to climb over along the way, because from the top looking back it was just kind of a straight line up the mountain.
Angie: Right. I mean, you forget that how many times you have been pushed underwater, meaning you’ve been pushed underwater and someone or something, whether that be the business, or a client, or an employee, is trying to drown you. You know, you lose your confidence, you lose the idea of what you started to build the business for. You fail, you have walls that you run into, your own ego gets in the way, your idealism gets in the way. And you spend all this time underwater. And what really makes you, ironically, the hero, is that you come back to the surface each time. And when you get to the surface, you start to climb again. And when you’re climbing, you’re not climbing with energy. You’re not climbing with expectations. You’re not climbing with labels. You’re just following your heart. You’re climbing with your heart, and that’s the only energy that you get.
And when you get up there and you get the sense of accomplishment, and you’re thinking, “Oh, wow, I succeeded.” You don’t get up there and think, “Wow, let me take all this credit for these accomplishments.” You get up there and you look down, and you’re like, “How the heck did I actually do that? There’s no way that I did that.”
Michael: Yeah, like, “If I had known that was what was going to be involved I might not have even done it in the first place.”
Angie: Well, that’s the thing. I mean, I think that a lot of people know that that’s really what the journey is about, and that’s what stops them from breaking away or breaking up, or whatever you’re doing in your life. It hurts, and it hurts because it’s hard. And it’s hard because it takes a lot of time. And you’ve got to realize that when you’re doing this, or when you’re climbing that mountain, I mean, you’re not alone. There’s other people out there who are climbing it. But unfortunately, where the vast majority of business owners and even advisors go to get help is they go to books, and those books just fuel. It makes them feel inadequate.
Michael: Like, someone else had the vision. Why don’t you have this awesome vision as Steve Jobs, or Bill Gates, or pick your leading entrepreneur person?
Angie: Right, it makes you feel that you aren’t good enough. And so then you give up, or you try to go to a silver bullet. There’s no silver bullet in building a business. I mean, there’s not one. There is trying something and failing, and trying something again, and trying the same thing over again and doing it different. There’s breaking patterns, breaking ideals. There’s just all sorts of things that you have to do to get up there. And so the main reason I’ve never have written a business book, and I channel all of that through my column or my blog, is because I haven’t actually figured out how to sell a business book, when in fact people are going to be disappointed when they pick it up. Because there is not going to be a Hero’s Journey in the book that I write. There is going to be a brutal, honest, direct kind of truth, which is what I give my clients.
I’d like to say one other thing here, too. I think the reason why my columns turn out so great, and I’m not saying that with an ego. I love to write, and I love the columns that we write, and I think about them a lot, and I love the blog. The reason that they’re great, in my opinion, is two reasons. One, I don’t do it alone. I don’t write alone. For my entire career, I have written the vast majority of my columns and blogs with Bob Clark. Bob Clark has been my ghostwriter when I couldn’t write. He has been who I have a conversation with every Monday about what we’re going to write. And he breaks me down. I mean, he challenges every word I say. He clarifies in my head. He gives me perspective on what I’m writing, and he’s a true gift to me because he’s able to really break that down.
And then the second thing is, is if you actually read my columns and blogs from the very beginning that I’ve been writing, to even now, they follow not only the journey that my advisors are going through and the industry is going through, but they’re also following my journey. So I’m being a bit vulnerable in the column through my words and showing you, you know, these are things that I’m experiencing. These are the heartbreaks I’m experiencing. This is the denial that I’m experiencing in my own business, in my own consulting. And I think the combination of that, and the love of an industry, or the love of working with advisors, I think that that’s why the writing turns out the way that it is, and why I’m so blessed to continue to write for “ThinkAdvisor” and “Investment Advisor.”
What Angie’s Consulting Business Looks Like Today [11:04]
Michael: So maybe for those who aren’t familiar with your background and what you do in consulting, can you maybe just talk for a few minutes about what is your consulting business as it exists today? Like, what do you do, and who do you serve?
Angie: That’s a great question. So everybody wants to go out there and they want to define, you know, exactly what their business is. “This is exactly what my business is, and this is what it’s going to do, and it’s never going to change.” But businesses change and evolve. My background is, you know, I got my degree in financial planning from a CFP registered school at Kansas State University. Great school, and I had great mentors. And while I was in school, I fell in love with the relationship between advice and money.
So if you draw a triangle, at the very top of that triangle is money. And then to the left, the dot to the left of that triangle is an advisor, a financial advisor. And then to the right, that right dot there is the client. And what financial advice truly is, everybody wants to say, “Financial advice is managing money, dealing with money.” But to me what it really is is perspective. What we have is we have an advisor and we have a client, and so many people get defined by their money, either not having enough money and believing that money can solve their problems, or when they get to the point where they have all the money, and they realize that having more money is just an illusion. They realize that they’re not happy with all this money, or that they’ve got more problems when they’ve got more money, then what that advisor does is it gives them perspective of their money.
If you think about money in general, so money is selfish. If you look up the definition of selfish, it’s to do anything for personal gain or profit…personal pleasure or profit, excuse me. Well, money is the same way. If you define yourself by money, you define yourself by how much you have, or what you have, or how much you don’t have, you start to change your own self core. Well, when you have a financial advisor, no matter if you have very little money or more money, that advisor gives you perspective on that money. And it helps you think about, what is it that you would do if you didn’t have the money? Or what is it that you would do if you did have the money?
The reason I’m telling you all of this is because when I was in college, I got so fascinated with that relationship. And what I realized is that money is just like a business. When you’re building a business, the business in and of itself, if you think about the business like you think about money, so that same triangle. The business is at the top of the triangle, the consultant is to the left, and the client is to the right. The business exists for one sole reason, to turn a profit, to build a profit. So the business is selfish. And you’re in business with a selfish entity every single day. And that business will steal from you your money, it will steal from you your time, it will steal from you your confidence, it will steal from you anything it can steal from you with the goal to gain a profit.
And that’s why we have, you know, you have to have boundaries. You have to have core values. I’m a big person of values, so I believe core values is much more important sometimes than vision admission, but you have to have those things that prevent that business from taking from you everything that you have. And so when I…
Michael: What a fascinating kind of analogy to me. I feel it, I live in my business world as well. It’s this thing that you have a relationship with that always wants more and always demands more of you, of your time, and your dollars, and resources, and everything else, and you can only, you know… If you don’t take control of that relationship, the relationship controls you. Like, I’m slightly disturbed by it, I think, in some ways, but that’s really an amazing analogy to think about what literally is your relationship with your business? And if you’re not managing and structuring, and trying to control that relationship, then the selfish business will control you.
Angie: Right. That’s absolutely right. And when I was in college, I got to thinking about that. I got to thinking about… Well, we’ve got a situation where we’ve got, the advisory business, well, we’re dealing with money. We’ve got one selfish entity. And we’re also dealing with a business. We’ve got another selfish entity. But not to mention, we’re also dealing with a schizophrenic partner, which is the market. So what better scenario for me to help people, you know, fix? We’re dealing with all of these avenues, dealing with selfish things. And what power do we have to really help a human if we could help them understand what’s happening with their money, with their business, and with our schizophrenic market, right?
How Angie’s First Internship Taught Her Consulting Was A Better Way For Her To Help Than Being An Advisor [16:34]
Michael: So did you actually get started at Kansas State with the idea that you were going to go down the road of a financial planner and then kind of shift it to say, “Well, actually the things that we do as advisors with our clients is a very similar thing that I as a consultant could do with advisors in their business?” And you just wanted the practice management version of financial planning in kind of a similar vein?
Angie: Well, what I wanted, I mean, originally I wanted to just be a financial advisor. And when I did my internship, I did my internship in college out in Charleston, South Carolina with this really great man. And his business was built on values, and I really loved that. But what I learned, South Carolina is…I hate to put even this general term on them, but there’s a lot of old money down there. So I was dealing with these people who had, or was seeing, I guess I wasn’t dealing with them directly, was seeing these people with this old money. And I thought, “You know, I really just want to help people with these relationships that they’re having between money, and their business, and their values, and this schizophrenic partner.”
And I decided, you know, the best way I can help as many people as possible was not to be on the advisory side, but rather be on the consulting side. And so I got really fascinated with Sheryl Garrett, and her network. And her network was an hourly network for hourly advice. And I was blessed to get a job there. And when I got a job there, and I worked for her for a year and a half, my heart was just saying, “I need to just follow my heart. I need to dare to believe that even though I’m 23 years old, I can use my words, which is my writing. And I can build a consulting business on my own.” And finally I just went to Sheryl and I said, “I think it’s time. It’s time for me to go.” I wanted to go back to school, so I go back to school and try to launch this consulting business on my own.
Sometimes, you know…at the time I don’t know how that went over, but it was just something I couldn’t stop myself from doing. And I didn’t have the resources to do it. I didn’t have…I wasn’t set up to do it. It was absolute sheer terror. Everybody around me told me, “You’re crazy.” In the process of starting my consulting business I had gotten all these job offers, one being from the financial planning association, that were really good jobs. And I had everyone saying to me, “You need to just take the job. You’re 23, you need to learn. You need to do these things.” And I just couldn’t. I could not take the job.
And so I found a small business organization in Kansas, and it was called the Rudd Foundation, and they gave loans to young entrepreneurs. And they gave me a loan and that got me through three years of just trying to write my way to a client. And that’s what I did, I just wrote with Bob and we continued to write, and we continued to write. And finally I got one client, and then I got another client. And then I was blessed to get the attention of Mark Tibergien, and Tibergien starting sending me…he was with Moss Adams at the time. They started sending me their small clients, and so I started working with small clients. And then it just bloomed from there. Now to go back to your question of what I do. So now…
Why Angie Only Takes On 15 Retainer Clients At A Time [20:30]
Michael: So what’s the business now? Like what’s it called, and what do you do, and who do you serve now?
Angie: It’s gone through so many evolutions, and I hate to admit this but it’s really ironic because we’re talking about failures and successes. Right now I don’t have a website. I don’t have any marketing materials. I have a business card that just says, you know, “Angie Herbers, Growth Consultant” on it. And right now what I do is I have clients who are on a retainer, and those clients I help deal with all of these issues in their business, the relationship they have with their business, the relationship they have with their employees on a retainer, and I’m limited by those retainers. So I only take 15 at a time. And then I do…
Michael: So, like, 15 advisor firms that you work with at any particular time. I mean, how often does that list change? Do you end up with a waiting list that’s a couple weeks or a couple months until someone’s like, “Okay, Angie. I’ve completed my journey with you and we got to the place we were trying to get, and I think I’m done now,” and then they move on? And then someone else moves into the slot that they used to have?
Angie: Yeah, that’s a great question. So that’s how I used to do it. I changed that a year ago. You know, the firms that I want to work with are the ones who will dare to dream bigger than what they are. And I don’t mean bigger in size or bigger in money, but dare to dream what they think that they cannot achieve. I get so many prospects. I get probably four to five prospects a week, and those prospects will come to me and say, “I want to grow.” Or, “I want a human capital structure.” Or, “I want this,” or, “I want that.” What they’re doing me is they’re telling me the solution to what they want.
And when I get them on the phone and I talk to them, what I realize is that what they have done in the last five years, the actions of what they have done are not matching what they say they want to do. And when those things don’t match, everyone says, this goes back to the business, but everyone says, “Actions speak louder than words.” I don’t believe that at all. What I believe is that words and actions matching speaks volumes. If what you are saying and what you are doing match, then you can achieve anything. And so the vast majority of prospects that come to me, those things don’t match. They say they want to grow but they’re doing nothing about growth. And I can’t do it for you. I can only coach and consult you through it.
Michael: I mean, with the caveat from the other end, what if my problem is I really do want to grow? I just literally don’t know what to do. That’s why I’m coming to you and hiring you. If I knew the answer to these questions then I wouldn’t need to come and hire you because I would be doing it. It’s like, am I missing something in that continuum?
Angie: No, you’re on exactly what I hear. So when I have a client who comes to me and says, or a potential prospect who comes to me and says, “Ang, I know what I want to do, but I don’t know how to do it.” What they’re truly doing is they’re asking for help, and those are the people I can help.
Michael: So you literally want someone that says, like, “I have a vision. I don’t know how to execute it.”
Angie: That’s right, because at that moment I can say, “Great. Because now you’re ready to take help.” When people come to me and say, “This is what I want, and this is what we’re going to do about it.” They’re not asking for help. They’re just asking for a supporting cast. They are still the conductor of their orchestra, and they just want me to fall suit. Well, the problem is is that most of the time I can’t fall suit because I can see something you can’t see. And you come down to core values of a person or core values of a business. One of my core values is faith, and I don’t mean faith in the religious sense, but I mean faith in the sense of… Faith means true trust, and openness, and believing in something you cannot see.
And that’s what I need the client, meaning the person, that business owner that I’m working with, I need them to come to me and say, “I know what I want. I just can’t see it, so can you brighten that picture for me? Can you give me perspective by repeating back to me what I say, or giving me suggestions on what to do so that I can get there?” And those are the people I want to work with. So I would tell you 90% of the prospects that come to me, they just want me to fall suit. The other 10% that really, truly are asking for help, I will throw them in an hourly model.
So I open up certain times where we can do hourly appointments. I just can’t commit to being on a retainer with them. I’ll throw them into hourly, they can do the hourly with me or we’ll do a project together, and I do several projects a month. We’ll do a project together to launch them, and that way they’re still getting help. They’re getting hourly advice and they’re getting a project that I can do. And then when they do those things they get through that gate, and they show me that they’re ready, that they can actually implement. Then when I do have an opening on the retainer they’re the first ones that I offer them to.
Michael: Well, and I think it’s a fascinating thing, right? There’s so many analogies in what you just said for how we can or should run our own advisory businesses as well, like don’t work with clients that aren’t ready to work with you, and don’t work with clients that aren’t really ready to make the kinds of changes that you’re going to recommend to them. Otherwise life is short, and you’re spending a lot of time working with people that aren’t really going to work with and implement your advice anyways.
I think maybe the one difference that maybe you’re going through versus a lot of advisors is I find for most of us it seems we’re struggling so much with growth these days, like every prospect is a sacred resource. And even if it feels like maybe they’re a lost cause, I kind of feel like I got to at least go for it, I got to make a try. I got to see if I can get them to work with me. Whereas you’ve got a much more active, steady flow of prospects coming in, to the point where you can say no to 90% of them and really just winnow down the list to, “Here are the people I really want to work with that I think I can have a positive impact on.”
Angie: You know, I do feel very blessed that I have that situation, but what’s interesting is I’ve also realized, you know, the retainer clients that I work with don’t have a growth problem. They have the same problem that I have, and the reason that they have that problem is because they turn people away. And they turn people away because they don’t have… I mean, think about…I’m going to do this in a different example. You know, think about a friend that you might have, and that particular friend comes to you and just complains about everything. And they want you to listen and they want you to do all these things, and you give them tidbits of advice and help but they just won’t go out there and help themselves.
That friend is exhausting you of the energy that you do have to help the people that you can truly help. And so when you look at your life and you say to that friend, “You know what? I can’t help you anymore. You are taking away my energy. My energy is too important for you to be involved in my life or what I’m doing, and frankly you don’t care about what I’m doing.” Then if you remove that barrier, then you have so much power and so much energy to do and help the people who really want help. So while yes, growth is hard right now in the advisory industry, but I think that what’s even harder for me to sit back and watch is exactly what you said. That even though growth is hard, and they’re grasping for any client that they can get, the reality is sometimes in business doing the opposite of what you think is right is the most beneficial thing.
And I think that, and I teach my retainer clients this, which is why I don’t think they have growth problems. But I tell them, “Listen, we’re going to turn that client away. We should turn that client away, and in turning them away we get closer to what this business really is. And when we get really close to what that business really is, then that business will shine. And it casts a light so bright that people come to it. It’s the concept of ‘build it and they will come.'” And that is the mentality that I look at when we look at growth. And it’s so hard for people to do because they’re so desperate to want the acknowledgement of this success, or they’re so desperate for the just knowing that…so desperate for more money or a bigger business, or a bigger life, or whatever it is. And what they don’t realize is that all that energy they’re putting into things that don’t actually make their house brighter is the very thing that’s dulling their growth.
Michael: Well, and I feel like there’s been more and more writing discussion lately about the idea of… You know, well, at first, ideally you really have to manage and take control of your time, because if you don’t take control of your time and your business, kind of the theme here, then it starts to take control of you. But the better thing to manage isn’t even just managing your time. It’s managing your energy, and that effect that comes from, like, it’s not just about managing your time so you do the productive things and not the unproductive things. It’s what happens when you actually manage your energy to the point where you’re only doing the things that give you energy and get you excited, because when you do you end up putting even more time, and effort, and energy into them, and it doesn’t even feel like work at that point.
And we actually just recently did an article and write-up on Julie Littlechild’s new book about absolute engagement for advisors. We’ll put a link in the show notes, so kitces.com/18, for those who are listening because we’re episode 18. Julie’s book on absolute engagement also is making the same point that you managing your time is a starting point, but ideally manage your energy and spend your time and focus on the things that give you energy and keep you engaged. Because that’s ultimately how you make sure that you’re not just managing your time well but you’re managing your time in a way that you’re not going to get exhausted and burn out. Because it’s literally feeding your energy when you do the things that give you energy.
Angie: That’s right. I mean, Julie is exactly right, and when we talk about this idea of energy, that’s so true. It’s just managing where you put your energy and time. What I realize though is that people don’t actually know what that means. What does it mean to manage your energy? I could tell you that I am a person that, and I’ll just talk about myself for a minute, I am a person who just absolutely loves people, but they exhaust me at the same time. And what…
Michael: So you’re an introvert like me?
Angie: Oh, I’m a total introvert. I mean, in fact, I would rather sit reading all my business books and dreaming about writing a business book than actually writing it, which means that I’m not in alignment. But that’s a whole other point. We’re not going to talk about me. But the bottom line is, when I actually learn how to manage my energy, and it’s a constant struggle. It’s a constant struggle at first. It gets better and better each day, but when you learn how to manage your energy, what you are learning to do is putting up boundaries. You’re saying no to people who take away the energy. You’re saying no to the things that you don’t want to do. You’re saying no to…you know, sometimes it even comes down to your personal life. “No, I can’t do everything everybody wants me to do here. I can’t take care of it all. I can’t take care of the laundry,” or whatever it is.
You are just putting up boundaries, and you’re being really, really honest with yourself in saying, “Nobody can do all that they want, but they can have all that they want.” And if they do that, you manage your energy by managing the boundaries and putting up those boundaries. Then by just admitting to yourself that you can’t do everything and realizing that you can have it all, that’s when you have alignment of boundaries in the things that you want to do. Now I will say that’s easier said than done. And it takes a lot of practice and I’m not perfect at it.
How Angie Learned To Manage Her Time And Energy [33:45]
Michael: Well, you kind of have to rewire your brain a little, you know? So I read this a couple of years ago, and sort of, it was one of these things like I lived and I didn’t realize I lived until I read it and someone put the words on paper for me, that some people view the world as one of abundance. So like, “Hey, if this opportunity doesn’t work out there will be another one.” And some people approach it as a problem of scarcity, like, “I got to grab whatever opportunities come in because who knows when the next one is going to come?” And when you approach things in kind of a mentality of scarcity, it gets very, very hard to ever manage your time and your energy and say no to things, because if you always view opportunity as scarce it’s kind of this terrifying thing that might slip away.
When you get to a point where opportunities become more abundant, and you figure out how to create an environment where your opportunities will be more abundant, or you just approach it with a view of, “No matter what opportunity is in front of me, this is not going to be the last one of my life. Other things are going to come along.” When you view it with abundance, then when you get opportunities that don’t seem like a good fit, it’s not saying no and walking away from something. It’s saying no to leave room for something else.
So one of our most popular episodes was the one that Ron Carson was on, so episode 2, kitces.com/2 for those that want to go back and listen. And one of the powerful things that Ron had said in his episode is that he views that saying no to an opportunity isn’t a loss, it’s leaving room for a bigger game, right? It’s recognizing that opportunities can continue to come over time as time goes by, but the amount of time we have, that fixed 24 hours a day and 168 hours in a week, everyone’s got the same time, whether it’s us or the president.
And so we all have to manage that same amount of time, which means the way ultimately that you grow and move forward is you have to treat the time as your most precious resource and only allocate it to that small number of things that really advance yourself, advance the business, move you forward. Because anything else you say yes to, it’s not just a thing you said yes to. It takes up one of those valuable time slots, which means you can’t allocate that time anywhere else. And if you’re not careful with that you get stuck. You get at a point where you can’t grow anymore. You can’t move your business forward anymore because you didn’t say no to enough things.
Angie: Right, I mean, if you think about it, in the world there’s only one limited resource really, and it’s time. And so it’s all about what you do with that time. And if you don’t learn how to manage that time through managing yourself first, managing the energy that you have, then you’ll never actually conquer, and this is very deep, but you’ll never actually conquer the meaning of life. So you have to focus first on what that is.
When I’m in my consulting engagements, I don’t know if this will make sense to you, but when I’m in my consulting engagements and they start to talk about all of these things that they want to do, and they want to get started on them all at once, I’ll get them to focus on one thing. But then what happens is, you know, one of my firms will get an inquiry about a merger, or an inquiry about an acquisition. Or they’ll meet some guy that they get really excited about. And I’ll ask them the question, “Do you really want it?” And they’ll say, “Yeah, yeah, yeah, I really want it.” And I’m like, “Okay, so it’s worth your time and energy to go down this road and explore it?” “Yeah, yeah, yeah.”
And then I’ll say, “Tell me, if you had the choice between this choice and this other choice, whatever that other choice is, which one would you say,” and I won’t use the “F” bomb here, but I will say, “Which one will you say ‘F’ word yes’ to?” And they’ll say, “Well, of course my other choice.” And then I say, “Well, then why are you wasting your time here?”
So I kind of live my life in this thought process of if someone asked me to do something, or I want to do something, whether or not I’m getting paid for it or not, is my answer “F yes”, or “F no”? And if it’s one of those, if it’s the no part, then I don’t do it. And I want to just be really excited to do that and to follow my heart in what that is.
Michael: Well, I know Greg McKeown did a fantastic book a couple of years ago called “Essentialism” that’s very much built around this framework of just focus your time on the things that really engage you the most and are really the highest and best use of your time. And one of the exercises that he talks about in the book is basically make a giant list of everything that you do, like all of the tasks, all of the things that you do throughout the day and week. Put a number next to each of them between 1 and 10, of, you know, how valuable and engaging it is for you to be doing that. So the things you dread you give a one, and the things that are kind of okay you give a five or a six. And the few things that you really enjoy doing you give a 9 or a 10.
And the point of the exercise for him is the way most people do this is they look at the list and they’re like, “All right, well, there’s a couple things that are ones and twos and threes, so I’m going to let that go. But everything that’s a six or above in the top half, that’s what I’m going to hold on to.” And the point that he makes is, “No, no, the real way that you excel and move forward is anything that’s not a 9 or a 10 on your list you ultimately need to let go of. And you have to always continuously be relentlessly cutting it down.” So it’s not just, “Hey, if I don’t dislike it I guess I’ll keep doing it.” It’s a, “Unless it’s a ‘hell yeah I want to do this, and I absolutely shouldn’t have to be doing this,'” everything else has to ultimately go away. You have to let go of, or eventually you’re going to hit a wall. You’re going to get stuck.
Angie: That’s absolutely right. And, I mean, to dovetail on that, the one other thing which ironically was told to us by business folks is when people are making that list they’ll also put a 9 or a 10 by their strength, by the thing that they do well. Well, let me tell you something. I’ll share something personal with you. I can sew anything in the world. Like, my greatest strength is actually sewing clothes. I can sit down and without a pattern I can make anything. That is my greatest strength. If I focused on my greatest strength and the thing that I do well, I would have gone out and I would have become a fashion designer or something like that. But you know what? My greatest strength is not hard for me. It’s not hard, it’s easy. It’s taking the easy road.
And what’s hard for me is to actually get people to understand what I’m trying to say to get them to move to the dream that they want to accomplish, the dream that they want to do. And that’s what I love about consulting. Consulting doesn’t come easily to me. It’s not my greatest strength. But it absolutely is the thing that I love to do. Writing, I’m not a good writer either. Writing is very difficult for me, it takes a long time. I get my words mixed up. But it’s really hard and difficult, and that’s what I love.
So when you’re making that list, make a list of the things that you really want to do. Don’t think about your strengths at all, and look at it and say, “You know what? This is really what challenges me. This is what really is fun to me because it’s hard.” And I find what most people do is they’ll take the hard things and they’ll say, “I’m going to have somebody else do that.” And then what happens is when they pass those hard things off to somebody else they get really unhappy, because all of a sudden they’re sitting in a job that they’re bored in, or sitting in their business that they’re bored in.
And at that point when they do that, and I’ve seen this throughout my career, when those advisory firm business owners get bored because they take the advice of, you know, only focus on your strength, or only focus on the things that you should be doing instead of focusing on the things that are hard for you, they’ll get bored. And what they’ll do is they’ll start sabotaging. They won’t just sabotage their business, they will sabotage their life. And they do that because it’s hard. They just desire something hard and challenging.
How Angie Got Started In Financial Planning [42:30]
Michael: So I’m curious how you got into this work and world in the first place. Were your parents in financial services and kind of shepherded you towards a Kansas State financial planning program? Or did you land in the industry kind of randomly? How did all of this get started for you?
Angie: Oh gosh. It’s funny because when I got on this phone call I said, “I am never going to talk about that again.” And I tell my clients, “When you say ‘never’ that’s probably the things that you should do.” So I had a business when I was young. I won’t get into the details of the business, but my grandfather, he was an entrepreneur. I was raised in Western Kansas in a small town, and school was really hard for me, particularly math. And so in the eighth grade we had an assessment in math, and I failed my eighth grade math assessment. And I was so angry.
And my dad came to me and he said, “You know what? You failed your eighth grade math, so when you go into your freshman year of high school you aren’t going to go into algebra. What you’re going to go into is you’re going to go into applied mathematics.” And he said, “Ang, this applied mathematics class is for mainly the kids that they don’t think are going to go to college. So what they’re going to teach you is they’re going to teach you how to balance a checkbook, how to understand the time value of money, how to run a business.”
Michael: At least you can know financial literacy math.
Angie: Right, isn’t that ironic? So I was mad. I was so mad. I was so embarrassed because I didn’t make it, and I was so mad because I felt like they were saying that I wasn’t going to go to college. And all I wanted to do was ever go to college. And I had this brilliant teacher. It was me and six other people, and this brilliant teacher taught me. She taught me time value of money. She taught me all of the things about money. She taught me how to run a business. And that all bloomed into me being able to have my own business. That business grew, and I was just so blessed to be able to not only go through high school and participate in all high school sports, but also to be running a business at the same time.
So this is a little difficult for me to talk about, but a week before I graduated from high school my mother died in a terrible car accident. And she was actually driving between…she was a teacher. She was driving between schools, but it was the night of my scholarship awards. And it was a difficult time for me. What I did when she passed away is I internalized everything that had happened. I had never dealt with…I didn’t know how to deal with cope and loss. I had been able to do all of these things, but I wasn’t able to deal with cope and loss.
So I think most people don’t know how to deal with kids in dealing with cope and loss. If I gave anyone advice about helping someone deal with the loss of a parent, I would tell them, “Do not allow that child to internalize it. You don’t internalize it. Go get help. Go ask for help. Get a therapist, whatever it is, to just be able to face it. Truly just face it, because if you learn how to deal with cope and loss at a young age you can deal with so many things throughout your life.”
Well, before that had happened, or before Mom had passed away, I was very gung-ho about going to college and majoring in business, and I wanted to get my MBA. And it was at that point that… I’m going to back up a minute. Because my mom was driving from one school to another it was workman’s comp. So we ended up getting a check. Myself, and my brothers, and my dad ended up getting a work comp check every week because of the accident. And so when I went to college, what I was getting was a weekly reminder of my loss, and I began to hate money. To me, it felt like blood money. It felt like, you are reminding me every week, until I was 20…I can’t remember now. You’re reminding me every week of what I lost.
And so that’s where my fascination of money began. So when I got to college and I was majoring in business I decided, “You know what? I have to figure out how to face this loss. I have to figure out not to connect money with the loss.” And so that’s when I jumped over to financial planning, and that’s how I came up with the triangle of money can steal from you everything, including your heart. It can steal from you everything of who you are. Sometimes it’s just a constant reminder or connection.
And so that’s how the love of…you know, they say when you hate something if you just actually let it in you begin to love it. And that’s what happened to me. I started to love these ideas of philosophies behind money, and then I had had this experience of having a business when I was younger, and I started to apply that work to the business itself. And it just became this beautiful picture to me of what my purpose was and how I could actually help not only business owners, but also advisors in industry of money, and then potentially maybe something greater than that.
Michael: So that’s kind of a…I’m sorry, it’s a very sad, but very fascinating journey about how you land in a world of financial planning and all of these relationships with money. So I guess that was part of what connected with you about all the weird relationships with money that we have by the time you got to Kansas State in the financial planning program?
Angie: Yeah, I mean, I had had all of these experiences, not only having my own business but having to deal with my own issues around money that…they say the greatest teachers are just searching to learn. And what I was doing was I was trying to just figure out for myself what I meant or who I was. And when you, not to get into the grief process or death and dying. I do think, though…I’ll talk about this later, but I do think it does change a person and help them become who they are. But the thing that I was struggling with was the loss of a mother is not something that anyone or anything can do anything about. It is a piece of you that you lost, and if you do any research on daughters losing mothers, what I had felt like I had found myself young, meaning who I was and wanted to do and in business, and where I wanted to go. Except for that when she died I felt like I lost a piece of her, and then I had this constant reminder every week of what I lost.
And so in order to actually deal with it I had to face it. I had to face the money. And I’m so blessed that I found a career in an industry that helped me face it and look at it in a different way. And I got there because I was searching.
Michael: So I’m curious then when you get into consulting work with advisors, and maybe this is narrowed slightly by the process that you have about deciding who to work with in the first place, but I’m curious how often you see situations where it’s these kinds of dynamics that become the blocking point in the business. Or like how many of us advisors get stuck around trying to grow the business, or can’t grow the business, or can’t figure out what to do with the business, or aren’t happy with the business, or it’s some blocking point in the business. And it’s not actually about the business, it’s some dynamic around our relationships with money and our connections with money that have kind of gotten us stuck in some unhealthy place.
Angie: I hardly ever say “always” but I always believe that it goes back to the money. I don’t believe that the industry of financial advice will be truly independent and objective, truly independent and objective until financial advisors are not allowed to be their own financial advisor.
Michael: So we as financial advisors need to have our own financial advisors?
Angie: Right. I think that a lot of times in the business when you have two selfish entities, money and business, connected, then that money and that business gets in the way of the perspective that that owner or that advisor has on their business and their career. And because of that, I think that that’s why there’s a lot of things in our industry that are broken, and I don’t mean broken in a bad way. I just think it’s broken. I think that advisors will lose perspective of their own business, and I don’t care how the business is structured. I don’t care if they’re a broker, I don’t care if they’re dually registered, I don’t care…NRIA. Until we are able to step outside of our own money, our own relationship with money, and we’re able to get help from someone who helps people on money, which means going to your peer and saying, “I need you to manage my money.” Or, “I need you to help me with my money.” I don’t think you gain a true perspective in your business until you do that.
And what’s interesting is one of the businesses that I work with, which happens to be Abacus in L.A., they do that. They go outside of their business to get advice…for the people in their business to get advice from other financial advisors. And Abacus takes nearly all my advice. They’re not a client any longer. They’ve really kind of broken what is really great. I mean, they’re very much in an innovative stage right now. In my opinion that’s what makes that entity so great. They don’t have a growth problem. They don’t have a people problem. They don’t have all the problems that many advisory firms have. And I believe it’s because they’re one of the very few advisory firms in the country that are truly, truly independent and objective because they go outside for their advice, or go to some other advisor in their firm for that advice as opposed to doing it themselves.
Michael: Well, and I know Rick Kahler has pounded the table this for years. In fact, I think he even did an article in the “Journal of Financial Planning” years ago about financial planners hiring financial planners for themselves and how few of us actually do. And it just reinforces that point to me, particularly in today’s environment where we’re saying more and more, “Well, my value isn’t just the investment stuff that I do. My value is the holistic financial planning that I’m offering, and it’s all the emotional stuff, and it’s the behavior gap, and it’s helping you have better relationships with your money so you can make better decisions.” And all those things that aren’t just about the technical expertise.
Or I’m like, “Hey, because I’ve got my CFP I can do my own financial planning.” Those are all things that uniquely only work when you engage other human beings with outside perspective. And yeah, there is kind of an awkward, almost hypocrisy to we’re increasingly talking about how financial planning is more than just the investment and the technical stuff but we’re not necessarily embracing that into hiring our own financial planners at this point.
Angie: Right. I mean, think about how many advisors out there will say to their client, “I don’t invest your money into anything I wouldn’t invest my own money into.” What are they actually saying? I mean, I wish every advisor would stop saying that, because what they’re actually saying is that, “I’m not objective. I’m picking these based on what I need for me, and as a result of that I’m selling that to you.” You have just taken out fiduciary. You have just taken out objectivity. You want to be truly objective? Then why don’t you have someone else do for you what you’re doing for them?
Michael: So the correct line is not, “I only invest for you what I would invest for myself.” The correct line is, “I only invest in for you what I actually do analysis and due diligence on to make sure it’s the right thing for you.”
Angie: And the keyword there is you’re ending statement, “for you.”
The Specific Growth Milestones That Many Advisors Stumble Over [55:51]
Michael: I’m curious if someone that talks to so many advisors and sees so many advisors and their businesses, are there common blocking points that we tend to have, or common walls that we tend to hit? Are there certain themes that you see regularly crop up, like certain problems or certain milestones we tend to hit in the business where common problems start to crop up?
Angie: Yes. So I call these “growth barriers.” What I really should call them is “breaking points.” But, you know, I’ve seen so many advisory businesses, and nearly all of them…people don’t want to believe they’re like everybody else, but in reality is it’s good to know that you’re like everybody else because you know then where to break yourself down. So there are common growth barriers or breaking points. And those breaking points, I can send you over a slide that you can download and look at what those break points are.
Michael: If you could send that over we’ll post that in the show notes.
Angie: I would love to. I would say we could put it on my website, but of course I don’t have a website at the moment.
Michael: We’ll put it up on our site. Hopefully…because, of course, we record these a little bit in advance, my pledge to all of you on this podcast is that I’m going to nudge Angie very actively for the sake of her business, as her temporary consultant here, between when we record this and when it actually goes live, that I’m going to try to get her to make a website. So the show notes are at kitces.com/18. And so we will have there some combination of Angie’s list of growth barriers, a link to Angie’s website, or a link to Angie’s website where you can get the list of growth barriers. But we will solve at least some of this problem by the time the episode is live. So kitces.com/18 for…we’ll let it be a surprise to see what exactly is there by the time we’re live.
Angie: So the growth barriers are…the ones that I know for sure are it’s at…or sorry, 350,000 in revenue, 750,000 in revenue, 1.2 million in revenue, 3.3 million, 8.5, and 15. And I haven’t seen enough firms. You know, there’s a limited amount of firms that are over 15 million in revenue. I’m sure there’s going to be other barriers that we’ll run into in the future.
Michael: So those are very precise points. Maybe you can talk about them. Let’s see, I think the first 4 were 350,000, 750,000, 1.2 million, and 3.3 million.
Angie: Then 8.5 and 15. So for a person who’s not very good at math I’m pretty damn good at numbers.
Michael: Yes. So where do these numbers come from? It kind of starts out Fibonacci-like, but then it breaks down a little. So what’s the theme or what’s the pattern here on these numbers?
Angie: Well, what’s interesting is that these numbers illustrate the point where you have to make an investment in your company to get it bigger. So what happens is is at each one of these points you have to take money out of your business that would traditionally go into your pocket. And you have to put that money back into the business, into something that you can’t see, or you can’t understand. And so what happens is, you know, everybody talks about right now how we have margin compression. We do have margin compression, but I kind of laugh about it because I know that there’s growth barrier at 3.3 million, and your margin goes down. And the average firm is somewhere between 3 and 4 million right now in revenue.
So I’m sitting here laughing going, “This is just a growth barrier, but we’ll see if we break through it.” What happens is you have to take that money and you have to not put it in your own pocket, right? And you invest it in the business, and you invest it in people, processes, things, leadership, work structures, consultants, innovation. You put it back into the business, so literally the term, “I’m working more for less money,” is true. You are. You’re working more. You have to do something that’s harder, you have to invest that money back in the business, and you are working harder for less money. It truly happens in the numbers and you can see it in these patterns.
Michael: So now I’m trying to think of kind of what the walls are. So 350,000 in revenue, I get it. That’s the point where you start hitting your ultimate personal productivity capacity where you have to start hiring an administrative assistant or associate planner or something, and that person adds nothing to the revenue and nothing to the bottom line. It’s just a cost. You know, you’ll be working harder and making less money because you have to get through that barrier to where you let go of some things and shift it down to a person so that you can grow to the next level. Is that pretty much the barrier?
Angie: Yeah. That’s exactly it. And then they get more complicated as you get bigger.
Michael: Right. So 750,000, I’m going to imagine that’s…so I’m now an advisor. I probably have a couple of staff, maybe three to five of them, and I’m now getting to the point where I spend as much of my time managing my staff as I ever actually did trying to see my clients and grow the business. And I’m now hitting a management capacity wall where I have to not just have an admin person maybe or an associate to hand things off to. Now I’ve got to actually hire some kind of office manager, operations manager person to help me manage the people?
Angie: So that’s what people traditionally do but that’s actually not what you should do. What you should do is invest in the technology. So you invest in more robust technology systems, processes, and procedures, and security. What you just described happens at the next barrier, at the 1.2. So you’ve invested in people and talent, now you’ve invested in technology. You get to the 1.2 and you think to yourself, “Crap. I’ve got all these people. I’ve got all this technology. Now I need some people to manage kind of the business and what it needs to do.” And so then you get into the C suite. You start looking at, “What is my operations manager? What is the potential COO?”
I will tell you, the vast majority of businesses that hit 1.2 actually never break 1.2. And the reason why they don’t break it is because there’s a transition that happens also with the advisor. So if that owner advisor… In order for you to truly hire a C suite in management and talent, you have to become the CEO, the leader yourself. And most people will say, “I can’t do that. I’m not a very good CEO. I just want to be an advisor.” I can tell you in the businesses that I’ve worked with I think that’s all just BS. Everybody can be a leader. They can be taught to be a leader. I’ve done it lots of times in my career. The difference is you have to want it. If you don’t want to do it, I’m not going to teach you how to do it.
But most advisors want it, they want to break through. But most of them won’t do it, and the reason they won’t do it is because they’re standing at that bridge, and they want to cross over to that bridge. And they don’t understand that they’ve got to give up advising. They’ve got to give up…or at least to some extent, give up working with clients. And they don’t understand what that job feels like. They don’t know what it feels like to be a CEO.
And so when I ask them to take my hand and walk with me across the bridge, what they’ll do is they’ll literally fight me every step of the way. And one of the ways…I have this beautiful CEO that I work with. He’s up in Portland, Vancouver area. And he was having a hard time breaking through. And I finally said to him, “From now on, whenever anyone asks you what you do for a living, I want you to say ‘I am the CEO of an advisory firm.’ I don’t want you to say you are a financial advisor. I don’t want you to say you’re a certified financial planner. I want you to say you are a CFO of an advisory firm.” And that broke him. When he started saying that, and he was saying it to himself is what he was saying. When he started saying that, he just went nuts. I mean, his growth went off the charts. And he now has this beautiful business with this light shining and it’s going to do great things. So until you identify yourself as the leader and the CEO you can’t actually make that happen.
Michael: And I’m constantly fascinated. The more I live the business and work in it, and go through these challenges with our own advisory firm, the ways that we unintentionally limit or constrain our businesses by our own self-image or our own view of what we are, or what we should be, or how we should relate to the business, that becomes limiting to it. I mean, that exact story you just said. Just explaining yourself and truly re-visioning yourself to say, “I’m not a financial advisor anymore. I’m the CEO of a financial advisory firm.” And then taking a hard look back at your time and what you do and how you’re executing it is a really interesting challenge and transition point for me.
I see the same thing when we look out at even a lot of the guests on this podcast that grow the business to some extraordinary point. They all hit this level where either they have to back away from how much advising they do with clients so that they can really grow the business, or a few that go the other end and say, “I’m going to take on a partner.” Or, “I’m going to hire a CEO and truly vest them with the responsibility and authority to hold that position,” and say, “All right, if I really want to be the lead advisor or the lead rainmaker enough, but I still want to grow this business, then I have to very much get out of the way of my own business,” is equally challenging.
Angie: Oh, absolutely. I mean, I have problems with that every day. Website is a perfect example. But I mean, the bottom line is is that if you look at all the problems you have and you really think about it, then the answer to those problems is you are the problem but you are also the solution. And in order to find that solution, sometimes it just takes…I should write this down. Sometimes it just takes another you to help you see you. And that’s what I do. I mean, I am just like most of the advisors that I work with. And I have the same problems and the same issues in my own business and in my own life that they have. And I’m able to see that and give them that perspective because I’m just like them.
Michael: And I think that’s part of the point as well for all of us just going through this growth and these challenges. It’s like, if you’re feeling these difficulties, this is normal. This is how it works. You’re not unique because you have some struggle points in the business. We all do. And the success in the business, even if you’ve had success or been successful and it’s going well, if you can work through them and have some success, the success will create new problems because the business will morph and change around you and get to new levels, like as you were talking about.
If you reinvest in the technology, and the process, and the efficiencies to go from 750,000 to 1.2 million, it’ll be like, great news. You made those investments. You’re bigger, and larger, and more successful than ever. Now here’s a new wall where you really have to do something, right? Like, congratulations, you got through a growth barrier. Here’s a bigger and more complex one.
Angie: Right. And each barrier that you go through gets your heart and your head stronger, and stronger, and stronger so that you can tackle the next one. The next one is going to be harder than the first one. The next one’s going to be harder than the previous one. And what’s confusing about it is that it’s going to shatter, and I mean shatter in the extreme way, it’s going to shatter your confidence. And the reason it’s going to shatter your confidence is because everything that you thought you knew up until the point that you are at is often times going to be the opposite of what is the solution, meaning the sales process as a perfect example. When we hit the 3.3 million growth barrier and we have actually gone through and faced other barriers, which is adding professional C suite types of talent to the organization, there’s something that happens in the sales process.
So traditionally in the sales process you have an advisor who goes into the meeting, they sit down, they have a pad and paper. They ask a lot of questions, they try to get a connection with the client. And through that connection, they kind of develop this little bit of a systematized sales process. Then what they do after they do that is often times they’ll go and they’ll create a plan, and then they’ll show that client the plan. And the client says, “Great. I love what you have done. Let’s sign up.”
So they believe that their sales process is the way to close. Well, I can tell you it’s absolutely…it got it to 3.3 million in revenue. But I can tell you, to get to 8.5 you have to break that completely. And what I mean by that is that you have to approach it a different way. Number one, unless you want to have a business full of rainmakers, which is very difficult to do, you have to do the sales process in a different way. And what you have to do in the sales process is you have to become the seller. Everybody doesn’t like to use the word “sell” in financial advice. Well, at 3.3 you have to become the seller. You need to learn how to give a pitch. You need to learn how to put boundaries around that meeting. You need to learn how to be able to express to people what you do without showing them, because showing them takes time and energy. And you need to be able to close.
The reason why the vast majority of firms in the advisory industry right now are having a growth problem is because the very closed process that brokers use is the closed process that needs to happen at 3.3. And because we refuse to sell, you aren’t closing. And they’re rejecting that. They’re saying, “I’m not going to do the sales process like brokers do.” Well, let me just tell you something. Those brokers are breaking away and they’re entering into your marketplace. And how do you think they’re getting the business that you want? They’re getting it through closing in the sales process. So you have to break your sales process. You have to do it different.
I’ve got tons of clients who, you know, I don’t remember one client actually that I’ve told that you need to break your sales process that liked it. I mean, they rejected me. I had one client actually fire me because he thought I was a lunatic. The bottom line is, is just when you think that you know exactly how to do something is when you don’t know. The thing that you say will never change is the thing that you should probably change.
Michael: Or the business grows to a point where the thing that worked in the past just doesn’t fit the business for where it is anymore. I mean, we mentioned it earlier, like Greg McKeown’s book, he has a fantastic whole section on this that he actually dubs “the paradox of success,” and kind of frames it that way. That the things that we do that make us successful eventually grow the business to the point where that’s no longer the key thing that you need to still make it successful. And if you keep doing the thing that made you successful after that point, continuing to do it will make you unsuccessful. Because what grows you through the last challenge often becomes the barrier that you have to change and adjust again to make it through the next one.
Angie: That’s absolutely right. You know, I call it breaking, or breaking up, or breaking through, because truly to get to the next point you have to break your pattern. You have to break your thinking. You have to break what you thought you knew. You have to look at it differently. Sometimes you have to breakdown. Sometimes you have to truly break a process, system, or a procedure, or your thinking on how it was done before in order to move forward into something bigger than you imagined or greater than you imagined, or to get there. And the only reason I’ve known that is because I’ve gone through my whole career essentially breaking myself, breaking myself down. And those things aren’t easy, those things are really difficult. The only way that you survive is you just don’t give up. You do not let that water pull you under and keep you under. You just keep trying to swim to the top so that you can get on that mountain again and keep climbing.
Michael: Well, it’s an interesting framing though, right? The people who are more successful, the most successful, it’s not that they had the brilliant vision where they didn’t get knocked down when everybody else feels like they’re getting knocked down. The only difference is they got up more. And I’ll admit, even going through my own entrepreneurial journey of building businesses now, particularly over the past 10 years of my career, that early on that just kind of sounded like a thing you say. You know, that the business is always hard and lots of people get knocked down. It’s just a matter of whether you can get back up and keep going.
But now living through it and going through the ups and downs of building businesses. And like, oh, I have a whole new appreciation. It’s really true, you have this relationship with this selfish thing that just demands more out of you and abuses you, and it’s hard to disconnect from it. And it just keeps knocking you down. And if you want to keep building it you just have to deal with it and then get back up and keep going. There’s really not much of any other way around it.
Angie: Yeah, you have to face it and you can’t let that failure get to you. So I merged my consulting business, I don’t know how many years ago, and the merger failed. I don’t want to get into the details of it, it just failed. And a failure is sometimes one big pivotal thing, and failure sometimes is just a lot of little small things that come together. And I was having a very, very difficult time dealing with the failure. And I had called Stephanie Bogan. And Stephanie Bogan, who is a great consultant in our industry, she had a business and I kind of watched her from the outside when I was building my consulting business way back then.
And I was talking to her, and I was saying, “Stephanie, I just, you know, I’m having a hard time over it because I failed. I failed. And I don’t know how I’m supposed to go out and consult other people to merge their businesses and acquire other businesses when I can’t even make my own merger work.” And she said, “Angie, I just want you to stop saying that.” And I said, “What do you mean? I need to face failure.” And she said, “You didn’t fail.” Because I was saying, “I failed.” She said, “You didn’t fail. It failed. It failed, so what? Move on.” And she broke me, she just broke me through. Just like, “Well, that makes a lot of sense. Like why couldn’t someone have told me that a month ago? It failed. It failed. What’s the big deal? If I go out in the industry and everybody asks me about the merger,” and still people do, all my answer is, “It failed. It just did.” And I don’t need to know why. I don’t need to go back and figure out why. I just need to accept it and move on.
Michael: Well, and as you mentioned earlier as well, just that separation of you didn’t fail, it failed, I think is so powerful, right? We have such a tendency to internalize those failures back to ourselves, right? Like, “It didn’t fail. I failed because I couldn’t make it work,” or something to that effect. That just being able to separate that out and saying, “It wasn’t me.” It was just, “I tried a business, a merger, an endeavor. I tried a thing and it didn’t work, and now I’m moving on,” is so crucial and so hard for most of us to make that separation.
Angie: Right, you want answers. You know, when I was going through it I wanted answers. I wanted to know, “Okay, what are the things that I did wrong? What are the things that I could have improved?” And you get into this terrible cycle of searching, and searching, and searching. And when I stopped searching I started believing again, really believing in what my purpose and passion was, what my strengths were. I started to trust myself again. I started to move, you know, just in a really positive direction.
And now that I have some hindsight on it, when I look back at it now I couldn’t be more thankful that it failed. And the reason why is because I think that I’m a better consultant than I have ever been because of it. Because now I understand when my clients come to me and say, “I want to merge,” or, “I want to acquire,” or, “I want to be acquired.” Or they’re going through succession issues at the end of their life and they’re telling me that they want a liquidity event. And I can look at that so much more objectively and say, “Okay, let’s go through this whole what you’re telling me and let’s find all the break points in your thinking. Really? You think that your business is worth four times revenue? Do you really think that? Awesome, why do you think that? That’s because you haven’t saved for your retirement, so let’s be realistic here. How much is your business worth?”
Michael: Is your business worth that or do you want it to be worth that because you need it to be worth that, because it’s actually a challenge on your end and not actually necessarily a value of the business?
Angie: Right. Let’s look at the business as the business itself, and then why don’t you go out and hire a financial advisor that can look at your money as money itself? That will get you to true alignment.
How Angie Quit Holding Herself Back [1:18:27]
Michael: So I’m curious as well, as we kind of get to the tail end of the discussion here. As you look back at some of the challenges, the speed bumps, the things that have come along the way, I’m curious if there are things when you look back saying either, “Here’s something I did, and it was tough but it was a good growth opportunity.” You know, when Rick Kahler was on the show he called them “AFGOs, another fricken growth opportunity,” right? Like the sort of thing that is not… “I didn’t enjoy going through that, but in retrospect I can see that that was actually a good growth moment for me.” Versus every now and then we have those just screw ups, “Hey, whatever you do here’s the mistake I made. Don’t do this.”
So I’m curious as you look back if you have some of those on either end that you can share of either, “Hey, here’s a challenge that you might feel bad about, but in the long run you’ll probably actually be thankful for it.” Or alternatively, “Here’s a thing, just whatever you do don’t do this. I did it and it wasn’t good.”
Angie: Well, let me go to the “I did it and it wasn’t good” part. You know, I just wrote an article in “Investment Advisor” about the Wall Street bull and the little girl that’s fearless and the Wall Street bull. And that article was really personal to me. It was personal because I was born and raised on a ranch, and I hang around with bulls. And there’s this metaphoric thing with money, bulls, and bears. And then that is what I was going through before. But I was talking to a friend of mine and she said, you know, “Talk to me about the failures that you’ve had throughout your career.” And when I look at the time when I launched my consulting business to the time that I broke away from my merger, I hadn’t had a whole lot of failures. I had pretty much had a nice straight line of failures and successes.
And she said to me, she said, “What does that tell you?” And I said…what came out of my mouth is I said, “I set myself up to fail.” And she kind of nodded her head. And I said, you know, “Not failing in the merger. I didn’t set that up.” She said, “Is it at all possible that for some reason because of your fear of money,” meaning the money that I was given after my mom had passed. “Do you think that money has anything to do with the fact that you’ve never actually written that book or pushed yourself to a failure?”
And so when I think about fear, you know, I’m terrified sometimes of launching my business bigger. Or I’m terrified of writing the book because it’s going to be a different book. It wouldn’t be a Hero’s Journey. It’s going to be me being very honest, and frank, and blunt, and channeling my creative energy from all the places that I’ve channeled it. But what I’ve realized now is that I am so sad in some sense. I’m grieving the fact that in those 17 years I’ve been doing consulting that I have been holding myself back so far that I haven’t done more, that I haven’t written more, that I haven’t launched more, that I haven’t gone after the business.
And once I worked through that, once I worked through the fact that I was just terrified of the thing that I was terrified of, in the beginning that’s what launched my career. Once I worked through the fact that I wasn’t…that I don’t need to be afraid of being successful or afraid of being what I want to be, that’s when all my energy came back. And that’s what I’m just trying to work for. So I’ve got so much stuff in the works that I’m doing right now, and now it’s just the hard work. It’s going through the process of getting all those things aligned so I can get them launched and done, and take care of my clients at the same time.
So don’t do that. Don’t hold yourself back. If you dream the impossible dream then you can find that impossible dream, so long as you can get over the fear of it.
Michael: And it’s the fear that holds us back? I mean, is that just at the end of the day we’re all afraid to fail, right? If I don’t try it, I can’t be embarrassed by failing at it?
Angie: I don’t want to say it’s that you’re afraid of failure, that at the end of the day you’re afraid of something. Maybe you’re afraid of failure. Maybe you’re afraid of love. Maybe you’re afraid of money. Maybe you’re just afraid of going outside your house. Maybe you’re afraid of being a CEO, who knows? Maybe you’re afraid of hiring people. You’re afraid of something, but until you face that fear, and you don’t want to face it fearless because you’ll get creamed. And you don’t want to face it fearful because you’ll never do it. You just need to slowly face it to the point where you can say, “Listen, this doesn’t have to be terrifying anymore. And if it doesn’t work out…”
A good friend of mine who’s a therapist actually told me to do this in my own head. She said, “If it doesn’t work out, just say, ‘So what? So what it didn’t work out? So what it didn’t fail? So what? I’m going to just get out of the water again, start at the bottom of the mountain and start climbing up there. And I pray to God I make it to the top so that I can write a book about it.'” So I guess that’s what I would say to the advice that I would give to every person out there who ever wants to achieve anything, particularly in this industry that I love. There’s everything to fear yet nothing to fear at the same time, and you need to just balance it.
Michael: So this is a show about success. And one of the things I’ve long observed, and more so as we go through the podcast with various guests is that the word itself, “success” means very different things to very different people, and sometimes even different things to the same person over time as we hit those different growth barriers and we work through them, and we set our sights on something new. And so as someone who’s been through this journey several times of, you know, I know that we didn’t talk about it much but you built a business very early on when you were young and sold it, and built your consulting firm and merged it, and went through the challenge of separating out, and now getting going again with your firm. And having gone through those journeys, as you look forward from here I’m curious how you define success.
Angie: It’s so funny that you asked this question because I’ve been trying to define success for myself for so many years. And success, to me, like really to me is just to be. Just to be me. And maybe that’s… You know, I’m very philosophical and very deep, and I’m also very innovative and I like to break things down and write white papers. I like to write books. But one of the things that I have always done throughout my life is I’ve taught. It’s ironic that my mother was a teacher. But I have taught. I have taught people because, you know, the best teachers are those who are searching for something. And I think I really, in all this journey, I really found something. I really found who I was, what my business is.
And so when I go forward, my goal and the thing I’m working on right now, and I’m so thankful for actually Bob Veres. I’m out here in San Diego and Bob Veres is out here and we have lunch, or really have coffee. Well, we don’t really have coffee. He doesn’t drink coffee and neither do I. So I guess I have water and he has orange juice. I’m so thankful for Bob Veres because he challenged me to just be who I was. And I went to him and I said, “You know what? I want to be able to take all of my intellectual property that I’ve developed all of these years, all of the writing that I’ve done, and I want to just launch it into the industry and allow anyone to explore that intellectual property, and to learn. And to either apply it to themselves or to throw it out and say, ‘This doesn’t apply to me,’ in a way that is independent of me actually giving that advice.”
So what I’ve done over the last year is I’ve created a new company. It’s called FourPointe Consulting Partners. I don’t have a website set up. It’s not actually launched yet. I’m hoping to launch it soon. And that is just an interactive training platform where any advisor can go on there and just listen to a video of what I’m teaching. And I teach a lot of different things. I teach trust. I teach compensation models. I teach what I’ve learned about the sales process. I’ve taught all of these things, because in the last 17 years I have just been on a search for learning what this industry is about and learning about myself.
And when I look at my success I want to continue to write, hopefully write a book, continue to consult. And my new adventure is then launch the training platform. And what I love about the training platform is that it will be the first, hopefully the first if someone doesn’t beat me to it. I’ve got to get on it. Now I got to do it because I just told everyone what I’ve been doing for the last year.
Michael: You’ve got a little time in between our pre-recording and when the podcast goes live here, so go to it. Finish building it.
Angie: Get it done. The one thing that has always bugged me about consulting advice is that, you know, there’s a lot of consulting advice out there in the industry. And I think that advice is good. It comes from the custodians and it comes from all of those things. But what has really bothered me is that that advice is not independent and objective. And it bothers me that financial advisors take business advice from those institutions and those structures. I mean, I think it’s good that they’re learning and that they are providing it. I don’t want to say practice management advice in general in any other institution is bad. I think it’s actually inherently good, but it’s not objective.
And so if you truly want to be independent, objective, then you need to take advice on your business that is independent and objective. And then lastly, you have got to take advice on your own money that is independent and objective, and we’ve got to help each other do it. Other advisors have to help other advisors. Other institutions have to help us independent consulting institutions, and we have to all partner together so that we can get to what my ultimate dream would be, which is to have an industry where all people have the opportunity to gain perspective, and that’s perspective on their money.
Michael: Well, amen. I think that’s a fantastic place to wind up. We will make sure we, again, reference out some of these things in the show notes. So kitces.com/18 for those of you who are listening. You can rest assured I will kindly be pestering Angie in between when we’ve recorded this and when all of you are hearing it that hopefully by the time it’s live she will have created some of her 4 Point website and materials that you can go and check that out there. And we’ll have her one pager of the growth barriers as well, so some follow-up materials for all of you as well. But thank you, Angie, so much for joining us and sharing your story and sharing your perspective here on the Financial Advisor Success Podcast.
Angie: Well, thank you, Michael. Michael, I have one thing to say to you before we go. You know, you and I kind of started in the industry together and I’ve been listening to your podcasts for a while now. And the only thing that I can think is there should be someone who should turn his own podcast on him. So I think one of your soon podcasts should be me interviewing you.
Michael: Ah, well, we are looking at turning the tables at some point here in a couple more episodes and having someone interview me.
Michael: Funny thing, there have actually been a number of people who’ve been volunteering for it lately. No pressure, okay.
Angie: You’ll pick the best person. It doesn’t have to be me. I just think that someone needs to turn it on you. You have a genuinely…I know much of your story, but you have a genuinely good story to share. And I think it would be great for your listeners to hear it.
Michael: Well, thank you. We’ll try to queue that up here in a couple more episodes, so stay tuned, everyone. You can get the Michael Kitces story as well.
Michael: All right, well, thank you again, Angie.
Angie: You’re welcome. Hey, Michael, take care.
Michael: Thank you, you too.