Welcome, everyone! Welcome to the 49th episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Anna Sergunina. Anna is the owner of MainStreet Financial Planning, an hourly-based financial planning firm founded under the Garrett Planning Network that has grown to more than $600,000 of revenue, all from simply getting paid to provide hourly financial planning advice (with no income from insurance products or managing investment portfolios at all).
What’s fascinating about Anna’s business, though, is the way that she’s figured out how to communicate the value of hourly financial planning – by creating very specific financial advice packages for various types of prospective client profiles – and then using her website to both explain the value of financial planning packages to prospects, and to screen out those who aren’t really likely to take the process seriously.
In this episode, we talk in depth about Anna’s 5-meeting process for financial planning, why she charges $100 as an upfront deposit just to have an Initial Inquiry approach meeting with prospects, the way she focuses first on the client’s spending to help them understand what they can save and what kinds of goals might be possible, and then proceeds to an interactive financial planning session using MoneyGuidePro, all of which leads up to a final meeting where she ultimately presents financial planning recommendations and then helps clients to implement them.
We also talk about how Anna sets the level for her financial planning fees, the sources of new business that has her firm on track to add more than 100 new financial planning clients this year, the way she re-engages existing clients for ongoing financial planning updates to generate a level of recurring revenue, and why and how she built extensive workflows in her Wealthbox CRM to manage the financial planning logistics with her ever-growing 6-person team.
And be certain to listen to the end, where Anna shares her own path into the industry, how she actually bought out MainStreet Financial Planning from its original founder, the way she’s decided to structure her week with some days dedicated to working in the business and others solely for working on the business, and why she thinks it’s so crucial that even fiduciary financial planners learn how to sell. Because you can’t get paid for your knowledge and expertise until you can sell someone on its value and why they should pay you.
So whether you have been trying to figure out how to better communicate your financial planning services, have been contemplating providing hourly services and wanting to know how to do it successfully, or are interested in more effectively using CRM to manage workflows, I hope you enjoy this episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- Why marketing and selling are crucial skills for hourly financial planning fiduciaries. [7:01]
- The benefits of having fees listed on your website. [18:46]
- Why MainStreet Financial Planning has six offices across the country. [30:24]
- Why MainStreet offers their services as packages and how they are priced. [33:25]
- The percentage of MainStreet Financial Planning clients who move into an ongoing relationship after the first year. [40:17]
- What Anna wishes MainStreet would have understood about workflows sooner. [1:06:07]
- Why MainStreet Financial Planning refers the investment management work out after doing all the work to qualify and set things up in the first place. [1:19:44]
- How Anna defines success. [1:36:41]
Resources Featured In This Episode:
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Full Transcript: Getting Paid For (Hourly) Financial Planning By Packaging Financial Advice with Anna Sergunina
Michael: Welcome, everyone. Welcome to the 49th episode of the Financial Advisor Success podcast. My guest on today’s podcast is Anna Sergunina. Anna is the owner of MainStreet Financial Planning, an hourly-based financial planning firm under the Garrett Planning Network that has grown to more than $600,000 of revenue, all from simply getting paid to provide hourly financial planning advice with no income at all from insurance products or managing investment portfolios.
What’s fascinating about Anna’s business is the way that she’s figured out how to communicate the value of hourly financial planning, by creating very specific financial advice packages for various types of prospective client profiles, and then using her website to both explain the value of those financial planning packages to prospects, and to screen out those who aren’t really likely to take the process seriously.
In this episode, we talk in depth about Anna’s five-meeting process for financial planning, why she charges $100 as an upfront deposit just to have an initial inquiry approach meeting with prospects, the way she focuses first on the clients’ spending to help them understand what they can save and what kinds of goals might even be possible, and then proceeds to an interactive financial planning session using MoneyGuidePro, all of which leads up to a final meeting where she ultimately presents financial planning recommendations and then helps clients to implement them.
We also talk about how Anna sets the level for her financial planning fees, the sources of new business that has her firm on track to add more than 100 new hourly financial planning clients this year, the way she reengages existing clients for ongoing financial planning updates to generate a level of recurring revenue, and why and how she built extensive workflows in her Wealthbox CRM to manage the financial planning logistics with her ever-growing six-person team.
And be certain to listen to the end, where Anna shares her own path into the industry. How she actually bought out MainStreet Financial Planning from its original founder, the way she’s decided to structure her week with some days dedicated to working in the business and others solely working on the business, and why she thinks it’s so crucial that even fiduciary financial planners learn how to sell, because you can’t get paid for your knowledge and expertise until you can sell someone on its value and why they should pay you. And so, with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with Anna Sergunina.
Welcome, Anna Sergunina to the Financial Advisor Success podcast.
Anna: Hi, Michael. Great to be here.
Michael: I’m excited to have you on the show today. You come to us from I think a little bit of a different perspective than a lot of other advisors we’ve had on the podcast because you kind of grew your business and career in the world of hourly financial planning and the Garrett Planning Network. And certainly, it’s a little bit of a different model than the majority of advisors by numbers that are, you know, either in a broker-dealer-based world where they’re compensated through product implementation or the other side of the RIA community that’s primarily assets or management-based fees. But you’ve I think pretty much done the better part of your career now in hourly financial planning and built what, to my knowledge is one of the larger hourly financial planning practices in the country at this point, with lots of clients and lots of team members. And so I’m excited to share the story of what you guys are doing there in hourly financial planning.
Anna: Yes, I’m excited as well. Lots of offices too, to add to…
Michael: Lots of offices and lots of locations. So let’s maybe just start right there. Can you just tell us a little bit about MainStreet Financial Planning, about your advisory firm and maybe paint us a little bit of a picture of what this advisory business looks like?
Anna: Right, I sure can. So we started…Jim Ludwick founded MainStreet Financial Planning in 2002, and his idea was…Garrett Planning Network was fairly new at the time, and he loved the idea of servicing, you know, clients, in the format where financial planning was available to the majority of people. You don’t have to go out and gather assets and really work on the real kind of money-related questions. And so the idea of having a practice like that really excited him, and so he started the firm in 2002 in the Maryland area, Odenton, Maryland.
So from the very beginning, we were focused around the fee-only planning. It’s either hourly or project-based. So we’ll use an hourly rate to figure out how many hours it will take us to deliver, you know, a plan, either it’s a full comprehensive plan or it’s maybe a shorter kind of a one or two questions project. And that has been the core for how we do things up until today. We structured it a little bit differently as to what we offer now in terms of having packages and things like that, but it’s still the very basis of what we do. We do not have a platform to manage assets, we never have, and I don’t believe we’re planning to do that. So something like that always gets outsourced to other advisors, because that’s what they do best, so we stay focused on planning. But we do offer obviously investment advice and rebalancing services, but not in terms of actually proactively managing the accounts for our clients.
And so we started in Maryland, Odenton, and we still have an office in that town, but because of the de minimis rule, and if you have more than five clients in any state you kind of have to register. And actually, I think Texas is, right, more than one client you have to register.
Michael: Yeah, first time you’ve got one, you’ve got to do your notice filing in Texas.
Anna: Hey, you know what? I have a client in Texas, so we actually have to do it this year. And it was funny because it was a referral from a client in Maryland, and I was like, “Oh my gosh, I just hope that somehow we don’t have to do that.” But anyway, it was not a big deal.
So going back to 2002, that’s when Jim started the firm. By 2006 is when I showed up around the block because I was looking for…just kind of how my career led me to just learning about financial planning. I found NAPFA Network and then I found Garrett, and then I just kind of started looking around in my area where I was living who was all involved in these networks and where are the firms that were practicing, you know, this fee-only kind of planning, because I really loved the idea. I did not want to be a salesperson, as I’m sure a lot of advisors dread that. But that’s one of the actually I think mistakes that I’ve made. I should have gotten into a sales job. But live and learn.
Why Sales Is Important For All Fiduciary Advisors [7:01]
Michael: You should have. All right, I’ve got to pause there. So why would you say that, right? I think particularly for a lot of the advice world, we’ve almost gone to, like, the other end of the extreme, sales is a bad word, right? Like, salespeople sell things, I’m here to give advice and get paid for my knowledge and wisdom.
Anna: Yeah, I believe that. I really do. Because I wanted to do financial planning, right? I didn’t realize that the sale piece, right, as much as this word…actually, I’m kind of 360 degrees about this concept today. But then I thought, “Well, I don’t want to…” Because the idea of selling to me was, my last year in college, I had internship at Smith Barney, right? And I saw the dynamic and what was…like how you had to make phone calls, right? Cold calls. I did not want to do that, right? I was not interested in investments per se, I was not interested in making cold calls, I just wanted to, like, really work with people, but I didn’t connect the dots in terms of how I was going to get to them, right? I knew I didn’t want to do like the cold calling piece.
And so I was like, “Well, I’m going to do financial planning. I’m going to be fee-only. I’m not selling you products.” So all of that sounded really nice and, like, perfect business model, perfect company to work for. And that’s kind of how I, like, “All right, I’m not going to do that.” But once I got to a point in my career where I started seeing clients, right, I started to get into the place where I had to get clients in front of…not just clients but, you know, centers of influence and people who can refer business, all of that kind of shifted to me and it’s like, “Okay, I now have to be more in the sales role.” And there was more realization that I had to sell myself, not a product, right? Which is in this essence as the financial planning we do, but it’s that relationship. And so I actually, you know, like I said, 360 degrees, and I love the idea of being in front of people these days. And I do a lot of it on my day-to-day basis.
Michael: It’s definitely one of the gaps that I’m seeing come up more and more in our advisor space, this whole phenomenon that even if you’ve taken a path to be in the, call, like, the advice business and not the product sales business, that you still ultimately have to sell. You said it. Like, you have to sell yourself. You have to sell the value of your advice and why someone should pay you for all this awesome advice that you say you have, but you’ve still got to convince someone to part with their hard-earned dollars to pay you for that advice.
And I think even in some ways it’s maybe more challenging to sell our advice, because at least if I sell a product, like, I can point to the product, there’s various features and benefits. People with lots of resources have made pretty marketing materials that show exactly what this product is and how it works, and the great things about it, hopefully, all of which are true and accurate, but, like, they’re packaged up for me, I just have to learn the sales pitch for the thing that someone can teach me.
And when you’re selling your advice and you’re selling yourself, you kind of have to figure it out more for yourself, of how do you convey the value of what you do when it’s almost literally all in your head? Just like, “I’ve got knowledge up here in my brain, I’m going to lay some knowledge on you, you should pay me for that.” And figuring out how to make that a sale is challenging, even though the reality is if you…you know, it doesn’t matter how much you know if you can’t convince anyone to pay you to give that knowledge to them.
Anna: Right. And, you know, I think for me, all of that started to come together as I became more confident in my knowledge, in my experience, and then once that kind of crossed over then I was more in front…you know, I wanted to be more in front of people because, you know, I knew that I could deliver service, it was just a matter of, “How can I explain to you what I do as a financial planner, and why you should work with me.” So it was a bit of a transition, for sure. And I know that others are going through that as well. And sometimes you don’t even come to that point. Like, there are a lot of advisors who don’t want to do sales. They just really want to be doing the advising piece, which is great, right? Because when we go and study for the CFP certifications, there’s no sales classes. They’re not teaching us how to do that. And, yeah, I wish they would. I actually really do.
Michael: You wish they would teach sales and business development in financial planning classes or programs. Yeah.
Anna: Yes, yes, I would. Right, right. Because when you come out of with the CFP certification, whether you work for a company or you start your own business that is going to happen. One way or the other you’re going to have to face it. Whether it’s, you know, 50% of your time spent on that or, you know, 25% because you’re doing the servicing piece, so.
Michael: So how did you end out filling the void? Was it just like school of hard knocks? You tried to convince people enough times with perseverance that eventually you figured out some things that work and stuck with them and now that’s the routine of what you do?
Anna: Pretty much. I think it was just evolving. So when I started with Jim in 2006, I didn’t quite have my CFP yet. I was working on completing the classes and I needed industry experience, so I started really at the bottom. I said, “I’ll take any job you want me to do, and I’ll just be an admin person, a paraplanner. You know, I’ll just grow myself into that position where I will be comfortable, you know, and facing clients.”
Once I sort of crossed over that and then, you know, something else happened that I actually relocated across the country, that put me in the position where, you know, I had no clients, I knew nobody, so I needed to force myself to go out and convince, you know, clients, convince centers of influence that what we had to offer was something unique and that’s, you know, why they needed to work with us. So it was circumstances, but it was I think also the progression of my career as I grew from admin person to paraplanner, to being an advisor, and then more of, you know, becoming a lead advisor and where I had to generate business, and to a business owner, where it’s like, “Yes, you’ve got to do sales because the business will not run.”
Anna: It’s not going to work.
Michael: But it is a striking difference to me, though, that if you go back a little bit further in the industry, like you get anybody who’s been in for certainly 20-plus years, either you were a salesperson that had the ability naturally or learned it almost immediately or you didn’t survive. Like, there were no other jobs besides financial advisor that got paid to sell and implement products, and so you were a salesperson or bust. And then later, if you were a good salesperson, the firm would allow you to go back to school and get your CFP marks and learn more.
And now we come at it from the exact opposite direction, which is more and more advisors come in and they want to just do the advising and do the planning work, and work in a planning firm. And they do that for a period of time, you can get paid reasonably for that, and that’s great, but then if you want to move up in your career ladder at some point, you have to take responsibility for clients, then you have to be able to get new clients, then maybe even you have to be able to manage a business and run advisory teams if you want to continue to grow your trajectory. And there’s all these sales and business development skills that become necessary for you to move up, but the difference is in the past, you needed them in year one or you didn’t make it past year one. Now, they don’t really even start showing up as real needs until you’re five years or seven years-plus into the business and you move through those administrative, paraplanner or associate planner kinds of support roles, and you start moving to a lead position where, like, suddenly you go, “Wow, I came into this to do the planning and not sales.” And then you have this realization like, “Oh, I’m not going to move up from here unless I actually learn sales and business development.”
Anna: Right, right, exactly. Yeah, that’s why I think I should have started at the other entrance and probably would have been…I think what that would have done for me is just it would have sped things up a little bit more in terms of, you know, getting clients faster, becoming more confident in, you know, in terms of facing. I knew how to do financial planning, I knew my…you know, I was a certified financial planner, but that was something I was lacking. I did take sales training separately because I wanted to learn, and I still do, you know, up until today. It’s really never over. It’s just still continuing education just like everything else we have to do to maintain our designation.
Michael: So going back to the practice for a moment, you said you’re all fee-only planning. It’s either hourly or project-based, right? Because project-based is simply like, “We estimate the number of hours, but we give you a hard quote,” So it’s a closed project as opposed to just an open-ended hourly fee, no one knows what they’re going to pay in total. So you’ve got this hourly or project-based structure, it started with Jim Ludwick in 2002, you added into the firm in 2006, and you’ve continued straight through to today still only doing the hourly and project-based financial planning work.
Anna: That’s correct. So what changed a little bit in the last…since 2014 is that, so when we started quoting the fees for the projects, it was, okay, so a client comes in, you know, we have a discussion with them, kind of get a sense of how much time we need to spend answering their questions, and then we would propose them a quote, right? And that’s what you were just describing. That’s somewhat uncertain, right? And everybody was a bit leery, saying, “Well, how much is this going to cost me? Is this going to be on a higher end of your fees?” And we would always tell them what the fee range was because you want to set some kind of expectations, right, so that they’re not totally shocked when they come in here. So we’ve had that from day one. You give them a range, right?
And then we’ve decided that instead of doing that, why don’t we look at the types of clients we were working with, figure out how much time, you know, we were spending on servicing those clients, like what did it actually take in terms of hours to deliver the service? And then we took the averages and created…we have three different packages right now that we offer. They’re same service, it’s just it’s now we have a product, right? So we’ve kind of shifted it a little bit. When they come to find us online and they go to our website, they get to see what the product is, the full comprehensive plan, right? And so they actually see the price first. So when they show up here in our offices, it’s not about how many hours are we going to quote them, right? It’s about what are we going to do for them? How are we going to do for them? And it’s really getting to know them much, much better.
So that actually eliminated a lot of questions that people had initially in their mind, “How long is this hourly thing going to take? How many hours? Is the clock ticking all the time?” So it really kind of shifted the approach to how the prospects viewed our business model. But sometimes these standard packages that we have may be not enough to address their questions, so we could always add more hours based on our hourly rate.
Why It Is Important To List Fees On Your Website [18:46]
Michael: So I’m struck by this. So I feel like…I mean, when I look at the advisor landscape overall, putting fees on an advisor’s website is, to say the least, not a common thing to do. I still don’t see a lot of advisory firms that put the details of their fee structure on their website, particularly when they’re kind of hard dollar fees like what you do. I mean, at least AUM fee schedules are sometimes up on websites, although anecdotally I find when I look around advisor websites, like, it is less than half that even have some kind of fee schedule up on their website, and even fewer that have kind of detailed price quotes the way that you do.
And for most of us, and I know it basically comes down to, “I’m afraid that they’re going to look at the fees and move on, and I’ll never have a chance to, you know, explain our value. Like, I’m afraid they’re just going to misunderstand my fees and think they’re too high and I move on.” So does that not worry you or is that not a concern that, you know, putting these things on your website, of like, “It’ll cost $1,000 or $2,000 or whatever the number is to engage us in financial planning,” we’ll just give people a sticker shock and make them not call?
Anna: No, it does not worry me at all. Actually, I was just thinking about a quote, I think it’s by Warren Buffett, but, “The price is what you pay, and the value is what you get.” And this comes from the sales training that I’ve done over the years. It’s just realizing is that people will pay you any kind of price as long as they can see the value in what you’re delivering. So our job is to show them that value through just very simple things like our website, right? Through the conversation we’re going to have with them when they contact us initially. In the first meeting when they show up in the office or online.
So all of that is part of kind of okay, yes, they see the price. And if they’re coming to us, to our website or looking for the cheapest financial planner then we tell them right away, “We’re not your cheapest financial planner. You’re not going to get the cheap financial plan here? And what does that even mean?” So there’s a little bit of education component there but never was worried about somebody being sticker-shocked by our fees and not having to do business with us. And that’s probably a prospect that you don’t want to do business with because they’re going to be, you know, watching the fees and not really seeing the service, seeing the value that you’re going to provide to them as an advisor.
Michael: Right, I guess it’s an interesting way to look at it from the other end. The virtue of having your fees on your website is all of your fee-sensitive clients screen themselves out. You don’t even have to waste the time of a phone call with them.
Anna: Pretty much. And one other interesting thing that we do, still do today, we’ve done it for years, is that we do not meet with anybody in person or online for initial meeting unless they pay $100 deposit, and then they complete a questionnaire. And I know that there’s a lot of conversations about, you know, clients or prospects.
Michael: So not only do they have to give you like a data-gathering kind of form up front, they actually have to pay you $100 fee, like, just to do the initial consultation? You don’t do the like, “I’ll do an initial consultation for free to figure out if we’re a good fit and then move on?” Like, they have to pay 100 bucks even for that meeting?
Anna: They have to pay $100 deposit when we meet with them. When they’ve finally completed a questionnaire and we meet with them in person. Initially what we do is we have phone calls. So we would take a 15-minute phone call and have a discussion with them. Explain to them the process, explain to them what we’re going to do, just, you know, in the shorter condensed version. And then if they’re feeling that they’re ready to dive deeper, then those are the steps. Yes. And that does also eliminate some people who say, “Well, I don’t want to pay $100.” No problem. Then we cannot have a meeting with you.
Michael: So if they pay the $100 and then they actually move on and work with you, I guess the… like, it’s literally just a deposit against their fee. So if they paid $100 dollars to do an initial consultation with you and then decide they don’t want to work with you, like, do you then refund the deposit, or is that like, “No, no, that’s a non-refundable deposit just to get the initial call with us?”
Anna: Correct, it’s a non-refundable deposit if they decide not to work with us. And they all know about that right up front. It’s also on our website.
Michael: Interesting, interesting. Like, I feel like that’s a big leap away from where most advisors are. To literally say like, “I won’t even do an initial consultation with you unless you pay $100 for that first meeting.”
Anna: You can look at it that way. And since I’m in charge of doing all of the prospect calls, so even just an initial 15-minute conversation or however long it takes, there’s…I mean, you know, you still end up maybe giving a little bit of advice to them, or, you know, that’s…so it’s not like you’re completely saying, “Okay, well, if you don’t pay $100, you know, no deal.” Not really. A lot of the times I explain it to prospects, it’s like, “Think about this, when you go to the doctor’s office, right, you have to pay some kind of copay. That’s how you should think about it.” And frankly, probably, if we think about it, maybe 1 in 10 prospects would ever even question that and say, “Oh, yeah, I’m going to go talk to advisors who don’t charge anything, and then I’ll call you back.” “Oh, that’s no problem, you can do that later.” So it’s not a big deal. And we’ve done it for years.
It helps to eliminate people who are not serious. And sometimes maybe, you know, initially those who don’t go through after the initial meeting, maybe perhaps that was not a match, you know, for whatever reason, but at least, you know, they’ve got to see our process and then they, you know…I feel like we’ve done all we can at that point to show them the value. And I’m circling back to that point because that’s what we want to do so that they can make a smart decision whether they want to work with us and our process.
Michael: So the next natural question this leads to me is how on earth are you finding people that show up on your website and are willing to pay a $100 for the privilege of finding out if you might be a good fit for them? Since that’s…we’re not even at the engagement point yet, we’re just at the like, “Let’s figure out if this is a match.” So, like, what is the marketing process for getting people to show up and being willing to pay $100 upfront meeting fee?
Anna: So our marketing process is fairly simple. We get a lot of our referrals through networks like NAPFA, Garrett Planning Network, XY, and then the referrals from other centers of influence, clients themselves. So it’s sort of a natural…we don’t pay for advertisement anywhere, there’s none of that. It’s really organic growth. I think the prospects who are finding us, you know, they have specific needs and questions and problems they want help with, and so when they come to us or somebody sends them our way, you know, they see what we have to offer, so it’s just a matter of taking them through the process.
Because most people don’t understand what we do, right? They just get to us. They know they need to talk to a financial planner, they know they need to talk to somebody who’s fee-only, and that’s it. And then they get to you and it’s like, “Okay, well, I’ve got all of this going on.” So you have to take them through a process and explain to them, “Here’s how we do it. Here’s how we’re going to address your questions. This is how it works.” So it’s kind of like step by step conversion and conversation with them so that when you come to a point where you say, “Well, the next step is for us to do this, right, to schedule a meeting and this is how it works,” it’s not a question in their mind because now you’ve painted a picture, right?
And so, you know, in terms of marketing, I mean, we have a blog, just like any other financial planning website. We do our shows, so, you know, they can look around, they can google our name, they can see that we’re active, they see that there’s presence. So I think that also leads them to want to have a discussion and want to have a conversation with us. But that’s really it in terms of marketing. And I think also because we do hear from a lot of prospects about, you know, the fact that we’re pretty clear about what our process is, what fees are, right? Because they can see that on our website. So those who see that the fees aren’t fitting their budget, they’re going to select themselves out. So we don’t even have to talk to them. So that also helps kind of lead them through the process in our pipeline.
Michael: So referrals that come in from the association and network groups. NAPFA, Garrett Planning Network, XY Planning Network, and then referrals from COI. So who are centers of influence referrers for a firm like yours? Really, where do those referrals typically come from? Is that the, like, the traditional attorneys and accountants that a lot of advisors go to or are your COIs a little bit different?
Anna: Combination, so yes, the CPAs, accountants, estate planning attorneys. What’s interesting with us is that other advisors are also a big part of that referral bucket. Because of our business model being so unique in terms of us not managing assets and doing this project work, we frequently get clients from advisors that, for example may have a minimum assets that they want to manage and this client does not fit into that category and they’ll say, “Well, go talk to Jim and Anna at MainStreet because they can help you, you know, with your questions as you don’t have half a million dollars for me to manage that.” So it’s been big, big, big source of referrals for us because of that.
Michael: So can you, like, give any sense as to the breakdown if I look at all the clients that you got over the past year? Like, what portion come from network referrals, what portion comes from other advisors, what portion comes from other COIs? Like, I’m just imagining if you’re an advisor that wants to do more of this business model, what should I expect drives the bulk of my new client opportunities and growth if I’m trying to get started?
Anna: Right. So referrals are about 30% of all the leads that we get.
Michael: That’s referrals from other advisors or referrals from clients themselves who…
Anna: It’s a combination. I don’t have it broken down more than that. But our clients, the centers of influence, I’ll call those referrals. Then we have the associations. So that’s about another 30% of the business. And then the rest is we classify it as through our website, okay? I’m sure we could probably expand a little bit more, but I don’t have the data at the moment. Because sometimes they find us on the association sites, right, and then they come to our website, and that’s how we know. Because it’s also it’s not that we can’t track them. Sometimes they don’t specifically tell us where they came from. “Well, I just found you on your website.” But even in our initial intake form, we specifically ask them, “How did you find us?” Like, they have to answer that field or otherwise they won’t be able to complete the form. But that’s the breakdown.
Why MainStreet Has Six Offices [30:24]
Michael: Interesting. And so, I mean, to have almost a third of your business just coming straight through the website, and I granted a few were probably, they found you on NAPFA and clicked through and then engaged you through your website from NAPFA, but I can’t imagine it’s all of it. So, like, where is…I mean, do you have any sense as to how the rest find you or is this like, social media efforts and stuff that you’re doing like that or just someone’s typing, I don’t know, “hourly financial planner” into Google and you’re actually coming up as the results that they’re getting?
Anna: Yeah, I can’t speak to that, but I think it’s more of if they type “an hourly financial planner” or “a financial planner,” it probably brings them to the NAPFA, Garrett, or XY websites, and from there they kind of navigate into. This kind of speaks, Michael, to why we have the locations or why we have six offices across the country because people still look for somebody in their backyard, okay? They want somebody who is close by that they can drive to. And so the associations, at least NAPFA, allows for a local planner search, okay? And so that helps kind of narrow down, “Okay, so who is in my backyard, right? I’m going to go talk to these three or four local firms.” So I see a lot of that still being true today, right? That’s how we sort of started initially, right, when Jim launched the company. But now this whole aspect of online work, it’s funny how they still find you locally, they know you’re here and there in their town, but they would be very willing to do work online with you. It’s like this combination, sometimes it’s just I can’t put it together in the head, so.
Michael: Interesting. And so what does this add up to for you guys? Like, how many new clients do you typically take in a year? And I guess just overall now, like, how many clients are part of the advisory firm?
Anna: Right, so this year we’re on track to actually…last year, 2016, we had 100 new clients, 97 new clients meeting. Those who came initially to us and for those who we did initial plan.
Michael: How many?
Michael: Ninety-eight new clients. That is a lot of new clients.
Anna: It is a lot of new clients.
Michael: Ninety-eight new clients, of which, I guess, from those numbers, like, about a third of them were NAPFA, Garrett, XY Planning Network website referrals, about a third were center of influence advisor referrals, then about a third came from the website.
Anna: Yes, and we’ve been tracking that data for, you know, a few years now. Specifically, the percentages breakdown is pretty steady. So yes, correct.
Anna: This year, we’re actually on track to get to 120 clients, so quite a bit more than last year. And this is new clients, ones that come for the first time, never done financial planning before, and then they go through our initial one-year work of services.
How MainStreet Packages Their Services [33:25]
Michael: And so, what’s the range of scope for them? So some might just be coming to buy an hour or two of your time and that’s the whole engagement, others may be doing a full comprehensive financial plan and a more in-depth project? Like, how do you break down the combination of the two?
Anna: It’s probably 90% of the full comprehensive plan work, and the rest are either smaller projects. Like, we have what we call a Quick Start session. It’s just, like, a 90-minute kind of a discussion conversation or some of it might be hourly. So it’s mostly comprehensive planning work. It’s those packages I was describing that when they come in they get a full service for one year.
Michael: And where do you typically price those full packages? I mean, I know there’s …I’m sure there’s some range just depending on the scope, but, like, where does that typically break it down?
Anna: It starts at $3,000 and all the way to $4,200.
Michael: Okay. So $3,000 to $4,200, if they’re going to do a full project plan, and then if they do hourly, like, you just quote them a straight hourly rate?
Anna: Correct, right. And the fee range is really…it’s not even a fee range because each specific package has a fee, it just depends on where they are in their life phase. Like for example, a single person coming in just kind of starting out would be more on the $3,000 package, our retirees or pre-retirees would be more on a $4,200 package, and then like our family plans are somewhere in the middle, which are like $3,600. So it just depends on where they are, not so much on the range. They don’t get a range. When they come into our website, they see the specific numbers.
Michael: Okay. And that’s part of your focus, is not giving them a range, just saying, “Here’s the number.”
Anna: Correct, right. And we explain to them in the meetings that, “Okay, well…” And that’s why we have initial meeting, is to understand do they kind of fit our box, right? Do they fit our package? And they like that too, right? Because then they kind of identify themselves “Oh, right, we just got married and we’re about to have, you know, a child, we need to do all these things.” And they see this package, “Oh, this is for me,” right? I mean, think about your own buying patterns, right, buying behavior, when you look for a product or something, you want to see how you fit in. So it really does help with, in terms of them understanding like, okay, where do they stand, and, you know, where would be the best choice for them?
Michael: And so, I mean, I’m just kind of doing, like, the rough math here. So, you know, $3,000 to $4,000 a client, 100-plus new clients granted maybe a few are hourly work as well that are a little bit lower, but, like, this is hundreds of thousands of dollars of new client financial planning fees every year.
Anna: That’s correct.
Michael: It’s a big number. And then what about after the first year, right? It’s like at almost 100 clients a year, you know, you’ve got a huge planning revenue just for the clients this year, then you’ve got, you know, the 98 you did last year, and, you know, the 90 or 100 the prior year, and the prior year and so forth. So do you do ongoing planning work for the existing clients as well or is it pretty much every new year is a fresh start for finding the next 100 clients that are going to pay planning fees?
Anna: Right. So it’s both. There’s definitely every new year where we start from scratch, of finding the new clients, or I would say more or less they find us, and then those who had done the work with us before have options into converting for second year clients and then so forth in terms of doing more planning and kind of ongoing, we call it Annual Review programs. So there are options for them to work with us past just one year.
Michael: And how do you price that for them? I guess, how do you price that and how do you offer it to them? Like, they get to the end of the planning process, “Hey, if you want to come back,” or just do you call them the next year and say, “Hey, we can do a renewal of your plan. Here’s the cost, do you want to come in?” Like, how does that get positioned and done?
Anna: Right. So we’re changing it a little bit going forward in 2018, but traditionally, it’s been at the year one of when their engagement is ending, we’re having a check-up session with them and that’s when we start a conversation about, “Okay, here’s what we’ve done so far for the year, this is how it has been, here’s what we can offer going forward.” And so it’s usually a one-year agreement that they renew with us. So we’ll have to do that continually every year, right? And the prices or the fee range is…and it’s a range because it’s two different services. If they want to meet with us twice a year versus maybe quarterly, some clients need that kind of help. So it’s $1,800 for Annual Review or twice a year kind of engagement. And it’s not just meetings twice a year, there’s a lot more, but to differentiate the two. And then our more involved, we call it Continuous Service. That’s $3,200 a year.
Michael: Okay. And, like, can you talk a little bit more about what the difference is? I mean, I get like Annual Review will meet with you once or twice a year, Continuous Service certainly implies something more there, but, like, what is the difference between the two that you explain to someone of like, “Where’s my extra $1,400?” Because I’m going to go, “Is it just the difference between quarterly meetings and once or twice a year or is there other stuff to it?”
Anna: Right, there’s that. So there’s just meeting with them more often. They have, you know, more of a direct access to, like they can call my cell phone if I’m their advisor, they can my cell phone pretty much any time if there’s questions. For the more involved service, we would take a look at their portfolio more often. So if it’s, you know, maybe three times a year versus doing it twice a year for Annual Review clients, part of the Continuous Service we would also offer them if they had family members that needed some assistance, we would offer, you know, some of that. Obviously not a full comprehensive plan, but, you know, something to that extent. And that’s about it.
So the rest is just a normal kind of updating the plan, reviewing the goals, looking at their spending. So all of that is covered in both plans. It’s just the one that’s more meetings and just more access to the advisor. Kind of be available, like, it’s almost like on-call. So you have to be available pretty much all the time. And it’s really not that bad in terms of clients. I don’t have my phone going off the hook. It’s really not that. But in terms of when the client…you know, when there is an issue and the client wants to get a hold of you, then yeah.
The Percentage Of Upfront Annual Clients Who Become Ongoing Clients [40:17]
Michael: So do you have a sense as to how many of your, you know, upfront annual clients that you get started with each year move into an ongoing renewal plan basis? So is it like half of them or a quarter of them, or how many actually move from that upfront to an ongoing relationship?
Anna: It’s about 25%. But it’s hard to track this data because one year, like…because you’re thinking about it this way probably. Okay, well, so we’ve got 100 clients, 25 of them will sign up for an Annual Review program next year. And that’s very true they will, but it doesn’t always mean that they will sign up for it year two or year three. So it’s kind of…you know, in terms of we know how many convert, but then sometimes you may lose them. Sometimes what happens is that after year one they say, “Okay we’re good for now. We’re going to come see you maybe in year three.” And so we have a lot of those too.
Michael: Okay, so like, the every other year approach for connecting with you.
Anna: Exactly, exactly. But we do have a base of about 150 clients that are every year in the combination of these services, either a Continuous Service or Annual Review, where they do come in, they’re consistent, and they…you know, the clients may change again, they may just do it for some time and then they switch, or they don’t come back that year, but it’s about consistent…you know, consistent recurring clients is about 150 of them.
Michael: So I’m just trying to peg some numbers here that, you know, like 100-plus new clients at fees that start at $3,000 is like $300,000-plus of revenue. You’ve got 150 or more ongoing clients with review fees from $1,800 to $3,200, which is another $300,000-plus of revenue. It’s like between all of these, is that accurate that you’re doing $600,000 or $700,000 of financial planning fees through the year? Is that what it adds up to?
Anna: That is about right.
Michael: Oh, it’s a monstrous number for planning fees, right? I feel like in a world where there’s still a lot of discussion of, “Yeah, but you can’t really make that much money as an hourly planner,” like, it’s a big number when there is $600,000 or $700,000 of…like, I was going to say hourly fees, but I guess, in practice, like, it’s time-based fees. But you’re not actually often doing, “Hey, it’s just X hundred dollars an hour and we’ll bill you for our time.” You found it’s mostly project scope just so people know what they’re paying and getting into?
Anna: Exactly, exactly.
Michael: And do you ever worry from the other ends that like, you quote a $3,000 planning fee and then you get into the planning work and it turns out to take way more time than you’d expect it because all this stuff comes up after you’ve gotten into it with the client and you’re now pigeon-holed into a $3,000 fee? Like, does that not happen to you or is that like an overblown concern, or it happens and you just absorb it, or how do you handle those situations?
Anna: It has happened. Not as often. I guess because we’ve been doing it for a while in terms of estimating the fees, right, when the client sits in front of you. And that’s kind of what we’ve done for the first 12 years of the business, right? We would sit with them, we would talk to them, and then it’s like, “Well, it takes us 10 hours to do your plan,” right? So you kind of…as an advisor, you start getting a sense of, you know, if they talk slow that perhaps they’re going to take longer, if there’s complexity to their plan.
But I think, Michael, also what helps is we have a very rigid process that we go through in terms of how we deliver the plan. So in my mind, when I’m thinking about that, if they don’t fit quite a bit into that process, then I start to think, “Okay, well, maybe somewhere I need to factor in more time.” So sometimes, yeah, sometimes you can underestimate and not realize that they’re going to throw something at you in the course of the engagement. We tell them upfront that this is…you know, in case that something does come up, then we’re going to discuss with them beforehand, before we do the work, that if there’s more time needed, then we’re going to bill them for that. But it’s not that I will do the work, and then turn around and give them an invoice for more than what we discussed. So it’s very rare.
Sometimes if like you spend half an hour more, and it’s not that we’re even tracking our time that much. If they get into a comprehensive plan, it’s just going through the meetings, going through the process. But sometimes it’s more and sometimes it’s like, “Wow, okay, this was a pretty simple plan, but because we had an agreement, and not that we did not deliver the value, don’t feel bad about it.” So yeah, you kind of just work around it.
Michael: Can you take us through then a little bit more of what your planning process actually looks like? Like, for my $3,000 to $4,200 of planning fees for a project, like, what do I get? What does that process entail? What happens to earn your way through a $3,000 planning fee?
Anna: Sure, I can. If you have a computer handy, you can go to our website and I can actually walk you through. We have a diagram that explains.
Michael: Sure, we’ll include a link to it in the show notes directly, of the MainStreet Financial Planning website.
Anna: Yes. It’s mainstreetplanning.com. When you get to the site, and right at the top there’s navigation bar, and you click on “individuals,” and then there’s individual services. And then that takes you to the very top of the page, and you see it says “step by step.” So this is the process that everybody goes through, starting from initial phone call when we chat with them for a few minutes, and then they start working the questionnaire and submitting their deposit. Then we have the initial meeting where we get a sense of exactly what we’re going to do with them and for them. In that meeting, usually about an hour, we discuss…go through the questionnaire just to understand where they’re coming from, what kind of questions they have or what kind of questions they need to have because they haven’t thought about it. So it’s a bit of a discovery process. We figure out what kind of documents we’re going to collect from them, and then we confirm the fee. That’s when the prospect knows what is it that they’re going to get into.
Michael: So you have your just initial inquiry, which is the, like, 15 minutes let’s check in phone call just to make sure we’re reasonable fit. They pay $100 for that. If they’re interested beyond that point, then you’ll do a full one-hour initial meeting, which is more of our traditional data gathering discovery process meeting. You’ll finalize a fee quote to them at that point and start collecting information? Like, are they expected to bring the classic data gathering forms to that meeting? You will tell them like, “Hey, when you come in for the initial meeting, bring, you know, your statements and copies of your documents and so forth?”
Anna: No. Some clients want to bring things, and that’s fine. What we ask them to do for the initial meeting is just fill out the questionnaire, and that’s pretty deep enough. So initially, they’re going to have to pull their data. So we just tell them, “Hey, have it handy.” Because what we want them to do is not to bring it to the meeting, but have it handy so that they can scan it and then upload it to us so we don’t, you know, don’t have to do that. But no, after we’ve agreed to work together then we can figure out exactly what documents we need, right? Because initially you don’t really…when they fill out the questionnaire, sometimes there could be confusion, sometimes they don’t specifically state what’s on there.
So after going through it, like, now you have a sense. Okay, “Oh, you have a 401(k), it’s not an IRA.” You know how that could be sometimes not properly recorded. So we can’t quite request the documents at that point. And we don’t want to because you’re not a client yet. So yeah. So after the initial meeting, what they walk out of the initial meeting is a good understanding, which if you scroll down on the page, what they actually are going to get, one of these packages.
Michael: Okay. So, you know, starting and growing a family package, single, no children package, approaching retirement package. Okay, with all the details of the stuff that’s covered, right? So I’m starting a family, you have debt strategies, rent versus buy, insurance coverage, tax savings ideas. All right, like, just all the stuff that’s relevant for someone in that scenario.
Anna: Correct. So when we’re explaining to them how and what we do, this is exactly the same process. You walk them through and they’ve got it. And they make a decision sometimes right on the spot, that this is what they want to do, and then we just kind of start the process. But they have a list of documents we’re going to need, so they can now go home and start putting it all together. We sign an agreement, and then they give us a deposit. So they give us a deposit of…they’ve given us already $100, then they give us $1,100 more, so that’s $1,200 altogether, and that kind of starts the whole engagement.
Anna: They start working on collecting the documents, and then we set a meeting for initial…the very first…what we call a goals meeting.
Michael: Okay, and so what happens at the goals meeting?
Anna: So what happens is once they’ve submitted all their documents to us, then the very first thing we do is what we call a spending plan. So we prepare a spending plan for them. Over the years, we’ve kind of customized and designed our own…it’s a basic Excel spreadsheet, but it has all…so they’ve given us our spending data, it has all of their expenses, and we look at it on a yearly basis, and then we try to figure out, okay…because in an initial discussion or a first initial meeting, we’ve asked them about some of the questions. Like, “You know, what are some of your goals?” And our questionnaire actually has some of those boxes that they can check off. “I want to retire,” or, “I want to buy a house,” or, you know, those kinds of things. So you kind of have an idea what they’re thinking, right?
What we do in the spending plan is we try to lay it out a little bit for them in terms of just the expenses, expenses and the income. So expenses are on the top and then income at the bottom. So they can actually just see it from the cash flow standpoint because so many people don’t even see it that way. And then much less, we can actually determine whether they can start saving for those goals if we don’t see if there’s any discretionary dollars left.
So we prepare the spending plan. It’s just a draft document because we’re going to use it throughout the engagement to clean it up more, to make it workable for them. So the first column is where they actually…where they are today. Like, it would be for one full year. Then we try to envision, and this is usually what an advisor does because the advisor is the one who’s had the meeting with them. Because we have two paraplanners who help us do the document…you know, the backend work, the document collection and help prepare some of these spending plans as well, but the advisor is the one who kind of envisions, “Okay, so if this is our example of the family starting out, right, so, maybe their goal is to have children in two years.” So that would be the next column. We’re not going to do 100 columns, but we may do 3 or 4, right? Basically, the idea is what is the next significant phase in your life where expenses are different from your income? And so if we’re thinking about a family starting out, your life does change when you start having kids, right? So, yes.
And then, you know, maybe the next one, and for most people, they want to focus in the next maybe five years, right? So that would probably cover the next sort of five-year period, and then we can think about, “Okay, what is after that? Would that be maybe sending kids to private school or one of the clients changing careers or jobs?” Again, just the very basic, because that leads us into having them think about their goal.
Michael: Okay, because as you said, like, you’re not even at the point yet of doing, you know, accumulation projections. Are you saving enough towards these goals and what you’re moving towards? Like, you’re just trying to boil down spending. And I guess essentially, like, and what’s possible given your cash flow in the first place.
Anna: Correct, right, because out of that discussion and just having them envision, we’ll do that next, right? We’ll start doing the projection. This is where the interactive session comes in. But we’ve got to get them thinking in those terms. We’ve got to start them envisioning what their goals are because for some they don’t even see it, they don’t, like, envision it in terms of, “Okay, well, we want to buy a house, but how is this possible? Can we afford it?” And they can actually start seeing it on that spending plan and start, you know, kind of making it real, because for most it’s not. A lot of times this goals meeting could be two sessions, right?
But, I mean, this is sort of a simplified version, but sometimes you get into it and if there’s that challenge, right? If we need to work on that. Like, those things we have to address first before we get into projections and, you know, and running scenarios in our financial planning software. Like, we’ve got to get the basics first, and we’ve got to…sometimes the clients have issues with spending, and so how can you work on these higher, you know, more complex issues when the basics aren’t covered? Like, they’re not going to…they’re just not going to move past it. And so it’s been really, really, handy tool over the years to just kind of get the conversation started. We also prepare a financial statement, that’s just because we need to understand, you know, where they are, where all the accounts are because sometimes things get lost.
Michael: So how long do this…is this goals meeting typically a full, like, two-hour meeting? To me, it sounds sort of meaty.
Anna: Hour and a half. No, hour and a half. So if it goes beyond hour and a half then we schedule the next follow-up session. Most of the times it’s not because once we collected their data, we prepared these initial documents, we send it off to them. So they, when they come in for a goals meeting, they’ve reviewed it, and they’ve given…sometimes they give us feedback before the meeting, right? So they’re prepared.
Michael: So if there’s difference, like you never get into one of these meetings and then you look and go, “Oh crap, there’s a…one of these numbers is wrong,” and it kind of throws the whole meeting off because you would have sent it to them beforehand. So they could have told you, “Hey, this number is out of whack and this other thing has got to get changed.”
Anna: True, true. Anyway, a lot of times we do, particularly if we’re doing this meeting online, we could just change those numbers right on the screen. So it’s like it’s even better than in-person because…like, the numbers don’t…unless they’re really significantly different, and that’s why we send it to them ahead of time, because we have their data, right? We have their spending, we have all of their statements. I mean, there could be a surprise, but more or less it’s not.
Michael: And so then what’s the…so the next meeting is what you’ve labeled the interactive. So we had initial inquiry, 15 minutes to get to know each other, initial meeting where we really scope out the nature of the plan, the goals meeting where you’re reviewing a spending plan based on the information they gave you so you can start figuring out, “What sorts of goals are we working towards?” Then meeting number four, you’ve labeled interactive session. So what happens here?
Anna: Right, so in that goals meeting also, besides the spending plan, review, and analysis, we’ve also identified their goals. So specifically, you know, “When do you want to retire.” I’ll use an example of retirement because that’s a very first one we kind of pinpoint for them. Now that we know what their lifestyle looks like, right, we can use, for example, if they need $50,000 to live on, right? Then we can set a goal for having a $50,000 lifestyle for them as a retirement goal. Or if they’re buying a house and we figured that they can afford a $50,000 downpayment, then that becomes a goal, because MoneyGuidePro, and that’s the software we use, is goals-oriented, right, planning software. So we’ve got to have those specific goals laid out so that between the goals meeting and an interactive session, we can actually produce the plan for them.
Because in the interactive session, we’re actually already showing them what the scenarios look like. So they come because they’ve been through these meetings, they’re pretty antsy by that point to say, “Well, will this work? Will this work?” And at that point, a lot of people are asking, “Okay, what about my investments?” “Well, hold on, we’re not going to address your investments just yet, we’re going to work on the plan first.” But that’s it. Pretty much in the interactive session we go through, we show them what variables go into the planning software, you know, because we need to confirm, because they haven’t seen it yet, right? They just thought about it, they talked about it, now they need to see it. And then once they see it, we show them the results. This is when we can confirm that they need to save more or they need to spend less, or they need to retire later, whatever the outcomes are, right? That’s when we have. So by that session, we pretty much have laid out the plan for them.
So then, when the final…we call it a final presentation, but its final presentation in this initial engagement, by then, we now can talk about their portfolio, right? So how now the investments that you’ve got are going to help you achieve these goals that you laid out for yourself, right? We know you have to save more, for example, if that’s the case, for most people it is, then, you know, now we need to figure out where are you going to save? So we’re going to give them obviously the analysis of where the portfolio currently is at, and then if we need to tweak it, if it’s off-balance, right? So we’re going to give them precise recommendations of what to change. But then also then now we can connect the dots between where are they saving and where everything is at. So that’s where the final presentation is, where we put all of this together.
Now, that’s not the only piece that we discuss in that meeting, it’s also, like, if we’re looking at all of their insurance programs, so, you know, going through life insurance, disability, property and casualty, so pretty much a complete summary of recommendations that they get from us. So at that meeting, they actually have a full, and it’s pretty…it’s a tangible plan because we give them depending, you know, if they work with us online or if they come in person, we can give them a binder that has reports that we’ve used so they actually have something they can hold onto, or all of it is available electronically for them.
They also have an actual plan, right? Because when you hand somebody a binder that has lots of reports, they get lost, they get overwhelmed in the first meeting. But we create an action plan for them, so then the next phase is when we start implementing. So they know the plan, they know what they need to do, now let’s start working on all of those items that we’ve kind of identified as priorities, you know, something important for them to achieve the results that they want.
Michael: And your planning software of choice for all of this?
Michael: And just curious, what led you to MoneyGuidePro as opposed to eMoney Advisor or, you know, some of the newer tools like Advizr or RightCapital, like, why MGP?
Anna: I think it’s just initially when we started, when Jim started, MoneyGuidePro was…those companies didn’t exist, I guess, back then. So we just…we’ve never really changed the software.
Michael: Continued to be happy with the software and the iterations they’ve done. I mean, I guess back then you would have been on G2, then they went to G3, now we’re on G4.
Anna: Yes, yes. Correct. Right, I mean one thing I wish that we could do a little bit more of is the cash flow planning, which in MoneyGuidePro it’s not that big, but for most of what we do, and because of the spending plan that we develop for them, that kind of fills that gap in terms of, you know, having the cash flow module. And we use…I’m blanking on the name. I think it’s called MyPlanMap to automate the action plan.
Michael: Okay, yep.
Anna: You load all the action items for their tasks and then that automates, sends them an email, and we can follow up. Because that’s kind of the later phase, is to make sure that we’re implementing the…
Michael: So MyPlanMap is basically a tool that lets you track if the recommendations and action items are actually being followed through and implemented?
Anna: Correct, right. And then we tell them right up front is that, “Now that we’ve given you the plan, you’re not off the hook. Now the time is to implement.” And so they know that we’re tracking them in that time. I mean, you know, in a good way, but it’s like, “Okay if you don’t check it off as complete, we’ll be in touch with you to find out, you know, what is happening. You either just didn’t get to it, or maybe you forgot,” or, you know, whatever the situation is for the client. But we need to make sure…or maybe they need help, like, maybe they need implementation help. And we can make ourselves available.
Michael: We’ll make sure we put a link to that in the show notes as well. So for those who are listening, this is episode 49, so if you go to kitces.com/49, we’ll have some links out to MyPlanMap as well if you want to check it out.
So Anna, you’ve got this six-step process for 100-plus clients that you’re taking through this year, so how much of this process is actually you and how much of it is the team around you? Like, how many advisors and people are under the MainStreet Planning umbrella to be able to do all of this work for 100-plus new clients and 150 on renewal, and, you know, however many that are maybe necessarily on ongoing renewal but they call you up because this year is the year they need something from you, so they call you, how does this get structured? What does the team look like around you?
Anna: Right. So typically, the process that we’ve just gone through is what an advisor does with the help of a paraplanner. So that’s a normal pair, you work with the paraplanner because they’ll do the data gathering, you know, the preparation of some of these documents, and then, so the advisor typically just well, obviously does all the meetings, right? The paraplanners don’t do the meetings. But then also, you know, the preparation work in the background, like reviewing the documents before the meeting, right? And then in the final presentation meeting, setting time aside to actually, you know, finalize everything and make sure that what we’ve worked through…because paraplanners don’t attend the meetings, so we have to take really good notes, and then we have debrief sessions, you know, so that what they’re working on actually makes sense, so that when advisor comes and it’s the time just to review and get ready, it’s there and it’s not, you know, somebody else’s data or it’s completely, you know, misrepresented in terms of what the client wanted.
Michael: So the paraplanners are just doing all that behind the scenes, the paraplanner is doing all that behind the scenes, of taking the planning data that they’ve given you and formulating in the spending plan and then taking the goals that they’ve given you and prepping it up into planning projection so that you can do the MoneyGuidePro interactive session and kind of preparing the plan, written recommendations, and the deliverable to the client so you can simply go out and present it.
Anna: Correct, right. Pretty systemized process in terms of we have workflows set up to help us do that so that we know where we are in each of these steps, who is responsible for what, do we need to collect more documents. Sometimes paraplanners do attend the meetings for, you know, whatever reasons. Maybe it’s an interesting case or maybe they have time to do that, but most of the time it’s just the advisor. And that’s one of the difficult parts of this, is sometimes you hear a lot of stuff in the meeting and you can’t quite put it in the notes, right? It registers in the back of your mind, but it’s not…it doesn’t translate into the CRM notes or, you know, other notes we scan. And so sometimes you kind of lose that. But because we meet regularly, we have regular meetings with our paraplanners twice a week just to work on those client prep time. This is when we sit down and we go through all of the cases that are open at any time. As I was actually counting on my plate, I think I have 30 clients that I’m working on at the moment. So these are the plans that are open.
Michael: So what do you use just to manage the workflow of keeping track of all the different clients and where they stand and what planning work you’ve done and haven’t done? Like, that’s a lot of open financial plans in any particular time.
Anna: Right. Well, we use Wealthbox as our CRM, and over the last year and a half that we’ve been using it, we’ve built up very extensive workflows inside the program so that way it’s attached to a client record. And it took me particularly a while to get used to having that, you know, step by step work. I didn’t need the workflow, I could do the plan without having to have the workflows, but when you work with a team, and it’s not just the paraplanner, it’s also our admin person, Kassy, because she has to schedule the meetings, right? She has to plan the calendar.
Michael: So she has to know when is the plan ready to be presented so that something kicks off for her that says, “Contact this client,” so that the meeting is scheduled and you don’t have to remember to tell her to schedule every client meeting.
Anna: Yes, yes. I think I was the worst in terms of adapting to workflows, but I admitted it and so they have to work with me, but yes. Because if she is confirming the meeting for tomorrow, the work has better be ready, but sometimes I don’t get to know that until I come to the, you know, prep sessions, but the paraplanners work. So yes, it’s workflows have been tremendous in helping us as our team started to grow, because we did not have workflows when it was just Jim and I, right? It was really simple, two people, we can figure it out. Not anymore, not anymore. And then as we are adding more advisors, that becomes, like, I’m not involved in that process, Jim is not involved in that either. So we need to have that.
What Anna Wishes MainStreet Would Have Known About Workflows Sooner [1:06:07]
Michael: Well, I feel like that’s a really important point to make around the whole framing of workflows. That it’s not about your ability to keep track of your own tasks and what you’ve done, like, when you’re a solo advisor and maybe even sometimes when you’re solo with a sole assistant. It’s a close enough bond that you can just say like, “Here’s where we stand with clients and I need you to do this and I need this to be done,” and you can work through. But I find the moment a third person is involved, like, besides just you and an assistant, that the moment three people interact on the client, and the odds are good that not all three people are in the room together at all times, that if you aren’t using some kind of structured workflows, that’s when things start really getting dropped and start slipping through the cracks. It can happen sometimes even with two people, but really as soon as it’s three and not everybody is part of every communication, if there isn’t some structure to how it all works, things just keep slipping through the cracks all the time.
Anna: For sure. There’s been a lot of pain around that. I know it, for sure, but yes. I would even suggest two people, if you could start developing workflows, because you’re going to have to tell this….you’re going to have to train your assistant, so you might as well record it. And if you have a program, or if your CRM allows for workflow, just systematize it. Because it’s going to be so much easier down the road. I wish we understood that sooner, I really do, but well, you know, live and learn. That’s how it goes.
Michael: I was going to say, like, so if you could go back and talk to prior you from 10 years ago to learn this lesson better, like, what would you have said to convince yourself a little bit earlier to go down that road?
Anna: Ah, the workflows. Yeah, I guess we should have had in a more clearly defined process because it was a lot…it’s still a lot of pain to train someone, and I realize that more and more as we’re hiring and adding advisors and other team members. So that’s, like, you know, record what you’re doing. Write it somewhere, do a screen recording, but have it so that you don’t have to repeat yourself. It’s been a tremendous time saver. And it’s actually pretty difficult in terms of developing the workflows, right? Because you have to think…I mean, you have to think globally. You can’t just think about, “Okay, these are the meetings we have.” No, you don’t. There are other team members that are involved. I mean, there’s a lot that’s going on in terms of that. So, I mean, this is probably one of the most proud things we’ve done in terms of creating a system that can operate without me or Jim. I mean, if we can teach it to others, right, or for our new advisors, they can use it. They have a team, and they can come in and just deliver the service.
Michael: And so, as you look forward from here, like, is it just more growth, more advisors? Like, what’s the path forward for you? I guess, what are the pain points for you today?
Anna: Definitely more advisors as Jim transitioning into a retirement phase, which I’m not sure how much longer would that be. It’s been four years since we, you know, executed his succession plan, and he’s still very willing and excited about doing this work. So it’s not like he has to retire on January 1st. But as he does that, you know, the transition, I definitely cannot do this on my own. And so we’re in the process of actually hiring somebody right now for our team, an advisor. And with the locations that we have, right, and where our business comes from, we’ve got to have advisors that are in those offices, particularly in the Maryland, D.C. area because Jim and I are not there. We’re on the West Coast. And so we travel quite a bit for that. So definitely more advisors to help service the clients.
And then I think as team grows, we’ll have to see what other roles to fill, but I mean, the big step we’ve taken already this year is that we’ve hired an operations manager, which completely changed, at least for me, how this whole, you know, financial planning practice evolved into a business that can operate without me, and that I can focus on client work, right? Still do a lot of that, but then actually also growing the business and working on the business, and not being so much involved in the weeds.
Michael: So how do you break down your time between that at this point, of, as you put it, like, working on the business versus working in the business?
Anna: So it’s only…it’s been since April that Ryan started with us, so I think now I have a better sense. So I think 50% of my time I could devote to working on the business, and then the 50% of the time is where I spend my time with clients.
Michael: And is that a balance you see sticking or do you want to get back to doing more client work, or are you expecting you’re going to end out doing less client work?
Anna: I think less client work. I think that’s kind of where it’s going to get, but we’ll have to see, we’ll have to see. We’ve launched a new…
Michael: Is that hard for you? I mean, you’ve…if that 10-plus years immersed in the client ends, like, is it strange to say, “My path forward is probably spending less time with clients?”
Anna: No, it’s not. I haven’t really thought through in terms of, you know, how much time exactly. I know that I’m going to have my clients that I’ve worked for, you know, for a number of years now. I’m always going to do that. Whether I’m going to take new clients at some point, it’s going to help make a decision whether I’m involved in that. But I’m also realizing that I alone as the financial planner can only do so many client meetings and help so many people. And my goals are much bigger than that. And so in terms of getting to those goals, I have to do something different. And so that just means I have to put myself into other parts of the business where I can actually help more people, right? Or we as a team and as a firm can help more people. So I think it’s a logical progression in my mind of how, you know, even adding an operations manager. So I’m not involved so much in the weeds of that. It frees up more time for me to do more business development, right?
But it’s not necessarily just for me as an advisor, it’s for the team, right, or for the whole company. So then those advisors who come in and work with us don’t want to do the sales piece, that’s fine, I can do that, right? Because I actually like it. So I think, you know, I’ve grown over the years from these various roles, and I’ve been in all of them, right, from the very beginning so that I recognize now what my strengths are, right? What am I really enjoying…enjoy doing and where do I see myself going forward? And yes, I’d love to help more people, but it’s just I only can do so much.
Michael: Yeah, it’s funny how kind of the role of what we do changes. I mean, I know I was looking back, you know, this fall was my 15-year anniversary with Pinnacle. And when I joined the firm originally, like, the defining characteristic of why I took the job at the firm is it was an opportunity to be a director of financial planning in a growing advisory firm, with no sales and business development responsibilities whatsoever. Like, that was the key thing for me, because I started on the sales side and I was not very good at it. And, you know, essentially failed out of the sales side but wanted to stay in the business. And so, like, I had to find a role that did not have any sales and business development skills at all at any point. No trajectory for them. Like, I had a nice stable position that wouldn’t involve business development.
And now 15 years later, I’m a partner for the firm, and one of the only things I’m still responsible for is some level of business development. And it’s amazing how much that journey kind of takes us to places that we maybe never thought we were going to be early on. But then you get there and you look back and it’s like, “Wow, we covered a lot of ground. Things are very different now.” Funny how you kind of figure out what works for you as you just do things and really figure out what you’re good at, what you want to do more of and try to let go of the rest.
Anna: Yes, it’s the difficult part, but yes, you kind of have to do it as you face the new day every day.
Michael: How do you structure your day and your world from here as you’re trying to, I guess make this transition or keep making this transition of less in the business and more on the business? Is there, like, a typical day or maybe a typical week for you at this point?
Anna: As a matter of fact, there is. So about every week, I lay up my schedule. And it’s the same schedule unless I’m traveling or at a conference. But Mondays and Fridays are typically my work on the business/client preparation work, marketing, you know, whatever I can fit in those days is what I do. And then Tuesdays and Wednesdays and Thursdays are all for client appointments. So I just kind of, you know, have the same template every week. Now every morning, for about two hours, I spend on prospecting. So that’s either following up with prospects that contacted us or if we had meetings. So that takes, you know, about two hours, maybe sometimes more. So that’s part of that. And then sometimes even weekends is where I open up. If I don’t have enough time for client work, because that’s still, you know, a good chunk of my time, then I can do Saturday appointments as well just to fill that out. Fill that in and give it more availability. But that’s been…has been my schedule for some time.
I think what will eventually happen is that maybe less client work, or as we’re hiring an advisor to be in the support role, that it’s maybe, you know, in our process that I don’t have to show up for all the meetings, right? Maybe I do the first meeting, right? The initial meeting, the sales meeting, right, and get them into our pipeline. And then they do a second and third meeting and I come for a fourth meeting. That’s kind of what I’m envisioning once we have a support advisor. So then that frees up my time, and I don’t have to do the prep work maybe as much as I do now because we have a CFP who, you know, who can do a lot more of that. So that opens up more time for me to work on the business activity. So probably one more day dedicated to that is what I’m hoping for.
Michael: And are you just naturally a structure person that’s evolved, like, that’s built this out for yourself and it just evolves as the business shifts or is this something you had to push yourself towards to have this kind of structure in the first place?
Anna: Yeah, totally not a structure person because the workflows were a nightmare for me. But I had to come up with the structure because it was just…it is still pretty crazy some days because I could go from…actually, I think 2 weeks ago I had 10 appointments. That was my record number of appointments I’ve ever had in one day. And that was client meetings, staff meetings, and then some other things that I’m working on. Because if it gets that chaotic, I’ve got to have structure because I can’t just have, you know, all of these different types of activities spread out on my calendar. So I forced myself into the structure. You know, it wasn’t something natural.
But as I work more with the team and scheduling two…because we have to schedule for two, actually not even two time zones, it’s not just East Coast, West Coast, it’s kind of across. So I’ve got to have schedule that I can…my assistant can take and just go with it and say, “Okay, you’re going to be here, you’re going to travel and these are the days that we can offer.” It’s pretty intense. She has a full-time job on just around schedules for Jim and I, for all of this that we’re doing. So yes, I’ve got to have a regimen that I follow, because nothing will get done, for sure.
Michael: Yeah, it’s funny. I had a similar challenge. I mean, I was a no-structure person for most of my life, and just, you know, eventually, it gets so busy that you have to have the structure, you have to start creating structure for yourself or you’re just spinning from one thing to the next to the next all day long. And it’s hard to actually get anything done when there’s that many different things coming at you all at once.
Anna: I mean, even today, you know, not that it’s not going to go away, but sometimes the day is over and I feel like I haven’t accomplished anything. And I look at my schedule and say, “What was I working on,” right? Sometimes I have that feeling. And so having…like, having an understanding, you know, Monday is a day of client prep work, you know, staff meetings, you know, all of that stuff, it kind of gives me that structure so then Tuesday, Wednesday and Thursday I can focus on just client work or client meetings and not have to think about it. Also, it made me a little bit more organized around when I get my work done because a lot of times I…and both Jim and I actually work that way, I’m kind of a last-minute person, or I get ready for things…I don’t prep for a meeting three days in advance. It just doesn’t work like that. I’d rather have more fresh things in my mind.
And so sometimes it’s difficult when you work with a team. You know, I can’t bring that to the table, they’ve got to do their work. So it forces me to follow the schedule, right? It forces me to allow the time to do that because I can’t just come in here last minute and be ready. I can, right? I kind of strive on that, but it drives that across. So I have to stick to the schedule.
Why MainStreet Refers Investment Management Out [1:19:44]
Michael: But through all of this, you’re still committed to the core hourly and project fee model, right? Like, I’m curious both…you know, I know a lot of advisors that would say like, “You know, why would you refer the investment management workout? You can get paid for that, it’s still fees, it still fits in fee-only, it’s part of that umbrella, so, you know, why send it out so someone else gets paid when you did all the work to qualify it and set it up in the first place? And, you know, you told the client what to do and got them queued up on the whole thing, why is it that you don’t want to do the implementation as well?”
Anna: For me, it’s a personal kind of decision that I don’t particularly enjoy the investments. And I believe and I feel like even in the engagements that we have with clients, it’s not about that. I’m much more excited about talking to them about, you know, the other side of the plan, the other issues, the life kind of changing decisions, right? Not with the portfolio. We’ll talk about that, but it’s not the primary factor. So I don’t want to spend the time, even though if I could have, you know, one of those systems in the house, right, Betterment or, you know, one of those robo-advisors, for example, to do the work, I still don’t see myself being involved. At this point, I think we’re not going to be managing assets, but maybe that will change as long as I don’t have to do it. If there’s an advisor that wants to do it. But then that kind of…if we go that route, right, believe me, this is a question that everybody asks us, “Why don’t you do it?” Because then it becomes about managing accounts, then it becomes about that. And we are planning-focused, right? Not that investments are not a part of it.
So I think it’s just kind of the core of what we’ve been doing all these years. And I think if we change it, then that changes our sort of business model as well. You know, we do get clients who say, “We don’t want our assets to be managed.” And that’s fine. You look at them in the eye and say, “I don’t need to manage your assets. I can give you recommendations and what to do with your portfolio, but it’s not a active management service.” So it’s a personal choice and a decision. And there are not that many people do what we do, so that also helps to stand out, right?
Michael: Just to differentiate by the fact that you really only do the planning work.
Anna: Correct, correct.
Michael: And what about the insurance end of things? Like, how do you make sure that clients actually implement and do the recommendations?
Anna: So well, for insurance, we work closely with Low Load Insurance Services, right? Or sometimes if the client has a relationship with somebody locally or they’ve done, you know, insurance somewhere before, that’s fine. But with Low Load process, you know, we request quotes, and then when the client gets the quotes then we discuss them and then going through that process, because Low Load keeps you updated as far as where the client is at, in terms of their life insurance, disability. So that piece is taken care of, right? That we can monitor.
For property and casualty, all of those, the implementation, for example, recommendations that they have to implement, at our six months check-up session, right? Because we go through everything that they’re supposed to be working on, we check and make sure that that has been done on their part. But that’s kind of…at that point, as far as insurance, it’s more of hand-holding and making sure they actually contact a person when they’ve changed, what they’re supposed to change or get more.
Michael: So what was your path into this whole world of financial planning in the first place? I mean, how did you come to fee-only hourly financial planning as a business?
Anna: Well when I graduated from college, I majored in finance and didn’t really have an idea what to do with that degree, and it sounded kind of interesting when I got into it. And in my last year college, I had…part of the degree I had to take an investments class. And I think that’s where I learned about the CFP program. And I went to Towson University, so they’d just started offering some of the courses for CFP program and I became interested. It kind of gave me an idea that maybe I could have a profession because I thought I was going to work at the bank when I graduated from college. I mean, where else do you go? I couldn’t even, you know, think through. So that was kind of the first, you know, look into, “All right, so there is something I can do with all of this that I’ve learned.” And really, it was just one investments class.
Then I also, part of the curriculum was to have an internship, and I had an internship at Smith Barney. And that kind of put me into the box of not wanting to deal with investments because I didn’t want to be a stockbroker. You know, I worked with them, they were nice people but just, like, it wasn’t me, like that whole idea. And then now I learned about the CFP program and I was like, “Well, all they talk about all day long is stocks, this is not financial planning, so I definitely don’t want to do that.” So it sort of was, like, kind of a natural progression from where I was. But very, very early right after college I kind of made a decision that that was something that I was interested in, and I could see myself having a path as far as a career, you know, studying for the certification and then finding, you know, a path where I can grow and become an advisor.
Michael: Okay. And then, as you got to the point of joining the practice with Jim, and I think you said he started in 2002, you joined in 2006, and then ultimately you bought him out and took it over a couple of years ago.
Michael: So can you talk to us about what that look like? Like, what’s a succession plan in the context of an hourly financial planning firm? Because I have to admit, I don’t know any other advisory firms offhand in the hourly space that have actually done, like, a full internal succession plan owner transition the way that you guys have, so what does the succession plan look like in an hourly practice like yours?
Anna: Right. Well, it kind of evolved naturally. I think a lot of things that we’ve done over the years sort of work, you know, because we face certain challenges and it just happened, it happened that way. But with Jim, it’s always been…because the clients would always ask and say, “Well, Jim, you know, what will happen if you’re not going to be here?” And, you know, once we started working together and he’s like, “Well, Anna will take care of you,” right? That was his sort of initial response, right? When you have some…now you have two people you can kind of say that.
But at some point, right? I think by 2008, maybe closer to 2009, once I had my CFP certification, then we started talking about more…he started talking more about a structured kind of a plan saying, “All right, well would you take care of my clients, right, if something were to happen to me, right, because now the business has been around for a while?” And so we actually even put together a buy-sell agreement and funded it with life insurance. But I wanted to make sure that I was not, you know, obligated to do that. I don’t like, “Jim I’ll do it in case something happen to you.” I never believed that anything would, but, you know, right, you’re a planner so you kind of have to do it. So we did it. And then, you know, the business continued to operate as normal.
And then I remember, a couple years later, actually by 2011, I moved out of the Maryland, D.C. area to San Francisco Bay Area, right? So that kind of separated us into, “All right, well, I am on the West Coast, Jim is on East Coast, and so, you know, how do we actually make it work in terms of operations?” And then I remember going to conferences and there was this, you know, hot topic about succession planning. It was just starting to pick up. It was everywhere. And that was actually 2013. I was at a conference, and then after the conference, I was going to the East Coast offices and Jim picked me up at the airport and I was just frustrated with just going into a conference and just all these discussions about succession planning and how to do it and, you know, all of that.
And, you know, as I saw him I said, “Jim, you’ve always talked about executing this transition plan that you’re wanting to sell the practice at some point.” And he says, “Yes.” And I say, “Well, I’m ready to buy it now.” And that’s how I kind of, you know, asked for the sale, right? Or closed the business.
Michael: So you really took that sales training to heart, of asking for the business opportunity.
Anna: I did. I said, “Do you want to sell it? I’m ready to buy it. That’s it.” And so, yes. And, you know, in terms of buying an hourly practice, well, because we’ve had clients that were coming back to us, right? That’s how you kind of…at least in my mind, that’s how I valued, right, the business that I was buying.
Michael: The recurring revenue, essentially.
Anna: Plus I was part of it and…correct, correct, right. So I looked at that. And then because I’ve been involved for so long, right, so from 2006 to 2013, clients knew me. So I thought, “Well, if Jim disappears one day, I could just work with them, they’ll be fine,” right? They know me, I’ve either worked on their plan or they heard of me because, you know, I know I’m part of the team. So it was more of a natural transition because of the time we spend together. And so, yeah, within a couple of months, we, you know, put all the formal paperwork together, and in 2014, January 2014, it was official. I actually bought up 100% of the business from him. And we have a four-year agreement. It’s a month and a half and we’re done with that four-year agreement in terms of Jim being around. And well, you know, it’s not like…he’s not going away next year, but more of a, you know, formal transition process and how he actually gave me opportunity to pay him over time for the business. So that was really helpful as well, and transition the clients.
Michael: So can you share, like, how do you structure an agreement like that? Is it just you valued it based on the revenue, was there a multiple of the revenue, you financed it as a seller’s note or did you have to go borrow money? Like, how does a deal like this come together for you?
Anna: It was a combination of all of those factors, right? The revenue that we had and a number that we could justify in terms of paying, or I could justify and Jim was happy with paying for the business. So we came up with that number. And then I gave him 20% down. It was a downpayment of 20%, and then the rest was he carried the note, I didn’t have to go to the bank and get a financing from that. And then I just paid him…still paying him over time, so almost done.
Michael: Like, how do you get to a price? Did you go get like an external third-party valuation or just sort of used some industry rule of thumb, like, a multiple of revenue and say, “Well, here’s why I think it should be a little lower,” and Jim says, “Here’s why I think it should be a little higher,” and you just kind of go back and forth until you got a number that everybody can live with?
Anna: Exactly. We did not utilize services of external company, so we just kind of worked on it ourselves. And once it became comfortable for him and for me we were like, “Okay, that’s a deal. Let’s make this a reality.”
Michael: Okay. And so, as you look forward from here, I know you said you’re focused on continuing to grow the client base and then the staff to serve them, but for advisors who are maybe earlier back in their stages, you know, if you were talking to like, you from 10 years ago coming into this. You know, I think it’s still astounding just the number of new hourly financial planning clients that you’re doing. There are a lot of advisory firms out there where a great year is like they grow by 5 or 10 clients in a year. And if you do that every year, year after year, you know, you can get 50 to 100 paying clients in a decade. And that’s their reality. And you’re adding 100-plus new clients a year, paying thousands of dollars in upfront planning fees. So for someone who’s looking at this today or maybe you from 10 years ago, like, what’s your advice about how you…how do you market and sell hourly financial planning that brings in those kinds of people and that volume? What’s the advice you would give to a younger planner who’s aspiring to do the number of clients that you guys are doing every year now?
Anna: Right. I mean, there’s a couple of things, I think. I am going to definitely emphasize on the sales process because that’s a big part of this, everybody’s, right, work in terms of, you know, working with people, right? So that’s one. Number two, you really have to love this. And both Jim and I do, because if you don’t, it becomes tiring. And it’s actually fun because we get to do so many plans, you get to have so many different cases. So I feel like I’ve gained 20 years of experience in the last 10 because I’ve seen so many different clients and different parts of the country, right? California is quite different than Maryland, you know, than New York. So, you know, figuring out for yourself whether that’s something that you want to do.
If you just want to work with a set number of clients, then that’s fine. I actually, I think early on, I have liked the idea of having to interact with a lot of different people. So that was actually okay for me to have more clients, right? Not necessarily just working with 20 or 50 clients every year for the rest of your planning career. You know, I guess, you know, how is this business model possible? You have to look at it from the business perspective, right? I think getting outside of this box that you have to…like, what really changed for us and made it more streamlined is the idea of the packages, right? Is understanding where you spend your time, and how long it takes for you to deliver the service, and packaging it, systematizing it.
So looking at your business in terms of that, right? Do you have to do it all yourself or can you put systems in place? Can you hire people to help you deliver the same service? That’s what I would like to, you know, propose, you know, those advisors who are thinking about this, starting out or doing already this kind of work. How can you streamline it? Because once you do that, then it becomes more fun because then you can see more clients if that’s your goal, right? But because the system is working, right? It’s, like, it’s just there. You just have to show up and do your part, and a lot of times it’s just be the advisor because everything else is running on its own.
Michael: Yeah, I love the way that you frame it there. Like, don’t just try to sell your time, sell packages that you systematize, because when you systematize then you can get people to help you deliver the service. You know, I feel like there’s a mentality out there that because financial planning is customizing the needs of the individual client, you can’t systematize it. And it feels like you’ve very much turned that around and said, well sure, you just have five or six different systematized packages for clients in different circumstances, but that you have systematized the process of customized planning.
Anna: Exactly. Yeah, that’s probably the biggest difference and why we’re, you know, so successful now. That’s why we can do so many plans a year. And I’m sure we can do more, it’s just how do we become more efficient? That’s the biggest question. Every day I ask myself, “What do I have to do today so that, you know, it could be a huge step forward?” And not just in terms of more clients, but, you know, how can we show more advisors that this business…you know, this business model is possible and then how can we service more clients? Because clients do not know. When they show up at our doors or your doors, they don’t know. All they know that they have a problem, they have a pain, and they need help. Whether you’re going to charge them hourly or you’re going to offer them AUM service or you’re going to offer them one of the packages, they just need help and they need you to solve the problem. So we figured out a way to solve their problems.
How Anna Defines Success [1:36:41]
Michael: So as we come to the end, this is a podcast about success, and one of the themes that we always talk about is that success means different things to different people, often different things to us in various stages of our own business. So you’ve had a phenomenal successful career trajectory, and, you know, from I guess what? Eleven years after joining Jim’s firm, you’re now at the final month or so of completing a buyout, becoming the full-time owner of the business. You’ve grown $600,000-plus of annual planning fee revenue in a world where a lot of people still criticize that the hourly model can’t possibly be profitable or generate much revenue, and obviously, you’re certainly proving that wrong. So you’ve had this arc over the past 11 years, and so as you look forward from here, at the personal level for you, how do you define your success going forward? What does success mean to you?
Anna: Personally, it’s fulfilling my potential. And fulfilling my potential means, you know, all of that hard work. And you frequently use the diagram, the illusion of success, you know, with an iceberg and then all this hard work. So a lot of times I feel like if I can just do all that hard work, if I can just get through it, right, then one day, right, I’m going to put my head above the water and actually, you know, get some air and actually feel that I’ve accomplished something. So I’m still looking at, you know, my personal life and then business, right? How can I do more, right? That’s always the challenge. And so success to me is going through that process, going through the pain, and going through the days where it’s all awesome and everything works the way you do. So I think I’m much more into the whole doing the work kind of, you know, mindset. And give me the challenges I want to work through them. I want to face them. And that’s, yeah, that’s how I would think of it.
Michael: I love that message. You know, one of the reasons to me early on why I started the podcast is, you know, that iceberg illusion. So success is like an iceberg, and most of us only see the small sliver that’s above the surface, which is where we put all the outward, you know, good-looking stuff, profits, and success and AUM and all those different metrics that we put out there in the business, and then no one sees all the hard work that happens behind the scenes. So we often get strapped in this world where I know I’m having challenges in my business, all I can see is everybody else’s iceberg with only the sliver above the surface that looks great, and so it feels like my business is hard and everyone else’s is easy.
And I love your philosophy to it, that says, “No, no, like, the business is hard for everyone, and the changes we have to go through are hard for everyone, but the success is actually going through that journey of figuring out how to conquer the next challenge and move through it and then grow the business to the next phase so that you can hit the next challenge and go through it again.” And I don’t know, to me, there’s a very…like, the success is in the journey, not the outcome kind of philosophy of what you just said, that I think is really striking to me.
Anna: Right. No, I can’t agree more. It’s just definitely you want to, you know, hit those peaks, right? Those accomplishments, right? And what I’ve seen even with, you know, some of the things I’ve done personally and in the business, sometimes when you hit that big goal, all of a sudden you feel like the worst. You feel miserable, right? And it’s like, “Okay, well, let’s get started again. Let’s go underwater, right? And do all the hard work so then you can come out and be happy.” That process alone is what I crave. That’s what I see myself doing forever. And that’s how I define the potential, getting to that point where I don’t think it ever ends. I don’t think you can do enough in terms of your business and accomplish your personal goals, that it’s going to be…it’s always going to be that. I think just realizing that has helped me quite a bit to shift my mindset around it.
Michael: Well, amen. Well, thank you for joining us here and sharing your story and the journey that you’ve been through so far.
Anna: Thank you so much for having me. It was awesome.
Michael: Absolutely, my pleasure. Thank you.