Welcome back to the 143rd episode of Financial Advisor Success Podcast!
My guest on today's podcast is Cathy Curtis. Cathy is the founder of Curtis Financial Planning, a solo independent RIA in Oakland, California that oversees nearly $60 million of assets under management for 52 client households.
What's unique about Cathy, though, is the way she's positioned her business into a niche of serving women, and in particular, single, independent-minded women who specifically want to work with a female financial advisor as their financial partner, to the point that the majority of Cathy's new clients find her through a Google search.
In this episode, we talk in-depth about why Cathy chose to build into a niche of serving women as a way to better stand out and attract clients in the crowded San Francisco advisor marketplace, how she refined her website to the point that even new prospects compliment her on how it spoke to them, the way she's been able to generate most of her new clients from organic Google search traffic, even though she focuses on working with local in-person clients, and why the business development success of focusing into her niche eventually has forced Cathy to implement a minimum fee requirement just to better determine which prospects were really qualified to do business with her or not.
We also talk about Cathy's financial planning process itself. How her targeted marketing has helped her to get clients who are willing to go through a lengthy, detailed 20-page data gathering questionnaire, why she includes a draft financial plan meeting with clients and uses eMoney Advisor's Decision Center instead of printing out any details of a financial plan, the reason she chose HiddenLevers and Kwanti to be her risk tolerance and investment research tools, and the surge meeting approach that Cathy is using to cluster all of her regular client meetings into just 3 different months throughout the year.
And be certain to listen to the end, where Cathy shares how she got over the impostor syndrome struggles she faced early on as a career changer entering financial planning. Why she thinks new entrants to the profession today should work for another advisory firm for several years before going out on their own, and how the industry pressure to consolidate led her to merge into another advisory firm, only to realize that she really did prefer being an independent entrepreneur, and now simply leverages technology and outsourcing solutions instead to make herself even more successful.
What You’ll Learn In This Podcast Episode
- How Cathy Thinks About Having A Niche That Comprises 50.1% Of The Population [03:54]
- What Cathy's Firm Looks Like [18:51]
- How Clients Are Finding Cathy Through Google [32:40]
- How Cathy Developed Her Own Personal Brand [41:44]
- What Cathy Does For Her Clients [48:39]
- How Cathy Utilizes A Paraplanner [1:10:07]
- Cathy's Onboarding Process [1:12:57]
- What She Does For Clients On An Ongoing Basis [12:28:07]
- What Surprised Cathy About Building Her Business And Why Financial Planning Is Such A Great Career For Women [1:34:28]
- How Cathy Dealt With Challenges While Growing Her Business [1:37:08]
- What Success Means To Cathy [1:45:37]
Resources Featured In This Episode:
Curtis Financial Planning
Cathy's One-Pager on the Value Of A Financial Advisor
Around 40% Of American Couples Now First Meet Online
Ellen Looyen Branding
CUESA Farmers Markets
Michael: Welcome, Cathy Curtis, to the "Financial Advisor Success" podcast.
Cathy: Thank you, Michael. I'm super excited to be here.
Michael: I'm excited to have you on the podcast today both because I think you've built an interesting firm with a niche in working with women, as you say, specialized in the finances of independent women. And I really want to explore just what you build and what you found by kind of going down this road of specialization. And also just, I don't know, to talk about the phenomenon, maybe phenomenon is not the right word, but this rising focus of a niche with women, and to me, what is still a somewhat widely debated topic around the industry of like, can you have a niche in what's like 50.1% of the population? Are women a niche? Is that even a valid way to think about it, notwithstanding the success you've had in going down that road? How do you think about the topic of niches and something like having a niche in specializing with women?
How Cathy Thinks About Having A Niche That Comprises 50.1% Of The Population [03:54]
Cathy: Yeah. So that's a really good point. I get that kind of role that I think a lot when I say I specialize in the finances of women, and that's my niche, because it's true. It's not only 50% of the population, but everyone knows women control a lot of the household wealth now and all those different things.
But what's interesting about the way my practice has developed, and in particular, the kind of women that I attract, I've attracted mostly single women, which I like, by the way. I'm happy about that because I feel like I can develop really connected one-on-one relationships with a single person. I find working with couples a lot more challenging. Yeah, it really suits my personal style.
Michael: Interesting. Because kind of literally, there's only one person in the room, you don't have to deal with all of those weird couples dynamics because you're working with single women.
Cathy: Exactly. There's a real benefit to that for me. A lot of times with me when I am working with a couple, because of the way I put myself out there, it's the woman in the couple that usually finds me, right? And she's the one that's sort of dragging her husband into the room to do the planning. And I find that I have to take some time to make sure that he's on board with me. And it disrupts the process a bit. And when it's just a woman in the room, we go right into it. I feel the trust almost the minute they walk in the door and I greet them. And I have a really friendly office. And they probably know a little bit about me because I've really put myself out there on my website and things like that. And I don't have to take that extra time, which I enjoy, and I can get right into the meat of things.
Michael: There's two interesting things that jump out at me from that framing. One, I almost feel like it's, I don't know, it's the gender reverse of what so many of us do in the industry traditionally with what's still roughly 77% male advisors, at least by CFPs, working with mostly male clients. That I feel like we kind of fall into the same default with men working with men, as what you found in being a woman working with women, with I guess the distinction that you're actually ending out focusing more on single women. The industry traditionally has ended out with men working with men and didn't do a good job necessarily of engaging the other spouse. And so we perhaps have a history of treating couples like single people a little bit more than we should. Whereas you're on the other end and specifically focused on that relationship.
Cathy: Right, right. Yeah. I've talked to other advisors about this and I said, "Do you work with a lot of single men?" And the answer is usually no. It's either couples or women. I don't know if you've found that in your research. But I don't know how many single men seek out financial planning.
Michael: It's an interesting point. That's very true. I do not see a lot of clients that are single men. I don't know how much of that is male stereotype, we just like to be bullheaded and manage our own finances sometimes.
Cathy: Right. I think that's part of it.
Michael: I know there's certainly a piece. I see it reflected in at least a subset of couples we work with, and even with my wife, because we are now kind of gearing up for a process of finding a financial advisor ourselves, that...
Cathy: Oh, boy, that's going to be a...that'll be a...
Michael: Yeah, that'll be a whole other interesting series of articles at some point.
Michael: But the fact that I find is, it's one thing even just to know the money stuff or have a money-dominant spouse, it's a whole other when literally the couples dynamics come forward. And to me, that's always been one of the drivers for at least a subset of couples. It's some version of like, "So what brings you to our office today?" "Well, my spouse told me I had to be here." That there's literally a couple issue around their money, and that's actually literally the trigger event that brings them in. Maybe they're not happy with how they're saving or how they're investing, or someone was responsible for the money and lost a bunch of it, so now they want to work with an advisor, or they're having stress about how they're spending, so they need an advisor to keep the peace.
Cathy: Or they don't talk about money at all. They just live their lives and they're not discussing it, and one or the other is worried about that and wants a plan.
Michael: Yeah. And older couples, we get someone that wants us to be there as an advisor because they've been the money-dominant spouse and they're afraid of what happens when they pass away, and they want to make sure someone is there to have a relationship with the spouse. Like, lots of different angles, but so many of them are kind of very literally a couples dynamic that changes when you're working with single folks.
Cathy: It completely changes. In fact, sometimes it'll start as a couple because she really wants this to happen, right? Whether it's because there's been no planning, he spends too much on gadgets, whatever. And then sometimes he'll drop out, in my experience, where she's more interested in it, she's more detail-oriented, she really is motivated to make it happen, and he'll stop coming to the meetings. Which I think that's really disappointing for my client, the woman. For me personally, it works just as well.
Michael: Yeah. But I feel like that's the habit we see on the other end as well, right? One spouse is the one that often leads the money and leads the advisor relationship. At least by historical sort of gender stereotypes and norms, it was often the man, right? We see this still routinely with baby boomer couples in particular. The wife manages the checkbook and the cash flow, the husband manages the assets and the balance sheet. And so when there's investment stuff on the table, the husband tends to be the one that engages us, and sometimes the spouse either isn't engaged or disengages, or we try to engage her early on, but then at some point, she disengages.
And same challenge in sort of gender reverse, of, it's hard to keep both members of the couple engaged, in part because there is some, just, I think success in households that at some point, you start carving up the couple's duties from one person to another. Just kind of lets you work more efficiently as a household. Person A is responsible for this, and person B is responsible for that. And so if they've had that habit for 20 or 30 or 40 years as a couple, it's really hard to keep both of them engaged, because it's literally not how they've chosen to live their financial lives in many cases.
Cathy: Yeah. And so in working with mostly single people, I don't have that issue. It's very easy to keep the engagement very strong. And I didn't start out wanting to attract single-women households. It just kind of has evolved that way. Obviously, some of it is because of the way I put myself out there, but I'm not saying, "I don't work with couples." I do not say that at all.
Michael: But that's what I was going ask, are you out there trying to reach and promote single women? Is this like a conscious choice, "Geez, I just feel like I'm working better with them or have a better relationship, a connection, I want to work with single women," or it's just kind of turned out that way on its own?
Cathy: To tell you the truth, it's turned out that way on its own. It's really hard to put yourself out there and go, "I want to work with single women." That sounds kind of strange to me, right?
Michael: Yeah. That's what I wondering, how do you market that effectively?
Cathy: Right. So I did put that on Twitter for a while, and I thought, "I've got to take that down. That sounds ridiculous." And then I started using "independent women." But what does that mean? But somehow...
Michael: Well, I guess it means something to independent women.
Cathy: Yeah, somehow. And I've rewritten my website so many times. And I am trying to attract a certain type of client. They come through my door. It's like magic. Most of the clients I get from a Google search are single women who have either inherited money or a professional want to retire. It's unbelievable how often this 50-ish-something woman who has some pain of some kind, right? Like, "Please tell me I can retire tomorrow." They can't wait. Or they inherited money and they have no idea how to invest it. Usually, it's some fear thing, right? I guess that's how most people come around and seeing a planner, they're afraid of something. And 9 times out of 10 with me, it's this single woman. So I can't explain it. It's just a phenomenon that I'm really happy about.
Michael: Well, and I'm struck, you said both that some of them are finding you online. I think you said literally through Google. And you'd commented earlier as well that the process with single women often moves quickly for you because they already kind of know you and trust you from social media and website stuff that you're doing. So can you talk a little bit more about like what are you doing that you're putting yourself out there that both it's expediting the client process when they become clients, and you're getting to the point where they're literally finding you through Google?
Cathy: Yeah. I think by the time they find me through Google, most have read my website. And I can see that they're reading my website because I put this really cool thing on my website called Lucky Orange. And I can actually...I don't know, maybe this is common, but it's new to me, I can track where people go on my site. It's really interesting how much time they spend on each page and what they read. And a lot of people read my bio in-depth. And I have a lot of...I have personal info on there, a little less now than I used to. And a lot of the women say, "I love your website. It really spoke to me." I get that comment often. And I've had...ever since I built that website so many years ago, it seems to draw people in. I think it creates trust. I feel like they're already...when they walk in they feel comfortable with me.
And I have to say something too about the way women are with women. I think women, when they're talking to a woman, tend to be a little more open anyway, when it's one-on-one and just two people in the room. I think that makes a difference too.
Michael: Interesting. And so some subset of women that are specifically looking for that dynamic and relationship find your site, strong independent woman on the homepage, you start messaging to them directly. It becomes clear like you're a female advisor that works with women. You've got, I think, a whole section about why women and why you work with women and what you do. And so the women who specifically are looking for that go, "Oh, my gosh, Cathy is for me. This is for me. This is what I've been looking for."
Cathy: Yeah. And another thing I found with the women that come my way anyway is they're usually...they don't like dealing with their money, and they're a little bit ashamed that they don't know more. And they definitely have feelings of anxiety around it. And on my homepage, I have "There are simple truths about money and they are not as scary as you think." I've had that on there forever. And some people have told me, "I don't know if I like that." I have people critique my website. And I think, "I think it's okay because..."
Michael: "It's not for you, it's for them."
Cathy: Yeah. I think women are afraid. So that's putting it right out there that it's okay to think it's scary, and "Come on in and we'll try and alleviate those fears through some very simple ways to deal with your money." And that message seems to resonate.
Michael: Very cool. Very cool. And then you cue right up with, "Our proprietary process," or, "With our design your best financial life," you start walking them through, "Here's what we're going to do for you."
Cathy: Exactly. That's relatively new, by the way. I've shifted my way of doing business many times over the course of my career. But just lately, I've made a pretty big shift. And that was one of them, trying to tie the two things together, the financial planning and the investment management in one cohesive package. And that's a direction that I'm going right now.
Michael: So, and I want to ask you more about that because I know you've evolved your pricing and service model over the years, as so many of us do as we try to figure out what works and what works for the people that we're trying to work with. But it does strike me in this discussion, and kind of going back to the original question of like, can you have a niche with women? Is there such thing as having in a niche with half the population? That it strikes me part of what you've done, you're...and I almost put it like, your niche isn't women, your niche is women who want to work with a female advisor. Which is actually a very particular subset who are looking for that and are seeking you out, are seeking that out, I guess, and finding your website and saying like, "Oh, this is for me. It's a woman who works with women like me, who are independent women who want to work with an advisor." And that becomes the connection. Whereas as you said, they literally say, "Your website spoke to me."
Cathy: I love it. That's perfect. That is my niche. Thank you.
What Cathy's Firm Looks Like [18:51]
Michael: Excellent. So talk to us then a little bit more about just the firm itself and what it looks like in terms of like size, who you serve, how many clients, how you measure. I don't know if assets under management or revenue. How you look at just the size of the business and where you stand.
Cathy: Okay. So I do use the AUM measure just because I know that that's what everybody wants to hear. So I'm up to about $60 million in AUM right now. I work with 52 households and about 62 individuals. So you could see there's a lot of single individuals that I'm working with. Yeah.
Michael: Yeah, that's very few couples, close to 80% of them are single. Okay.
Cathy: Right, right. So 70% of the households are single women. And I'd say the average age is probably 50. So I have a nice clientele of older women who have been widowed and inherited money. I have a lot of people that have inherited money. I work with a lot of pre-retirees who are working towards retiring as soon as they can. Most of them have a few years to go. And I so far work with very few of younger people. And that's not for lack of trying. A lot of younger women are attracted to my brand. And this has been a real struggle for me, which I know it is for a lot of advisors, to find the right service that works for them. That's still coming up in the future. For right now, I work with the 50 to anywhere up to 80-year-old woman who wants a financial partner. And so that's what makes up my clientele.
Michael: I like that, "We work with women who want a financial partner." It's a very powerful statement. Again, as you said about a certain type of prospective client, a certain type of woman that's specifically looking for that.
Cathy: Right. And focusing on the single market, it makes a lot of sense. These women are by themselves, right? They are trying to manage their whole lives on their own, whether they choose it or not. And a lot of them don't have time to really delve into their finances. They're busy working, or they have a real lack of interest in getting in too deep. So I serve that void for them and helping them get that together, alleviate the anxiety and all of that. It's a great feeling. I feel like I'm really of service to these people.
Michael: So if I do kind of the basic math, $16 million of assets under management, 52 households, so the average client is just over $1 million. Is that actually a targeted minimum for you or just that's where it averages out across a wide range of clients?
Cathy: No, no, it's not the targeted minimum. In fact, my minimum is lower than that. I just happen to have quite a few clients that have a lot more than $1 million.
Michael: So where do you set a minimum? Do you do it by assets or by fee?
Cathy: Well, currently, I'm doing it by assets but also by fee, so either $500,000 in assets or a minimum of $5,000. So I decided to keep the minimum $5,000 because I do attract a lot of people who want financial planning. That's what they really want. And so people are willing to pay that. Even if they don't have the assets that will make up the 1%, they're willing to pay a little bit more to do that. So that's over the last two years I've established that minimum, and it seems to be working.
Michael: Yeah, I'm a big fan of the approach. If you're doing purely asset management and your business is just kind of put on the blinders and manage the pot of money that's handed to you, you may as well just have an asset minimum because it is what it is. But for firms that are more holistic around planning and setting forth a value proposition that says, "Look, we do a bunch of stuff, investment management is just part of it, it happens to be how we tie in our fee, but we provide a lot of value outside of that as well," I think there's a lot to be said for not having an asset minimum and just having a fee minimum that literally gets you to whatever the revenue per client it is that you need in order to make the math work and the business work.
But it puts the choice, as you said, back to the client, prospective client to say like, "Look, here's the list of stuff that I do. Either this is worth $5,000 to you or not. It might be worth $5,000 to you regardless of your portfolio because you just really want financial planning advice around some other non-portfolio thing. So if you're comfortable to pay this fee, we've done our math, we know that this is a good relationship for us, so drop the asset minimum, just let it be a fee minimum." And worst-case scenario, the only people who pick you are the ones who're half a million dollars anyway, so you'll end out at the same place. But you leave the door open for people to value you for your service instead of only defining them by their assets.
Cathy: Exactly. And I'm surprised how well it's working for me. Because I used to do financial planning only, and then I would do this whole wealth management thing. And that doesn't work, because I take on a one-time financial plan, and guess what? I'm not paying attention to all these wonderful clients that are paying me year in and year out, and sometimes very substantial fees. So I found myself really in a bind on that. And I actually got very burned out because I was doing a lot of financial plans in a year as well as trying to keep up with all the ongoing clients. So this thing where I charged the minimum and I could still do the planning for someone who really wants it and is willing to pay is a revelation. And I'm really thrilled that... I don't know why it took me so long to come to that, to be honest with you. But you know how things go in this. You try things out and see if they work, and if they don't, you move on to the next thing. But it suits me that I can still offer the planning only if they're willing to do it, if they're willing to pay.
Michael: So are you offering the planning only...are you actually offering in a standalone basis now or it's just, "Our ongoing minimum fee is $5,000 per year?"
Cathy: It's ongoing.
Michael: Obviously, they could hire you for the first year, get the plan and fire you I guess if they really want to game the system. But nominally, you're not even doing one-time planning business, you're doing a minimum fee on the relationship, and then they can decide how much value they're putting on the planning versus the investments versus the blend of the two.
Cathy: Exactly. And in my whole prospecting pitch, I emphasize that, "I want to build an ongoing relationship with you. My job is to provide the value so that when the year is up, you don't even think about rehiring me, you just do it." And that's kind of my pitch. And I make it very clear. I've tried to make it as clear as I can even on my website now because I've had some women get a little frustrated with my website when they realize that I don't do the one-time thing. I guess because they're reading my website and they're thinking, "Oh, this sounds perfect for me," and, "I like what she's saying." And then they get to the part where it's "How much assets do you have?" And it becomes clear that, "Oh, this isn't what I thought it was." So I'm trying to do some work around that to be a little clearer about that on my website so people don't get to that point and then get upset.
Michael: To frame it more as a standalone fee than an AUM fee?
Cathy: No, to make it clear that I'm looking for an ongoing year-over-year relationship instead of a one-time engagement.
Michael: So I'm struck that you like you said, not only were you doing these one-time fees, you were doing it to the point that it was leading to burnout. So talk to us more about what's going on there that just getting paid for the financial planning was that bad.
Cathy: Well, I was also getting...I had AUM too. I've always had AUM, but I was working really hard. Part of the problem is I've been very slow to hire, okay? So there's a lot going on here about why I might have got burned out, other than doing financial planning. Because I really enjoy being a solo practitioner, it's just the way I made up. I like it. I haven't wanted to build a big firm with a lot of employees. And so once you grow, that's what most people do. And if they had this issue that I did with the planning, they would have hired a financial planner.
Michael: Right. But you didn't want to.
Cathy: I chose not to do that. And I have tried. I've got a setup now that's working well, but this wanting to stay simple and solo has kind of been something that gets in the way sometimes.
Michael: So would you characterize that as a lifestyle firm? Is that a good label? I know it's kind of become a loaded term in the industry now it seems.
Cathy: Yeah. Yeah. Because that seems like it's not really important that you earn money. When I hear that, that's what I think. And that's definitely not the case. It's, I'm working for my retirement and all that, just like everybody else. So I don't like to think of it as a lifestyle practice at all. But in the way it is, is that I want to have the freedom to come and go as I want. I have a robust life outside of the office with volunteer work. My husband loves to travel. I get some great travel opportunities through some of the volunteering work I do. So I think part of it is I don't know how to integrate my lifestyle with building a bigger firm with more people.
Michael: And so do you worry at all about all the industry discussion of consolidation is the future, big firm is the future, solos won't survive, all of that buzz and discussion?
Cathy: I really don't because my pipeline is always full. I don't have any problem with the prospecting process at all. So I feel really comfortable with where I am. My firm grows every year. I may lose some clients, I'll gain some clients. Sometimes I add more expenses because I decide I want to do coaching or not. But I feel like I've had steady growth. I'm on a gross for right now. I don't see things slowing down. So I really don't worry about that consolidation piece at all. I feel fortunate that way.
Michael: Yeah. Well, and as you've highlighted, you've got a clear and focused niche about who you work with with a social media and digital presence that attracts the people to you, so it's not like anybody is coming for your clients anyways. You kind of have your own unique space, which to me has always been the point of having a niche. There are so many niches where you can be wildly successful with your clientele and still basically be too small for any mega-firm to come after you, right? Like Vanguard's got there 30 basis point, $25,000 minimum you get access to a CFP thing, but their depth is nowhere near what yours is with your particular target clientele. And when Vanguard measures its growth in the trillions, they will never make a competitor to directly come after your niche. It's just far too small for what they measure, even though it's a very sizable niche and you can make a very, very good living at it. It's probably a lot of advisors could make a very good living at it at the same time.
Cathy: Yeah, I really believe that. The robo thing came and kind of went. I know it's still there, but that doesn't seem to affect me that much. I get clients, recent clients who have had all Vanguard funds who still aren't sure if they're invested properly. So there's a lot of motivating factors of why somebody would seek out an advisor. And to me, if you have a niche, it's golden if you get the right niche and you know how to market to it. You know the right things to do to make them find you. That's the whole key.
How Clients Are Finding Cathy Through Google [32:40]
Michael: And so can you talk a little bit more about just what are you doing that makes them find you? As you said, the pipeline is good. You're getting business through Google. You're having a great growth year. I think for most of us as advisors, like, yeah, I would love a world where people with $1 million just show up on my website and give me their life savings. So how exactly does this work?
Cathy: Yeah, I know. You know what? In preparation for this call, I started looking over where most of my clients came from, and my oldest clients, hands down all referral, but the newer clients, especially the last two years, a lot...and when I say newer clients I mean because they had the assets and they wanted to pay my fee to come on board. Which means $500,000 to $1 million at least, right?
Cathy: They've come through Google Search. And I think there's a couple things. One, I think it's really true that more people are feeling comfortable hiring professionals over the internet now. I know that's true. I don't even know if five years ago people would have been so comfortable doing that. And so I'm benefiting from that trend. And I have been doing social media, website blog marketing for long enough, where I've built up some kind of a presence on Google, whatever their algorithm is. I've been quoted in so many articles. A lot of this is due to Twitter, and being an early adopter. I started Twitter in 2008 before so many advisors were on there. And I lucked out so much in the people that I got connected to back then on Twitter.
And the other thing that happened is I built a website that in 2008...2008 was my big year of change. I decided to market to women, and I found out about social media, and I built a new website. And the website was so different from most advisors' websites out there. It was bright green and pink. It was really saturated. I've toned it down since. I miss that website, though. I love that website. I really do. And so it got noticed by industry people. I would get, "Oh, I love your website and the message." I got so much attention from that. It was incredible that just being on Twitter, Facebook, LinkedIn, which was all I was doing, people would find their way.
And I think that's probably true always of someone that does something that's a little out of the ordinary. I know that's what you do. You have people on this podcast, they do something a little out of the ordinary that's really interesting. Well, I feel like I did my little out of the ordinary back then, and now I've got to catch up with all these other people doing all these really amazing things in our industry right now with podcasting and whatnot. But back then, I kind of was like in the forefront. And that laid the groundwork for this platform that I have to bring in clients. And it hasn't really slowed down that much
Michael: Well, and you make an interesting point around just the change in habits of how we meet people and engage people online. I was struck that there was a survey out earlier this year that I think probably saw stream by on Twitter at some point talking about the ways that people meet, that couples meet. And they had all these fascinating statistics. Like 20 years ago, basically, no one met online, because there was no internet yet, now, almost 40% of all couples meet online. And meeting through friends, just like the traditional version of referrals, used to be 33% of how couples met, now it's down to 20%.
So if you're twice as likely to find the love of your life online as you are through friends, you probably going to be okay finding an advisor online instead of referral through friends as well. We've kind of, I think, figured out now that, "Oh, you can actually search even more effectively by going on the internet and searching for everyone than just asking my friends and family who they know, whether I'm looking for a significant other or a financial advisor." And that's, I think, a much broader societal and cultural shift. But just it strikes me like, if you're twice as likely to find your spouse online as by being referred from a friend, that's a pretty striking thing about where people are going to find advisors in the future as well, which you're seeing, as you said.
Cathy: Yeah, it seems so logical, right? You've got the whole universe of advisors out there, versus the one or two that a friend, who may not know anything, refers you to. It makes sense. In fact, I get a lot clients that have had bad experience with advisors and a lot, and they say...I said, "How did you find them?" "Oh, my boss referred me," or, "My sister referred me." And it doesn't work out, because they didn't make the choice. When you go online, you get to read about the person and really see what they have to offer. So I think it's an interesting trend.
Michael: Yeah. With the caveat, as you noted, like, if people are going to find you online, you better have some way that you're distinct from everybody else, because there's a couple hundred thousand advisors. And if you're just trying to find them online, we all kind of look the same. You're not likely to stand out. Which to me, again, is what's so interesting about, as you've said, the marketing and how you framed your website and this focus on, "We're here to serve independent women." Because if you're...as you said, if you're an independent woman, the website you've made speaks to them, right? I don't know very many advisors who say, "Oh, I get a lot of clients on my website. They all say that my website speaks to them."
Cathy: Oh, that's good. I didn't know that. But I'm interested about that. And I get that all the time.
Michael: Yeah. I almost never hear that. And I think that's the distinction. Because your site is so targeted to who it is that you're trying to serve. And most of us I think still have the mentality of, "Well, as long as you have at least X dollars, you can be my client, because the math will work." But since anybody could have half a million dollars or a minimum or whatever your minimum is, we cast the net so wide. And when we cast the net so wide, our websites don't speak to anyone, they just kind of say, "Here's what we do. And we're credible and trustworthy." And we try to make all the cases for the stuff that we do. But it's just something I don't hear from almost any advisor saying, "Oh, my clients love my website. They say it speaks to them."
Cathy: Yeah. Yeah, it's been my best-selling tool since the very, very beginning. And I have a creative side to me that I was able to use in building that. I know you can be creative with financial planning, but that's not really creativity to me. It's building a beautiful website that attracts people and writing a great blog post that you get 50 comments on. That's kind of what creativity is to me. So I'm happy I was able to bring that into my practice.
Michael: So you said that 2008 was a big year of change for you when you decided to start focusing on women. I know you were in the business for like 5 to 10 years already before you got to that point. So what changed? Was there some trigger event or like moments that made you say, "Okay, I've been doing this for seven years, but now I'm going to make this big change and redo my website?"
Cathy: Yeah, it was like, "Okay, if something doesn't happen soon, I'm not going to be able to do this." I had the most boring website. It was a canned advisor website with royal blue and white and couples holding hands on the beach and looking at papers in the advisor office. And it looked corporate and just like everybody else's. And I so was not inspired by it. And I wasn't attracting that many clients. And I was really like, "How am I going to do this?" Fortunately, my husband at the...he's still my husband, but he had a mortgage brokerage firm, and he hired me to...that was when the mortgage thing was booming. It was incredible. And so he took me on as a mortgage person, and I did loans him, which was really actually great experience and chimed so well into the financial planning piece. But that kept me busy and earning while I was trying to build my practice.
How Cathy Developed Her Own Personal Brand [41:44]
But in 2008, I decided I need to make a change. I took a personal branding course from this incredible woman who I so grateful to her because it taught me about becoming your own personal brand, right? Forget about having the corporate image.
Michael: What was the course or the person? Do you remember?
Cathy: I don't know if she does it anymore. Her name's Ellen Looyen. It was with another six women. And boy, did that change my world, I'm telling you. This whole concept of a personal brand was so powerful to me. And that's when I decided, "That's it. I'm going to be my own brand. I'm going to build my website around that." It was a 10-week course. During that course, I hired a web person. A friend of mine is very creative. And we collaborated on my website. And I remember every night I would write pages on my website. But it was while I was taking this personal branding class, so always in mind, "Who are you trying to attract? Who are you...?" It was amazing. And to me, the power of personal branding is big.
And then at the same time... Oh, so I was at the time doing traditional marketing. I was out in the world. Because I decided to focus on women, I joined every woman's group I could possibly think of. I was out all the time. Women in Business, Ladies Who Launch, the Hatch Network, I could go on and on. I even taught a mentorship program for entrepreneurial women at the time. And all of these women's groups had seminars on how to use social media to build your brand, and I took all of them. I learned about Twitter and Facebook business pages and YouTube. That's when I opened up all those accounts.
Cathy: Yeah. That year was such a fun year. It just was life-changing in so many ways. And it kind of took off from there.
Michael: So how did the intersection of it come together? Because I get just saying, "Hey, I want to make my marketing better, so I'm going to do a personal branding thing and try to get away from the generic advisor website field," but I feel like that's sort of separate from also saying, "And I'm going to go deep into this specific focus on working with women." Was it all bundled together for you or were there two different changes or decisions going on at the same time there?
Cathy: Well, I remember in the personal brand course, she talked a lot about having a niche as a way to build your brand. What do you stand for? Who are you trying to attract? And I know I already enjoyed working with women, I had some women clients, so I think it was part business decision, a way to turn my business around, attract more clients, and part emotional. That, "Yes, that really resonates with me and I want to work with women." So it was...definitely, it was part business, because I was afraid my practice was going to fail. So I thought, "What do I have to lose? What do I have to lose by trying to build a practice around a niche, instead of marketing to everybody?"
Michael: It's an interesting framing that like, "Well, I'm not growing well enough anyway, so what the heck?" But I do see, so many advisors get fearful around focusing in on some kind of niche or specialization. Because I think the mindset is, "Well, what about all the people who don't fit that who now I'm going to say no to or they're going to be turned off by my website?" And we get so stuck on who we won't get if we focus that we don't see enough of who you actually do get if you began to focus.
Cathy: Right. From the minute I made the decision, I was so happy. I never turned back. I never thought about, "Who am I missing out on?" I was so ready to make that kind of a change. And it does fit...I'm making it sound like it was business and haphazard, "Oh, I'm going to fail anyway." But I am really passionate about women's empowerment. I do consider myself a feminist. So it also suits my value system quite well. So it wasn't as random as I'm making it sound like.
Michael: There's a reason you picked that niche and not any of the other zillion things on the planet you could potentially do.
Cathy: Right. And the other thing about the single...you've said in another podcast, and I think it's really true, a lot of us end up attracting who we are, right, in the end. And I was a little bit of a late bloomer in the marriage department, so I experienced life as a single person and building up my own finances and all that. And I feel like I really have that to share. I bought a couple of houses on my own before I got married. I did a lot of big financial things. So I really feel confident that I can help women do the same. So, I think that those personal experiences drove who I'm attracting to.
Michael: Right. And in kind of a very literal sense, gives you some pretty good credibility with them. Although I don't think there's a literal requirement, like you can't specialize in a thing unless you are the thing or have done the thing, you can learn the issues of those people and become an expert in them, even if you're not one of them. But it is a heck of a lot easier if you just actually lived it and done it yourself. Like, "Yeah, I know all of these issues because I literally went through them for the first 10, 20 years of my career. I know how to speak to these issues." And it probably just shortcuts the process very easily to get to, "Well, I know what their pain points and their issues are and I know how to message to them because it's me. I just have to make the thing I would want to buy and other people like me will probably want to buy it as well."
Cathy: Yeah. And I totally agree with you that you can learn to serve all kinds of people. I totally agree with that. But when you use the word "easy," what's wrong with ease? Ease goes a long way when you're trying to build a business and be the marketer and be the employer. So yeah, I'm a big believer in that.
What Cathy Does For Her Clients [48:39]
Michael: And so help us understand what you're doing for these clients. If you've got a $5,000 minimum fee or working with half a million up, average client is $1 million, what does the planning process look like? What do you actually do as clients say, "Okay, read your website, love what's there, sounds great, I want to be a client, sign me up?" What happens next?
Cathy: Okay. So after they sign my agreement, the very first thing I do is send them my...I have a 20-page questionnaire that I've developed and had redone a gazillion times. And I love my questionnaire to them.
Michael: All right, I've got to ask, 20 pages?
Michael: It's a lot of questionnaire.
Cathy: It's very detailed. And it's great because I get everything I need. I just love my questionnaire. And I know that's a lot of questions. I don't care.
Michael: And you give this to them upfront before you meet with them. I guess you may have done like a prospect meeting, but like...
Cathy: No, I don't. I don't give that. That's way too much for a prospect. This is after they've signed my agreement.
Michael: Okay. But you haven't necessarily done a data gathering meeting in person. This precedes the first meeting as a client.
Cathy: So let me start with the prospect process. First thing is I do a phone call, 15, 30-minute phone call. All of them are booked through my online scheduler that's on my website.
Michael: And what do you use for that?
Cathy: I use TimeTrade now. And it works fairly well.
Cathy: Yeah, it comes through. They fill out a form on my website, answer certain questions. So I start the screening process on the website. Really helpful. How did you find me? I do an asset level tiered. Is it $500,000 to $1 million, $1 million to $2 million? I used to start at $250,000, and I was getting too many $250,000, so I switched it. It's amazing how much that's changed up who actually follows through and books a phone call.
Michael: Right. Just if your asset requirements are in half a million dollar increments, you kind of get a sense if you're at $100,000 or $200,000 this probably isn't for you, which is a nice, subtle way to actually point out, "This probably isn't for you."
Cathy: Yes. Yeah. Which has cut way back on the amount of phone calls that...and I'm so happy about that. It's really hard for me to turn people away. So it's helped me a lot in...the whole prospecting thing isn't as traumatic for me as it used to be.
Michael: It's an interesting point, though, that one of the challenges if and when you really actually get a good advisor website that attracts people and it makes them contact you, the good news is like you can get some really good clients, the bad news is, if your marketing is that good, you may also attract people who are not actually good clients or can't afford your services. And if you don't have a way to screen them out, it actually becomes a significant bottleneck for the firm because you spend a lot of time with non-qualified prospects. And at best, it's a waste of time to spend a lot of time talking to people you literally can't do business with, and at worst, then you'll feel sad and guilty when you have to turn them away, and you compromise and you'll take them anyways, and then you're taking clients who aren't a good fit for your firm.
So the whole like make your website a filter, a magnet to attract the qualified prospects but also a filter to eliminate the non-qualified ones is actually a very powerful mechanism, if only to not put yourself in the position where you're then going to compromise your standards in the meeting with them?
Cathy: That's exactly what I wanted. And that's so true. And it does work. And I tweak the language on there about every month now, or I change something to stop the people that don't fit what I need right now from even contacting me. Some still slip through. Like they'll click the $500,000 to $1 million, and then they'll add a little note, like...
Michael: "I don't actually have this, but I still want to talk to you?"
Cathy: Yes. I had one of those this morning. "I really like what your website said." At least they tell me they don't have the money. They all say that, "I don't have the money."
Michael: Well, which still helps at least so you can make just a business decision about whether you want to spend some time in this conversation or how you're going to handle it.
Cathy: Right, right. Yeah. But it's getting me on the phone with a woman who's a single mom and really wants to get some help starting out, being good about her money, oh, my gosh, that's like, "I want to help you." So it's good for me to have this screening thing and have it work. And that's one of the reasons I put this software on my website, so I can see what the flow is like, where people stop, where they go forward. It's been really helpful in that.
Michael: Oh, your Lucky Orange tool? Because if shows you, I guess, how they're flowing through your site and what they're engaging with?
Cathy: Yes. And where they stop and where they keep going. And as soon as I raise the minimum on the asset thing to $500,000, people will stop right there a lot. And to me, that means that I put a successful screen-up. And that really works for me.
So if I talk to them and it seems like we'll be a good fit, I schedule a face-to-face. I always do a face-to-face. And that's when I do just the conversation. I try and really engage them and not...they haven't really done any questionnaire or anything at that point. I ask them to bring in last year's tax return and account statements. Because the tax return says so much about their situation.
Michael: And so they're bringing that in as prospects?
Cathy: Yeah. Yeah. After the screening phone call.
Cathy: Yeah. And I find it's not really that I need them to do that, it's just another step in how serious are they about hiring me? If they're willing to do that and they do it, it's a really good sign.
Michael: Right. Whereas if they balk at that, then it probably means they're going to be a problem client going forward. With, I think, the interesting caveat that, I think for a lot of advisors, we sometimes get ourselves in trouble that we ask for so much stuff early on during the prospect phase when prospective or new clients don't necessarily actually...they're not trusting us, and they're not comfortable with us yet because it's so new to the relationship, that it's too much upfront, and it kind of feels offensive or uncomfortable to them. But it's different, I think in a process like yours.
I've seen a version of this in our new client business as well. When you're active in a social media and digital marketing realm, your first meeting with the client is not their first impression of you, it's like their 500th impression of you. Because if you're active in the social realm, people tend to cyberstalk you for a while, especially prospective clients. And it's helpful because it means by the time they show up, they've actually been following you for a while and have already made a fairly conscious decision to trust. Which is different than even the classic referral, which is like, all right, well, I'm supposed to trust you because Jimmy says you're good, and I'm supposed to trust you. But I'm still kind of figuring it out, even though it's a referral. And we've long found that the prospects we get through blogging and social media are actually warmer leads than referrals.
Cathy: Oh, for sure. I completely concur with that. It's so true. And I love that feeling, that feeling... And you can almost feel it when they walk in. "Oh, they feel really comfortable already. Isn't that interesting?" And it just makes the meeting so much easier. In fact, I didn't use to have prospects bring in anything, but I'm not kidding, most will say when we're setting up the meeting, "What should I bring?" And so I thought, "Well, if they want to bring things, this just helps me so much with deciding whether..." And so now I do that. I say, "Bring your tax return and your account statements."
Michael: So you do a screening call, 15 to 30 minutes. They schedule through TimeTrade. If it looks like it's going well, then you do like a, I guess an approach meeting, bring in their account statements and tax returns and do, what is this, like a one-hour meeting with them. Like, "Let's get to know each other. You talk about you, I talk about me. We'll see if we want to work together?"
Cathy: Yeah. And I make it real clear it's a "get to know each other" meeting, not a "tell me your financial problems and we'll solve them sitting there." It's, "I want you to feel comfortable with my office space, me." It makes such a difference to see someone face-to-face. So it really is a get-to-know-you-type meeting. But I find out a lot about people in that meeting. So I'm writing things down the entire time. And those notes are always really valuable when I start doing the financial plan.
Michael: And these are all physical in-person meetings? Because I'm struck, you do a lot of digital marketing. Are they actually all local to you?
Cathy: Yeah. Most people want to come into my office. I keep trying to throw out the Zoom option, and I'd say 95% want to come into the office, which is fine.
Michael: So I think that's a striking thing, though, that you're doing digital online marketing, but you're still attracting and working with local clients.
Cathy: Oh, yeah. I have a lot of local clients. Yeah, that's true. Well, where I live, it's interesting. You know Oakland has become the Brooklyn of San Francisco, right? And there's so many people moving over here right now that I'm in kind of in the sweet spot as far as geography. And I really don't know how many fee-only...I don't think there's as many as you would think in my marketing area.
Michael: So by the time they just start looking for an advisor to work with at all, there aren't a lot of options on the table. And so you make the shortlist pretty quickly, especially if they're searching for female financial advisor, because you work with women who want to work with women. That's your niche.
Cathy: Right, right. Yeah. So a lot of my clients end up being local. I'm amazed how many come from like even my immediate neighborhood. It's incredible. My office is run on Lake Merritt in Oakland, which is very central. And there's a lot of apartments around there. It's a really booming area. So I think that benefits me quite a bit.
Michael: Okay. So you do this initial get-to-know-them meeting and connect, and they've brought in tax returns and statements. You're getting to know each other. Is it at that meeting ultimately that you're going to then ask them like, "Hey, this sounds great. I think we'd be a good match. Can we work together?"
Cathy: Yeah, depending on how the meeting goes and also how big the...I have to say this, how, how much assets the client has. If it's a big, big client, if we're over $1 million, if we're in the $2 million, $3 million, I generally push for a second meeting. Like, "Okay, let's take some time to think about this." I want them to be able to spend more time with me before making a decision. But if it's more this...the more typical client, the $500,000 to $1 million, generally, by the end of the hour, I can see whether we're hitting it off, where there's some rapport. But I never ask for the order at the meeting. I'll always say, "Is there anything else you would like to know?" and, "Please, I want you to go home and think about it." So never do we say, "Oh, great, you're going to become a client." It's always, "Go home and think about it."
And then what I always will do with all clients is I developed this...this is recent, and I really like this piece, it's an overview kind of based on, I think it's a piece you did about the value of an advisor.
Cathy: All the things that we do that aren't so obvious. I put a piece together and I had the headings like that, like making your life simpler, and then wrote down all the...making sure things get done. And I put the overview together and I said, "Okay, I've told you a lot about me, my process, whatnot, but I'm going to send you this written document for you to review and give you more things to think about." So they go away and they get that by email right away. And then I wait for them to contact me and tell me whether they're going to hire me or not.
Michael: Is there a follow-up process of like...is there a point where you ask them? Do you sort of say in the one-pager that you send them as a follow-up like, "Hey, here's an additional overview on the value of an advisor. I'd love to work with you. Reply to this email if you're ready to move forward?" You kind of ask for it there.
Cathy: Yeah. Yeah. And then if they don't reply to me, I have this all now in Redtail Workflows, which I'm thrilled about. I've just started to use them and I love them. If in two weeks I don't hear anything, I just send a friendly email saying, "Did you read through the overview? Do you need any more info? Would you like to meet again?" And generally then it either it's going to happen or not.
Michael: Interesting. So in two weeks, you have a Redtail, I guess, workflow that just kicks off to say, "If client hasn't closed, send them follow-up and see what's up."
Cathy: Yeah. And I want to go back to the very beginning with the 15-minute prospect call. If I don't feel like they're a good fit, I immediately refer. And I have three advisors that I know well, and I know they're taking on new clients, and I check in with them every now and then to make sure and that they haven't changed their model, that I can refer to.
Michael: Interesting. So that's the other way that you can kind of, I guess from the advisor, assuage the guilt that someone has come to you for help and you're going to say no them is like, "I'm not saying no, I'm just saying, not me. Let me introduce you to someone else who's a better fit." Right? To me, it's always the powerful mind reminder like your C client is someone else's A client.
Cathy: Exactly. And people are very appreciative. So you're right, it assuages my guilt, but I also feel like I'm doing a service. And these people are good. They've all been in the business a long time. I feel completely confident in sending the referral out.
Michael: Yep. Interesting. And again, that's just part of your vetting, screening process now to try to make sure this person's a good fit for you and you're not taking on non-qualified clients.
Cathy: Right. My goal is to not let anyone in my office that isn't a qualified client, just because of time. It's just time. Being solo, you have to have these different processes, or you'd waste so much time, you'd never get anything done.
Michael: Right. So you send them the final close, the one-pager overview. Out of curiosity, are you willing to share that with our listeners? Just I know everybody is always looking for different ways to explain what our value is.
Cathy: Yeah. Yeah. Sure.
Michael: Okay. So we'll include that in the show notes. For folks who are listening, this is episode 143. So if you go to kitces.com/143, we'll have a link out for Cathy's one-pager on the value of a financial advisor. Appreciate that.
Cathy: Yeah, no problem.
Michael: So you've done the prospect meeting, you sent them a follow-up, they send you a reply and say, "Yes, we want to work with you." So now you're emailing a financial planning agreement or investment management agreement or something to sort of bind this relationship?
Cathy: Oh, yeah, definitely. I send my agreement. And I send it via DocuSign always. I do everything via DocuSign now if I can. They sign it, I get it back. I immediately send out the questionnaire, the cash flow worksheet. I have a separate cash flow worksheet. Couldn't figure out how to get it in the PDF, therefore, it's separate, which is fine. And a document needs list. Those immediately go out. And I emphasize how important it is to get me all the documents on the list. Because you know, you've got to have the documents to back up what they write down on the questionnaire. So that's a must-have. And I'm surprised how good people are about getting that stuff back to me and getting it back thoroughly. It's really a blessing. Because I hear that's a roadblock for a lot of advisors, is not getting the stuff back.
So the questionnaire, like I said, is very thorough. The documents back up everything in the questionnaire. And then cash flow, I'm a pretty much cash flow-based financial planner. I like to see everything they're spending money on. I don't just say, "Oh, you could just do lump sums on this category and that." Because what I find is people most of the time don't know where the money is going, and they want to know where their money's is going. And it's relevatory for them. And so that's a big part of what I do is cash flow.
Michael: Well, I've always joked, the challenge around cash flow planning is the clients who know where their money is going can tell you, but they don't need your help. And the ones who really need your help can't tell you where it's going in the first place sometimes.
Cathy: Right, right. They may not be overspending, but they don't know where it's going.
Michael: So do you hit roadblocks with this just 20-page questionnaire plus a cash flow sheet plus a big documents list, and you're telling them like, "You have to do all of this?" Do you hit blocking points? Is there something...
Cathy: That's what I'm saying, most of the time I don't.
Cathy: It's amazing. I don't know why.
Michael: I was going to say like, to what do you attribute that? Because that would be helpful for a lot of us.
Cathy: Gosh, I wish I could tell you. I'm amazed how many women send that stuff back perfect. They're so organized.
Michael: I wonder how much of that is just the buildup in the marketing process. That again, your marketing is kind of speaking to a very specific type of target clientele, a very specific type of woman who's in a certain situation and really wants to take control of her money and her finances. That's what's kind of leading up to all of this. And so you just end out kind of self-selecting a segment of clients that really, really want to figure this stuff out. Then when you ask them, they do.
Cathy: Yeah, they're highly, highly motivated people. That's true.
Cathy: That's very true. What was I saying before? A lot of the reasons why they see me, one of the big ones is, they're so burnt out on their job, they really want to know if they're on track. And this is people that are like 55, 57. And they know they may need to work till 65, but they really want to know. And a lot of the time, once they do the plan and I'll tell them and it's still they have to work several more years, they're like, "But at least I know. There's a light at the end of the tunnel." So that's a highly motivated person... And then the inheritance piece is another...I get a lot of people that parents have died, and it's a big chunk of money that they have no idea how to invest. And it's emotionally charged and all that. And I think that's a strong motivator too, to not have the money sitting there, not working for them.
But anyway, I feel very fortunate that I don't have to keep asking people for...that's such a drag to have to keep asking for documents. And I use ShareFile, so I send them an upload link. And most people send them back via ShareFile. Everyone's willing to use a computer now to share documents, which is great. Very few insist on FedExing or whatever. So I don't have to scan. That saves so much time. Everything is already in the computer.
How Cathy Utilizes A Paraplanner [1:10:07]
And then I start on the plan, or I do have a local paraplanner that I give plans to who is a big help.
Michael: So like a freelancer that just does other people's financial plans?
Cathy: Yeah. Yeah.
Michael: So who is that? Do they work with lots of advisors or is this just a one-to-one relationship for you?
Cathy: This one is a one-on-one relationship. It's not one that works for a lot of advisors. It's a local person that wanted extra work and is already doing financial planning work. I have had a few of those come my way over the last few years.
Michael: Interesting. It's just kind of a part-time staffing solutions. You don't have to fully train them and manage them, but you can get some just like contract work help. I guess you pay them by the hour or pay them by the plan just to do the input and prep work?
Cathy: Right. And I use eMoney, so they have to know eMoney. I know eMoney really well because I build a lot of plans in it. So I know I can find...I like that because it's easy for me to find errors in other people's work because I know the software so well. Because what I find is, even though somebody else is putting it together, I find that unless...this is what I think happens. Unless they're the person that's actually going to sit in front of the client and present it, it's never as good as a person who is doing it and is going to sit in front of the client. That's what I found.
Michael: But you still don't do the whole plan yourself. You still have some balance point that says, "Well, I have to put the finishing touches and the review on, but it's still time savings for me to let someone else do the bulk of the data entry, and I'll just do the final round review?"
Cathy: Right. And well, this person I'm working with right now is great because I do an overview whenever...I have a process where I have a Google Doc open, and when I'm working on the plan, I do an overview with key points. It's like a template thing, and I fill it in. And she's perfectly happy to do that. So we're on the same page there. So I get an overview that's really good, that I can then tweak and work with as I delve into the plan before the meeting. So that works really well.
Cathy: Yeah. And a lot of the times when you're working, this is what I find, it's not the paraplanner's fault, it's your fault. And you've got to say what you need. "This is how I work. This is what I want. This is how I think." Because we'd all think so differently. So I take on a lot of that myself, that it's, I have to be a good manager of the paraplanner to make that relationship work well.
Cathy's Onboarding Process [1:12:57]
Michael: Interesting. So you gather all this data, I guess you have the client context because you had the original meeting with them in the prospect process. So they've said yes, you DocuSign an investment management agreement, you send out the questionnaire and the cash flow sheet and the documents needs list. So does this then go straight to, we take this data, put it in the planning software and the next meeting is a plan presentation meeting?
Cathy: Yeah. The next meeting is...I call it the draft plan meeting.
Cathy: It's not final by any means.
Michael: It's the draft plan meeting. Okay.
Cathy: Yeah. Yeah. And I call it that because the first thing I do in that meeting is I have big double screens in my office. I don't print out anything, nothing, not even my overview. Well, I have my overview. I have it in front of me, but it's not client-ready, it's more for me. I have the two big screens. I pull up eMoney. And the first thing we do is a data check. And clients like this because it's a complete review of the stuff they gave me. I probably have some questions. Instead of emailing them 10 times before the meeting, I ask them there.
Michael: Right. So saves on a bunch of back and forth on clarifying the data. And since you've already set up that it's a draft plan meeting, it's okay if it adjusts. I'm just struck because I still remember back to my early days of doing plans, and there's nothing quite worse than having gathered all this data, entering in the planning software, printed the plan, going to the meeting with your lovely printed plan, you get like five minutes in the meeting and the client says, "Well, actually, this number right here, this is incorrect. It should be something else." And you're like, "Well, crap, everything I printed and bound for you is all wrong now. I guess this will be a useless meeting, but I'll totally send you a follow-up after the meeting that is now highly useless because I had a data point that was wrong."
Cathy: Think about how much time that waste and paper. I have this thing about printing paper. Oh, it's so wasteful, because I don't believe it gets recycled, and I don't know where it goes. But I don't want to waste all this...I don't want to waste time, and I don't want to waste paper resources. I want it to be efficient. And my clients never ask me for papers ever. It's amazing to me. And even after that meeting, I'll go, "Do you want to take..." Maybe I'll print out something, they never take it. They don't want it. I don't ever do a printed document for a plan.
Cathy: And that's evolved. That's evolved over the many years. Of course, I used to print out plans and go through what you just described.
Michael: So you put eMoney up on the big screen. First thing is the data checks. Just like go to the input section and say, "Here are all the..." Well, I guess you go to the input section and look at the numbers or do you go to like the output of the balance sheet and start saying like, "So these are the numbers we had," and if they want to change it they can?"
Cathy: If you know eMoney, I go to the cash flow screen. And I go income. I delve into the income. I delve into the expenses. I delve into the savings. And we double-check income, increases on income. I do go into the expenses because it's amazing how much they...they might have done that cash flow worksheet fast.
Michael: Right. It's not like seeing it up there and knowing like, "We're about to do a whole bunch of projections specifically on this, are you really, really sure these are the right numbers?" And all of a sudden people are like, "Actually, I want to correct that number now."
Cathy: Yeah. I always say garbage in, garbage out. This cash flow thing is super important. So we'll spend quite a bit of time on that one screen. Me sitting there updating whatever it is they forgot or want to change or whatever. So I do spend a lot of time in that meeting making sure the data is good. But at the same time, we're looking at the cash flow worksheet, and I'm explaining how that works. I spend a lot of time on that worksheet. "Do you have positive or negative cash flow? Where's it going?" And then on the right side is that you get a view of the portfolio assets and what's going on there the whole time. So that's...I talk through the software. I do multiple scenarios most of the time. I use that feature, which is great, where it shows a graph. You've got the base plan, and then you can layer on scenarios. And it gives a visual of what happens to your money.
Michael: Is that part of Decision Center?
Cathy: Yeah. Yeah. Clients love that. I flip back and forth between the detailed cash flow and then that a lot in the meeting.
Cathy: That's really shortened my meetings, that Decision Center. Because it's so clear what's happening.
Michael: Yeah. Again, it's just that the traditional world, like, "Okay, we're not sure if the client wants to retire at 60, 62, or 65, so we'll print 3 scenarios and run numbers for each. So we'll have talking points on each and all the prep work that goes with creating alternative scenarios in advance for the planning meeting," or you just put Decision Center, or MoneyGuidePro would be Play Zone, you just put that up there and say like, "Oh, you want to retire a year too early, well, let's just grab the little slider and move the retirement age up and see what happens." It's like three seconds in the meeting and the chart changes live on the screen, rather than all the hours of prep time that sometimes goes into printing all these alternative scenarios.
Cathy: Right. And then there's another feature on that Decision Center where you can change various things like the growth rate on investment. There's so many things you can change right in that scenario right on the fly. So you could say, "Look at how important it is that you get this much return on...we shoot for this much return on your investments. If I toggle this down to 4%, look what happens." It's really the visual thing is so helpful.
Michael: So how does this meeting end? Is the idea, "This is a draft plan meeting, but when we get to the end, we're going to have formulated the final plan and we'll print or commemorate something at that point," or does this draft plan meeting eventually lead to a second meeting where you say like, "Okay, that was the draft plan meeting, now we're going to do the final plan meeting?"
Cathy: Yeah, I do a second meeting. And usually, there's a bunch of recommendations that flow out of this first meeting, of course.
Michael: So what kind of recommendations are flowing from the first meeting? And then I guess, how do you title the second meeting?
Cathy: Well, I call it the...I hate using the word "final." I've got to come up with a better word for that. Because I always tell them, "This thing is fluid. It's not final." But it's final with what we're working on right now. It's the roadmap for the next six months or a year, let's say a year. Yeah. Because usually, I have work to do after that meeting. Some of the changes that they want do, I just can't get them all...I'm pretty good at eMoney on the fly right in front of the client, but sometimes it's like, "I don't feel like doing this right now, right in front of them. I'd rather focus on them." So I put that aside to do after they leave.
So there's recommendations, like they're not maxing out their 401(k), they don't know about donor-advised funds. We go over that. Do they want to do it? All kinds of things. And I put that in a list, and I email right after that meeting, same day if I can, all the key points, and then the to-do list for me and them. That goes out right after. And then I try and schedule the second meeting right there, usually a few weeks out, to come back in, update me on progress and what they've done. And a lot of emails go back and forth after that. And then they come in to look at this kind of "final plan."
Michael: And so that's where ultimately you're building up like final recommendations that you're going to deliver?
Cathy: Yeah. And I also do investment in the second meeting, but we'll get into that. Yeah.
Michael: So what kinds of to-dos are you creating after the draft plan meetings? It sounds like this isn't recommendation time, so are these like, "Hey, we need to get more data on this, and we need to get a copy of that?" Is it more information things?
Cathy: Yes. Sometimes it's information, other times it's like, just for example, "Oh, we want to buy a rental property." I do my best attempt to do a scenario on that. But when they're in the meeting, I'll say, "Okay, have you been to the neighborhoods that you want to buy in? Have you talked to a realtor? Have you done any research at all?" I hate to say it, most of the time the answer is no. So the homework is to go out, find a realtor, or go to the areas you want to live in. And then I keep on them for that, if that's really a serious goal, to see what they can find. So things like that. If they're going to have a baby and they're not sure about what they're going to do about daycare, it's like, "Have you researched what options there are for you in your area as far as costs? Please find those out for me." That kind of thing.
Michael: And so then you build up to a final plan meeting where I guess just they're coming right back in to look at more eMoney Decision Center scenarios?
Cathy: Yeah. The second meeting is more of...it ends up being more of a review, unless there's some really...some issues that they're having a hard time making a decision on. Like recently, I had someone that has stock options and they don't know whether to exercise them or not. There's some things that maybe need to be reviewed again, that they're not quite sure of. I told them to go, "Think about my recommendations, see if you agree, we'll come back and talk about it again." Maybe something like that. A lot of it is just making them comfortable with the plan as it is, the direction that we've got them headed, and have a little bit of finality to that so we don't have to meet. "How many times are you going to meet on this?" It's like, "Okay, now it's your time to go do these things."
Michael: And investment implementation comes as a part of that final plan meeting as well? Like, "We've set the plan, now we're also going to get your dollars invested?"
Cathy: Yes. So I've worked on the investment piece during this whole prep of the plan thing, and they get a email. In my questionnaire, I have a risk tolerance questionnaire that's written, but I also send them to HiddenLevers. I use HiddenLevers for risk tolerance. I send them a link to the HiddenLevers. Risk survey, I have them fill that out. I've got that data.
Michael: I was going to ask out of curiosity, why HiddenLevers? There's a lot of players out there in the space. What led you to HiddenLevers in particular?
Cathy: Yeah. I was at a TDA Conference, and I did a demo with the guys there. And I liked it a lot. It was the first risk software I'd looked up. So I really didn't know what I was comparing it to. But I liked their approach. And I really wanted that risk tolerance software. I just knew it was going to add so much to the way I do my investment management process. So kind of a leap of faith, but I'm really happy with it. I like it a lot. You could do investment policy statements directly from that software. And very detailed presentations, which are great, but I don't use, because the kind of clients I have aren't interested in that much detail. But I do use their Investment Policy Statement feature. I have talked to other vendors since then, but I like what I'm doing, and it's become a part of my process. And it integrates well with TD Ameritrade, very well.
Michael: In terms of doing what? Analyzing their portfolio or queuing up documents?
Cathy: No, it integrates good with eMoney. So I connect eMoney to Ameritrade, eMoney connects well with HiddenLevers. So I can upload the portfolios right into the software.
Michael: Okay. So you input them into eMoney and then it uploads to HiddenLevers. Then you can do your analytics stuff in HiddenLevers.
Cathy: Yeah. Right. And after they become a client, then TD integrates with eMoney, uploads into HiddenLevers.
Cathy: Yeah. Anyway, I'm doing that work trying to figure out what their risk tolerance is. And I get a lot of information and need for return. So the two things for me are risk tolerance, how much do they need to return to make their plan work? And we have that discussion in the second meeting. So I'm ready to talk about that. I've uploaded their portfolios into HiddenLevers. I also use Kwanti because I love the simple interface. I use Kwanti a lot. I love it.
Michael: So what exactly do you use Kwanti for? Deeper analytics on their current portfolio so you can do like...
Cathy: I use it for both, but yeah. Because the reports are so simple and easy to understand.
Michael: So for those who aren't familiar, Kwanti is just kind of a investment research, investment analytics platform. So I guess kind of a Morningstar competitor.
Cathy: It does have some risk things in it, but it's not as robust as the other risk software. But I use it for the analytics. How much do they have in large-cap? How much do they have in mid? How much do they have in small? That kind of thing.
Cathy: And I load all my portfolios in there so I can see what they look like.
Michael: So you can do kind of proposals, "Here's yours, here's ours, here's how they compare?"
Cathy: Right, that kind of thing. Yeah. And then I have them sign off on the investment policy statement. It's pretty broad strokes. It's mainly about the asset allocation that I want them to sign off on. And then I follow that very closely that they don't go outside of the bands.
Michael: Okay. And what do you use to monitor that? Is that iRebal and TD Ameritrade or something else?
Cathy: I use iRebal at TD. Yeah.
Michael: Okay. Interesting. And so that wraps up the process? Kind of essentially across three meetings, a data-gathering meeting that happens as they're a prospect, a draft plan meeting, and then a final plan meeting and you're through your process in three meetings with them.
What She Does For Clients On An Ongoing Basis [12:28:07]
Michael: And then what happens on an ongoing basis with clients?
Cathy: Okay. So I established this in the very beginning, that we'll have so many meetings per year that I will initiate and have a clear agenda. And then if they want additional meetings, they can request them. So my real goal, though, is to try and get, depending on the level of assets, to have one, two, or three meetings a year with the clients, and have them be at certain times of the year grouped. And I'm not perfect on that. That's kind of where I'm headed.
Michael: So can you talk to us more about that with this grouping meetings?
Cathy: Yeah. Some people call it a surge. I've learned this from my coach. I'm in a group coaching program. And I love this concept of not having meetings, random meetings scattered all throughout the year. But to group them, you're going to be talking about similar things. You could do the same prep. Like for example, with my client base, it's super important that I do a tax planning meeting every year. So I try and do that in early November or late October, when I know what mutual funds we'll have coming out, things like that. Because the tax changes hit Californians so hard. And it's such a big topic here. And people are really wanting to know how to save tax. So I always do a meeting to make sure they're doing everything they can to improve their tax situation. So that's one, right? Well, that's going to be October/November. So I'm in the process right now of scheduling all my tax planning meetings for my clients. And everybody gets that no matter what asset level they are.
Michael: Interesting. So that's part of the efficiency. It's not just, hey, we're going to do a chunk where we do a whole bunch of meetings in October and then it's lighter in November, but we're going to do a whole bunch of meetings all on the tax planning stuff. So it'll just be one tax planning meeting after another. Which I guess, you get really used to your talking points really quickly. Which I suppose is part of the point, right? You don't have to...your brain doesn't have to keep reworking what you're doing with tax planning this year, all year long. You get to stay fully focused on it in one month.
Cathy: Right, right. That's the goal. And then for clients who have two meetings, I'm going to plan on spring-ish time prior to tax time. And I call that "let's update your plan" meeting. Where they come in, we review the data again. I go over the data, "Has anything changed? Tell me about what's happening with this." We just have a conversation about their plan. Always something has changed or something new has come up. People love the opportunity to be able to do that. So those are kind of the focuses of the two meetings. Bigger clients have...I'll do something social like lunch or...I'll do more meetings with my larger clients. And some of them have a lot in...some of my older clients are quite needy in service because they're just...they need help managing more things. But I'm trying to do a process that is similar for all clients. That's my goal as far as the meetings go.
Michael: Interesting. And when you try to do these surges, how much are you trying to package meetings together? You're trying to get through all 50 clients in a month? In two months?
Cathy: That's a really good point.
Michael: In two weeks? How intense are you going on this?
Cathy: Some advisors I know do a lot of meetings in a day. My problem is...
Michael: I know Matthew Jarvis does a version of this. He does like 7 meetings a day for 3 or 4 weeks and just does 100-plus meetings in a few weeks.
Cathy: Exactly. So I'm in the coaching program that Matt is one of the partners.
Michael: Oh, Limitless Adviser?
Cathy: Yeah. And that's where I learned about this. And I think it's brilliant, but I can't do...first up, none of my meetings last only an hour. It's at least an hour and 20 minutes. So I can't do an hour. And I can't see that many people in a day. It wipes me out. So for me, the most is three, three a day. So if you figure, there's 52 households, yeah, so little more than half a month spent in meetings.
Michael: Okay. But is that really the...like, you're going to do 50 meetings over the span of 3 or 4 weeks to plow through all 50 clients and then just basically no more client meetings for another 2 or 3 months through November/December, aside from the one-off client that says, "Hey, I've got a thing, I've got to meet with you?" We always have to respond to those. But short of that just...
Cathy: That's the goal.
Michael: ...you're going to do every client in October, and then no client meetings in November/December, except whatever you have to do reactively.
Cathy: If I can, yes.
Michael: Interesting. It's kind of an intense October, but it sort of sounds really nice by the second week in November.
Cathy: Well, yeah. Think about, first off, I know I get...there's so many distractions. You could think about what you want to do. What else do you want to do with your practice? Maybe you want to start up a podcast, maybe you want to add another service. Maybe I want to figure out how to work with these millennial women that really need help. Well, if I'm busy, busy, busy every day and don't have any kind of system for meetings, how am I going to free up that time? That's why it's so appealing to me. And then of course, if you want to take a vacation, it makes it a lot easier to take a vacation too. But just having stretches of time is to me such a gift. And I really would like to get to that point.
Cathy: So that's the new goal of mine.
What Surprised Cathy About Building Her Business And Why Financial Planning Is Such A Great Career For Women [1:34:28]
Michael: So as you reflect back on this journey, what surprised you the most about trying to build your own advisory business?
Cathy: There's a lot to it. Well, I'll tell you what, when I first started, I was so afraid that...because I was a total career changer, that I was never going to make it a success. I thought people are going to...the fraud syndrome, I don't have the experience. I didn't come from the industry. No one's going to want to work with me. The biggest surprise is that none of that mattered. And it really doesn't matter. You can get the training. A lot of it is your personality and how you work with people and how you communicate. It's softer skills than having to have these years of background in the industry. And that's what...I do want to say, this is my plug for women advisors, somewhere on Twitter today came out that still, only 14% of advisors in the US are women. I know you mentioned a higher statistic earlier in the call.
Michael: Yes. The CFP rate is a bit higher. It's 23%, still not a huge number.
Cathy: It's dismal. And so my niche that you just made for me about women looking for female financial advisors is a really good one because there's not that many of us out there really.
Michael: Yeah. And there are 150 million-plus women in the US, so there's a pretty sizeable target market.
Cathy: Right. And then the thing is, I think women don't know what a great career this is. It really is a great, great career, especially for someone with an entrepreneurial mindset. It's fantastic. And I don't think that that is really well known. Women still think you need to be constantly selling, that you need to be extremely analytical. And maybe they have to work firms that are like boys clubs. None of that is true. There's so many options. You don't have to go out on your own like I did. I was extreme. I started my firm straight out of my other career. I never worked for another financial firm. You don't have to do that. There's so many other ways to get in. And then once you're in, it's just such a great field that utilizes, I think, some of women's best skills.
How Cathy Dealt With Challenges While Growing Her Business [1:37:08]
Michael: So what was the low point for you in the journey?
Cathy: I think my low point was probably...oh, I know what my low point was. I was trying to handle my growth, and I was really looking for ways to do that. And I decided to merge my firm with another firm. And it was a mistake because I'm a really independent entrepreneurial sort, one, and two, I forgot how much I don't like structure, corporate structure. So I realized pretty early on that I had made a mistake.
Michael: So were you like tucking into a larger firm then?
Michael: Because you had to sort of assimilate into their culture, into their corporatism, as it were?
Cathy: Yeah. But I was vehement when I joined them that I was not going to give up my brand right away. Because I just couldn't do it. I thought "I'll only do this if I could keep my website, keep my brand." And they agreed. But with the idea that eventually, of course, I would want to merge it. So that's why I thought if...when I decided to disengage, I thought, "I better do it now, because I can't keep my website. This isn't working." There's no way I could keep the separate website and all these things. So in 11 months' time, I decided to leave. And I had to...brought all my clients over, paper them with the new firm, had to repaper them all back. That was really hard.
Michael: So as you look back now, what did you miss the first time about going into it that you had to peel out?
Cathy: I was under the impression that financial planning was going to become a piece of the business. And it kind of became clear that that might never happen, or it would take a long time for it to happen.
Michael: Because they're more investment-centric?
Cathy: Yeah. And I'm definitely a financial planning-centric advisor. So I couldn't reconcile that.
Michael: So is that like, you wish you'd done different due diligence upfront just to try to suss that out more in retrospect?
Cathy: Yeah, probably. Or, I don't know how I would...you either believe people or you don't. Maybe you get it written in a contract. That might have been the smart thing to do.
Michael: So if your pain point was handling growth and wanting infrastructure and then merge and found out that didn't work and went back out on your own after 11 months, so how did you handle the growth challenge?
Cathy: Well, I've handled it pretty well now. I use Total Office for working with TD Ameritrade. So I have help. It's not just me. I outsource an awful lot of things. I have an outsourced chief investment officer. I outsource bookkeeping. So I've built the infrastructure myself as a solo firm that does a lot of outsourcing.
Michael: Oh, interesting. So you're outsourcing client admin kind of work to Total Office. You're outsourcing the paraplanner work to the local paraplanner. You've built this kind of suite of outsourcers around you.
Cathy: Right. Which is so possible to do. It's not that difficult to build a firm like that now. You just need to find the right people, put them in the right place, make your expectations known. And I'm just...I'm learning that that's what's the best way for me to work. Not saying I would never hire anybody. I'm open to that, and I'm thinking about that. But for now, that's how I'm running things.
Michael: So now that you're almost 20 years in the business, what do you know now you wish you could go back and tell you from 20 years ago making the transition in? What do you know now you wish you knew then?
Cathy: Yeah. I don't think I would start out completely on my own without...opening up your doors straight from another industry. RIA from the very beginning with no partners or anything was a pretty hard road. I would not do that. I'd go to work for another firm, even if it's a small firm, for sure. I was fortunate that I had another income source during...before I figured things out and found my niche and made some changes. So that I would definitely...
Michael: Go work for someone else. Just get a few more years of experience, learn from them, learn the industry more, go independent a little while later.
Cathy: Yeah, I would. I don't know if I would go into a big wirehouse firm, but I would find a good smaller firm. And there's plenty of those out there. That's always a problem in this industry, though, is who's hiring. Yeah.
And then I think I probably would have hired somebody sooner. I think firms, solo firms that have really strong administrative support person can be very, very successful. I really believe that. Even if you want to stay small and you're just that team and then you outsource everything else, I think that works really, really well. And I would...if I was starting over, I would have done that a lot sooner. And not worry...see, I'm always worried about, "I'm not making enough to do that." And I think that's a mistake. I think the money will come. If you're dedicated and you're willing to pick yourself up when it gets hard, the money is going to come. So don't worry so much about that. I was always worried about that.
Michael: Yeah, it's sort of the chicken-egg problem. I see this for a lot of advisors. Like, "I'm worried I'm not making enough money to afford this hire," or like, "Literally, doing the hire takes a big chunk out of my check." Because if you're a solo, it's all out of your pocket directly, but then kind of missing like, but you won't be able to grow more and earn more unless you hire someone, because you're hitting your capacity crossroad, and you're going to be done wherever you are if you don't hire and create some capacity to get bigger in the first place.
Cathy: Right. I know this for sure. I've met so many advisors, in the last year especially because of the coaching I'm doing, that have this setup or have decided to have this setup because of the coaching and are just cannot believe how much they used to do that they've been able to offload. And then they have more time to focus on the business, the client retention, the prospecting, all those things. So that would be strong piece of advice.
Michael: So any other advice you would give to young advisors in particular, or I guess young women, in particular, looking to go down the financial advisor route?
Cathy: Yeah. I think if I went to work for a firm, I would make it really clear from the beginning that you want to be on an advisor track, rather than maybe getting stuck on an administrative track, if that's what you really want. And to find out if there is such a track. And if there's not, can one be created? And I'm guilty. Look at me, I'm a solo advisor that once you build up a firm, maybe you're a little hesitant to give up things. And so you want to be in the right culture.
What Success Means To Cathy [1:45:37]
Michael: So as we wrap up, this is a podcast about success, and one of the themes that always comes up is just the word "success" means different things to different people. So you've built this successful solo firm, I'll call you proudly solo, of thriving as a solo and not wanting to hire. So the business is successful, how do you define success for yourself at this point?
Cathy: Definitely having balance. So I love what I do. I take it very seriously. It's a huge part of my life, but I don't only want to be a financial advisor. So I spend time outside of the financial industry. In my old industry, I used to be in the food industry before, so I kind of made my old career into my volunteer hobby work. I've kind of flip-flopped it. And personal finance used to be my hobby. I loved it. Even as a kid, I was interested in stocks and things. So I kind of flip-flop these two passions of mine.
Michael: Oh, very cool.
Cathy: Yeah. So I'm on boards and I plan programs for Commonwealth Club in San Francisco, which is a really interesting public forum with about 20,000 members. I'm on the board of an organization that runs farmers markets around the Bay Area, CUESA. And they do a lot of educational programming around healthy food and food systems and things like that. So I'm very passionate about that almost equally as I am about personal finance. So the two kind of...they just keep me happy and thriving.
Michael: Well, very cool.
Cathy: And I think that's really important.
Michael: Yeah. Well, I love it. I love the balance and just kind of the finding of fit between what the firm does in your life and what you do in the firm, and putting those in harmony.
Michael: Well, very cool. Well, thank you, Cathy, for joining us on the "Financial Advisor Success" podcast.
Cathy: Thank you. I totally enjoyed it.
Michael: Oh, likewise. Thank you.