Welcome back to the 168th episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Erin Botsford. Erin is the founder of Botsford Financial Group, a hybrid RIA with the LPL platform that oversees nearly $1 billion in assets under management with offices in Dallas and Atlanta. What’s unique about Erin, though, is the way she built and evolved her firm over the years, from being entirely centered around herself as the lead advisor, to the end where even still having her name on the door of the firm, Botsford Financial Group, presented no impediment at all to her selling the firm and transitioning the clients. Because in the end, it’s far more about the mentality of the founder to build the business beyond themselves than how they happen to name the firm.
In this episode, we talk in-depth about how Erin built her advisory firm over the past 30 years, the transformation she went through after spending the first 10 years of her career working hard to grow to $300,000 in gross revenue and then, after a breakthrough coaching session, made a deliberate shift to transition herself from lead advisor of the firm to being rainmaker and CEO instead, and nearly 10X’ed the growth of the firm in barely three years. How Erin developed herself into a lead rainmaker role for the firm after self-admittedly not being a natural business developer and the way that Erin balanced letting go of being the lead in client relationships but still maintaining vigilant oversight of the firm and know that the work was being done properly for clients.
We also talk about how Erin actually shifted control of client relationships and execution of the firm, the three-meeting approach she used to transition clients, next-generation advisors who would manage the relationship in the future, the after-action meetings that Erin conducted with her advisors after the client meetings to instill lessons about how to better manage those relationships, and the steps that she took to initially institutionalize all the firm’s processes and procedures as someone who isn’t naturally inclined towards writing out her own processes and procedures.
And be certain to listen to the end where Erin shares why she ultimately decided to sell her advisory firm, the reason she felt drawn back to the advisor industry to teach other advisors how she built her firm by tying it to one of her charitable passions, and the way that Erin came to embrace the radical authenticity approach that she now takes in everything she does after a breakthrough meeting early with a client whose child was suffering through a terrible accident similar to something Erin herself went through as a teenager.
What You’ll Learn In This Podcast Episode
- How Erin Built Her Advisory Firm Over The Past 30 Years [00:03:03]
- The Transformation She Went Through During The First 10 Years Of Her Career [00:13:11]
- The Behind-The-Scenes Work Erin Did To Successfully Develop The Business [00:32:28]
- How She Delegated Clients To Her Firm’s Advisors, And Set Appropriate Client Expectations About Advisor Relationships [00:40:24]
- How She Recruited And Trained Her New Young Hires To Be Confident Advisors [01:18:21]
- How Erin’s Firm Grew Over 30 Years And Why She Decided To Sell [01:25:34]
- What Surprised Erin Most About Building A Business, And The Low Point In Her Journey [01:34:48]
- Advice For New Advisors And What Success Means For Erin [01:43:04]
Resources Featured In This Episode:
- Erin Botsford
- [Free Chapter] Seven Figure Firm by Erin Botsford
- Elite Advisor Success System
- E-Myth Revisited
- Who Will Do What By When?
- International Women’s Forum
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Michael: Welcome, Erin Botsford, to the “Financial Advisor Success” podcast.
Erin: Thank you. Thanks for having me here.
How Erin Built Her Advisory Firm Over The Past 30 Years [00:03:03]
Michael: I’m excited about today’s discussion and this journey through the business that you’ve been on, that I’ve seen a number of advisors do over the years of building a successful business unto itself. I know you’ve done this for 30-odd years, you were on Barron’s Top 100 and built a very successful independent firm, and then ultimately decided to make this transition to say, “Well, I’m actually not sure I want to keep doing the advising firm stuff anymore, but I really like teaching other advisors about what I’ve done,” and make this transition from being primarily focused in an advisory firm to primarily focused in teaching, training, and sharing what you’ve done with others.
I know you’ve recently made this transition and are going through this shift yourself and I’m excited to talk about both the journey of building the business, and, what seems to me to be a real challenge for a lot of us in the advisor world, of trying to figure out how you decide what’s next when you want to do something else and often when our lives are so tied up in our advisory businesses that are built around us. It’s a hard transition.
Erin: It wasn’t as hard for me as you might think. What ended up happening, and I’m sure we’re going to talk a little bit more detail about my journey, but I was lucky enough, I’d been in business for about 10 years and I was struggling. So I went and got some business coaching and it was a three-year program. In the third year, 12th session, I happened to be paired with a guy. We were supposed to compare results. At the time I’d started off with this business coaching, I had been doing $300,000 in production, and now I was really happy because I was on target to do $400, $450,000 and I was just super happy with my progress. So I was paired with him and I decided to go first and I said, “Hey, I’m Erin Botsford and three years ago I was doing $300,000; now I’m on target to do $400, $450.” And I’m thinking to myself, “Woo-hoo, look at me!”
Then it was his turn, and he said, “Hey, I’m Paul, three years ago I was doing $300,000 as well.” Of course, I’m thinking, “Well, look at that, we’re just alike.” And then he said, “This year I’m on target to do $3 million in production.” And he said, “I don’t meet with individual clients anymore. I’ve built a whole team around me and so I just prospect for new business and my team takes care of them.” And then – to add insult to injury – he said, “Yeah. And my wife, she just won the Bill Phillips Body for Life contest. So I’m also in the process of building a gym. So next year I’ll own a gym and a financial services business.”
And I was like, “What?” I’m just like, “You went from…”
Michael: I was feeling pretty good about this coaching thing until about eight seconds ago!
Erin: It was crazy. I felt that ALS bucket moment, that challenge, somebody just dumped this huge bucket of ice water over and I’m just like, “Did I miss a coaching session?” I just couldn’t believe it. And so, of course, the bell rings, it’s time to go back to my seat and I’m sitting there and just in complete disbelief. Finally, I’m like, “Paul, could I buy a few hours of your time?” And he graciously said, “Hey, yeah, in fact, why don’t you come spend the whole day with me and my team?”
So as quickly as I could get back to Dallas and I grabbed my husband. Some of the advisors will be curious to know my reason for grabbing my husband to go with me; I was sure that this guy was going to tell me that in order to do that kind of production, I was going to have to sell my firstborn, divorce my husband. I just wanted my husband there and said, “Whatever we have to do dear, you have to have to handle buy-in.” And so, anyway, I spent one day with this guy and three years later, I did $3 million, and then $4 million, and then $5 million. And my business just kept growing.
So anyway, it got to a point and literally whenever I got back from Paul’s office, I had one assistant and a part-time receptionist person. I remember saying to my assistant – she was 20 years old, I’d gotten her out of college – “Okay, here’s the deal. I’m going to go out and bring in new business and you’re going to do everything else.” And she’s like, “Okay…”
So literally that’s what happened. I ended up getting another person, and another person. By the time I sold the company, I had an office in Dallas, I had an office in Atlanta, and I had 18 full-time employees. The truth was, by 2015, I had written a book. This book is called “Seven-Figure Firm: How to Build a Financial Services Business That Grows Itself.” And I wanted to make sure I was telling the truth; that you can have a business that grows without your day-to-day involvement.
I took six months off and so, I literally, I went to Asia for a whole month. I went to India for a month. I went to Africa for a month and then I took the whole summer off; I just wanted to see, how did my team do? In 2015 we had a record year, so it was really fun to be able to congratulate my team. They really had done this. It also gave me the incentive, or let’s call it the permission to publish this book because I felt like, okay, this really did work and all of that.
So as I said, I worked myself out of a job. I started getting asked to give industry speeches. I remember it was 2016, I think, when I was asked to give eight speeches for the same big company. And right before I went on stage, the day before, I put up a PowerPoint slide and it said, “Come spend the day with me and my team.” After my first speech, I had 18 advisors sign up and I was charging them $3,000 to come spend the day with my team. And all of a sudden – I’m a ten quick-starter; I’m a ready, aim, fire person – I went back to my team and I’m like, “Oh, my gosh, we have 18 people coming. We’ve got to come up with an agenda or a curriculum.”
Michael: So as a ten quick-starter, out of curiosity, did they even know that you had made the offer to anyone to come to the firm before they found out that 18 were coming?
Erin: Of course not. I’m just that spontaneous and everything. And I will segue and say in the meantime, way back in 2009, my husband and I had been on Safari and we were introduced to this orphanage. And since then, we have supported the orphanage a lot. So when I did spend the day, we took 100% of the proceeds from that and we used that to help fund this orphanage.
What was interesting was I noticed, Michael, that these advisors that were coming and spending the day, they all had very similar challenges in their business. So one of the things I did was I allowed them…they were spending, $3,000, so after they spent the day, I also allowed them two hours with any member of my team, but they had to submit their questions in advance because I thought if I knew what their questions were, I could create content out of that.
Anyway, in the meantime, I happened to take an online course on something completely random, nothing to do with the financial industry. But I found out that guy that I took the course from, he made $50 million in his online course. And I thought, “Oh, my gosh.” So I thought, “Well, maybe I could create an online course.” And, again, I didn’t know how to do it and random things happen.
And here we go, three years later, I have an online course. The reason I was able to do this is my business did not require me to show up. It grew and grew and grew. And it was really fun because…I will say this, I got as much enjoyment out of my staff getting the wins. I don’t always have to be the one with the win. I liked having them get the win, the new client, the new prospect, the new sale, whatever it was. I got a lot of joy out of that. So sometimes me showing up, it’s like, “Here, I’ve got this, I’ll take over.” Well, they denied them the win.
So bottom line is I sold the company, I finished this online course, and the really cool thing about it was when Bob and I got a nice big check when I sold the company and we were able to look at each other and say, “You know what? We have enough. We’re done.” And so, 50% of everything we do going forward is to feed orphans in Africa. Just in the country of Zambia alone, there’s 1.7 million orphans. They got hit really bad with AIDS, the AIDS virus.
And so, we take care of 500 children and I’d to take care of 5,000 I don’t know. But for right now, that’s what we can commit to. For me, I’m just having the time of my life because I’m pouring into advisors and this course takes five and a half months, one hour to two hours a week for five and a half months. And I talk to them once a month and I mean the light bulbs are going on. So I’m having just a great time just pouring into advisors and in doing so it’s getting them successful, feeding kids. So it’s kind of a win-win.
Michael: So take me back a moment to this seminal moment with Paul. You’ve been going through three years of coaching after having already been doing this almost a decade at, you know $300,000 in revenue. Coaching got you to $400,000. Paul sits down and says, “Well, I went from $300,000 to $3 million.” And you said, you went out and you met with Paul and three years later you were there as well.
So talk to us more about what changed, what was the business in the first 10 years, right? Getting from 0 to 300 or 0 to 400 and then what changed that suddenly, the hockey stick of growth picked up over the subsequent three years?
The Transformation She Went Through During The First 10 Years Of Her Career [00:13:11]
Erin: So, first of all, in the first 10 years I started off as a stockbroker in Panama City, Florida. My husband was a fighter pilot. I was young, 28 years old. I did not know one individual in that town. And fighter pilots – military people – don’t make any money. So just the initial struggle of making it in the business was tough. But then he got out of the military and he decided to fly for American Airlines. So we moved then. He had been in the business three years and we moved to Dallas, Texas where I started over again in a place where I did not know one person. As you can imagine, let’s call those first six to seven years building blocks, but they weren’t really building anything. It was just…I build something and then I walked away from it because I had to move with my husband.
I was frustrated and I had this branch manager that said, “Why don’t you go get some business coaching?” So I got some business coaching and then I met Paul. And here’s the difference. The day I met Paul, there were a couple of things that he did for me, spending that day did for me. One was…and we can talk about this later, but I had a very rough childhood and background. It’s its own story. But to say that I had no self-esteem would be a huge understatement because I’d never even considered the thought that maybe I could be successful. And it was almost seeing Paul. I remember, thinking, “He doesn’t look any smarter than me and no better looking than me.” it’s like, “How can he do this?”
And so, basically, spending that time with Paul, it was almost like, without even saying anything, he waved his magic wand and granted me permission to be successful. The other thing he taught me was…we spent the better part of the day talking about the mindset of achievement. he didn’t have a to-do list, “Do this, do that, next do this, next to that.” What he made me realize is he made me think out to the future and he said, “Erin, what do you want your life to be like?” And when I left him, I actually wrote a sentence down and the sentence was, “I wanted my business to be the benefactor that allowed me to have a great life” because up until that point, my business was my life and a lot to the exclusion of everything else, you know?
What he made me realize was that I didn’t have a business where every client who walked in the door expected to meet with me, and I expected to meet with them. I didn’t know any different. Think about it. I was a stockbroker. I was hired to be a salesperson. They didn’t want me to think like a business owner. They just wanted me to sell stuff, to put money on their bottom line. And so, the idea of, “Okay, now I’m going to go independent,” which has its own set of challenges, right? You have to actually pay rent and buy computers and all of that stuff and hire employees and pay benefits.
And so, when I came back, I decided, “Okay, I’m going to really think of this as a business.” And the example I give to my students, and this was, I thought a great analogy that Paul and I discussed is that, let’s say I didn’t go into the financial services business, let’s say instead I decided to invest in McDonald’s franchises in my town. So I bought one on the Northside and I bought one on the Southside and I bought one on the Eastside. I’d bought one in the Westside of four different McDonald’s franchises.
And the question was in which McDonald’s franchise would you be in the back flipping burgers? And the answer was none of them, right? The owner of the company doesn’t do the work of the business. They don’t. The owner of the McDonald’s doesn’t flip the burgers. They hire people to do the work of the business. And I really had never thought of that before. I thought I was the one supposed to be doing this work of the business.
So I did go back and I said, I had one employee and a part-time and I decided, he said, “What you have to do,” because he told me, he goes, “I built a team around me. My team meets with, and services all of our clients. I just bring in new prospects. I sell the philosophy of our firm and I say, nobody gets me.
You’re buying the philosophy of firm, we have a whole team, we have people that will handle your long-term care insurance, and your regular insurance, and your investments and so you have to buy into working with our team.” So that’s exactly what I did. Now my team consisted of one and a half people when I started, but I just did whatever he told me to do. I just went back and I did it. And it’s interesting, and that’s why I believe so much in this concept of modeling.
While I think coaching has its place, heck, I was in business coaching for 15 years, but the problem I have with coaching is every quarter when I would go, I would sit there with a blank piece of paper. Our coach would ask us a question, I had to make it all up myself. And what a colossal waste of time. Why not just copy somebody, put your letterhead on it and just copy what works? I spent a ridiculous amount of time trying, “Does this work?” When it came to prospecting, “How do we get new prospects? Do I do seminars? Do I do this?” I tried everything. And why should everybody have to go through that learning curve is my question. And I don’t think they have to.
Michael: I love that discussion of the mindset shift of imagining you own four McDonald’s and you’re building your franchises, and the idea of, “So which one are you going to be situated in flipping burgers?” It just accentuates the point of, at the end of the day, are you trying to be a burger flipper who creates your own job by owning a McDonald’s franchise? Or are you trying to be a business owner that owns McDonald’s franchises? And one of the things you can do is hire the people who prepare the burgers. And just that fundamental mindset shift, it kind of reminds me of Michael Gerber’s “E-Myth” discussion, which was similar – I think that was a pie maker.
Erin: Yeah, well, in fact, that was one of the things Paul recommended that I read that book and literally I got it at the airport, I read it cover to cover, highlighted, and underlined it. It became my business Bible and I can’t tell you how many of those books I’ve given away to other advisors or at least recommended that they read it. I also got to share the stage with Michael Gerber one time, which was really fun.
Michael: Similarly, Erin, I had read “E-Myth.” I guess just very early on in my advisory career as well and found it similarly transformative of just the mindset of how you’re thinking about the business and this idea, at the end of the day are you trying to be a financial advisor or do you want to be an advisory firm business owner? Because there’s a difference between the two. So were there challenges for you in making this mindset shift or is it just that Paul said it and it clicked and you went all in and that was that?
Erin: That was it. it was kind of permission granted, go do it. And I will say this, people have asked me, because I ended up hiring two or three more people. I decided to go all-in, right. Because I was either going to do it and get the same results as him or I wasn’t. I just didn’t want to approach it half-assed because then I’d always wonder, “Well, if I’d just done this or I’ve just done that, maybe, maybe I could have gotten the same result.” So it was just a decision.
And the good news is, as I said, I had my husband with me and we looked at each other like, he’s like, “Honey, you could do this.” And I’m like, “Really?” And so, I was lucky I had the support. So he’s never like, “Hey, why are you hiring another person? And that’s coming out of our pocket.” I had none of that to deal with.
You know what was interesting was I would look around the office where there were other financial advisors that worked in the same office suite as I did and stuff. I just found it interesting that they would spend all of their time. Do you remember the old days we had quote fronds and things that? They’d spend all of their time researching, and studying the market, and all that stuff, and then they’d wonder why their production numbers were so low. And until I met Paul, I thought that’s what I was supposed to be doing. I thought I was supposed to be really knowledgeable about…I had to know if somebody asked me a question about this Saturday, the other thing I better know, well, I figured out that it was smarter to hire somebody and pay them $50,000 to know that stuff when I could go out and be making, a whole lot more money.
But I did think it was interesting. I started observing other people in my office and I thought it was interesting, the stories they told themselves because the hardest thing in the world to do in our business is go out and prospect and bring and risk that rejection that…you set yourself up for rejection. And so, we tell ourselves all kinds of stories to make sure that our excuses for not being out there and subjecting ourselves to that possible rejection. So I had to get a really thick skin.
Michael: Well, and I’m struck by that point in particular. As you framed it, the whole secret for Paul, the big transition for you was to hire a team that can handle all the clients so you can just go out there and focus on all the business development and grow the heck out of the business. And it sort of implicitly presumes that you actually have some natural skillset or ability or can learn to be good at the business development and want to spend all your time doing that.
Erin: Well, I can tell you, I remember thinking, I don’t know why, but I always thought that I would only have to prospect for seven years. And I have no idea where I came up with that number. I remember in seven years, in one day I’m like, “Oh, I still have to do this. I still have to do it.” And I can honestly tell you, it was not a strength of mine. It was not something I super-enjoyed or whatever.
I don’t know if it was a natural skill, but it just had to get done. And what’s interesting is I’ve heard advisors say, “Well, I don’t think I’m a people person or I’m this.” They say, “Could I hire somebody to do that?” And I don’t know, but my personal experience tells me the hardest part of the business is prospecting. So why would somebody work for you? if they’re good at prospecting, why don’t they prospect for their own business? Why would they feed your business?
I think that most people in our business are responsible for business development. I guess there’s some odd cases where they can hire a marketing team or other things, but for the most part, I think the owner of the business in our industry is typically responsible for business development.
Michael: Well, in general, in most businesses, even across a lot of industries, your high producing salespeople that generate business are often the most well-paid people in the entire business. Often very incentive-based, but if they really do a good job doing business development and bringing in new clients, new customers, new sales, whatever industry it is, the people who can make the revenue come in are often some of the highest-paid people in the organization because it’s hard to do.
Not that advising and the rest of what we do isn’t challenging as well. But at the end of the day, you can be the most brilliant, hardworking financial advisor. If there aren’t any clients to pay you for your time, you still won’t have a business.
Erin: Yeah. You know what was interesting, Michael, is that… I remember getting really mad because I’m like, “Nobody told me this. Nobody told me that my job was going to be going out there and doing this.” I really thought I was going to get to be a financial advisor. I didn’t know that I was going to be a marketing machine, you know? And I don’t know if it would’ve changed my decision, but I really didn’t know that. So, anyway.
Michael: Yeah. And to me, it’s that crossroads that you get to, that you literally got to, that so many of us get to, initially you have a lot of time and not a lot of clients. So we just go out there. We try to get anybody we can in the door, get any clients, get any revenue, just try to get going. But at some point, after a couple of years, you start approaching capacity where you’re using up all your time and there’s no more time and you start hitting this wall.
To me, that’s the wall where some people go out for coaching and say, “Okay. I feel my growth is slowing down. I’m not quite sure what’s wrong. We’re trying to figure out what’s wrong.” For some people, the growth just flatlines entirely and they may make that a conscious decision like, “You know what? The money I take out of the business at this point, it works for me. It solves my goals, it solves my family goals. I’m good with my 50 great clients or 100 clients and this much in revenue and this much in income.”
But if you want to keep growing further, if you want to move beyond that, almost by definition, the business has to grow beyond you and your individual ability to serve however many clients you can serve with the time you’ve got. And if you’re going to make that transition, suddenly a whole bunch of questions come up where if you’re going to say, “Okay, I’m going to have a bigger business with more people” to ask the question like, “Well, what are you going to do in that business at that point?” Right?
If you start a restaurant, often you’re the chef and the table-setter and the chief bottle washer because you wear every hat. If you’re going to go buy a whole bunch of McDonald’s franchises, you’re not usually trying to figure out which job you’re going to do behind the counter. You’re focused on building the franchises and growing more of them, and that same kind of shift, I think, kicks in for us as advisors. Once we hit that capacity crossroads, the challenge though is if you spent the past 3, 5, 7, or 10 years being the advisor and having all the relationships with the clients, shifting to say, “Maybe that’s not going to be my identity in the business anymore” is a huge challenge unto itself.
Erin: Right. And the other thing too, I guess the other gift that Paul gave me was this vision for the future and what it’s like, “Okay, what do you want at the end of the rainbow?” And I wanted that. Because my dad died when I was little and left my mom destitute and I’m very risk-averse, right? I probably did as much planning for Erin Botsford as I did for any client. I very much ate my own cooking kind of thing. And so, I wanted to make sure that someday when I wanted to, I could extract as much value from the business as possible.
When you make that a goal, you have to realize that a business has less value to a potential buyer if every customer is dependent on or is used to working with the financial advisor. And case in point, the day that I sold my company, the buyer of my company bought another woman’s business and she had about the same AUM, the same revenue as me, but the problem for her is that all of her clients were very much used to working with her and the bigger problem for her was she’d had a massive stroke. So as a result, she was able to sell her business, but she got about 25 cents on the dollar compared to what I got.
So think about that. I actually did extract out and my worldview was, “Okay, what if I had a massive heart attack? What if I got cancer? What if I had a stroke?” I was thinking about that at least 10 or 15 years before I ever even conceived of selling the company. I wanted all of my contingencies dealt with because, in my case, I had one son, and my dream was that he would join me in the business and then take over the business because I was making a lot of money, and I wanted that for him, too. But when the time came, he had absolutely no interest in our business whatsoever. So if I had not been really dutifully planning, I would’ve made an assumption, “Hey, I don’t have to be prepared for an outside buyer because my kid’s going to take over. And so, we’ll just transition the clients from me to my son.”
Well, I didn’t think that way. I planned for every contingency, not knowing which one was going to work out. Thank God I didn’t have a stroke. Thank God I was able to sell on my own terms. I had three complete offers that year, and I got to pick which one I wanted. It was only because there was no risk to the business.
In fact, I will tell you in all honesty, less than two weeks ago, I was talking to an old friend of mine in the industry, and it’s been two and a half years since I sold my company, and he goes, “So how are they doing? did most of the clients stay with them?” And I started laughing. I go, “The clients don’t even know I’m gone. We never made an announcement that Erin Botsford just sold the company.” They have no idea that I’m gone because none of them were used to meeting with me. So I go, “Nope. They’re all in the books.” And this guy goes, “That’s unbelievable.” And I guess someday it will.
Michael: It makes an interesting point, though, for a lot of us that worry about, “Well, if I sell the business, will the clients stick around?” To say, what would it look like if you so transitioned your role in the business that if it got sold, the clients wouldn’t even notice the difference because you weren’t that involved in the first place anymore?
Erin: I want to add one more point if you don’t mind. This was as much about my clients is it was about me. Okay? Bob and I travel all the time. We ski six weeks a year. We travel a ton. And what if my clients found out that I had been killed in an airplane crash? What does that do for them?
When I brought them in, I wanted to promise them that they could stay with my firm for the rest of their lives and all of their children and their grandchildren. Everybody would be taken care of.
So to me, having this succession plan that didn’t involve me showing up all the time was actually in the best interest of my clients. And so, yeah, it was good for me, but I wanted that longevity for my staff. None of my staff… they’re all there, they’re all integral to the business. And so, it was good for me, it was good for the clients, and it was good for my team who didn’t have to go look for another job because I sold the company.
The Behind-The-Scenes Work Erin Did To Successfully Develop The Business [00:32:28]
Michael: I think there’s a feeling for, at least some advisors of, “But when everybody else is doing all the client stuff, Erin, what do you do exactly?” Well, not necessarily at this point because you’ve sold, but in the final years, what was your role in the business at that point? What do you do from day-to-day, or when we’re celebrating? Like, “Oh, the clients, they see me so little, they basically didn’t even notice that we sold the firm.”
Erin: I did a lot, but it was all behind the scenes. So you talked a little bit about what are the disciplines and everything. So even though every single quarter we’d meet with clients, I still was the primary hunter. I was out doing breakfast, lunch, cocktails, dinner. I was still prospecting for new business. That’s one thing.
The second thing is it was my business, and I never took my eye off the ball. So how do I say that? Well, every Sunday night I had a Sunday night discipline from 6:00 at night till 10:00, 10:30, I sat there and I required all my advisors, every single meeting, every single call, every single appointment was memorialized.
Afterwards, they had to do a complete download. So I could look on the calendar on Sunday night and I’d see every call or appointment that had taken place in the business. And if I double-clicked, there had better be a meeting download. I wanted to read through it. They had to tell me. Because I had a big contingency, I had a lot of clients for one particular company, 280 senior-level executives from one company. Now, imagine if one or two of them got sideways with my firm. Things could have spiraled downhill really fast.
So I used to think of myself as a firefighter in Southern California, and I was walking around, and my hose was always dripping to put out little potential fires. So I needed for my people, let’s say they went into a meeting and they did a proposal for X, Y, and Z and the client balked at it and they go, “No, I’m not going to do that. In fact, my friend, Joe, he said, you did this, and he said…” I wanted to make sure that my staff would say to me, “Hey, you might want to just put a call in to Tony Smith, because…” So I was always prepared to put out any potential fires that happen. And truthfully, it got to be having 280 people from the same firm. I decided it was too risky, right? And so, I said, “It’s been a good run, but I’m going to really focus on other people.” Because I didn’t want that potential, especially in the day of social media, what if somebody posted, “Did you hear Erin Botsford got arrested embezzling money?” I’d be out of business, right? So that was a risk that I had.
But yeah, so Sunday nights, if I didn’t know what had happened in the meetings, I reviewed every meeting, downloaded the notes, and then I prepared exactly what I wanted the staff to do, what I wanted to get accomplished the next week. Monday mornings at 8:00, from 8 to 10, I met with my staff. The Atlanta office was virtual, Dallas was in person, and I had somebody working in North Carolina. On the phone I would say, “This is what I want to have happen this week. Boom, boom, boom, boom, boom.” And then…
Michael: And then what kind of things are we talking about at this point?
Erin: Well, I would say, “Okay, you know what? I saw that you had a meeting, the financial planning meeting with Bill Smith last week. Where’s the money? What’s the decision? You need to follow up with him.” When’s the money coming in? My thing is, “When’s the money coming in? Did it come in?” I was there to help drive revenue. And so, the other book that I… I’m sure that you’ve heard of this book. It’s, “Who Will Do What by When?” Have you heard of it?
Michael: Yeah. I know. I actually haven’t read it, though.
Erin: Oh, my goodness. Okay. It was…
Michael: All right. So I need to add this to my book list apparently. Okay.
Erin: Yeah. Because here’s what happened. Remember you said you interviewed somebody one time and he had four people leave within a short period of time. I had that almost happen. I had four people who were very upset with somebody in my firm, and all four of them wrote a letter. I called it the mutiny. And it’s like, “If this doesn’t change, we’re out.” I’m like, “What?”
So here’s what happened. Because I had an office in Atlanta, typically after my Monday morning meeting in Dallas, because I live in Dallas, everybody’s got their charging orders. And I’ll talk to you a little bit about what those were. But I’d go to DFW airport, get on a plane, go to Atlanta, and I might spend Monday, Tuesday, Wednesday, and come back Thursday to Atlanta or whatever I was doing.
I had an office manager; she would sit there and take all of these instructions. I’d say, “Okay. Carrie, I want you to call and follow up on that money from Bill Smith. Wes, I want you to do this.” And the mistake I made, Michael, was I didn’t say, “Okay. Carrie, I want you to do this by X amount of time.” So I had this office manager and my staff used to…they used to picture her a bird sitting up in a perch and as soon as I walked out the door she’d go, “Carrie, have you done this? Wes, have you done that? Kyle, have you done that?” And she just…she’d pick at them. And Carrie would be like, “I was just getting ready to call him and she’s pinging me.”
So the mutiny was actually resolved when I made all of them…I don’t know, the book happened to show up in my office. When the student is ready, the teacher will appear. So I got a copy of that book for everybody and as a team, we highlighted, we studied it. So from that day forward, now, my directions were, “Carrie, I want you to call or email Bill Smith by Wednesday at 4:00 p.m.” And so, my office manager had no right to ping anybody until they knew that time was up. And then this book also goes into… I was going to do a plan presentation for one of my… I’d say, “Okay, Joey, I need you to have that plan presentation done by Thursday at 2:00.” And so, what happened in that book is by Wednesday at 2:00, if it looks he’s not going to be able to get it done, he has to go back to you and they call it renegotiate. So it transformed how we did business because now there was a timetable on everything and it wasn’t this sort of oblivious amorphous timing. So it really did help my business a lot.
So those are the kinds of things, when I say I wasn’t involved… The only thing I wasn’t doing is I wasn’t meeting quarterly with all the clients. The idea of doing that right now – I think I would just kill myself because you go through the same portfolio, the same, maybe one or two recommendations. And I used to tease and say, “There are only 18 questions they can possibly ask you.” It’s just not rocket science. And so people said, “But I love meeting with my clients.” And the first answer I always have is, “All of them?” And then the second thing is I would meet with the clients because what I would do is usually a lot of my business is based on referrals. And so I would schedule clients, to come in at 4:00, meet with my advisor, and then I might take two or three couples out to dinner. So I did a lot of socializing with my clients, but I just wasn’t in those boring meetings, for hours at a time.
How She Delegated Clients To Her Firm’s Advisors, And Set Appropriate Client Expectations About Advisor Relationships [00:40:24]
Michael: Interesting. So how do you frame this with clients or with new clients? And maybe some of this is just one of the natural bias, the natural style that most of us have. You go out and do business development, you go to try to find potential clients to work with you and much of the framing is just literally you try to convince potential clients to work with you. It tends to be very us-centric.
I think for a lot of firms, there’s a pretty strong philosophy or belief set that if you want a client to agree to work with an advisor and form a relationship and bond with them, that advisor has to be involved in the business development process to build the trust, to get them there in the first place. And so, you’re in this realm where a huge portion of your time is focused on the business development and not interested in doing any of the client meetings on an ongoing basis. So how does that take you to get explained to the prospective client? How did that handoff work?
Erin: Okay. All right. It was very easy. So, yes, I’d be out breakfast, lunch, cocktails, dinner. I was the primary hunter and people wanted to meet with me and so I did the initial prospect meeting and so, basically, what I would do, I had a very strict formula on how… I never talked about investments. I have these things called disturbing tracks. I have 22 little avenues I can go down to get them very uncomfortable with some potential risk items that might be going on in their world that their other advisors have not pointed out. So that’s how I win the business. At the end of our time together, I might say, “And would you be interested in hearing about our investment philosophy?” But that was not… I basically did an end run to get all of the clients the prospects. And I had about a 95% close ratio on the first appointment.
So, yes, they were meeting with me, but I would get them very…let’s call it disturbed about some unfinished business that they might have. And then they go, “We need to get this stuff cleaned up. And, yes, we want to hire your firm. Okay. Well, let me tell you how we work. First of all, nobody gets me. And I have very wealthy, very high-powered, lots of celebrity clients. They don’t get me either. I’ve set up this business that you have to agree to work with various members of my team. Here’s how we work. You’ll be assigned a primary lead advisor who will be assisted by a relationship manager. You’re also going to be, from time to time where you’ll, we have another guy who will actually come in. I didn’t present the financial plans, I had a person dedicated, he created the plan and then he came in and the plan was shown up on the screen.
He presented the plan. So even my lead advisor and my relationship managers did not have to know everything that was in the plan. But, Joey, my planner, he had to know everything that was in the plan. So, anyway, it was very… it’s very matter of fact, if you… I’ve just discovered that your other advisors have missed some significant things. Now, you can continue to go down that road if you want to or you can come in and I’ll help you get that stuff fixed. But it’s just anything else, when you go to an attorney’s office, attorneys have paralegals, other businesses. When you go to your dentist, I mean your dentist doesn’t clean your teeth.
So why in our business can we not have other people that support the process of our business? Well, why do we have to be the ones cleaning the teeth? So you just explain, “This is how we work. And if you are great, I’d love to have my firm work with you. If you don’t, good luck with all that.” And I just never chased people. I think the strength, we called it our approach talk… I nailed it. And that’s what I teach my advisors, exactly the words I said and the strength of that site. Either we were a good fit or we weren’t good fit.
Michael: And can you just give us an example? what were some of these disturbing tracks, as you put it, of trying to open up, “You might want to be working with us and not another advisor?”
Erin: I said, I outline 22 in my course, so I’ll give you one. First of all, I learned these from another mentor of mine and I’ll just give you an example. I never want to see a client’s estate planning documents in advance because I see a lot of my competitors, as part of their prospecting, they’ll say, “Would you like us to review your estate planning documents?” My methodology, I don’t want to have seen their estate planning documents in advance because if I had seen them, I would already know what was in them, right? So when they come in we go down a path and we talk about, “Tell me about you and your kids, what’s your situation, whatever.” And then I’ll say, “Well, do you mind if I asked you a few questions?” And they’re like, “Sure.” And I said, “Okay. So can we talk a little bit about your estate planning documents? Do you do have them?”
And typically, they would have them and I’d say, “I know you probably don’t remember. Maybe it’s been a long time or a while, but can I just ask you a few provisions because we do have a pretty good level of expertise in estate planning?” sure. I go, “Okay. So, for instance, Joe, if you were to die tomorrow, does the vast majority of your money, have you left it to your wife, Sue?” And, of course, they always say yes. “And Sue, if you were to die tomorrow, do you leave the vast majority of your money to your husband, Joe?” And she’s just like, “Yeah.” “And then can I assume that when the second of you dies, you want the money to go out in some form or fashion to your children?”
And they’re like, “Yeah, yeah, yeah.” “So, Sue, I’m just curious about…if you put a provision, if your attorney put a provision in your document, Sue, what if you die first? You said that you wanted Joe to have access to your half of the money. Is that right?” “Yeah. Yeah. It’s our money together. I said, “But what if Joe gets remarried? What happens to your half of the money if Joe gets remarried? If he dies, do you have a provision to make sure that if Joe then dies that at least your kids get your half of the money?” “Well, I don’t know. I don’t know.” I said, “Well, typically in order to do that, there’d be a provision in your documents that would require Joe to sign a valid prenuptial agreement with his next spouse. And if he didn’t, unfortunately, he’d lose access to your half of the money. Do you have that in your documents?” “Well, no, I don’t think we have that.”
And anyway, so I can just…I go down these paths and I don’t want to bore your audience with the detail on that, but I have 22 of these little places and she’s like, “Well…” And I basically said, “Well, you don’t have that?” “Well, no, nobody ever talked about that.” I said, “Well, we can get that. Don’t worry about that. If you hire us, we can get that fixed.” The next one is, “How does the money go to your children? Is it outriders or graduated?” Everybody always thinks, “Graduated. Yeah, they get some when they’re 30 some when they’re 35.” I’m like, “Really?” I tell them, “I don’t like either one of those. And so, I tell them… I basically disturb them on lots, and lots, and lots, and lots of things.
And it’s it only takes… I always say be prepared with two or three because the first one they’re like, “Well, maybe that was just a little oversight on my attorney’s.” Second one is like, “How come they didn’t tell me this?” I’ll give you an example. You’ll love this one. This was taking candy from babies. I’m telling you. So this very senior-level executive come in, and he happened to bring his brokerage statement. And in the course of our conversation, I’ve never met them before, but he said… This was the second marriage. He had two kids by a previous marriage. She had two kids by a previous marriage. And the statement they showed me, they had $9 million in one single publicly traded stock in an account that said joint tenancy with rights of survivorship. And all was, I said, “Which one of you is decided to disinherit your kids?”
They’re like, “What?” I go, “I’m looking at your statement. You got your account set up. Your brokerage in New York was a brokerage house in New York. Joint tenancy rights of survivorship. What that means, Dennis, is that if you die, Cheryl has access. She gets all the money. Cheryl, if you die, Dennis has all the money. So which one of you has decided to disinherit your kids?” Like, “Well, neither one of us.” So I said, “You know what? I don’t even if you’re going to hire me or not, I don’t really care, but at least let’s get on the phone with your broker up in New York and let’s get the titling of that account, at least changed to tenants in common or some other…” I said, “This is a disaster for at least somebody’s kids. They hired me. That was it. They hired me just that. So they’re like, “Why didn’t our broker talk to us about that?” “I don’t know, but we can get it taken care of.”
Michael: And so the whole nature of disturbing tracks, as the name rather literally implies, is just some way that people become unsettled around the way their financial affairs or their current advisor or their current people are handling their situation because that’s what opens the question, that’s what opens the doubt, that’s what opens the mind to say, “Maybe we should be working together.”
Erin: Well, yeah. The thing about it is it’s just exposing vulnerabilities and these are real-life vulnerabilities that if it were me, I’d want somebody to point out. Think about it. I have clients, they always come in and they’ve got five rental properties in their personal names. Who hasn’t pointed out the flaw in that? Even if they don’t hire me, I would be doing such a disservice not to point out that, which is clearly so obvious.
Michael: You also said the part of this prospecting meeting essentially is to try to figure out if they’re a good fit or not. So what defines someone as being a good fit for you?
Erin: We had to come to terms. Our minimum investible assets was $1 million. And so, that would be a basic criteria, but also, I had people that… I had a person that had all their money tied up in their business, but they had so many issues that had not been dealt with. And they also… I live in Dallas, they live in California. And so, I made one trip out there when I heard them. It was a very large situation and I went out there and it was a disaster. It was two young guys and they had started this business and they hadn’t done anything from an asset protection standpoint.
They were also jerks. And so, in that case, my typical fee was going to be for that situation would have been about $25,000. So I quoted them a fee of $100,000 and they said yes. I regretted it later because it wasn’t worth the $100,000. They were just such train wrecks and they were young enough and doing cocaine enough that they didn’t think that they had any issues. And so, it was a disaster.
So yeah, having the right fit was super important. But for probably the last 20 years of my career, the vast majority of my clients came as direct referrals from an existing client. And usually, nice people, birds of a feather flock together. They usually have the same socioeconomic interests and things like that.
Michael: Well, I was going to ask just where did you find the prospects? I understand the sales process and the disturbing tracks and queuing up to, “Okay, well, let me explain to you how we work here. You won’t be working with me directly, but we have this team and you’ll have a primary advisor and so on.” But how were you finding the prospects and the people to get front of in the first place? you mentioned 280 clients at a particular firm. So were you deep into a particular niche of serving people at this one firm? Was that a driver for prospecting and building the business?
Erin: No. That was a lot that came way late in my in my career. So literally, when I started in Panama City and then I did it again in Dallas, Texas, I literally went where I didn’t know anybody. I went to the Chamber of Commerce and I asked the very first person I ever met to go out to lunch with me. And this is all in my book, “Seven Figure Firm.” And this is what I teach in the course too. But literally, I would have lunch with this person and I used the strategy of compliment ask questions. So think about it. I would take person…all she was the marketing person at the local chamber of commerce and I sat down and said, “Hey, so tell me about you. Where do you get your haircut? What do you do? I’m kind of new in town. Tell me about you.” And you give the person a gift of an hour of talking about themself. “Now, right now you just gave me that gift, right? Which is actually quite awkward for me because I’m so used to giving other people the gift of talking about themself.”
And so sometimes they’ll turn around and say, “Well, tell me about you.” I’m like, “Oh, yeah. I own a financial planning business and we serve clients and dah, dah, dah, dah, dah, but let’s talk about you.” I turn it right back on them. So after an hour, at the very end, I’ll say, “You know what? I have enjoyed our time together so much. Who else in town do you think? Who are some of the movers and shakers that you think I should get to know? I just love finding out about people.”
And they’re like, “Oh, you should know Joe, the banker. You should know this person.” They just would throw up on you! You need to know all these people. “Well, would you mind connecting me?” Literally, by the time I got back to my office, there was these mutual introduction emails. So then I would repeat the process and I took Joe the banker out and I took all these things. So I literally breakfast, lunch, cocktails, dinner, I was interviewing people about their lives. It’s just interesting you do that enough. And then I also did public seminars and so, I would invite people to my seminar. It was a building thing. Then in Dallas, I joined a couple of women’s groups, executive women’s round table where you had to own a business and international women’s forum.
There were some high powered women in that group and you had to be very careful in there because you weren’t really allowed to solicit business. But people find out what you do and they call you like, “Hey, we’re in the same group together. Would you mind taking a look at our portfolio or X, Y, Z?” So it really was just natural because I love people and if you’re there, if you show up, if the people… The thing about it is, is you have to wait till people have to have a triggering event to need your services. Most people don’t. And so, I was there when they had the triggering event because I showed up at these places.
Michael: So was that kind of the approach and philosophy overall that if I just keep networking and meeting people continuously and always asking, “Who else should I know and be talking to and just forever continue down that road, if you’ve not talked to enough people and reminded them of what you do, at some point, there’s some triggering event for their lives and the phone’s going to ring.” Was that the approach? “I just want to talk to enough people that eventually my phone will ring when they have their triggering events,” or was there…
Erin: No. What I do is I also ask them for permission. I said, “I give financial seminars. I bring in interesting guests. Would you ever want to be invited to one of my…” “Oh, yeah, I’d love to be invited.” Because I didn’t always bring in…I brought in a lot of outside economists and political figures and things that. And so, I tried to put interesting events two or three times a year and I would have them at the new George Bush, new presidential library. So I’d put on events at interesting places where people would want to go rather than just me giving seminars.
I built my business at the very beginning, 20, 30 years ago, doing…just hammering it out and doing seminars but I later started just doing events. I also got a lot of press. The Dallas Morning News did a story on me. if you Google me, you can go 30 or 40 pages. I tried to do… And so, only for the reason that every had financial advisor, when you Google somebody they better be able to find you in Google. And so, I went on WealthTrack with Consuelo Mack, I wrote a book, “The Big Retirement Risk: Running Out of Money Before you Run out of Time.”
So I did a lot of stuff to become known in. And I was only known in my own little world. The one thing I wasn’t known is in the industry because I just had my head down for 30 years, built my company. So what’s been interesting now is that I’m trying to sell my online course and it’s starting all over again. Now I have to meet new people in the industry. But I’m having a blast. It’s great.
Michael: So I was struck as well that as you were talking about setting up these conversations with clients, you’re not going to work with me, but let me tell you about how it’s going to work with the advisors at the firm. And you weren’t a fan of doing the ongoing meetings, just you put it there. It’s only about 18 questions that clients ask at those quarterly meetings, and then it’s just the same things that come up over and over again. So it strikes me that just you were very focused on literally systematizing this down to these are the 22 disturbing tracks of prospects. These are the 18 questions that clients will typically ask in review meetings so that you can then train your people on how do you answer each of the 18 questions and then they know and that’s that. was that…that was the structure to it, was just trying to systematize everything that way?
Erin: Yeah. And so, people often ask me how did I get my advisors? How did I train them? So I was lucky. And remember, I came back and I had one advisor, Kaylyn. And so, I started to bringing her in on every meeting. She went on in on every meeting and she was on every phone call. And so, what happened, I teach advisors how to have… It only takes three meetings, but it does take three meetings. And so, that’s what…this is exactly how Paul taught me to do it. So I was never in a room and never on a call ever again by myself.
So Kaylyn would come in, or Kyle, or Brad, or Wes, Carrie. I remember the advisors that I had over the years and the first meeting, I would come in and they were probably used to, they’re used to it hearing from Carrie because Carrie emailed them things or she responded or took their phone calls or whatever. But now she comes in and so, I’m leading the meeting and Carrie’s there, but I keep referring to her, “You know what, Carrie? What do you think about that?” I’m starting to defer…I’m deferring my credibility to her. I’m assigning, I shouldn’t say of deferring, I’m assigning my credibility to her. Not overtly, very quietly.
And I’d let her give the answers to questions or…and I’d only set her up if I knew she knew the answer. I wanted her to start looking really smart and I’d say, “Hey Carrie, can you…after meeting is over, can you get back to them on this, this, this, this, and this?” “Yeah, yeah, yea.” Okay. That’s meeting one. The next quarter goes by. I’m in the meeting, but I actually switch places with Carrie. She runs the meeting. And I’m in there for backup. I’m in there and if the client looks at me, all I do is I literally fold my hands across my chest and I just nod my head just a tiny bit. So I’m just basically affirming whatever it is that she’s saying. And then the third meeting, I’m late. I’m just late.
Michael: Darn it. I guess you’ll just have to start with Carrie without me.
Erin: And I do show up and I’m like, “Hey, how are things going?” “Oh, fine, fine. Yeah, we got everything answered. We’re good to go.” And I never meet with them again. And we never have to announce anything. It just happens. And, again, it doesn’t happen with your A clients this year. You start with your, let’s call it your C and D clients. And some people, I had a student asked me yesterday, “What do I do with these C and D clients?” I go, “You can do one of two things. You can get rid of them.” But I was in the business of helping people. And my C and D clients, once upon a time, they were my A clients.
They trusted me when I was a 29, 28-year-old girl that knew nothing. I’m not going to just kick them to the curb, I want them to be served, but they’re just not going to be served by me. And so, year one, in three meetings. You can be completely done with all your C and D clients. In year two, all of your B clients and year three, if you want to keep 10 clients that you meet with, keep them in all your clients you can socialize with. Now, mind you, this is…everybody’s got their own gig. This is what I did. But here’s another little tool or trick that I teach and this served me very well. I may have had seven conference rooms filled with our clients and as I said, that was my goal and that’s what happened. But let’s say I knew there was a plan presentation and there was $5 million on the line.
Here’s another trick that I used. I knew the plan presentation started at 2:00 and I figured it was going to be about two hours. So probably the recommendations would have happened about 3:00, 3:15, 3:30. And by four or so, the meeting should start to wrap up and either they’re going to take the recommendations or they’re going to balk at the recommendations. So I would time it. So I would knock at the door at about 3:45 and I knock at the door and go, “Hey, how’s it going?” Because remember, I brought these people in. Okay? These were my prospects that I turned over to an advisor. I’m like, “Hey, how’s it going?” And we had a signal. And this was super cool. And it works so well.
The signal was the advisor took their pen and if they laid the pen down next to their yellow legal pad to the right of the yellow legal pad, that means everything is going great, they haven’t given me any objections. The $5 million is good dah, dah, dah, dah. But if they put their pen cross at the top of their yellow legal pad, that told me, “You know what? Why don’t you sit down for a few minutes? I could use some help.” So I would wait for that pen signal. See where did they put the pen. If it was across the top of the yellow legal pad, I’d sit down, “Hey you mind if I sit down? What are you guys talking about?” And then the advisor could tee up, “Well, we were talking about putting X amount of dollars in X, Y, Z thing and they have some hesitation about that.” I’m like, “Really? Well, talk to me about that.” So I could go in and overcome those objections. And it just worked a charm.
And the thing about it is I made sure that my compensation models were such that that advisor needed to get…they wanted to get that $5 million, their compensation depended on it, but my firm’s compensation dependent on a too, so I’m not going to let that advisor hang out there. I want to make sure I support them. And then after every meeting that, we’d have an after-action. I’m like, “Okay, tell me what happened, what went on, what did you say? What did they say?” And so we would have just a little training on that. So.
Michael: Interesting. So it just all built around, “Look, as the owner and founder and leader of the firm, I’m here to help grow the business. I’m here to support bringing in clients. I’m here to support getting them on board, but I don’t want to bulldoze into every single meeting and try to be the closure that gets everyone on board because that disempowers my advisor. So I’m going to let them drive, but just have a subtle way to point out, “Okay Erin, I actually need your help a little bit on this one. This client or prospective client’s been challenging for me,” or “Nope, actually meeting’s going great. So, Erin, say hello and then you can go right on out because I’m all set here.”
Erin: And you know what? It gave both of us comfort because, as you know, Michael, I worked hard to bring that prospect in. And I would have been pissed. I bring a $5 million prospect in, and you can’t close the business. That means I’ve got to go out and get another one. And prospecting is the hardest job. So for God’s sake, once I brought him in, I wanted to make sure whoever was working on it… I wanted that business closed.
Michael: But that didn’t mean you sat in on every single meeting to make sure the client came on board.
Erin: Why? Why would I? You train good people. Everything was scripted. We had systems, we had processes, we have the steps of our process. And my people didn’t learn in a vacuum. They learned it from me. And so, once, let’s say Kaylyn, she had let’s call it 50 or 100 clients under her belt, she no longer needed me in there. I would bring Kyle into all of my prospect meetings, and they learned under me. So it took three years for them to really get good at it. And then after, they could handle all the day to day stuff. It was just closing brand new business. Maybe they hadn’t heard this objection before, and I wanted to be there to support them.
Michael: You make an interesting point that they’re learning under you, I’m presuming then where you literally, you’re the one that’s teaching them because you’re bringing them all in on these meetings to let them see it to model what works.
Erin: Yeah. And then Kaylyn, eventually, she brought people into her meetings. So when I was real comfortable that she was closing every single thing that came in she was also able to train people. So the other thing I did sometimes. I told you, I spent a month in Africa. I spent a month in India and sometimes we would record the meetings with the client’s permission. We would record the meetings and when I would get back, let’s say I had expected one client to bring in X, Y, Z, and the advisor hadn’t done it, then I’m going to sit and listen to that recording because what I did know is I had such a strong relationship in the community and with my prospects that I could always go back and recover. But I would want to listen from a training standpoint and say, “Oh, my gosh, okay, this is where I see the meeting went off the rails.” And it was an opportunity to move for me retrain a situation that hadn’t gotten the results that we wanted.
Michael: And I’m struck by this point you’ve made of doing after-action meetings after meeting with clients. Was this when things didn’t go well or do they always happen? And what do you do? What was the structure around this?
Erin: Let’s say it’s year one and I’m training Kaylyn and she…and this isn’t Kaylyn, I should use any other name, but I’ll use her name. She doesn’t know when a client says something, she doesn’t know that that’s an objection. Or think about, you have a staff person, they haven’t had a lot of sales training. And so, when the meeting’s over, the client’s gone, we’ve shaken their hands, “Okay, what just happened in there?” And I wanted to see if she picked up on what happened there and if she did…eventually, they all did. But I’m like, “Okay, remember when he said this? What did I say? How did I respond? I said that. “Now, do you see how that changed his outcome or it changed his demeanor or it changed, whatever.” For instance, I’ll give you an example.
Since I’m a woman and I belong to women’s groups, very often, it would be a woman who would drag her husband in to meet with me. He didn’t want to be there. He’s got his stockbroker and he plays golf with them every Wednesday. So he comes in and he’s sitting there with his arms crossed and I know…and it was just reading the body language. I didn’t know he had a stockbroker that he played golf with every Wednesday, but I could read the body language and so you know what I said? Beginning of the meeting, “I’m so glad you guys are here. I just want to make sure you realize that in order to do business with my firm, it is not necessary that we manage all of your money.” And you should have seen the body language.
“Oh, okay. Well, I can sit here and listen to her because I won’t have to have an uncomfortable conversation with Joe, my buddy.” It was amazing how you could watch that body language change. So just little nuanced things to diffuse the high tensions that sometimes come in a situation. I had a call one time. Client called me up. I was going to fly to Nashville to meet with a very wealthy prospect and my client called me up and referred this wealthy prospect and she called me up. She goes, “Erin, you just got to understand something.” She goes, “This woman hasn’t even met you and she’s insanely jealous and threatened by you.”
I’m like, “What?” I just couldn’t believe it and so I was so happy for the heads up because I wore the dowdiest business suit. I had a turtleneck. I wasn’t going to show one piece of skin in my business suit. And then when I walked in, it was just so funny. She was just bedazzled and bedecked out. She looked like she was going to Project Runway or something. It was just hysterical how she made herself up to come meet with me, the financial advisor who she was threatened by and she’d never met me. So what did I do with her? I never looked at her. I was like, “Oh, my gosh, it’s so nice to meet you.”
And I focused entirely on her, “Oh, my gosh, that outfit is so amazing. Look at your jewelry.” I just complimented her and I basically, I talked about my husband, my son. I needed to diffuse this fear or whatever she had going on. And only when she felt comfortable with me could I then even look at her husband or bring him into the conversation. I think I would have picked up on the cues. I know I would’ve picked up on the cues, but it was really nice for my client to call and say she’s just amazingly threatened already and I’m like, “Wow.”
So I have a specific seating system for all clients. I always sit the woman at the head of the table always. And I sit the male, I sit him on the side of the table when he’s looking at me, there’s nothing behind me to distract him. And it’s so interesting. When I have my staff, they greet the prospect and I teach them how to get that woman to sit at the head of the table because she typically won’t go there? So we have a whole seating psychology, how do you make that happen? Because what the nice thing is once you get them to sit where you want them to sit, they’ll typically, it’s when you go to church, people tend to go on the same pew all the time. So they’ll go back.
Michael: Yeah. Once you get them to sit in a place once, we fall into our habits and they always sit in the exact same chair every meeting.
Erin: Yeah. But there’s so much psychology that goes into it as you know.
Michael: Interesting. And why again was the…what was the point of the seating system and the structure to do it that way?
Erin: Well, from a psychological standpoint… I’ll give you a real-life story and this is how… Everything that I have built has been based on a story, usually. So early in the business, Bob and I had just moved to Dallas. It’s 1991, we bought a house and we were going to build a pool and he called me up and he said, “Hon, the pool guy wants to meet with both of us to discuss the pool pumps.” And I’m like, “Hon, I don’t care anything about the pool pumps. You can handle that just fine. Dah, dah, dah.”
And, of course, he calls me back. He goes, “The guy insists you have to be here to discuss the pool pumps.” So now I’m pissed. I don’t want to be there. The meeting is at 4:00, I’m new to the business now. Markets just closed. I’ve got to pack up all my stuff. I get home, the guy shows up right on time. I live in Texas. He’s like, “Oh, Miss Botsford. It’s so nice to know you.” And I’m like, “Okay, yeah, whatever.” So we get in there and we sit at our kitchen table and for the next two hours, he completely ignores me.
And I’m just seething. I’m infuriated, but I thought to myself, “What am I supposed to learn here? What am I…” And so really, I just…I sat there, I sat there quietly and we stood up and he went to walk out the front door. He’s oblivious to what he’s just done and he’s like, “Oh, Mrs. Botsford, thank you so much. I am so looking forward to building your pool and we’re going to put some good pumps in there and it’ll be great”. And I shook his hand and as soon as he walked out the door, I took my right hand, and I swiped it across my neck and I said, ” Ah.” And my husband’s like, “What do you mean by ah?” I said, “We are not doing business with that man.” And he’s like, “What do you mean he just spent two hours with us?” My husband was oblivious to the fact…
Michael: No. He spent hours with you and I spectated.
Erin: Yeah. And I’m like, “You insisted I’d be here.” I think about, in our industry, we always want the wife there. We always want both people. I said, “He insisted I be there and he had the gall to just completely ignore me.” And I actually…I have a talk that I’ve given it a lot of industry conferences and it’s called women have absolute veto power. We have an amazing tool that we can use. And all women… So I teach my staff, I’m like, “You know what? She may not be the powerhouse. She may be the stay-at-home mom, but let me tell you something, if you ignore her, you diminish her… Because a lot of times just me, I didn’t want to be at that pool meeting. A lot of times she doesn’t want to be in those financial meetings either. But “Oh, no, the broker says I need both couples, both people there. You better pay attention to her because if you don’t, by the time she gets out to that car and that door is closed, you’re going to be history.” And so I’m super-adamant about that.
Michael: The only thing worse than not including a spouse is forcing them to be included and then not actually including them in the meeting after you made be there.
Erin: Yeah. But I’m telling you, there’s a lot of advisors who are completely oblivious to that whole thing. They don’t get it. So my thing is if I put her in a position of honor and really, I put her in a place where she almost can’t be ignored, then I’m lessening because I can fall in the same trap. He starts talking about this, that, and the other thing and I’m tracking with him, I have to purposely make a point to bring her into the conversation, ask her opinion, etc.
Michael: You make an interesting point, seating her there; the head of the table is classically the position of honor, it’s hard to ignore someone who’s seated at the head of the table in a small meeting; they’re right there.
Erin: But it’s so interesting too, part of the city’s psychology is, let’s say you have a round table. What’s interesting is I teach that it’s a round table. If it’s a male advisor on the round table, the male advisor sits next to the male in the relationship and then he sits next to his wife. You never put the wife next to the male advisor and vice versa. If it’s a female advisor, I sit next to the woman. I do not sit next to her husband in a round table. I’m always going to put her between me and her husband. It’s just like, there’s so many unspoken rules that are out there and a lot of people don’t think through those.
Michael: And so why is that for the, I guess the separations in both directions?
Erin: Okay. I’m a woman. I’m a high-powered woman. She knows that she can be threatened. After all, she’s just a stay-at-home mom. She’s just a stay-at-home. In any way, shape or form, I don’t want her to feel threatened by me. And so, I’m going to put her, I’m not going to sit next to her husband. Because think about it, women inherently have a fear. I’m going to take their money, their husband, or both of them. It just is what it is. And being a woman, I know exactly how that feels. And so, with a guy, guys have it much easier, but still, you want to make sure the respect… A guy never wants to be seen as hitting on some other man’s wife. So it’s just really nuanced. But I’ll tell you, if you mess it up, you can lose it. A lot of people mess this up so much and the prospect walks out the door and they have no idea what they did wrong. “Why didn’t I get the business?” Because you were creepy and you sat too close to her. She felt uncomfortable. Who knows?
Michael: And so, that’s the point of the male advisor sitting next to the male and has the wife on the other side because, again, you’re trying to create that safe distance from a cross-gender dynamic.
Erin: That’s correct.
How She Recruited And Trained Her New Young Hires To Be Confident Advisors [01:18:21]
Michael: So as you grew the firm, how were you finding and hiring the people that grew with you to do this? Because it sounds you had a model that was built very much around like, “I’ll need to hire advisors that are going to go be business developers and bringing the clients. Erin brings in the clients, I’m going to teach you how to service them our way.” It’s a little bit of a different kind of hiring process than a lot of other firms. So who were you looking for? How did you find advisors and the rest of the team that was in the firm?
Erin: For advisors, I got the vast majority of them directly out of college and I preferred that I could get them Texas right in… In Atlanta, they’ve got degree programs and financial planning and so, I’d like to hire them. They’re 21, 22 years old. So I’d bring them on initially because those degree programs and financial planning, as you know, I would bring them in and they could do the technical work of the business. They could actually create the financial plans. And so the way I groomed them is they create the financial plans and as I said, then they would present the plans in the meeting because they knew where the numbers came from. There were so many reasons to do that too because let’s say there was a problem in the plan. And by the way, we always had a…we called it a trial close.
So when we would present the financial plans, we’d say, “You know what? We’re going to make the assumption that we got 80, 85% of this right.” And I always caveat it because presenting the financial plan, remember the client expects he’s going to have to make a decision at the end. “Here’s the plan. This is what you should do.” So I always found that to be the most high-tension meeting because they knew, “Okay, she’s going to want me to take out my checkbook. Here we go.”
So if there was a mistake in the plan, I was like, “Oh, okay. Well, there was a mistake, let’s…” And that would give them the excuse not to make a decision. So I would counteract that by… At the very beginning, I’d say, “You know what? We think we got about 80%, 85% of the data and the assumptions correctly, but we’re going to use this time together to clean anything up that we can and then we…” And then would go through…based on if we got this right or how much we got this right, classically, this would be our product recommendations. So it was basically a trial close. But, because of that, I had my brand new college students and, of course, I made my advisors go through the plan several times with the college student.
The college student would present the plans on a screen and he would walk them through the numbers and he would get used to presenting in front of people and then he would sit in the whole meeting and be able to hear the advisor make the recommendations, he’d be able to hear the questions, the objections, how you overcame the objections. And so, I loved having my college students and then I would basically, after about a year, year and a half, maybe even two years, I would start having them come in my meetings, depending on how good they were. Sometimes they ended up staying as just the planner. They weren’t people persons, they weren’t whatever. But I really trained them myself. Plus, I could get them at a really cheap rate. That means right out of college. But I had such great success and most of them are still with the firm today. I also paid them very well. I paid way above market because I didn’t want any turnover.
Michael: Paid above market to avoid turnover but on the flip side, easier to pay above market when you’re hiring them directly out of college because it’s still not a huge number out of the gate. You can pay folks a little bit less initially compared to hiring someone with 5 to 15 years of experience in the industry.
Erin: And I did have a couple of those, but I can’t say they worked out any better or worse than my college students.
Michael: So how long did it take from when someone’s coming into the firm at 21, 22 years old before they were at a point where you were ready to hand off clients then let them be in a lead position, primarily driving on their own?
Erin: Okay. So you’re going to find this story funny. So I had a guy, I’m going to call him Joe, it’s not his name, but he’s no longer with me, so I don’t want to reveal his name. But he had started with me right out of college and then I decided to open this office in Atlanta and I had two employees. I asked them…and they literally moved them, their spouses to open my Atlanta office and this guy was one of them. And so, one of our clients had $22 million worth of stock plus a lot of other stuff. And this guy, Joe, way back then, I was the lead person in the meeting, but Joe had been updating the balance sheet and doing all the prep work for the meetings and all that stuff.
So this is probably 15 years ago. So one day…now, you have to remember, I’m a 10 quick start, so I can be very impulsive. Sometimes that works, sometimes that doesn’t work. But as we were walking into a meeting, I said to Joe, “Joe, you’re going to run the meeting.” He’s like, “What?” And I’m like, “You know this guy’s situation better than he does and you know it better than I do. You’re just going to run the meeting.” And he’s like, “Are you kidding?” And the interesting thing is I knew I was going to do that, but I knew if I’d had told him the night before, he wouldn’t have slept. He’d had diarrhea. So I just…
Michael: Letting all that anxiety build-up when he finds out he’s being thrown the deep end a moment before he gets thrown in the deep end, you can’t really even mentally obsess about it too much.
Erin: No. He’d always been with me in the meetings and he’d prepared the meeting. So this time, we were going to switch seats. He was going to run the meeting and was just really funny. The client didn’t even bat an eye and he’d say, “Okay, Mister. So, I think…we’re recommending you do this, and this, and this and this, and this.” And the client would occasionally glance over at me. And I said, I would just add my arms folded and I would just sort of nod my head and he’s like, “Okay. Well, that sounds good.”
So again he ran that meeting and the next time I was late and then I never met with him again, $22 million-client and this kid was 25 years old.” So he loved it. And it’s almost they come in the next day with their statures like, “Oh, my God, look at me.” They change. Their behavior changes, the responsibility level changes because now I just turned over a really big client to him and he didn’t want to…he never wanted to let me down, kind of thing. So that’s the way it rolled.
Michael: And so Joe would have been what, three years or something into the process of learning with you if he was 25 and you’re hiring out of college?
Erin: Yup. Yup. I think he was maybe 26 because he had been with me like three years and we moved him to Atlanta and he had been working on the phone with this guy and I had been the one actually in the meetings in Atlanta and I decided I’m going to get a presence in Atlanta. I got an executive suite and then I built out a whole office. He was probably 26.
How Erin’s Firm Grew Over 30 Years And Why She Decided To Sell [01:25:34]
Michael: So what did the business ultimately grow to over almost 30 odd years of building?
Erin: Well, it could have grown to a lot more than it did, but I moved broker-dealers five times, which I don’t recommend at all. But again, my impetuousness, if I was mad about something or something changed, I… And some of it was good. And I could give you excuses or reasons why I either joined or left each broker-dealer. We ended up with almost right at $1 billion in AUM. And the last… We were doing in excess of $6 million in revenue per year, sometimes more than that. But that was a good year, an average year.
Michael: And so, why did you ultimately decide to sell?
Erin: I was bored. I guess I could have. And I know that’s crazy because I was taking home millions and millions of dollars, but I just decided I’d done this for 30 years. I think for a 10 quick start to do the same thing for 30 years is a really hard thing to ask somebody. And there was not a lot of challenge for me left. I closed everything I got in front of… I didn’t want to open another office. I guess if in hindsight maybe I should have started buying up other people’s practices, but I really didn’t want to do that for one reason. I’m probably the most risk-averse person that you know.
And so, I didn’t really want to take on, let’s say another advisor’s 300 clients or 200 clients, having no idea what that relationship had been like or what investment advice they’d been given or the expectations that they had. So, yeah, I just never wanted to do that. And so, I felt like… I’ve been working since I was 11 years old and let me extract some value from my company and I had already started, I’d written the book, “Seven Figure Firm” I’d started doing my online course and I thought, “Let me do something different for the rest of my life.”
Michael: I’m struck though that I know a lot of advisors who are risk-averse as well. And the way the risk aversion gets expressed is that they don’t want to grow a business beyond themselves and have to take the risk of hiring employees, bringing them in. What if they give the wrong advice? What if they mistake? What if they blow up the clients? What if we get sued? What if they leave? What if they leave and take clients? All of the challenges in that direction, it strikes me that your, your expression of risk aversion led you to bring in more of those people, not bring in fewer of them.
Erin: Yeah. And I guess because I really was a control freak and I had such control measures as to what our philosophy was, what products we used. Everybody did things the same way. And, again, it took me 28, 30 years to make sure everybody was singing out of the same hymn note. And I got a download of every meeting and every call and, in fact, my team knew that I was going to review things on Sunday night at 6:00. So you wouldn’t believe how many downloads were date-stamped Friday afternoon at 6:00 or something that because they knew on Sunday night, if there was a meeting on the calendar and I wanted to know what happened in that meeting, if I double-clicked and there was no download there, they were going to be getting a call from me on Sunday night. And they all knew that. So just get your downloads done and then go have a nice weekend.
And so, that’s how I maintained control. And I wanted to know. I could be in India, and something had happened. Just in the subject line alone, they had to say Eby Airbus, Eby Reed. And so then I could there was an issue, somebody complained…whatever the issue was, I wanted to be given the opportunity to either deal with it or not deal with it. And so, I always said was, “Don’t ever surprise me. I don’t want any surprises.” And so I had somebody send up $1.6 million check to another client. Wrong address.
They knew each other, but the client that was supposed to get it and the client that did get it, I had somebody email a balance sheet to the wrong person and these people knew each other, but I guess I had such good relationships with the clients that I was like, “You know what?” And I was very quick to say, “I’m very sorry.” And I never made excuses. It’s like, “We messed that up. We completely messed it up. I am so sorry. How can we make it better?” So I was super fast on, don’t ever make excuses, just apologize and be done with it because nice people are nice people and I’m sure they’ve screwed up a time or two before as well. So just admit the mistake, apologize, and move on.
Michael: I’m also just struck that sort of thematically to me that if you’re worried about handing off clients and handing off interactions to other advisors in the firm like the…one way to do that in a risk-averse manner is don’t hire anybody else and keep all to yourself. The other way to handle it in a risk-averse manner is just systematize everything you do and teach everyone to do it the way you believe it should be done and then they’ll do it your way and you can check the CRM to make sure they’re doing it that way.
Erin: Well, and the interesting thing about that, in all my business coaching, they’re like, “Okay, you have to systematize, you have to have systems and process.” And you think about Michael Gerber. He was all about that. But I couldn’t figure out how to do that. And as a 10 quick start I said, “Okay, I want us to create a system. I want to create a process.” And so, I’d get out a Word document and I’d start typing it up and then 15 minutes later, I’m off doing something else. I just didn’t have the patience to do it. So, unfortunately, at the time, I had hired a third person, so I had one, two, three people. The third person who was my right arm, her husband got brain cancer.
And so, every time he had a treatment, an appointment or surgery or this or that, I had a third of my staff out. And then finally, she was out for five months from January to May while her husband died. I literally hired that guy while he was still alive, his firm, he worked for an automotive firm. They fired him and I brought him in. I paid him $10 an hour just to do filing because he had no other skill set, but I wanted them to be able to be together. I knew the brain cancer thing wasn’t going to work out so good.
But anyway, I paid her the whole time. So when she was sitting at home next to her husband who was dying, I said..literally, I’d have to call him and say, “How do we send birthday cards? Where do we buy the birthday cards? Where do we get postage? How do we do this?” Finally, I said, “Hey, I’m paying you and would you mind if you sat there?” He was in a coma. So what I did was I hired a college student who couldn’t find a job. This was I think around 2000 and all I would do is pummel her. Her name is Laura.
I would pummel her with questions, “How do we send a birthday card? How do we place a trade? How do we whatever?” Everything was how do we do this? And so one by one, she would type up the process and she would send it back to Andy, my little college… And if he could actually do it, if he could…how do we know whose birthday is today? How do we know who’s birthday is tomorrow? Where do we… If he could do it, then I knew I had a system, I had a process, That’s literally over five months we created our first systems manual and it was born out of a horrific situation, but we got it done. And then, again, you have to change broker-dealers five times every time you change. But here’s another key thing for anybody listening.
What I did after that was every time I hired a new person, I would give them a quarterly bonus and it was based on them updating the systems manual. So, typically, when you hire somebody new, literally, I’d say, “Open up a word document or however you’re going to take notes because think about it, an existing employee is going to teach them how to place a trade or how to get an IRA distribution or how to make whatever all that back office stuff that happens, which I haven’t known about a long time. So in order for them to get this quarterly bonus, they had to show, because we kept a lot of stuff in Word, so you can do the corrections and I had to see that it was constantly updated with every new employee and that’s how I kept it.
What Surprised Erin Most About Building A Business, And The Low Point In Her Journey [01:34:48]
Michael: So what surprised you the most about trying to build an advisory business?
Erin: I guess what surprised me is that I’ve never been a very…I’m not financially super savvy. I’ve never been a market guru. I’ve always outsourced my asset management stuff. What surprised me is that people trust people who care about them. So I was really happy because I never thought of myself as being very intellectual or smart. I just liked people and I cared about their money. I didn’t get a chance to tell… One of the stories that I had personally was, but my husband and we got married and we… My mother had no money and so, the bride’s parents were supposed to pay for the wedding and she had no money to pay for my wedding, so I went on the Wheel of Fortune and I won. And so, between that and a couple of other things I had seen…
Michael: You went on Wheel of Fortune to get wedding money?
Erin: To get wedding money. Yeah. I was 20 and I lived in Southern California at the time. My friend, Maurice said, “Hey. Wheel of Fortune is doing tryouts for Bride’s Week.” I’m going to be a bride. So I went on, I solved the final puzzle. Final puzzle was down in the dumps. Anyway, so Bob and I had $22,000 total saved, paid for my wedding. I put $3,000 and I bought a townhouse in Southern California with a good friend of mine and that worked out great. I had it for 14 years. I gave the other $19,000 to a stockbroker and he lost all of it for me in about six months. I knew what hurt…I’d worked really hard to have somebody… He never even said he was sorry. He had put me in four investments that were so not right for a 20-year-old young girl. It was ridiculous.
Michael: It’s just like buying penny stocks that literally failed.
Erin: Actually, he bought four different limited partnerships and this was…remember in the year where all the limited partnerships just went belly up?
Michael: Oh, yes. Yes. Tax Reform Act of ’86. Blew them all up. Yep.
Erin: Blew them all up. So I guess I always look at everything and say, “What can I learn from this?” And the idea of I never wanted any person to feel about me or my firm the way I felt about that man. So I think that served me well to be very keenly aware. I really did treat my clients’ money as if it was my own money. And a lot of times I invested it just like I invested my own money. So that served me well.
Michael: So what was the low point for you in the journey?
Erin: You know, I don’t know if you know about my personal story, about my car accident and all that stuff that happened to me. And so, when I was 16, I was on my way to work at McDonald’s. I hit a guy on a motorcycle, he was killed and I was charged with involuntary manslaughter. I went through a criminal trial. I was found not guilty, but then the family of the young man sued my mom and me for a very large amount of money. And as I said, my father had died when I was 10 and he left my mother penniless, so with six kids. So we had just had a horrendous…I had a horrendous childhood, if you might say. So there was really nothing. Once I got through losing my father, almost going to jail, but not, and found not guilty and going through all that, it does start to put things in perspective.
Michael: I would imagine so. For all the other speed bumps that we get trying to be advisors and I’m like, “Well, no one died today.”
Erin: No one died today. And you know what was interesting was that story, I’ve told this story many, many times. It’s been written in the magazines and stuff. I was ashamed of my background. And so when my husband… The way my husband noticed me, my picture was on the front page of the local newspaper after this car accident. He’s like, “Oh, my God, there’s the girl in my algebra class.” That’s how he noticed me. So when we got married, I was so lucky that…as I said, we moved. He was in the Air Force, an Air Force pilot, fighter pilot. We moved 17 times the first 14 years we were married. And that literally saved my life because, Michael, no matter that a judge gave me, they proved without a shadow of a doubt that I did not, in fact, kill this young man.
He was 18, he had borrowed the motorcycle that morning. He was going 47 miles an hour in a 25 mile an hour zone. I was going 17. The truth was he was dead and I was alive. I was so messed up over that. And my mother was broke. There was no money for a psychologist. The irony was my father had a Ph.D. in psychology, but my father woke up one day on Valentine’s Day, 1970 and died of a massive heart attack in front of all of us kids. Ph.D., he just hadn’t gotten around to doing any planning. So here we were left.
So the big thing I want to tell your audience is this. I wanted to take that story and bury it so far underneath the rug and moving with my husband was such a gift. So I come back to the U.S. because we lived in Germany from ’85 to ’88. I come back and I get a job as a stockbroker. And I want people to see me as the glitz girl, but this time I buy a nice fancy car and I want to wear fancy this and that. And then one day in 1992… And, by the way, I never wanted anybody to know my story. I was ashamed. That was my history. That was my past. Forget it. And that was how my family handled things too.
We just put it under a rug and we didn’t talk about it. Then one day in 1992, this random couple came in the office and my branch manager said, “Oh…” I was on deck. So I got to meet with them. And he was just getting ready to retire from a major pharmaceutical company and they had a good bit of money, but oh, my gosh, they were just so distraught because their son had hit a guy on a motorcycle and he had been killed.
And the financial implications, what if they’re sued? And I just started shaking and like, “No, no, no, no, no, no, no, no, no, no, no. We’re not going here. We’re not going here.” And I’m like, “Oh, my God.” And these people were just distraught and they said their son was suicidal and so, I finally opened up, I said, “Well, I can kind of relate to…” I told my story and oh, my gosh, it was these people, they literally went lurching lunging across the desk to come hug me.
And they were crying and somebody could finally relate to the fear and all of this stuff. And I’m like, “I can tell you right now he’s going to be okay” kind of thing. And when I saw that reaction, I was like, “These people just want to work with someone who’s human.” You know, somebody who can understand maybe their fears. And so, from that day forward… I’ve told that story. I’ve told my whole story because I want them to see me as, you know what? I’ve lived a little bit of life. I understand fear and turning your life savings, turning your money over to somebody else ranks way high up there in the fear scale.
So what I have found most of all is…the more vulnerable… I have a section in my course, I call it Get Naked First. And I teach my advisors how to say, “You know what? You might be wondering how I got into this business and why I’m uniquely qualified to help you.” And then you tell your story and you tell maybe how you got beat up a little bit. And you always want to make sure that you don’t want to end up getting stuck in the mud puddle that how you came out of it, what you learn from that. And people buy that. People buy real people.
And so, the biggest surprise I’ve ever had is didn’t even know what I knew about money management, but they knew I was real and they knew I’d been through a few things and I had picked myself up the floor and I’d scraped myself off. And here I was, I was still standing. I’d lost money, I didn’t trust him. I got how that felt. So it’s amazing what being authentic can do in bringing in clients. The end.
Advice For New Advisors And What Success Means For Erin [01:43:04]
Michael: So what advice would you give to new advisors coming into the industry today and trying to get started from scratch?
Erin: Go to your local chamber of commerce, meets somebody, take them out to lunch, and ask them a lot of questions about themselves. Get interested in other people. It does take breakfast, lunch, cocktails, dinner. I did that for the better part of my career. You’ve got to be out there.
And the other thing I would say is take my course. Model what I did. Don’t reinvent the wheel. When you get in front of a prospect, say these things and they will say yes. Everybody can go out and figure it out on their own, but I’m telling you, there’s a real good way to shortcut that because I tried everything and I finally figured out what is it that works. And so, I’m offering that to people that want to short-circuit the learning curve.
Michael: And so, again, for folks that are listening this is episode 168 so if you go to kitces.com/168, we’ll have links out as well for anyone who wants to take more of a look at Erin’s course. So, Erin, what comes next for you? You’ve sold the business, working on the course?
Erin: Yeah. So I’m proud to tell you that I spent a couple of years creating this course and I had my first group of people go through, we call them our founders’. January one of 2019. In the entire year, I trained a little over 200 advisors. I have two employees working for me and after having paid all of the expenses, I was able to send a check for $87,600 to my orphanage in Africa. And so, I’m just going to keep working this. The nice thing is I do it out of my house because it’s online. I don’t have to do anything. I don’t have to go anywhere, do anything. And so, this year my goal is to train 1,000 advisors. I’m actually in discussions with five pretty serious broker dealers because my premise is that let me train your advisors. They will listen to me because I’ve actually done what…I’ve actually done this.
Michael: Works better than the home office, just kind of parroting whatever home office periods, even if they’re right’s not the same when it comes to the home office.
Erin: You know what? I don’t to say that, but that’s the response I’ve gotten from advisors because I’m credible. I’ve been in their shoes. And so, I’m hoping…because like I said earlier, there’s 1.7 million orphans in the country of Zambia alone. These are little girls, little boys who have no mommy and no daddy. And so, I’m hoping to have a bigger impact. And I’ll say, one other thing for your advisors, something that Paul really talked to me about was… And you made a comment earlier, Michael, about, “Yeah, maybe there’s this guy and he’s got enough to meet his needs and all of that stuff.” And what I’ve learned is that… I’ve talked a lot advisors. Oh yeah, they want to 10 times their business. They want to double their business, they want to grow, they want to be Ron Carson, they want to be whatever.”
And what I’ve learned is that you have to have a big enough why. And your own personal comfort will never be a big enough why to get you to do what it takes to actually be a multimillion-dollar producer. It’s just not a big enough why. So I found a big enough why, little kids that don’t have mommies and daddies. And that is enough. Every morning when I get up, I’m on a mission because guess what? If I’m not successful at this, those kids won’t eat. So that’s a pretty good driver for me.
Michael: Hmm. Yeah. That’s a pretty good driver.
Erin: And I’ve actually got a succession plan. I’ve bought life insurance on myself so that if something happens to me before I get this going much bigger, that those kids will still eat. That’s how much I care about them.
Michael: So, Erin, as we wrap up, this is a podcast about success, and one of the things that always comes up is just the…even the word success means different things to different people. Sometimes it changes for us as we go through our own lives. So you built and sold this incredibly successful advisory business. You’re building the course now. How do you define success for yourself?
Erin: That’s a good question. And I’ll define it two ways. I’m married, I’ve been married 40 years to the same man and I adore and worship him. I feel that’s success having a marriage that has gone through a lot and survived. I have one son who’s 36 and he was just interviewing for a very high power job at a defense company and he was down to the last two candidates and his boss asked him a question and said, “Who in the world do you admire the most?” And he said me. He said, “My mom.”
And he called me up because I wanted to hear how the interview went and I said, “Okay. How did the interview go? What did they ask you? Did you get the job or whatever?” And so, he told me…he goes, “Well, they asked me the question, who in the world do you do I admire the most?” And I said, “Really? Who did you say?” Never expecting, he said, “Mom, I said, you.” I’m like, “What?” “You. Yeah. You, mom.” And he said, “I told them your story and I told them how much you’ve overcome.” And the lady interviewing me said, he goes, “She started tearing up and said, you know what? I bet your mom would really like to know this.”
So that’s success – when you can raise a child, have a big business, and your child admires you. And then the bottom line is, one of the exercises that I have my students go through is I have them write their own eulogy and I give them my eulogy. Here’s what I wrote years ago because having a eulogy means it’s something that you want somebody to stand up. You’re dead, but this is how you want to be remembered. And I really believe that it defines…you put it out there, “These are the things I want somebody to say about me.”
So guess what? I have to become that person because when I wrote my eulogy, I was not that person. But this is who I want to become. And so, to me, success is about what do they say about you in your eulogy? Because at the end of the day, we all just…you put all your toys and they all go back in the box and all you have is what you gave back to people, who you helped along the way. To me, that’s success. If I can feed another kid, if I can help another advisor get out of the muck in the market because this is a hard business, then that every day gets to be success.
Michael: Amen. I love the message, Erin. I love it. Well, thank you so much for joining us on the “Financial Advisor Success” podcast.
Erin: Well, thank you so much for having me. It’s just been an honor to be here. And you’ve been so inquisitive and I appreciate you having me very much.