Welcome, everyone! Welcome to the 48th episode of the Financial Advisor Success Podcast!
My guest today is Gail Graham. Gail runs an eponymous marketing consulting firm called Graham Strategy, that works with both advisory firms and B2B vendors serving financial advisors, on how to more effectively craft relevant marketing messages to reach their target clientele.
What’s fascinating about Gail, though, is that she’s had a similar marketing role in a wide range of advisory industry businesses, from the private wealth division of PNC bank, to Fidelity’s private client group, and later as Chief Marketing Officer for the mega-RIA United Capital. And through the journey, Gail has gained some incredible insights about what it really takes to effectively market an intangible like financial planning services.
In this episode, we talk in depth about how to more effectively communicate financial planning and its value, from the importance of using plain language that people understand (instead of saying “I’m a fiduciary” simply say “Here’s how it works – I’m personally liable if I give bad advice”), to the benefits of converting your value proposition into a physical proposal sheet and bringing a Sample Financial Plan to every prospect meeting (because it literally makes the advice value proposition more physically tangible), to the benefits of including “proof points” that actually validate your value proposition with prospective clients (such as “we’ve helped 300 families do this in the past 8 years”).
We also talk about why getting better at financial advisor marketing is all about getting clear for yourself on who your ideal client really is, why it’s absolutely essential to focus in order to find the right marketing messages that really resonate, and Gail’s process to finding and refining your own value proposition.
And be certain to listen to the end, where Gail shares her perspective on the benefits and challenges of the RIA custody model, and why she’s decided to collaborate as a marketing strategist with Apex Clearing to try and help disrupt the status quo, for the betterment of advisors and their clients.
So whether you have been contemplating to how to make your own marketing of intangible financial advisory services more tangible, have been reconsidering who your ideal client truly is, or are simply interested in hearing some new perspectives on marketing topics, I hope you enjoy this episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- How to effectively communicate financial planning and its value to clients and prospective clients. [4:37]
- What advisors need to understand in order to find clients. [9:37]
- Why letting ego and money drive a job decision was the biggest mistake Gail has made in her career. [31:08]
- Tangible ways to demonstrate you are actually doing financial planning well. [54:03]
- What it takes to be successful providing advice in the digital age. [1:08:21]
- How to overcome the fear that focusing on your ideal clients with ruin your business and existing clients. [1:00:10]
- Three truths that the industry must face to create a dialogue about the emotional side of money, and why traditional services are not enough. [1:04:38]
- What financial advisors can do better when it comes to marketing, and why it is important to use language that is easy for clients to understand. [1:32:01]
- How Gail defines success. [1:39:59]
Resources Featured In This Episode:
- Gail Graham – Graham Strategy LLC
- Wordle Word Clouds
- Marketing For Dummies by Alexander Hiam
- The Millionaire Next Door by Thomas Stanley and William Danko
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Full Transcript: Creating Tangible Advisor Marketing Messages For Intangible Financial Planning Services With Gail Graham
Michael: Welcome, everyone. Welcome to the 48th episode of the Financial Advisor Success podcast. My guest on today’s podcast is Gail Graham. Gail runs an eponymous marketing consulting firm called Graham Strategy that works with both advisory firms and B2B vendors serving financial advisors on how to more effectively craft relevant marketing messages to reach their target clientele. What’s fascinating about Gail, though, is that she’s had a similar marketing role in a wide range of advisory businesses, from the private wealth division of PNC Bank to Fidelity’s Private Client Group, and later as Chief Marketing Officer for the mega-RIA, United Capital. And through the journey, Gail has gained some very incredible insights about what it really takes to effectively market an intangible like financial planning services.
In this episode, we talk in depth about how to more effectively communicate financial planning and its value, from the importance of using plain language that people understand, so instead of saying, “I’m a fiduciary,” simply say, “Here’s how it works. I’m personally liable if I give bad advice,” to the benefits of converting your value proposition to a physical proposal sheet and bringing a sample financial plan to every prospect meeting, because it literally makes the advice value proposition more physically tangible, to the benefits of including proof points that actually validate your value proposition to prospective clients, such as, “We’ve helped 300 families do this in the past 8 years. We also talk about why getting better at financial advisor marketing is all about getting clear for yourself about who your ideal client really is, why it’s absolutely essential to focus in order to find the right marketing messages that really resonate, and Gail’s process for finding and refining your own value proposition.
And be certain to listen to the end, where Gail shares her perspective on the benefits and challenges of the RIA custody model, and why she’s decided to collaborate as a marketing strategist with Apex Clearing to try and help disrupt the status quo for the betterment of advisors and their clients. And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with Gail Graham.
Welcome, Gail Graham to the Financial Advisor Success podcast.
Gail: Hi, Michael. How are you? I’m so glad to be here.
Michael: I’m doing well. I’m glad that you’re here. I’m really excited to have you on the podcast and talking about marketing and marketing for financial advisors. You know, this is an area that, I don’t know, as the years have gone by for me I just I’m passionate about the whole theme of advisor marketing. And this appreciation I think I didn’t have when I started in the industry, that, you know, we like to talk about advisors as, we’re really good at marketing and sales and business development because we get clients and we grow businesses, and it took me a long time to really appreciate that. In truth, most of us are actually pretty good at sales. We get in front of people, and we can convince them to work with us, but we’re actually really bad at marketing. And once you separate sales and marketing, it becomes really noticeable that I feel like we’re good at sales sort of…we persevere despite our sales, but we’re not really good at marketing. I don’t know if you’d agree that’s a fair characterization or not.
Gail: Well, I do think, you know, the industry has a lot of very, very smart people. You know, perhaps people that are a little more mathematical than creative, in some cases, in some roles. I think less has changed with more planners being in the business. But I think what’s really funny is, so I never thought I’d be in marketing. I am an accidental marketer. I actually ran clients and then ran businesses, and as a private banker, you know, ran teams and ultimately ran a private banking organization.
And the reason I ended up getting into marketing was I felt like I was hearing blah, blah, blah all the time, from the industry, from my own salespeople, and even from myself. And I realized that we weren’t getting through to people. And when you think about marketing, to me, it’s about trying to connect with people better. So you’ve got to kind of think of this as, “We’re in the business of helping humans.” And so humanizing what we do and talking in more simple human ways I think is one of the keys to good marketing, which our industry kind of has missed because we’ve made it seem so mysterious.
How Advisors Can More Effectively Communicate Their Value [4:37]
Michael: Yeah, or sometimes I feel like we just can’t figure out what to say, right? We have this strange gap that advisory firms have phenomenally high retention rates, so clearly clients like the financial planning stuff that we’re doing, but then if you try to explain…if you ask and try to explain like, “What is the value of financial planning that you bring to your clients,” we all seem to struggle about how to explain what it is. I think it’s really hard to market something if you can’t even figure out how to explain what you do that’s valuable.
Gail: Have you ever, you know, done word clouds? If you haven’t, you go online and just google search “word cloud software tool,” and it’s free. And you throw all the words that advisors say into it or, you know, just take a couple of pages of one of the magazines that we all read, and what you’ll find is the words that are said most often come up really big. And you’ve probably seen a word cloud. What has happened too is everybody has sort of started saying the same thing, so blah, blah, blah, I call it the giant sea of sameness, and then they just start saying it louder. So like comprehensive wealth management, even the word “fiduciary,” consumers have no idea what we’re talking about. It’s like we think they’re deaf. If I yell louder, they’re somehow going to hear me.
Michael: Yeah. Well, and just the nature of…right? Like, things like, “No, no, I’m really comprehensive. I know everybody else says they’re comprehensive. Like, I’m comprehensive.” It’s just…
Gail: Yeah, I know. I know.
Michael: …we get stuck in these traps I think sometimes. You know, I know FPA did a survey last year and found that I think it was 78% of financial advisors differentiate on service. And I’m like, “That’s like 78% of drivers think they’re above average.” Like, 78% of people can’t have the best service. The math doesn’t work, but we’re all there and saying like, “No, no, I give better service than everybody else.” As though anybody says they don’t give good service.
Gail: “I’m the most comprehensive of the comprehensive, and I’ve got…what differences me is my people.” I love that one too. All right, “You know, my people are experts.” And sometimes I’ll say, “As opposed to what? Idiots?” Other people have firms… Actually, if you want to do good marketing, that might be a way to get attention, is to have a big headline that says, “I make sure I don’t hire idiots.”
Michael: It would be more distinct. It would be more distinct, right? You know, “Smith Advisory, no idiots here.”
Gail: Right. Yeah, so I ended up getting into marketing in, gosh, 1996. I went to PNC Bank at the time, which people don’t even know this but BlackRock was a subsidiary of the bank at the time.
Michael: BlackRock was a PNC? I didn’t realize that.
Gail: Yeah. Oh, it’s just Larry Fink does not want…Larry Fink does not want anyone to know that. It’s probably his most embarrassing time in his life because he would hate to think that he was. But at least 70% owned by the bank. And they were really struggling with the fact that they had a brokerage business, a trust business, a private banking business, they had an estate planning business, they had this BlackRock thing. And they hired me as chief marketing officer when I had not had one day of marketing training.
So a friend of mine who was a CMO of Advest at the time gave me the book “Marketing for Dummies,” and I read it on the airplane, and I went out there and I said things like, “I’ll kill your own cash cow before your competitors do it for you,” and, you know, threw out some other marketing lingo, and I got hired. And later after I got hired I said, “Why the hell did you hire me. I don’t know anything about marketing.” And they said, “Well, most of the people we know in marketing were pretty terrible.” So they had had so many bad marketing people that they decided to hire someone who was really passionate about the people we serve.
Michael: So at least if you were coming in with a fresh marketing start and no marketing experience, you couldn’t make the mistakes all the other experienced marketing people were making.
Gail: Exactly, exactly. And I think what was different in those days too was those were the days, you remember this, you were probably a baby or maybe in high school, but banks and private banks and wealth management firms, everybody was doing things like having navy-blue brochures with Roman columns on them.
Michael: Because that was strong and secure.
Gail: Yeah. So I wouldn’t even say this…I actually always had a blast. We really shook it up. We combined all the businesses into one and we formed this business club, at the time it was called PNC Advisors. And I learned so much because what we did there and what has been something I’ve always done is we focused on researching consumers and really understanding the consumers, and then, only then, deciding how we were going to go about marketing. And I’d say that that I think is something advisors most, you know, don’t often have access to or don’t have time to do is to really think about not what you have to say, but what is the…who’s the audience? What matters to them?
What Advisors Need To Understand In Order To Find Clients [9:37]
Michael: So what did you find in PNC and blending these together? So you said you had a private bank, wealth management, trust, so I guess like a bunch of things that classically serve high-net-worth, sometimes it’s silos because that’s usually how they evolve in large organizations.
Gail: So exactly. It’s funny how so much of those things changed and some things stayed the same. So what did people want? They wanted things to be easier, more understandable. They wanted managing their affairs to take less time. They wanted to feel like the people that worked with them really understood them, not in their silos but understood them as human beings across those needs.
And then what started to happen while I was there was just really interesting. So we’re kind of getting into the story of my long life here, but we started doing research, not only on consumers, but we started looking at competition. And one thing we found, and this was 1999-2000, was we did this big study of very high-net-worth people and we also started to find that secretly they were cheap and they were starting to wonder why they had to pay so much. So price sensitivity, the first time I saw it was in that period of 1999-2000 among people with $5million or more. And that’s when I first started to put an eye on looking at Fidelity and thinking, “Wow.” It was so interesting because we saw a lot of high-net-worth people secretly taking their money off to Fidelity and Vanguard. And even today I think we’ve all continued to see that trend.
So, you know, when you think about it, you know, in those old days, it was really hard for people to do business with firms. Everything was manual and you had to go to face-to-face meetings, and if you had five people in the organization that you had to deal with, it was super hard. Integration of those services it’s all…you know, throughout the industry now, not just that bank, but we’ve all really started to see that you have to integrate all the services into one, into one relationship with the client, and you have to try and make it easier for them. And then I think increasingly, and we’ll probably talk more about this, people have to believe they’re getting value for what they pay for.
Michael: It’s funny to me that this whole framing of even then you’re [inaudible 00:11:50] this phenomenon that a lot of high-net-worth clients were actually kind of cheap. Like, the thing that drove that home for me was reading Thomas Stanley’s “Millionaire Next Door,” which I know also came around that time, mid to late-1990s. And one of the things I still remember from that book that was so striking is he talks at one point about how they were trying to do all this survey research with millionaires. And so, as with any survey, one of the biggest challenge is just getting the people who would fit it to fill it out and do it. And especially challenging for high-net-worth folks because the usual things you might do of like offer them, you know, a $25 or $50 gift certificate or something doesn’t necessarily work very well for them because, you know, they’ve got million or millions of dollars, so are they really going to care about the 25 or 50 bucks?
So he said for a while they started trying to do something where they would appeal to people’s goodwill and say, “You know, we’ll make a donation in your name to the charity of your choice, right? Like, you don’t need the 50 bucks anyways, we’ll donate on your behalf and you’ll get a little bit of psychic goodwill.” And he said one of the things that really surprised them about the research that they found was they surveyed more affluent people and less affluent people, one of the things that they found was that the affluent folks were just as likely as anyone else to take the 50 bucks. They didn’t even need it. Just, you know, if you’re really good at picking up those pennies all your life, and that’s actually how you accumulate your wealth, you can have a lot of wealth and still be very frugal. And that was part of their whole millionaire next door theme, that there’s a lot of people with wealth who live frugally.
Gail: Yeah. Well, if you remember…remember when Costco started carrying wine?
Gail: Yeah. I mean, it was like, you know, every Mercedes and BMW pulled up to that place to buy that discount wine. It was before you could get discount wine. So, I mean, I think we’re in a world where price transparency and people’s expectations for, you know, fair prices, so just that’s a secular trend, that’s a big long-term trend. And I believe we’re hanging on to our current pricing. And that’ll be something for us to talk about more.
Michael: Well, and, I mean, to me the internet did it. Like, the internet has become the great pricing equalizer that you can’t hide behind pricing anymore and rely on people not to know what’s going on. You know, even down to the last time I bought a car, you know, we went into the dealership and found what we liked, because I’ve got my wife and the kids in tow because we were picking out a minivan, and found something we liked and got to that awful point where you have to actually go through the haggling process with the salesperson, who comes back and says, “Well, you know, I’ll go talk to my manager and find out the best deal that we can get, blah, blah, blah,” and comes back with a price.
And sitting right in front of him, I pulled out my smartphone and I googled the car, and I googled a price search, and in about 30 seconds literally showed him, “Well, here’s another dealer 8 miles up the street who’s offering this for $1,000 less than you are. So either you can fix this bogus price you just gave me or we’re just going to pack up the family and drive 8 miles up the road and go buy it from them today because I’m going to have a car at the end of the day, and I don’t need to pay you more when I can drive 8 miles to save $1,000.” And, you know, sure enough, then they come back from the manager a few minutes later and it’s like, “Oh well, we figured out a way to make it a little bit lower than the previous price that we swore was the lowest price we could do. Here’s a new low lower price that coincidentally is a couple hundred dollars cheaper than the other person.”
Gail: Absolutely. So just remember, that’s not just a smartphone, that’s a smart consumer, and people are smarter and smarter. One of the things that really strikes me in so many respects, and I think this is starting to be something a lot of people in the industry are talking about is why is financial services so different from everything else consumers do in the world today? So as an example, I’m redecorating a house, I’m renovating a house and then decorating it in South Carolina. I have access to Pinterest and Houzz, and Wayfair, and overstock.com, and virtually any curated, you know, solution I want. If I see a piece of furniture I want, I check it out on Google I know. I have an interior decorator who works with me, we collaborate, it’s super easy. I can make purchases with one click. It all happens. And then, you know, in every other aspect of our lives, there’s a lot of control, so you have that smart consumer. The technology is just enabling the smart consumer. And whether it’s communication, whether it’s product selection and comparison, whether it’s acquisition of products or servicing of products, there’s this integration of our digital life and our personal life.
And then you go to financial services. And, you know, I just had the horrible moment of realizing that I have to redo my estate plan because I’m moving states. I dread it. I dread it, you know, because it’s so kludgy and I know that this attorney is going to drag me into her office again. You know, the financial services in the broader sense, not just investment management is still so different from the rest of what we do.
Michael: And I think that’s the pressure building on us. I mean, and even down little things like the…you know, I couldn’t even do the example I just stated, of, you know, I’m talking to the car dealership, I’m like, “Well, I’m just going to verify you’re giving me a good price by looking it up online and seeing whether it’s a good price.” I can’t even do that in the advisory world because no one puts the prices on the website. You can’t even…
Gail: Yeah, don’t even get me started on that.
Michael: You can’t even figure out what people charge. And, I mean, it’s the ultimate irony, especially in the RIA community, because we’re legally required to make a public brochure that explains our pricing. It’s called an ADV Part 2. And we have to make it publicly available, but we don’t even make that accessible on our websites. But anybody who wants to know what we charge just has to go to IAPD and look it up.
Gail: Yeah. So let me ask you, Michael, how long do you think, let’s just put it out there, like, at what point is…when do we reach the point where we cannot get away with that anymore?
Michael: Honestly, like, I think we’re in that transition moment now. You know, we even had kind of an unwitting accidental experiment with this for our advisory firm. So I pounded the table about this for years internally at Pinnacle, that we needed to have all the pricing clearly stated on the website, and we did it for a while. And, you know, we get a pretty steady flow of leads from the website, because they kind of drive through a lot of marketing stuff that I do, and we had a problem at one point about two years ago where we were doing some updates and so we had to take the fees off the website for two months. And we took the fees off the website for two months and the new client activity dropped like a rock. And we got the issue fixed and we were able to put the fees back up on the website again. As soon as we put them right back up, a couple weeks later, all the activity rebounded.
Gail: So here’s the thing lately I’m excited about. So, you know, I get an idea in my head sometimes and I just enjoy thinking about it. So I think I put this on Twitter. It’s my bed. It’s completely unfounded, I’m not making any big news, do not take me seriously unless you enjoy imagining things, too, but, you know, I look at the big BlackRock and how they’ve reorganized themselves and they now have this big digital framework around their organizational structure, and then I look at a company like Amazon who has all the data in the world. If you put the two of them together, which by the way Capgemini World Wealth Report just studied and 78% of wealth management industry leaders actually believe that one of the big tech, Apple, Amazon Google, Facebook, is going to enter our business in the next 3 years.
So just imagine the smarty-pants at BlackRock, my friend Larry Fink, we used to call it black box because that’s how smart they are, getting together with the marketers and digital experts at Amazon. Do we think any of us that they would do business the way we do business? Would they build it? Would any of us build it? If we could rebuild what we’re doing, if we could start over, we wouldn’t build it this way.
Michael: Yeah. Well, I mean, even when you get down to a company like Amazon, which you know, last I saw I think the Trust Survey said Amazon is the number one trusted brand amongst millennials now, every price is right there online, every single price. Whereas in our industry, you know, we actually have websites that say things like, “The ardent belief in transparency and independence, which is why you can’t find our prices on our website.”
Gail: Yeah. But, you know, so when we think about that, okay, because I have enormous empathy for our industry too. It’s easy for me to wave the flag and say, “Guys, we’re going to have to change and let’s all wake up.” We really have to look from the very beginning of what we do, you know, all the way through to what happens in the advisor’s office, because the murkiness in fees, it’s so Byzantine to try and explain. Do you remember…again, you’re probably too young, Michael, but there was this book, “The Bonfire of the Vanities.”
Michael: I remember the movie.
Gail: Oh, hey, you listened. Look at you. Well, I believe it’s in that book that there’s this story of this guy in financial services, I think he was an investment banker, trying to explain to his son what he does for a living. And the kid is going like, “So you didn’t bake the cake, daddy, but you slice the pieces of the cake.” So the father is probably trying to explain that he doesn’t exactly slice the pieces of the cake, he takes the pieces of the cake and takes one crumb from one piece and puts it on another crumb, and the kid looks at him and says, “Dad, why don’t you just get a real job?”
And I had to laugh because the complexity of how our industry…you know, I came from asset management, from, you know, Fidelity, obviously spent a decade there. We all know fund structures. I can’t even understand them. After the time being there, my eyes would glaze over. I don’t even understand all the share classes. I don’t want to know the management fees. I just want to know like why does it have to be so hard. Because if it’s that hard to explain, that doesn’t feel good. You know, the whole problem advisors have is wouldn’t it be easier if they could simply say, “Here’s what I charge you,” and not have to hold their breath hoping the client doesn’t understand that they’re actually paying all kinds of other fees inside those products?
Michael: Well, and to me that’s what starts to open the door for disruption, right? When someone comes in and just says, “Look, here’s a crystal clear structure, here’s exactly what I charge, exactly what I do.” I think to some extent that’s even part of what’s helped the RIA side of the business to grow a little faster than some of the other channels there. I would argue still not doing it well since we ironically don’t want to be transparent about our fees on our website, but, like, we’re clearly within the law the brokerage industry was.
Gail: Yeah, I think many RIAs want to be clear. But you know what’s hard about it, they want to be clear. I have a passion for RIAs and an empathy for the challenges that RIAs are facing today. But how do you suddenly go and explain to people, “Oh, I know you used to think I charged you 1%, but really I charged you a lot more than that because I’m passing along charges from other people in my fee structure.” You know, we almost have to…like, what was it when your kids was like, “Ollie, Ollie, I’m coming free,” and everybody comes forward and no one gets caught. But I believe, I think index funds and ETFs have helped. I know that there are these…you know, there are other ideas out there like clean shares, and I think fund companies are going to have to respond by making the products simpler and clearer.
Michael: Well, and to me, that’s kind of the natural outcome of this movement towards fiduciary for the whole industry. That just it puts pressure on everybody up and down the line to make things simpler and clearer. If only because one of indirect effects of fiduciary obligations is that when you’re the advisor, like, when it’s your butt on the line, complexity is just scary because there’s ways that you might mess something up, explain something wrong and get sued. Like, just it’s safer and more defensible for you as the fiduciary to recommend clearer and simpler things. There’s fewer opportunities for confusion and misunderstanding.
Gail: Absolutely. So you mentioned my favorite word. So Blaine Aikin at fi360, he worked at PNC when I was there, so I think he’s great, but I saw him recently. I think we were trying to get a cab and we were both in New York or something, and I said, “Blaine we need to change the words.” I said, “That’s an F-word. That word is hard for people to even say, consumers, they don’t like it.” I said, “They really don’t…” I did a little test with a group of people in a focus group and they were like, “I don’t like how it feels to say that word.”And I was laughing because I’ve recently seen some advisors, instead of saying, “But I’m a fiduciary,” because no one really knows what that means, really being clear and saying, “Here’s how it works. I have signed up so that I’m personally liable if I give you bad advice.” You know, just in human language.
The other thing that kills me, and I’m not real connected to exactly what’s happening with DOL, but, you know, if you look at it from a consumer’s perspective and you talk about suitability versus best interests, wow, the industry sounds like we’re in the mafia or something. Like, how can something be suitable for you and not be in your best interest? Like, the reverse of that would be that things that are…I mean, why would I ever think of something suitable that wasn’t best? I really think that we need a new dictionary, we need new words.
Michael: Well, the way I frame it to people, and I’ve kind of pounded the table for years, like, fiduciary and suitability are the standards. The things they actually pertain to is sales and advice. I mean, we have suitability standards for salespeople, we have fiduciary standards for advisors. So if you go to someone and just say, “Look…” I think we understand what an advisor is and we understand what a salesperson this, right? We have those images in our head, of salespeople versus advisors. And that’s the actual difference we’re talking about. I mean, like, legally, someone who works for a broker-dealer as a salesperson, if you give advice that’s more than solely incidental to your…the sale of your brokerage products, you actually have to register as an investment advisor anyways. That’s why so many people are hybrids now. So it’s literally a sales versus advice environment. And I think we just went back to say, “You know, do you want to work with a salesperson or an advisor?”
Gail: But how do you handle the hybrid? I mean, the truth of the hybrids? You know, when I left PNC and I went for one year to the worst company I’ve ever worked for in my life, Fleet Bank, where I’m glad to tell you I lasted one year, they fired me probably because I spent the whole year saying, “Oh my God, I can’t believe we’re doing this.” And they fired me on the day I returned from my mother’s funeral, so that was Gail’s very bad year. I was a disaster. I was terrible. It was just awful. But the thing was, when I went onto Fidelity, you know, every rep at Fidelity is a hybrid because they’re selling and they’re selling managed accounts as RIAs. I had to mention that crazy year because I don’t want anyone thinking I’m skipping over that horrible experience when I jumped from PNC to Fidelity.
Michael: Yeah, it sounds like that’s a dark year. And it was short-lived for Fleet as well, right? Because they rolled up into Bank of America a few years later. Isn’t that who bought them?
Gail: Yeah. So you have to be from New England to know this, but their old local look like a toilet bowl, and now I know why, because it was like that kind of place. And they used to actually say, “If your customers don’t kill you, your employees will.” And I ran a piece of the private bank that was…all of New England was about, I don’t know, $49 billion wealth management business for the bank. I had to listen to motivational tapes to go in the morning to work because no one ever talked about what was good for the customers. It was just an awful thing.
So one thing I will tell you in my career is that, you know, I really believe in financial services, but there are bad places in financial services, and I think that RIAs by and large are a white light and a group of people who hold themselves to higher standards, but, oh, you know, it just makes me sad that so many companies, and I was at a conference at BlackRock last year and I listened to some heads of some of the large wirehouse firms talk and I felt like I needed to take a shower afterwards. Yeah, I hate that.
Michael: I mean, I think it’s just the challenge, right? There’s so much money in the money business that it’s ultimately why all these discussions around conflicts of interests matter. And it’s not that, as you say, like, it’s not that there aren’t a lot of good people that do a lot of good things, it’s that the business also attracts bad people. And if the bad people aren’t accountable for the bad things that they do, then the bad things proliferate. And at worse, you can actually make more money doing bad things profitably than you can doing good things profitably sometimes, and so if the bad players get too profitable too quickly doing bad things, they drag down the entire reputation of the industry.
Gail: Yeah. The mindset I’ve always had is I’m not in the money business, I’m in the people business because it’s about people. At the end of the day, you know, money is just a figment of our imagination. We all somehow agree that there’s some store of value in this unit thing called money. You know, what it is is it’s the difference between people’s hopes and dreams and goals and fears and all that. It’s an exchange of value that has to do with their lives. And you know that I’m a champion of financial life management and I spent about nearly five years at United Capital with Joe Duran and that team, and, you know, really deep down in the DNA there, it was this point that it’s not about the money, and that money is an emotional topic. And then when we’re serving people in this industry, caring and loving them as customers is like at the center of yourself is what makes the difference between a good advisor and a person who’s just here to make money.
Michael: So you went from PNC to a dark stint…
Gail: A dark pool.
The Biggest Mistake Gail Has Made In Her Career [31:08]
Michael: Yeah, I mean, was there some good takeaway life lesson from that?
Gail: Oh my God, so many. So to give you the quick story. So I was a private banker blah, blah, blah, I won’t mention names, but I had a #MeToo moment at another financial firm, #MeToo in the # kind of me-too, in 1996, and I couldn’t stay there anymore because I just knew that I couldn’t stay there anymore, and went to PNC in Pittsburgh while my husband was still in DC. So I had this very modern marriage where we were living in two different cities. And so that was only reason why when head hunter called me about going to Fleet, my husband was being transferred to Boston. And they hooked me, I use that word “hook” for a reason, you’ll know in a minute, because they paid me a lot of money to go and take this job. Because we had done a really good work at PNC and it’d become really well-regarded for the integration with the businesses and the customer focus and all that, so they thought, “Well, we’ll just buy this person, we’ll drop her here, we’ll do the same thing.”
Well, they paid me a lot of money. So I was miserable from about day two because, you know, once I got past getting excited about the free donuts in the morning, I had to deal with the real job, my husband looked at me, because we were finally in the same city, which was the best part of it all, he looks at me and said, “Well, you’re getting paid like a whore, you should expect to be screwed every day.”
Michael: Spousal support right there.
Gail: And I thought, “Oh, my God.” So I learned my lesson, which is…I love the guy. We’ve been married 34 years, but what I learned there was the biggest mistake I ever made in my career was I let my ego and I let money drive my decision about a job. And I think part of it too was I wanted to be in the same city with my husband so I let myself believe things that weren’t true, but I didn’t follow my heart and my gut, and I let my values take a backseat because my deep down inside I knew these weren’t my kind of people.
Michael: I was going to say, I mean, did you have a gut warning as you were earlier in the interview process or was it one of those like…because I know this happens to some people, that there are occasionally some bad forums that are just really good at making it look good upfront until you show up and you go through the first three days on the job and then go, “Oh my God, what have I done to myself?”
Gail: Well, I think what it was, and they weren’t bad human beings. You know, it was the situation. I should have read the fact that that situation was this really stressed out organization of trying to blend Bank of Boston and Fleet Bank and it wasn’t going well. And they were facing an uphill battle, and they’d made overpromises to their shareholders, which led to a lot of bad internal behavior where they would make quarterly numbers, you know, jack the rates on overdraft charges and all this other stuff, you know, that they felt they had to do almost in survival mode. So, you know, in retrospect that was the year of 9/11. It was a bad year. That was the year of Brazil falling apart, Robbie Stephens fell apart. I mean, all these things happened. So it wasn’t just the people, it was maybe in the circumstance they were in, the culture became a really bad culture. And so I learned a lot.
In fact, at the time I thought, “This is the worst thing that ever happened to me.” I will tell you now that learning both of the career situation but also the devastation of my life from the loss of my beloved mother of an early death from a horrible disease, to coming home from her funeral and on the first day back of work losing my job. It was like, you know, the spirits in heaven were banging me on the head with a sledgehammer saying, “Wake up sister. You’ve got to do some thinking, you’ve got to change your life around, you’ve got to learn something from this.” And I did. And I think that’s when I really became far more sensitive to my own need for my work to have a really strong purpose. You know, a sense of whatever I’m doing I’m trying to do the right thing. I’m trying to be champion for the people we serve. Really a more noble calling, a north star to my career. And I’ve been able to have that ever since, I have to say, including now at my consulting job.
Michael: So what was the aftermath of getting fired from Fleet Bank and then needing to make a decision about what’s next? I mean, what happened from there?
Gail: Well, I drank a lot of wine and laid in bed. And it’s really at the same time.
Michael: Most of us are out for a while.
Gail: And at the same time with chocolate and cookies. You know, I have to say, I really had to deal with my ego because I had always been successful. I’d always been, like, top of the class, whatever. And to have to look at people and say, “Oh, well, that failed, I failed,” was so hard. And really to look at them and not cry and look at them and keep my shoulders back and my chin up. I had identified myself with success far too much until that point, and then I sort of went around and I started telling everybody, “Look, I got fired.” I was like…almost like, “Let’s practice telling more people that you got fired,” and then realizing I just told someone I’ve been fired. They may not like me but guess what? I’m still here, I’m okay, I’m alive. So I grew up a lot. I grew up a lot.
Michael: I don’t know if it’s a true statistic but the one I had heard recently is that the only thing that’s worse than the failure rate on entrepreneur starting businesses is the failure rate for a successful entrepreneur starting their second business, because they come in so overconfidence from having been successful the first time in something that’s otherwise so challenging that they tend to make a lot of really bad and careless decisions because it’s easier when you’ve got some dollars and money and resources, having been successful with the first business, and there’s no humility there’s no hubris, and so you tend to get yourself in trouble. And it’s all ego. It’s all ego getting in the way.
Gail: Yeah, and look, if we didn’t have some positive arrogance, none of us, you, me, other people that have done well, we wouldn’t have done well. But there’s this thing about being willing to be introspective and grateful for what comes your way and not assume you have any right to it. You know, so you asked what happened. So after recovering from that and being a silly woman who ran around telling everyone, “Hi, I got fired, do you still like me? Am I…” You know, thoroughly kind of manic, I started revisiting what I wanted to do with my career. And I knew at that point I didn’t want to go back to the banking industry. And I had a really good relationship with the people in the community of wealth management, and I think the lesson is that, one of my lessons in life is have friends. Really care about your friends and network with people, not just to get something but to get to know them and to build relationships.
And I was so fortunate. This guy I knew, who was at that point at Fidelity, suggested that I talk to the head of strategy at Fidelity. And I think I mentioned to you when I was at PNC I was noticing people were leaving and going to Fidelity. And we were doing this research and we were finding that the customers who left were saying, “I like this thing they have called a website.” And, I mean, imagine that, they have a website.
Michael: And, like, you could just go to a website and do things and you don’t have to call your bank rep to get something done.
Gail: That was shocking. But at the same time, what was happening at Fidelity was that they were developing…at that time they had more millionaires in America had accounts at Fidelity than any other firm. They didn’t have necessarily their largest accounts, but they were touching so many people. And I think that statistic is still true, through their 401(k) business, through everything else. But these people were getting very wealthy, who had bought into Magellan and other stuff, and then what was happening was they were reaching a certain age and a certain asset level where, especially after 9/11, they were saying, “Maybe I need some advice,” and there was nowhere to turn, because believe it or not, in 2002, so I went there…and this was when I was interviewed in 2002, there were only maybe, gosh, maybe 20 people who were representatives at Fidelity who were allowed to have accounts assigned to them. That was the very early, early group. They called it private access. It was their early little friends of Ned private client business.
So I came along and I met with them and I said, “Listen, I think you have an incredible opportunity.” But they were interviewing me and somebody else, like, from Mellon Bank or something, and I said, “But for you to think that you should now wield a wealth management company and try and be like the other companies, that makes no sense for who you are. You know, you should figure out how to be something different and to bring low cost into the equation of wealth management.”
So they hired me, and it was really quite interesting because I actually had to meet with Ned Johnson, who took…if you ever saw him in the day he, like, pointed his finger at my face and was shaking in my face and he goes, “You know, missy or something, they’ve brought me other people here who want to talk to me about high-net-worth and I fired all of them.” I was like, “Okay.” I’m thinking, “Well, I’ve already been fired once so go ahead.” But what we were able to do there, and it was a team of people, I started in strategy and I ran the strategy for high-net-worth consumers at Fidelity, and then I also…the strategy for retirees, people entering the first…that was when the first boomers were going into retirement. And it was phenomenal.
Michael: And basically, when fidelity started seeing this massive 401(k) outflows as people started retiring and said, “We need to come up with a way to be relevant for these assets as they leave the 401(k) business?”
Gail: Yes. And if you remember, we launched a retirement income planning tool then. There was actually a pretty darn good tool that people could on their own fill out, and with a rep on the phone looking at the same screen they had, build a retirement plan and an income plan. There were incredible advancements. And part of the time there was a guy named Jeff Carney, there was Ellyn McColgan was there, Bob Reynolds, who’s now at Putnam was there. They were incredibly, incredibly creative times. So I was in there doing strategy and marketing, and then they asked me to build out the private client business and prove the model, which we did, which became their national Private Client Group. And that was really great.
Along the way, they then asked me, in 2007, to go into the RIA channel, which is now…I forget what they call it now, Fidelity Institutional, but it’s the RIA channel. It used to be IWS. Because they recognized that as still the age wave and wealth wave kept occurring, that their direct model, their Private Client Group wouldn’t be enough. And Ned Johnson and Abby Johnson’s brilliance is they don’t care how people do business, they just want their money at Fidelity. So, you know, extending the RIAs meant they could keep more people at Fidelity through an RIA.
So I was with them from…I was with their the RIA business from 2007 to 2012, and through that process, of course, weathered through the Great Recession, and during that time, I was asked to cut all kinds of costs in all the institutional marketing businesses. And what happened then was I started to find that I was losing my inspiration again because I had loved the building part of building something really positive for consumers. I will tell you that I never cried so hard as the day I had to fire 68 people, including 2 of my friends, which we had to do. You know, I had to cut $32 million in costs out of a $186 million budget and get it done in 90 days. And you don’t do that without firing a lot of people.
But from 2010 to 2012, I just felt like I had my head down, I was doing the job, but I didn’t feel the connection to helping consumers anymore. You know, I mean, hitting the numbers wasn’t enough. So that’s when I actually did a research project for Abby and Kathy Murphy and Mike Durbin at the time was running the IWS channel, on the future of advice with another group of people, very smart people, and I discovered Joe Duran. He was a client of ours, but I really hadn’t spent much time looking at the model for honest conversations and the money mind and the client engagement model, and I just was so lit up. I was like, “Oh my God, this is what I want to work on.” And Joe knows this story because I literally said at a speech…Joe, you know, talked about the profile of the company. They were small, they were really small at the time, I don’t know, $10 billion, and I said, “We should either buy them and adopt this practice throughout our retail organization, or we should put them out of business because this is a big threat, this is a big deal.” Everybody laughed, ha, ha, ha, but then we wanted to go back to…
Michael: That’s what you said internally at Fidelity.
Gail: Yeah, Fidelity. I said that at Fidelity.
Michael: We need to buy this or we need to do it and take over because otherwise, it’s a threat to us.
Gail: “It’s a threat to us,” I was saying, “Because we’re not bringing…” And my favorite thing when Joe and I first started talking was that we agreed on this one very important point, money is emotional, it’s not rational. People are emotional. When people go to meetings with their advisors and the clients don’t do any talking, it’s because we’re not talking about what matters to them.
So I quit. You know, at this point, I’d learned from the time that I lost that job at Fleet that money isn’t what drives me. I mean, I need to have enough money, but more money isn’t necessarily going to make me happier at some point. And with two-career family and everything, I could afford to say to myself that, “Life’s too short and I need to be more fulfilled.” And I went to Fidelity, I said, “Look, I’m going to leave. I want to go to work for a client.” They were graceful. It was wonderful. They allowed me to talk to Joe, you know, not to have a non-compete situation. And I called Joe and…or actually Cecile Munoz, I called Cecile and she called Joe, and then he called me and he goes, “I don’t think I can afford you.” And I said, “Well, I don’t really even have a price tag, so don’t even talk about that. Let’s just talk about the business.”
And I remember being in a grocery store and he kept calling me, and I’m trying to buy groceries, and…but he was so passionate. And I went out to California and I spent time with the team. And at that point I came in as head of strategy and business execution to help, not only with what is this client experience that we want to deliver and what is…you know, to really ultimately led to the development of what is Financial Life Management. But in those days, you know, they were running fast and like cowboys and I knew how to run these larger organizations, so I spent, you know, about our first year working with Joe and the team just to help get organized. Because we needed to get organized so we could grow big. And then I spent the next three and a half years in marketing, but my real [inaudible 00:46:27], the real thing I bring to the table is strategy inside around the consumer, messaging. You know, I’m not, never was, never will be a real advertising person. So about a year ago, Joe and I started talking about where the company was and what it needed, and we agreed I was going to step away because I could no longer do the flights back and forth. It was making my [inaudible 00:46:50].
Michael: Because you were still based in Boston…
Michael: …from the Fidelity days and the United Capital headquarters is Newport Beach.
Gail: There is no more convenient commute than Boston to Newport Beach, California. There’s no way to get there. And I was like every other week doing that, and doing Dallas and all that. And the time in my life was changing. My husband was turning 65, and, you know, this fabulous man I’ve been married to all these crazy years, we decided that our number one priority in our honest conversations card was spending time with people we loved. Unfortunately, we were married to each other. So we both made some changes to spend more time with each other. And it’s worked out beautifully that I could leave United Capital, they’re in good hands, the new CMO, he seems like a great person. They have such a good message. And then I had to decide what’s next for me. And that’s kind of, as you and I talked this summer, that’s where I’ve been for the last few months, is figuring out what’s next.
Michael: And so where are you ending out? What’s next?
Gail: Well, I’ll tell you, it’s been so much fun. So I started thinking about the fact that now that I don’t have any corporation that I’m responsible for, I can just be myself, myself. So on my Twitter handle it’s @TheGrahamBrand. It’s me, it’s my belief system, it’s my opinions, it’s my whatever skills I bring to the table. And I knew that I wanted to consult rather than work full-time, but I don’t even have a website because honestly, I’m being very selective about the work I want to do, and I haven’t really had to go drumming it up so far knock on wood. And frankly, I’m just being lazy. I just have to get that website done, so remind me next time, tell me I need to do it.
But what you’ll hear from me or see from me is that my job now is that I just want to be a proponent of people that have the big ideas in our industry. I want to build the brands people love. So when you say, “Love,” we’re in financial services and I say, “Yep, love,” because love of…you know, brands people love are the brands that do the right thing. For consumer companies, the ones who I think people love are the companies that are bringing transparency, caring, trustworthiness and cost efficiency. I really believe we have to get to cost efficiency to consumers. So organizations that are really trying to move the needle, not just to be like everybody else, and who I believe when we talk have an aspiration to be noble. That appeals to me.
And then on the B2B side, it’s, and I’ve just really enjoyed this, it’s talking to all the different companies out there that are trying to bring what I call challenger brand ideas. Ideas that are going to disrupt the industry but for positive reasons, like for the greater good. To make a better glide path, if you will, for our industry to get from where we are today, to that place where we feel like we are as good as we can be in terms of our client experience, our trustworthiness, our cost-effectiveness, and, you know, the value of what we deliver, which I believe…I’m a huge advocate for human advice, but I think it has to be delivered differently.
So what all that goes to is my firm, Graham Strategy, is marketing advisory firm, and I do a lot of work around focusing an organization on what is the strategy, really kicking their tires hard on that, Is the organization aligned around the strategy? What’s the message? What’s the competitive positioning? What’s the brand story? And then when we do all that kind of groundwork then we get into how should we market this? So it’s really fun because I want to be on a…I want to feel like I’m on a team and that the work I do matters in the world. So, you know, I want to be affiliated with people where I’m going to be so proud to have been part of their story.
Michael: So this sounds like a sort of a large firm, large enterprise kind of consulting role in business. I mean, you know, you’re not talking about individual advisor’s businesses doing marketing strategy in the scope of what you’re talking about here. Are you?
Gail: Well, I’ll tell you, so one thing I am doing, and I don’t know if you’d put it in your list, but I’m writing for FA and I’m speaking where I can, and I am trying to create some tools and templates for advisors so that every advisor can get some of my methodology. So I just wrote last month in FA about sharpening your message. And it takes the process I use and makes it actually very doable for someone to do in their own office. I have another one coming out this week, next week on something called the Strategy Wheel, which is a way of looking at your business and your strategy and making sure that what you say you’re trying to do and what you’re doing every day actually matches up. So I’m going to be doing education for the small advisors, but I have also done a couple of one-day workshops frankly for people that are friends, and I believe in those people, and I want to help them.
But right now I have two…I have one B2B client and one firm. That firm is a firm here in Boston that is Seaward, Seaward Wealth Management. They’re a couple of billion-dollar firm, they’ve been around a really long time. They’re the finest people I know. And what I love there is they are working on how to transform their firm to become a financial life management firm. So I’m working with them very directly and very hands-on with their team, and I really enjoy it.
Michael: I’m just wondering, I mean, what kind of work does that entail? I’m just trying to envision, like, a multibillion-dollar RIA.
Gail: So the first thing is, this doesn’t matter how big the firm is, because I’ve done this with three-person shop and I’ve done it with, you know, United Capital, is I walk in the room and I just say, “Tell me what your strategy is.” So starting there, every firm I know needs to work on, “What is our strategy?” And I know I’ve heard you talk about it. Who are the clients you serve? What do you do better than anybody else? How do you prove it? All of those things. So typically, the process is a couple of sessions with the team, really working with them on what is, you know, they call it the value proposition. I do a competitive review with them. I make them sit back and look at all their competition, and then look at what they say about themselves and we critique it, which I actually wrote about that in that article.
I mean, really get a beer and a bucket of popcorn and just sit in front of, you know, your computer, pull up websites of 10 RIAs, and it gets really clear which ones have a good message and which ones don’t, where things are overly redundant. And so we do workshops like that. And then I start to help produce for them a messaging roadmap, a brand architecture, and then ultimately what is the marketing plan, what is the…you know, what are the tactics?
How Advisors Can Tangibly Demonstrate The Value They Add [54:03]
Michael: So I feel a little bit depressed because I feel like most of us, you know, the start of that was this sit-down discussion of, you know, where are your strengths, what do you the best at, and how do you prove it? And I feel like most of us would fail right there, can’t answer that question well, right? Like, I do financial planning, I do it well. Like, the outcomes take 30 years, I don’t know how I’m supposed to prove it, right? How does the average advisory firm get over this kind of hump? Like, is there some magic to figuring this out that we’re missing about how do you prove it?
Gail: Well, actually I’m thinking of sharing this tool that I have, that’s a one-pager, that really helps you kind of force yourself to sit down and write this out. So I’ll give you an example, and it won’t be Seaward because, you know, they’re my client I’m not going to give away their secrets until we’re ready, but, you know, I can tell you that…some examples are, for instance, when you think about who you serve, you know, one guy called me and I tried to help him out but he kept telling me that his target market was Delaware. That doesn’t work. And I mean, I’m not the only person who say this. Steve Sanduski says this, everybody says this, right, in marketing, Julie Littlechild, that you need…Steve Wershing, you need to know and speak…and Bill Bachrach, certainly all the time, like, that you need to really think about who is your ideal client.
So let’s say I am looking at working with a client. I’ll really make sure that they think about who is that ideal client, and then what is the emotional response of that person? So where is their mindset? So for example, right now, if you’re looking for prospects who’ve never used an advisor before, they’re probably skeptical, you know, because there’s a reason they haven’t used an advisor before. I believe right now one of the biggest problems we have is we’re full of words. We don’t show anybody anything, we don’t have anything tangible. So I might say, “You want to go after Gen X and a lot of people that are focused there. The Gen X, you know, prospect who is skeptical about advisors has heard, you know, some good and some bad about them, who doesn’t really understand what they’re going to get from advisors, who’s heard all this lofty language and all these promises that haven’t followed through, etc.”
So, you know, I’ll work on how to explain what you’re doing as three easy steps, how to create visuals that say, “Let me show you what I do,” and present it to them more tangibly. Like, you know, clearly at United Capital, the tools, the Guidebook, the GuideCenter, those create tangibility from an industry that’s been trying to be an intangible for far too long. So the point I’m making is that you have to understand what is the emotional state of that person that’s going to purchase from you, what is holding them back, you know, in terms of wanting to use you as an advisor. Are you clear at being able to explain what you do? Can you show it to them so that it’s almost a sense of proving it?
And then I do think there needs to be proof points, too. Like, “You know, we say this because we’ve helped 300 families in the last 4 years build retirement plans. You know, we can prove this to you because every one of our staff takes three times the amount of continuing education required for their profession,” or, you know, other things that are real.
Michael: Like, that’s an interesting way to frame it. I mean, just the whole idea that…I mean, at the end of the day we sell an intangible service, which is really hard to evaluate. So what can we do to make things more tangible, to make handouts, documents, as you said proof points that reinforce the points that you’re trying to make?
Gail: Yeah, and another big topic is that in addition, so for Gen X prospects, I can tell you this, they want to see something. They’re used to being able to look online, and like you were talking about Amazon, you don’t only get the prices, you get to see the stuff, right? There’s a picture, so your visuals matter. A concern I have right now is a lot of advisors are going to lose your baby boomers in retirement because suddenly they’re in retirement, they’re like, “Oh-oh, I already hit my number. That’s what I paid my advisor for, now I’m in retirement, these fees look pretty expensive, what am I really getting from my advisor?”
Michael: Yeah. I’m on a fixed budget now, so I’ve got to care about my outflows a little more than I used to.
Gail: Yeah. So, again, creating a sense of tangibility. Like, I had this concept I shared with some advisors in a workshop, which was, you know, why don’t you think about your clients approaching retirement as though they’re graduating and there’s a ceremony to it in your relationship with them? Why don’t you say, “We’re going to go through a new diagnostic that isn’t just your retirement plan, but we’re going to talk about where we’re going from here in sort of the five-year increments. Let’s talk about what you want to achieve in each of those five years. What are the different trade-offs you could make?” You know, even think about a new kind of client engagement tool, a new profiling process or something that creates a sense of a milestone and helps them envision what the relationship with you is going to be like once they’re in retirement. Because right now it’s kind of like, “See you later,” you know. So tangibility, things people can see and touch, some ceremony around the changes in people’s lives, those are the types of things I work with clients on the retail side.
Michael: And are you willing to maybe share this kind of value proposition one-pager with our listeners and we can either…we can post it in the show notes for the podcast, since, as you said, since you don’t have your website up yet?
Michael: So I’ll give you a hard time about that, but sort of that…
Gail: Sure, yeah. Yeah, I don’t have time to put up my website because I’m doing freebies for everybody.
How To Overcome The Fear Of Ruining Your Business By Focusing On Your Ideal Clients [1:00:10]
Michael: Fantastic. So this is episode 48, for those who are listening. So if you go to kitces.com/48 we’ll make sure we have that value…figuring out your value proposition one-pager from Gail up there that you can go through and maybe try to spend a little bit more on this dynamic. Like, how do you figure out who your ideal client is and what you need to do for them?
Kind of two challenges for us as advisors. One is figuring out who our ideal client is in the first place. Kind of like, “Well, anybody who pays me enough money to make my business work because I would like to pay my bills.” And then that even if we kind of find that, I feel like there’s a there’s a secondary challenge to it, which is it feels scary or sometimes outright terrifying to try to focus on your ideal client. In a world where most of us don’t have a business fully comprised of “ideal clients” already, if we did we wouldn’t be going through the exercise, a huge portion of our revenue comes from non-ideal clients, and it’s hard to imagine how the business could survive if all I did was work with ideal clients and not take all the people that allowed me to get my business to where it is today. How are we supposed to overcome this kind of…I sort of find it’s like, visceral fear of, “Am I going to blow up my business by focusing on ideal clients because I couldn’t have even gotten to where I am now if I focused on my ideal clients?”
Gail: Yeah. Well, you certainly don’t go back to your core clients and say, “You know, you’re not really my ideal client.” So they don’t need to know that, right? But what you can say is… I’ll take you back in the day when I was a private banker. I had traditionally had a book of business of wealthy people, and what I learned was I really liked dealing with families that had owned businesses and were in the technology arena, where they had complex, like, stock options and that kind of stuff.
And, you know, I just started to say, without trying to be, you know, in any way distancing myself from the doctors, lawyers, corporate executives and inherited wealthy clients in my book of business, but I started to say to the prospects I liked, like the technology executives and their families, I’d say, “You know I feel I’m best working with people like you.” You know, that’s if I’m talking to the client or if I’m talking to a prospect, “I feel I’m best working with people in the technology industry, and the reason is that I really understand both the volatility of the roles you have, the way the stock that you own can come and go, and how important it is, you know, as you’re being entrepreneurial to both plan for the upside of that and the downside of that. You know, I’ve found that I’ve learned enough about the companies in this area, that I can speak to my clients much more knowledgeably about their organizations.” You know, I would just say it like that.
So I gradually became kind of the little private banker to a bunch of high-tech guys and won a $300 million account away from Goldman Sachs. And it was just because, the client, actually who’s still a friend of mine,” he said, “You just made me feel like you really cared about working with us. It wasn’t just the money.” So your ideal client can be just where you feel like you can add the most value. So I don’t know, I don’t know if that helps you. It doesn’t mean you only talk to, in my case high-tech executives. But, you know, I think everyone practically speaking, has to have a base of business to pay their bills. And it’s just as you mature and get more successful, I think you need to think of yourself as a scarce resource. And that’s another thing I do enjoy, is saying to people, “I’m not for everybody.” And at some stage, this is certainly what I say now, is that, “You know, I’m at the stage in my career where I really kind of pick the clients that I think I can help the most.” So people think maybe they won’t be on your club, you know, they can’t get into your club.
Michael: So we’ve talked about the advisor marketing side here, I do want to shift a little because you mentioned you’re working with some B2C clients, so Seaward Wealth Management, and then you’re working in the B2B end. So I guess it means like firms that work with us as advisors. So are you able to share who you’re working with on the B2B side?
Gail: Yes. I’m actually working with Apex Clearing.
Michael: Apex, okay?
Gail: It’s really…yes, Apex.
Three Truths The Industry Must Face [1:04:38]
Michael: Okay, so maybe you can explain for people who aren’t familiar who or what Apex Clearing is. I don’t think they’re really a household name in our advisor community. Although I guess if you’re…I’d say if you’re doing marketing work with them maybe that’s going to change soon.
Gail: Yeah, I know. If it doesn’t change then I’m not very good at what I do. So it’s really an interesting story. So 2012, I believe it was, a group of people stepped in to purchase a failing clearing firm, which was Penson, and that became Apex Clearing. And when that happened, the folks that came in, that came from an entity in Chicago, very smart people, they looked at what was going on in the clearing industry and they kind of scratched her heads and said, “Gee, this really doesn’t make sense.” Like, in other words, that the old ways of custody and clearing made it very kludgy, very difficult for people to do things as simple as opening accounts or, you know, operationally both for the customer to open the accounts and for staff people to open the accounts. So they spent a lot of time rethinking the business, reimagining it, retooling it. They narrowed down their customer base and they reemerged as Apex Clearing. And the reason we don’t know a lot about Apex is that they have been sort of behind the scenes helping to build Betterment, Robinhood, Stash, and other firms like that.
Michael: Yeah, I mean, they’re a big deal from that end. You know, for everyone who’s kind of wondered, like…
Gail: A big deal.
Michael: …why is it that…well, I mean, I feel like this is sort of the wake-up call for the whole industry. Betterment showed up in 2012, I mean, they were a little early, but, like, they hit the advisor scene in 2012, and you can go their website on their smartphone, open an account, transfer money, fund it, and actually be invested in about 3 minutes. And we’re still sitting here on the advisor side saying, like, “Well, I really hope soon we can get to the point where we don’t have to fax the new account paperwork, we can email it, at least. And, you know, maybe if it goes well and there are no [inaudible 01:06:40], in two weeks we’ll get the ACAT transfers in and we’ll be done.” And Betterment is doing it in 30 minutes, funded and dusted on a smartphone. And Apex is the back-end that was making that happen for Betterment, for Wealthfront. Robinhood, Stash, a whole bunch of those kind of robo direct-to-consumer startups that have these amazing superfast integrated experiences on opening accounts and funding accounts and investing.
Gail: Yeah. So if you remember what I said earlier about, you know, if Amazon entered the business would they do it our way? Well, the answer is no. And because they were working with these real innovative firms, you know side-by-side, Apex was able to help build from the ground up a new way of working that’s if you think about it… I look at all the custodians and, of course, I was at a custodian for a long time, so, you know, they’re near and dear to my heart. I’m very empathetic. I know that they’ve given a lot of people jobs and really helped our industry grow, and done great things.
Michael: You’re building up a really big “but” at the end of this.
Gail: I know, but here’s the “but.” The truth is, if anybody in the executive teams, if any of the custodians could do it over, they would do it differently now. They would change how they were doing business. Imagine it like this because I don’t know…
Michael: In terms of, like, the service and the technology or the underlying business model of what they do?
Gail: I think a lot of things. I mean, here’s…the way I visualize it is we still have these big…you know, we’ve got these big plumbing systems, and what they’ve done to make them modern is they’ve attached APIs to them so they can connect to a lot of things, and they’ve created new surface layers and workstations to make it look and feel prettier, but at the bottom it’s still these big kludgy, you know, plumbing systems.
What It Takes To Be Successful In The Digital Age [1:08:21]
Michael: Right, like, we’re building on all this technology infrastructure that got created in the 1980s I think mostly, late ’70s and ’80s as the, you know, the guts of computers showed up and people started computerizing trading and brokerage?
Gail: So imagine it this way. There’s this…I forget the man’s name, but one of the senior executives at Oracle made the point that APIs…you know, we think of APIs as these add-ons to systems, but what if APIs, in fact, themselves are the operating system, okay? So in other words, what if you could create information highways that don’t require you to even go down to the level of the plumbing, that are just…and again, don’t ask me too many technical questions because I’m a marketer, but what the Apex processes do is they let people open accounts on their phones, they let the operational staff in the firm deliver on what’s needed to get those accounts opened almost instantaneously.
So, you know, this conundrum that I think our industry faces, and I believe Apex can play a role in, and I don’t want to sound like a shill for them, but I feel about them the way I felt about United Capital when I went there, which is we have some truths that need to be told. We have some places where we need to get honest with ourselves, we’re going to have to dig deep and make changes so that see the truths that we told and the story that we really got, you know, to create dialogue about was that money is emotional and therefore traditional financial planning alone is not enough, and that life management and a new kind of client experience were necessary. That’s a truth and a movement that I see happening now across the industry even beyond United.
Well, a second truth that has to be told is that, for us to be successful providing advice in the digital age, we need to solve for the conundrum of improving the client experience while at the same time driving down costs and confronting the conflicts of interests that occur, that exist. So let me take them in that order. And again, I’m not a shill for Apex here, but I’m going to just speak to the example of sort of what I think that they bring to the table here, which is, you know, you can’t have a digital…you can’t say, “I’m really cool, I’m very digital. You know, I have this digital interface for my consumers,” and then have the experience you just described about account opening. It makes no sense.
Michael: Like fax paperwork, writing signatures. I mean…
Gail: Yeah, you know those stacks of paper where everybody takes those yellow tabs and tabs the pages that people have to sign, that is like so 1982. It’s just terrible.
Michael: Because for some custodians someone actually is still taking the piece of paper and keying it into a piece of software that was written in 1982.
Gail: Yeah. And I was alive in 1982, unlike you, so I know it’s true.
Michael: I remember it. That was a good year for kindergarten.
Gail: Yes, I’m sure. So, you know, the digital experience, you know, is really important, and I believe we’re at the tip of this. It isn’t just about account opening. I believe over time everything we do with money will be omnichannel and there’ll be a digital, you know, opportunity or access to use digital to getting to what people need, you know, whether it’s for lending, payments, you know, portfolio management, you know, whatever, financial planning, that collaboration and the advisor and the client seeing the same thing at the same time. It’s just the way the world has got to be. It makes sense.
So the second part of the conundrum is while that is a big leap, and I’ve recently read something where an advisor was saying, you know, it’s going to cost us a lot of money to invest in this. And yes, that’s true, it’s an investment, well, at the same time I am one of those who believe we’re headed to a 40-basis points world. And maybe it’s 50 basis points. But the point is it’s not where we are today.
Michael: Meaning the AUM fee for advisors is going to fall to 40 or 50 basis points?
Gail: Yeah, it is, which will mean advisors will need to serve many more clients. And they’ll be using their time on the human side of the stuff and not on, you know, the manual work that we do today. So, you know, this is my belief. So if you both need to invest in digital and drive down your costs, here’s the problem. What you’re getting with the traditional custodians is all these fancy schmancy front-end digital tools that they’re offering you, but they’re not driving down your costs, they’re not changing your practice fundamentally. And that makes no sense to me.
So with an Apex, you’re getting the ability to deliver that “what I want, when I want it, how I want it” experience that, you know, the consumers today are looking for, and they can really create massive efficiencies. And, you know, ask them, not me, if you want to know more about that because it’s not something I want to go into detail on, but what I’ve seen is that there are no…those conversations about, “Well, who do I fax it to,” there’s no one to fax it to. It all happens…you know, it just happens. Like, big data is the solution for getting all the “know your customer” stuff done quickly, not Betty, and, you know, and some other person in the office.
The third leg of that stool is that, in terms of the cost structure, that we need to drive down our cost structure, well, part of the problem with the cost structure, and, again, you know, I think this is one of those Byzantine bowls of…or it’s a bowl of spaghetti, let’s put it, not Byzantines, a bowl of spaghetti that we need to fix, is that just as we saw with, you know, TD, an organization I respect very much and which Michael, you said a few things about this last week, just a few, you know, what that exposed in that situation is that our custodians, they love us. Yes, they do, but they have to protect these revenue streams and revenue sharing. And that, that is…that does not pass the sniff test. If you showed consumers the world we live in and explained revenue sharing, it doesn’t work.
Michael: And so then what’s the third pillar of our complex here?
Gail: Well, the third part of the conundrum is the thing that you brought up last week, my friend, conflicts of interest.
Michael: Yes our infamous TD Ameritrade because they were removing most of their no-transaction-fee ETF line up, including all the ultra-cheap Vanguard funds and iShares BlackRock Core funds, in part because they refused to pay TD Ameritrade anything for shareholder servicing and stuff on the back-end. And the reality is TD Ameritrade makes their money on those NTF funds because the asset managers pay them on the back-ends because someone’s going to pay for it.
Gail: Yeah. So that truth, which is revenue sharing, is…I mean, honestly, again, if we were starting over, nobody can really bring that to light, you know, and show it to the public and explain it to the public and feel okay about it. It’s kind of this weird thing where our industry is so used to this frankly scheming of revenue sharing from fund companies through the distribution channels that, you know, we’re hooked on it because we have overhead to pay. And I speak now as a former person from the custodial businesses. You know, they’ve got to pay their overhead, that’s how they got paid, so they’re kind of…it’s an addiction. But as you saw last week, it’s not only…well, it wasn’t only the decision that was made, but it was sort of the blunt-force trauma with which it was delivered. You know, it’s just clear that, you know, they’re having to balance what’s right for advisors and therefore what’s right for consumers with, “What do we need to do to make, you know, make our revenue targets?”
And I don’t want to…it is not just one firm. I felt badly that it came across the way it came across from TD. But I even think with the E*Trade deal with TCA, if you read the fine print and that revenue boost they’re expecting out of TCA from being purchased, there’s a little mention of being able to realize better economies with the asset managers or negotiate better, you know, financial arrangements. It’s rev share, that’s what they’re going to do. They’re going to muscle the rev share to increase the revenues at TCA.
Michael: So, you know, I’d written recently that, you know, at some point I’m expecting some level of industry disruption to come and someone steps forward and just says, “Hey, our [inaudible 01:16:54] business is we just charge you a simple flat basis point fee and we strip all the other stuff out, and then that’s where we end.”
Gail: Yeah. Well, that’s the kind of…I think that’s…you know, when I look that’s why I decided I wanted to work with Apex. I had met Bill through LinkedIn, and he reached out to me and then we had this phone conversation over the summer, and I had that same feeling I had when I met Joe, which was like, “Oh my God, I want to help this guy. I don’t care what it takes, I just believe that somebody needs to be what Joe was, which is a truth teller.”
Michael: You know, there are a handful, but yeah.
Gail: I mean, we all need to be truth tellers. I always go back to this. Nobody is a bad person, at least only a few, okay? I have a few. I’ll tell you about those later. But most people aren’t bad people. If any of us had a chance, let’s say we threw the Legos all went back down and we had to rebuild the industry, how would you build it, right? The truth tellers in the industry, Joe Duran, I think Bill Capuzzi is a truth teller, there are others out there, the truth tellers are the ones willing to raise their hand and say, “Look, guys, everybody here, we know this is true. We need to address it sooner or later, let’s address it now.” Because if we don’t, I’m telling you, Amazon will do it for you, Google will do it for you. I really, really believe this, which is why I am tough and people find me sometimes, you know, real pain in the ass because I say what I think. I say this because I believe it’s true. And I want us to be better.
Michael: Yeah, to me it’s a market that’s ripe for some industry disruption right now, so I’m really curious to see what Apex brings in. I mean, again, that combination of, “Let’s just build on more modern technology and not be stuck with 1980s or maybe sometimes 1990s plumbing. And what does it look like when you simplify the custody model and just actually try to be really good at the custody?” And I think that to me is sort of the striking effect that I’m finding all over the industry right now. That, you know, so many companies are under pressure right now. They’re trying to figure out, “How do we do more for advisors so that we either get their retention or keep their retention?”
And the big thing for years now has been, “Let’s do practice management advice for them because you kind of win twice.” One, if you give some good practice management advice hopefully you build goodwill with the advisor, who maybe feels a little embedded to the platform to help build them. And when you’re in any kind of these asset management or custody businesses, if you help your advisors be more successful, they literally bring more assets, so it kind of pays for itself if it goes well.
But, you know, I have to admit that the challenge that I don’t find from the advisory end, like, there are more and more companies coming at us now saying “I can help you with practice management, I can help you with practice management, I can help you with practice management,” and I increasingly find myself just saying, “Well, could you just take all the resources you’re spending on practice management and just use them to make your product better or your platform better?”
Gail: Truer words have never been spoken, Michael, because I just have to say, like…you know, here’s how I see it. Like, have you ever seen those things on those infomercials where they’re going to sell you one knife but they’ll give you five for free?
Gail: Right? Free gift with the purchase? How good is the knife if they’re giving you five for free just to make you buy it? Now, I’m a crazy person who buys that kind of stuff, so don’t get me wrong. You know, it can be a marketing strategy, but, like, if you have to keep luring people with, you know, all these bonuses and all these extra things, like, more frosting on the cupcakes, it’s wasteful, A, and you have to ask yourself, “Okay, I know that it doesn’t look like I’m paying for it but I really am paying for it. Where am I paying for it?” You may wonder. “Where am I paying for it? How am I paying for it? And if I didn’t have to pay for it…” There’s this wonderful kind of study called…well, there are two kinds, “Discrete Choice,” and I forget the other one, it’s a buyer value study, where you ask people what they like and what they’re willing to pay for. And it’s really interesting because everybody likes free ice cream, but I’m only willing to pay for one scoop, you know.
So I think we’ve gotten a little nutty in this competition for… You know, there was a song back when you were a baby that was, “More and more and more, how do you like it, how do you like it,” okay? It’s disco, okay? Really, do we need all that? Or, as you said, do we focus? You know, take away what is…take away, simplify…kind of take away what is maybe valuable but not to everybody and offer it to people at a price, charge for it. If it’s good they should be willing to pay. And really pare down the core offerings.
Michael: Yeah, I mean, and, you know, nothing against even the fact that some platforms can frankly do practice management advice at their scale than what just a slew of independent individual consultants maybe can do. So I don’t think it’s the worst thing that there are some large practice management consulting divisions tied to broker-dealers and RIA custodians because they do have essentially a captive channel to scale a consulting business. But, yeah, if you can charge me for the consulting advice and then just make the actual core platform cheaper and better because it doesn’t need to subsidize the practice management division, that would be better.
And I’d say the same thing on asset managers as well. You know, wholesalers are like…you know, the number of wholesalers that are coming at us now to say, “Hey, you know, we can give you practice management insight.” And I can be, like, “Well, could you just make a product out and then I’ll call you when it’s a good product?” Because it’ll come on my search and screens.
Gail: Yeah, I was on the Advisory Board, the RIA Advisory Board at PIMCO I think, like, 2014 to ’16 or something, and they were really great about that. They were really focused and they didn’t, like, fluff it up with lots of stuff. You know, like, “Let’s talk about third-generation wealth and all that.” That they really stuck to their knitting, and I admired that.
Now, I will say this. I think everything in life is about evolution and cycles. And I think that one thing that I’ll say is there was a time for the custodians to help educate the industry, and they did. They fostered the RIAs. We wouldn’t be there without them. Like Schwab, you know, really sticking it out there Fidelity, they used to have this thing where it wasn’t even an RIA, it was just like authorized signatories or something on accounts where retail people could get an advisor. All of that was good. And I think it kind of ballooned into these large educational organizations, but we’re at a different place, and we have to step back and say, “Where are we now?”
And I think now where we are is we need that technology and those processing skills to give us the digital experience, the lower cost and the greater transparency which you can only have with reduced conflicts. Because that’s where America is, back to where we started. You don’t go on amazon.com and wonder if there are, you know, shady deals happening behind the scenes, you just don’t. Now, maybe they are, and I will be deeply disappointed if so, but I don’t think so.
Michael: Well, if there are at least they’re pretty minuscule given the company’s size and scale. And for better or worse, you know, they don’t let it impact the experience for the end-user. Again, like, I think that to me was what certainly got me pretty worked up around the news for TD Ameritrade. Like, again, I don’t begrudge that the company makes its money, and we all get that free platforms aren’t really free, but if the problem is you need to put a price increase through, like, if they just came and said, “Hey, you know, we can’t give you all these Vanguard funds for free anymore because there’s too many of them now getting paid, so either we’re going to get paid three basis points on the back-end from State Street SPDRs,” because, you know, their whole expense ratio is only three to seven bips, so I’m assuming they’re not getting paid more than three. If they just came and said look, “Either you can switch to these SPDRs and we’re going to get paid three basis points or I’m just going to charge you three basis points as an asset-based wrap fee to keep trading the Vanguard funds,” that would have been fine. Like, you know, I get even a price increase if you have to do a price increase, but when your conflicts impact the way that advisors actually do business and the advice/client relationship then it creates problems.
Gail: So let’s imagine that all the fund companies and the custodians could go in a room and in old days like Tammany Hall, there’s no internet, nobody knows, they all cut a deal and they fix it, right? The problem is we can’t do that. And everyone’s competing with each other and it’s only prolonging this, which is why what we’re going to see, I think, just as we’ve seen with these, you know, the Betterments and the other distribution models that have come about, which will mature and will grow and be…you know, people say, “Oh, they’re for the millennials.” Well, guess what? My kid is at Goldman Sachs, he’s 31 years old and he makes a lot of money, he’s a millennial, you know. But the new entrants will keep poking and poking at us until we realize…and I think I said it earlier in the broadcast, you know, one of the best piece of advice I ever got was, “Take your own cash cow and make it obsolete before your competitors do it for you.” That is, like, at the top five things I know in business.
Michael: So let me shift a little bit kind of back to the advisor side of marketing and marketing financial planning. You know, you’ve had a really interesting history of doing this in all these different context, you know, marketing, private wealth under Fidelity then actually marketing to us as RIAs and then marketing financial planning to consumers at United Capital. So, like, wearing your marketer’s hat, your marketing expert hat, like, what do we as advisors not actually get about how to market what we do?
Gail: Well, I said earlier about showing people something that could make them get it. You know, it’s like Steve Jobs famously did not try and explain the iPhone, he showed it to people. So look at the financial plans you produce, do you have a prototype plan that you hand people and say, “This is what you get?” Because the notion of financial planning is as obtuse as, you know, like, “What does that even mean? I don’t know what that means.” And by the way, so many people have used the language and not delivered anything of value, so do you have a sample plan that when you say to people in just good old English human language, you say, “Listen, what I do is I work with people to make sure I really understand their whole life, not just their money. I figure out with them what’s really important. We use this plan as a dynamic process where we’re constantly making changes. Here’s one, an example of what it looks like. If you work with me, this becomes the basis of our relationship. We use it and talk about it, and which I can do over the phone, on video or however you want to do it, just as you would keep a fitness journal or, you know, a Pinterest board or something like that.”
Like, how do we make it not fuzzy and old-fashioned, and really, you know…I mean, I still have the plans I received over the course of my life. They were navy blue, they were on a shelf, and they were dead the minute I received them because they were based on a bunch of assumptions, and they presumed with a lot of confidence to predict the future. How do we make it different? So I would say tangibility point and being able to show people things is really important.
Michael: Well, and even just the tangibility of a sample plan. I have to admit I don’t know a lot of firms that actually have and bring a sample plan into their financial planning meetings with clients. I feel like we’re more likely to have like an investment proposal than we are a sample financial plan even though ironically the sample plan is easier because once you make it once you can bring it every time, but the proposals are different for every client.
Gail: So here’s how you need to think about it, you know, and I will say this, I give so much credit to Joe Duran for his incredible marketing savvy, and working with him, you know, as a colleague was fantastic because he had these moments of brilliant insight. And one of them was, “All people really care about is am I okay?” And I thought that was a brilliant summation of our industry. But, you know, when you show someone a plan, you know, show it to them and say…what you’re really answering is, “Hi, I want you to work with me. I’m now saying all these words that you may be glazing over because you think I’m just like everybody else, but here’s what you’re going to get.” Show them what they’re going to get. Nobody else does. You know, that’s where if you can come out and say like, “You know, I have a three-step process or, you know, there are five things I do with you every single year, here’s what you get, take a look at this,” I would do that instead of brochures, honestly.
Michael: Yeah, you know, we wrote a couple of years ago. I know advisors that have adopted now is the idea of creating a service calendar of, you know, the months of the year or the quarters of the year or whatever the cadence is for you when you do things for clients, that just literally shows on the calendar, like, “Here’s what we do for you. At the beginning of the year, we’re going to have a meeting and we’re going to do a review of your tax situation. In the middle of the year, we’re going to review your insurance and estate. At the end of the year, we’re going to do some rebalancing your portfolios, look at your employee benefits, help you with the salary review, and do any end of year Roth conversions.” Like, I mean, whatever the things are the common touch points for clients, and just literally make a piece of paper that says, “Here’s what I do for you through the year.”
Gail: Yeah. Oh, I’m a huge fan of that. And the other thing is do a quick scan every year and ask yourself, “What can I do to save my client some money on other things?” Like, you know, taking 1035 exchanges on insurance policies, revisit property and casualty insurance. Do you know how much people appreciate when you save them $1,000 on their mortgage, on something else? And remind them. So when you do all these things and saying like, “But a couple of other things that we did for you.” So when I think of the value I get from my advisor, let’s say I pay him $20,000 a year in fees, you know, a lot of people it’s not just percentages, it’s, “You know, how much money did I make last year? Did I make enough to cover the fees?” Well, if you can add to that that you saved me $3,000 in some fashion with just, you know, helping me make sure I was getting the best of the best in whatever services I’m using in the world, that’s a great tangible.
What Financial Advisors Can Do Better In Terms Of Marketing [1:32:01]
Michael: So what do we need to do better when it comes to marketing? Is it all about this translating intangibles to tangibles or is there other stuff?
Gail: Well, I think it’s number one, really sharpening your message. And I’m going to get you that one-pager, and I’d be happy to, you know, talk more with you about how I can help provide more tools around that. But really sharpening your message and knowing what you’re going to say and that you have, you know, a value proposition that makes sense. A simple, clear, competitive one-pager that you make sure it’s the same thing you’re saying on your website, that you make sure your entire office can say, you know, stand up and deliver. Make sure that what you say is differentiated and powerful for the right target audience. And I believe say it in English. You know, I have found people pay attention when you talk like a human. I think that really matters.
I think that take a hard look at your team and if you’re saying stuff like, “We’re experts, blah, blah, blah,” well, how do you prove it? How do you prove it? And don’t say things you can’t prove. If you do say something like, “You know, we specialize in working with small businesses,” make sure you’re putting out a couple of good, you know, articles every year. You’re delivering more things so they actually see you do what you say. So that’s number one, it’s really, sharpen your message, it’s important. And I think two then, make sure that, as I said, sharpen the message, make sure it’s something you can deliver on, that it’s aligned how you’re running the company. Like, if you say, “We give great service,” but you’ve got some lazy receptionist who doesn’t answer people’s phone calls, fire her, right? I have to say, a lot of times it’s about the courage to lead your organization and make the hard decisions you have to make to make sure your organization can deliver. So that’s where it goes beyond marketing into execution.
And then when you’re marketing, prioritize. Don’t do a lot of little things, do a couple of big things. And my point to you about things like show people what they get, that’s actually a lot more powerful than giving them a bunch of brochures. I think the standards in our industry, which are asking for referrals, and I think Julie Littlechild and Stephen Wershing and some of the work they’re doing on that is really good, so go check out their books if you haven’t. Thinking of, you know, how you ask for referrals in a different way is always smart. You should be practicing that the way I should be doing my abs every morning and I don’t, and I should, so I have to work harder on that.
And, you know, at some size of an organization you should get third-party marketing help. You know, there are a lot of people out there offering marketing services. You know, I’m at a point in my life where I only want to work with two clients, maybe three at a time, but I know so many good people. And I’m sure, Michael, you do, and all the practice management websites have those people. You know, because third-party help is useful. And what I wrote in the article for FA last month was about how to build your own, like, kind of a pool group together of some clients, some friends, and some people from your office and get them to critique you for you. You can do that, it’s free. It’s free. And the advice of someone who doesn’t know anything about your firm or anything about marketing, that’s the best advice because at least in terms of feedback, that’s your prospect. And if you said to someone, “Go through my website just for fun, I’m buying you beers. Go through and critique all the stuff you don’t understand,” wow, that would be powerful and fun.
Michael: I was going to say and possibly a little bit depressing or deflating, but it’s a great experience.
Gail: No. And, you know what? By the way, imagine you did that. Imagine you had a little party and you said, “I really want to get feedback because I care about taking care of clients and I care about helping more people with financial services, but I know it’s a really murky topic, it’s a hard thing for people to understand, so, you know, I’m having beers and pizza and I’d love you guys, you know, to form teams and look at my stuff, and I’m going to put up $500 to charity, and I’d like each team to, you know, tell me the top three things that you liked and the three things you don’t like about what I’m saying.”
Michael: I like that.
Gail: If you asked me to do that and I was your friend, I’d do it.
Michael: So where do you go from here? Like, you said you’re working with two clients, you might take a third, so, I mean, if someone’s listening and they’re interested, like, what do you have to do to get the third slot?
Gail: Yeah, reach out to me. Well, you know, part of the problem is my husband and I love each other, and that’s not a problem. I shouldn’t have said it that way. We’ve been married 34 years as of tomorrow, yeah, which is a big deal, and then I am trying to…he’s got a job where he travels the world so I’m trying to travel, so if I can’t help you, it’ll either be because I don’t believe I’m the right person to help you, or I simply can’t put the time aside to do it. I have already talked to some people and found people to help them. You know, typically, the kind of work I do is a little bit more of the sophisticated side, so it’s typically the firms of $1 billion or more. You know, if you get one of your groups together some time, Michael I’d be happy to come and work with a group of people, but I can’t really give my time without sacrificing my personal priorities now, you know, on a smaller level than that. I’m trying so hard to be true to that. It’s really not easy for me.
Michael: Yeah, it’s an interesting challenge and we’ve talked about it on some other episodes as well that…you know, Greg McKeown calls this the “paradox of success.” That the more successful that we are, the more opportunities that tend to come, which eventually gives you a lot of things you have to say no to, which is hard for most of us, and so we say yes to things we should have said no to, and then we get trapped in things that take too much time and we lose control of our business and our lives because the success and the opportunities it brought creates the problem.
Gail: And I’ll tell you, I’m not…I’ll tell you what it is. It’s not that I don’t want to work with small firms, I want to be impactful. I’m on this mission around improving the industry and I care about the consumers. I want us to be better for the people we serve, so I’m trying to use the time I’m allocating to work in the way that leverages me the most. So the local firm I’m working with here in Boston, I believe that this area where I have lived, I believe it totally needs a shake-up in the wealth management market here. And these people are going to do it at Seaward, and I am going to be…I am convinced that not only will they be successful for their clients, but it will shake up some other firms around town that need shaking up. So I feel like it’s making a difference. Apex could affect a lot of advisors.
So, you know, I have to look at it, and I’m a servant to this, I’m not trying to be egotistical. I know it sounds kind of hoity-toity, I don’t mean to be that way. I mean more that I only have, you know, a runway of a few years left that I want to work this hard. You know, I’m only trying to work, like, 30 hours a week. During that time I keep asking myself, “I really feel this urgency to improve the world we’re in, financial services. You know, there’s a 9% consumer approval rating for financial services, okay? So in that time, I keep asking what’s the best way for me to do it. So I’m happy to continue, like, education things. I’m happy to speak or meet with larger groups where I can talk to more people at once, but it does mean, in truth, that I don’t really have the time for the one-on-ones that I might have had earlier in my career.
How Gail Defines Success [1:39:59]
Michael: So as we wrap up then, this is a show about success, and one of the themes is that success mean different things to different people, sometimes different things to us in different stages of our lives. And so as you look forward from here about what you want to do with your time and focus, you know, you’ve kind of alluded to some of it, but I’m curious how you define success now.
Gail: You know, I think it’s self-expression. To be able to make…you know, have an impact, and to be unfettered at this point, where I can really be, not diverted by priorities other people give me, but focused on the things that really matter to me. You know, I’ve always thought of my job, I’ve always said when I feel like I have a job, that’s a problem. I should feel like I have my work on this earth, what I’m here to do, and success for me now would be to believe that, you know, even though I’m no longer in a big corporate job, you know, that people see me as an inspiration, and that the things that I’m trying to do are meaningful to people and it might strike a chord and make a difference in moving the industry forward. And also, on a personal level, I want to be richer in my total life. I want more than just my job. You know, I want to make more friends and spend more time on things like that. Not that you people in financial services aren’t my friends, by the way, if anyone’s listening who’s my friend, but, you know, neighbors, things like that.
Michael: All right, well I’m excited for you in finding this kind of new balance. I think it’s a challenge for everyone, and again, you know, one that shifts for us as we hit certain career stages or milestones in our businesses, and so…
Gail: Yeah, I mean, look, I’m a mom of two, I, as I said been married a long time, I love, adore my kids, but, you know, I have been that crazy dual-career, corporate executive female, very senior levels in an industry of all men. I’ve been one of those 5 women in the room in a roomful of 200 people for a long, long time. And I’m really proud of the industry and what we’ve done together as an industry. I’m proud of the career I’ve had, but I need to take…pay some attention to the other parts of my life now.
Michael: Well, amen. I think you’ve earned it. I think you’ve earned it.
Gail: Yeah. I’m looking at the sunset right now, and it’s really pretty.
Michael: Well, beautiful. Well, thank you, thank you for joining us and sharing your story.
Gail: Well, thank you, Michael. Listen, I’m going to say this as a little plug for you. You know, you stand up for what you believe, and I always see that when you do that, you allow your emotions to show. And I think, you know, people that are willing to actually put their emotions on the line and care enough to step out of the box of, you know, I don’t know, whatever corporate identity people think we should have, they’re the passionate ones. You know, Joe and I used to talk about this because he can be very passionate. You know, the crazy ones, those of us who believe things deeply and are willing to say it, that is pretty special. So, you know, I just applaud you for what you’re doing, and I hope you keep continuing to do it. The industry needs you.
Michael: Well, thank you. Hopefully, I won’t put my foot too far in my mouth on this, but…
Gail: Well, if you do you’ll just pull it out, right?
Michael: Yep, and keep on marching forward.
Gail: That’s right, okay?
Michael: Thank you again. Thank you for joining us on the Financial Advisor Success podcast.
Gail: Well, thank you. Thank you, and everyone listening. Bye.