Welcome back to the thirty-third episode of the Financial Advisor Success podcast!
My guest on today's podcast is Jeff Rose. Jeff is the founder of Alliance Wealth Management, a solo financial planning firm with just one support advisor that oversees more than $40 million in client assets in Carbondale Illinois, a rural town of barely over 25,000 people.
What's fascinating about Jeff's advisory business, though, is not just that he's been able to successfully grow his firm in an area with a far more limited natural market than being in a dense metropolitan city, but that recognizing the constraints of his local geography, Jeff decided to develop an online blogging strategy to get more prospects. And after 9 months of toiling away with nothing to show for it, he landed his first "digital" client – a widow with $2M who had simply Googled "certified financial planner in Illinois" – and become obsessed with digital marketing. Nearly 10 years later, Jeff's online marketing efforts have been so successful, he's generating more than $100,000 per month in revenue from his online efforts, and is powering leads not only to his own advisory firm, but is also providing a high volume referrals to an outside insurance business for people who just need term insurance, as well as referring additional prospects to a number of other financial services firms as well.
In this episode, Jeff talks about how he built his digital marketing platform, the setbacks he's had along the way, and how it powers his advisory firm, which he has made so efficient that he's able to spend only 1-2 days per week to keep it running, with a combination of Redtail CRM, Blueleaf, InStream Wealth, and Slack, while he continues to leverage his blogging platform to grow new revenue streams.
And be certain to listen to the end, when Jeff talks about the major move he's about to make – literally, moving over 150 miles away from his own advisory firm – where he goes for inspiration and new ideas, and why, despite or perhaps because of his financial success, his primary focus is now on getting even more efficient about the work that he does, so that he can spend more time with his four kids as well.
And so whether you’ve been curious to know what it takes to successfully build a blog and digital marketing presence that generates new clients, or want to see how success online can bring new opportunities beyond just the advisory business alone, or simply want a glimpse into a hyper-efficient solo advisor’s firm, I hope you enjoy this episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- What Alliance Wealth Management looks like today. [4:17]
- What Jeff charges his advisory clients, and how he structures his planning and AUM fees. [8:54]
- Jeff’s transition from a broker-dealer to an RIA, and why he still works with an FMO for fixed annuity business. [10:57]
- How Jeff has built partnerships with other agencies and companies that help his business grow and earn him more money through his blog. [10:57]
- How living in a rural area with very few high-income clients hasn’t gotten in the way of the growth of Jeff’s advisory business. [41:48]
- The turning point in Jeff’s blogging content creation that started landing him clients. [56:50]
- Why Jeff has focused on digital marketing to grow his business, and how he’s been able to take a blog that powered the growth of new advisory clients to generate almost $100,000/month from blogging outside of his advisory business. [1:17:10]
- How affiliate revenue works in the world of blogging, and how to get started with it. [1:22:02]
- How Jeff chooses who to hire onto his team, and how he communicates efficiently and effectively with them remotely. [1:32:21]
- Where Jeff goes for ideas and inspiration. [1:36:54]
Resources Featured In This Episode:
- Jeff Rose - Alliance Wealth Management
- Blog - Good Financial Cents
- Online Advisor Growth Formula
- Jeff Rose – “7 Financial Advisors I Would Like To Punch In The Face”
- Redtail Technology
- inStream Solutions
- Todoist for Slack
- XY Planning Network
- Advisors Excel
- Impact Partnership
- LPL Financial
- Strategic Coach
- Commission Junction
- Michael Hyatt
Full Transcript: Building An Online Marketing Machine That Takes Over Your Advisory Business with Jeff Rose
Michael: Welcome, everyone. Welcome to the 33rd episode of the Financial Advisor Success Podcast. My guest on today's podcast is Jeff Rose. Jeff is the Founder of Alliance Wealth Management, a solo financial planning firm with just one support advisor that oversees more than $40 million in client assets in Carbondale, Illinois, a rural town of just $5,000 people.
What's fascinating about Jeff's advisory business though is not just that he's been able to successfully grow in an area with a far more limited natural market than being in a dense metropolitan city, but that recognizing the constraints of his local geography Jeff decided to develop an online blogging strategy to get more prospects back in 2008. And after nine months of toiling away with nothing to show for it, he landed his first digital client, a widow with more than $2 million who had simply googled "certified financial planner in Illinois" and found him. And in the process Jeff became obsessed with digital marketing.
Now nearly 10 years later Jeff's online marketing efforts have been so successful that he's generating more than $100,000 a month in revenue from his online efforts. And is powering leads not only to his own advisory firm, but also proving a high volume of referrals to an outside insurance business for prospects who just need some term insurance. And is also referring additional prospects to other financial services firms, as well, where he participates in the revenue for providing the referrals.
In this episode Jeff talks about how he built his digital marketing platform, the setbacks he's had along the way, and how it powers his advisory firm. Which he's now made so efficient to focus on his marketing efforts that he's able to spend only one or two days a week to keep it running while he continues to leverage his digital marketing platform to grow new revenue streams with a combination of Redtail CRM, Blueleaf, inStream Wealth for financial planning, and Slack to manage all of his internal teams.
And be certain to listen to the end when Jeff talks about the major move he's about the make, literally moving almost 150 miles away from his own advisory firm; where he goes for inspiration and new ideas; and why despite, or perhaps because, of his financial success his primary focus now is getting even more efficient about the work that he does so that he can spend more time with his four kids, as well.
And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast with Jeff Rose.
Welcome, Jeff Rose, to the Financial Advisor Success Podcast.
Jeff: It awesome to be here.
Michael: I've been looking forward to this episode because I feel like, this may be totally one-sided, I feel like we've shared a special social media bond over the years. Because we both started on Twitter back in October 2008 and you've grown this tremendous blog Good Financial Cents and built a lot of your advisory business around blogging and social media and digital marketing. And I know we're starting to see more advisors doing that these days, but I feel like there are very few of us that have actually been doing this for almost 10 years now as financial advisors.
And so having watched from afar as your site has grown and your platform has grown, your advisor business has grown, and I know you've leveraged out other related income streams, as well, which we'll talk about a little bit here. But I'm certainly excited to have you on the podcast and have a chance to hear more of your story and let you share some of what you've learned and figured out over the years about how to build a business.
Jeff: Yeah, I'm excited, a little bit apprehensive because I know that you're a stickler for detail. And so I feel like I'm almost testifying, like I'm on trial or something.
Michael: Yeah, but I try to be gentle on the cross-examination as we go through the details. So don't worry, just answer truthfully and everything will work out for you. All right?
Jeff: All right.
Jeff's Advisory Firm As It Exists Today [4:17]
Michael: As a starting point though can you just tell us a little bit about your advisory firm as it exists today?
Jeff: So as it exists today the firm name is Alliance Wealth Management, we are a registered investment advisor. We are with the state, in the state of Illinois right now. I have one full-time advisor, he is now the President of the firm. And we have one full-time staff, which is our office manager. Or, as we like to say, client of director relations.
Michael: Okay. So one staff member who's now operating as the President, as well as one for, what was the title again? Director of...
Jeff: Client relations.
Michael: Client relations.
Michael: They have all those fancy titles. You hear "Director of First Impressions."
Jeff: That's the one I liked and we went with it.
Michael: Yeah. We had Ron Carson on the podcast early on and, at least as far as I know, he was the first one to do that "Director of First Impressions" thing, at least that was where I first heard about it. So yeah, I love the titles. It's good to have good titles.
So how big is the business? I don't know if you measure in terms of assets or revenue or clients served. How would you describe the scope of the business and who you serve?
Jeff: Yeah. So right now we've got about $40 million of AUM, and that includes fee-based assets plus any annuity. Mostly just annuity business. We're predominantly fee-based as far as generating the fees for the business. As far as who we serve, we predominantly do focus on retirees, pre-retirees on doing retirement income planning. We've gone back and forth with that, just trying to figure out what that is. And, which we'll talk about this with my blog, I get readership all across the board. We have people that are coming to us looking for information on requirement-owned distributions, we also have people that are wanting to start their first Roth IRA.
So obviously with your work you've dealt with XY Planning, there definitely has been some thought of creating some sort of retainer fee or reoccurring fee for the Gen X, Gen Y. And we know that we could do it, but it's just this other thing that, "Do we really need to do it if things are working well, what we're focused on?" I suffer from FOMO, so I always feel like I'm missing out if I don't instill this revenue stream.
Michael: Fear of missing out, yes, the good old FOMO demon. Yes. So of $40 million, how many clients is that, how many people are you actually serving in the business?
Jeff: Right now we have, I think it's about, 130 households. I'd say half of those would be what we would label the B and A clients.
Jeff: Actually, maybe less than that. So I still have a lot of folks that probably wouldn't be a good fit if they were coming to us today, but when you've been in the business for 15 years you kind of have people that have been there. As long as they're not sucking up a lot of your time and voicing too many complaints, we're fine. We have been able to exit some relationships and sometimes things just kind of take care of themselves, but yeah. So that's about 120 households, but we're only probably servicing extensively with about half or less than half.
Michael: And I'm just sort of doing rough math. So $40,000 million, 120, 130 households, typical client is $300,000 or $400,000 of assets under management. I guess it's kind of a skewed barbell for you, right, like there's a big chunk that are much lower and probably a chunk of As that are much higher?
Jeff: Yeah. And where we live, and not to say that it's my area, I live currently in Southern Illinois. We were just talking, this is not Chicago. So everybody says, "Oh, you're in Chicago." No, not even close.
Michael: What did you say, you're six hours from Chicago?
Jeff: Six hours from Chicago, correct.
Michael: So just to think of how big is Illinois, start at Chicago, drive straight south for six hours. You are still in Illinois and you're coming up on Jeff's house.
Jeff: Correct. So the town that I currently live in, I think the population is 5,000 or 6,000. Where my office is located, it's a university town, we've got about 25,000 that reside there. We don't have any corporations. We have some hospitals, we have a university, but that's about it. So there aren't a ton of super A clients, I would say, that are over that $2, $3, $4 million in assets. And I think we only have maybe 10 clients total that actually have, with us, over a million dollars of assets.
Jeff's Fee Structure [8:54]
Michael: Okay. And what do you charge? Are you strictly an AUM model? You mentioned some annuities, I don't know if you've still got a hybrid BD business and you're doing some annuity commission business as well. What does the revenue model look like for you?
Jeff: I'd say right now we are about 80% that come from AUM on fees and we are in that 1% ballpark figure for most clients. We have a planning fee that we charge just kind of like our initiation kind of fee. Which we don't do a lot now, we do a lot more of what we call free chats, which is actually my President now, Andrew, actually takes care of those. And these are people that contact us through the site. So he actually takes care of all those, and that actually has saved a lot of time in having to go through the entire planning process. But that's how we kind of are indoctrinating the process of seeing, "Are you a good fit or are you just trying to get some free information?," whatever that looks like. But mostly fees.
And then on the annuity side we do not have a hybrid relationship. So any annuity insurance business we make, so any annuities are typically fixed, fixed index, and very little permanent policies. I mean occasionally, if somebody is doing more legacy planning, but I don't think I've sold a whole life policy in my life. I'm not saying that they're bad, but I've just never seen a need for one.
Jeff: And the occasional hybrid long-term care policy, but that's like one every nine months, I think.
Michael: So how do you actually get that business done as an RIA? Is there some insurance broker general agent in the area that you route through or do you put this through a custodial platform? How do you actually get insurance done as an RA without a BD license?
Jeff: Yeah, so we ended up partnering with two different FMOs. And usually you can't do that, but basically I got appointed with one, and then Andrew got appointed with the other. And we're just kind of like that so that we can kind of put out, "All right, here's what the client is looking for. What's the options out there?" Just so we can kind of get two different perspectives.
Why Jeff Still Works With An FMO [10:57]
Michael: And so maybe for those who aren't familiar, can you explain kind of the FMO structure and what they are?
Jeff: Yeah. So the funny thing was somebody asked me, "What does FMO stand for?," and I don't know what the F stands for. I'm probably going to google it really quick so I don't sound like an idiot, but it's something "marketing organization."
Michael: Yeah, I was going to say I think they're field marketing organizations.
Jeff: Field marketing organization, okay.
Michael: Back when insurance agents were out in the field. So sometimes they're called independent marketing organizations, IMOs, or field marketing organizations.
Jeff: Thank you. So for me whenever I made the switch from the...I went from the broker-dealer side to independent side with LPL, and then I went from the LPL independent to the full-on RIA. So for a year-plus I didn't sell a single annuity and really had no interest in selling. Because, "Hey, this is where I'm going to go, I'm just going to do AUM and that's it." And then I had a prospect come in that had like a $600,000, $7,000-dollar rollover and I lost the business because he bought variable annuity from the AXA guy down the street. And he just wanted a guaranteed income stream. And at the time I couldn't offer him that because I didn't have that tool in my toolbox at the time.
Jeff: So I just thought, "You know what? Okay, I don't really need to sell these, but if somebody wants to buy one I at least want to be able to have that opportunity." So I just started doing more research, and then I got familiar with the FMOs. So essentially all they are is if you have your insurance license, you sign all your insurance contracts with them so that they get a cut of anything that you sell. And for that they will give you marketing support. And that could be they could build a website, they could pre-bill seminars, just different marketing tactics. They'll help you design brochures, anything like that for the most part. And I didn't even know they existed and I forgot how I even got introduced to them. I'm sure someone told me about them that was an RIA, but that's how it all started.
Michael: And who are your FMOs of choice at this point? Who are you working with that you're finding is working well for you?
Jeff: The two are Advisors Excel and Impact Partnership.
Michael: Advisors Excel and Impact Partnership, okay. And so if you get a client case, basically you'll bid it out for both, "Hey, we're looking for a fixed annuity for three years that we can use as a CD alternative. Okay, guys, tell us what contracts you've got and what you can do." And then you just pick whichever one is the best from what they come back with?
Jeff: That's kind of the beginning process, yeah. And then we'll try to do some more research on our own just to make sure. I would say predominantly though, like with fixed, we don't do a lot of fixed annuities, we'll do some. Really it's the income portion, when someone comes to us and they want some sort of guaranteed income stream.
Jeff: That's predominantly what we use it for.
Michael: So indexed annuities with income riders. Do you do any immediate annuity business, as well, at this point?
Jeff: At this time we haven't, we haven't found a situation yet where it made sense. But typically it's just with the income riders with those annuities.
Jeff: Yeah. And those were always client-led. It's just like, "Hey, let's just have this conversation. Is this something that's important to you?" Obviously we're doing the financial plan and trying to get a sense of what their retirement goals are and how much money they want, basically. And just to find out, "Hey, is it important to you that's there's a portion of this that's guaranteed?" And then we just begin that discussion. And then outweigh the pros and the cons. And I think you've probably seen I've been somewhat outspoken. Like the very first blog post I wrote for Forbes, or article for Forbes, was five reasons why I hate variable annuities.
Michael: Well, and I believe you also still have an article out there somewhere, it was something to the effect of "seven types of financial advisors I'd like to punch in the face."
Jeff: And that's even with fixed-income annuities. We've seen there are situations where they can make sense, and there are situations where they're completely misused, misrepresented, and just crooked pieces of you know what that are selling them. And it's just frustrating when the client doesn't realize that until year 3 of 10. And you're like, "Yeah, well." And you can't say, "Well, you could have done this and you would have had a guaranteed $5,000 more a year," because you can't really cry over spilled milk since you already did it. But yeah, it's frustrating.
Michael: And I feel like I have to put it in context for people. That when Jeff writes an article that says "seven types of financial advisors I'd like to punch in the face," so if you pull out your little podcast and you look at that cover image on the podcast, Jeff is kind of a built dude, he has a striking resemblance to The Rock. So that's a scary thing when he says, "I don't like you taking advantage of clients and I want to punch you in the face." That's a high-stakes article coming from Jeff.
Jeff: I really want to take that blog post and turn it into a video, as well. But if I do it, I want to really do it. And I'm thinking I need like a boxing ring and some gloves and everything else.
Michael: Oh man.
Jeff: I know.
Michael: It's going to get dangerous.
Jeff: It could, it could.
Michael: So you've gotten an FMO relationship for a small slice of client-driven annuity business, the core is an RA doing assets under management. You're on one of the RA custodial platforms?
Jeff: So right now we have a combination of two things. Still with LPL Financial on their RIA side, so just using them as a pure custodian. And we also have some assets that we are using a third-party asset manager. It's about 60-40 now, 60% with LPL, 40% with the asset manager. And we're still trying to decide if we're going 100%. Most people think, "Okay, you're just making things complicated," which I would 100% agree with that. But I just have this weird thing of wanting to make sure that my clients are protected. And sometimes we have money split between the two custodians just because, because it makes me feel better and usually it makes the client feel better. But I don't know.
Michael: So who's your TAMP of choice then?
Jeff: Right now we are using FormulaFolios.
Michael: Okay. FormulaFolios. And what's their deal or their style?
Jeff: Their big stickler is, well, I feel like if I say it it's going to be what any other asset manager would say. But basically just taking conservative risk and not trying to beat the market per se, but basically trying to minimize the client from making stupid mistakes, or the advisor. "Emotionally-free investing" I believe is one of their mantras.
Michael: Okay. What decided for you when you're going to do a FormulaFolios solution versus something on the RIA platform, I guess, as a portfolio you're going to build and manage more hands-on? Is there some distinction between the two of who feels like a good fit for one and who you tend to self-manage?
Jeff: Yeah. So typically really one strong determinant is where are they coming from now. Do they have a taxable portfolio that's heavy in stocks and mutual funds and we don't want to just go and sell everything obviously just because it doesn't fit our current investment portfolio?
Michael: Right. And if you go to the TAMP, they're going to basically say, "Sure, we love to manage. You can send us all that in cash." Right?
Jeff: Correct. So that's where an LPL is just a perfect, "Hey, we're just going to transfer everything as is, and then we'll make changes over time."
So that's usually a big determinant. And I think it's really just the conversation of how much control do you want to have, what's your investment risk, what's your investment goals, but that's the starting part. We don't really have to say, "Hey, we're going to go here, for sure." Like we just had a new client that's got about a million in. Just they've got stuff kind of scattered everywhere, so it just makes sense to go to LPL and just try to self-manage there.
Michael: Okay. And then what do you actually use for portfolio management tools and process? Are you using all LPL tools or are you using some outside portfolio rebalancing or portfolio accounting software solutions? How do you actually handle that portfolio management?
Jeff: So within LPL they have some of their models that they use. And we only use that for a fraction and we're actually in the process of diluting that. And I'm curious to see if we were recording this six months from now. But I didn't realize this, but we have access to DFA, Dimensional Fund Advisors, within the LPL platform and we just got approved to use them just like a month or two ago. So that's something that we are strongly, strongly considering just because it's just that much easier and DFA has got a good story. But other than that no, I don't think we use any LPL tools. And I don't even know what LPL offers, to be honest with you, if anything.
Michael: So you're using all your own technology that you've put together over time?
Jeff: Pretty much. Blueleaf is probably our main portfolio management tool just as far as looking at allocation and deciding where the client is at and what we need to do.
Michael: So Blueleaf, for those who aren't familiar, kind of pulls in account feeds, let's you do some, I don't mean it in a negative way, but kind of basic portfolio reporting. They're not going to quite have the fancy depth of reports that some tools like Orion and Tamarac and Black Diamond might have, but you don't necessarily need that depth for every client.
Jeff: And I will just say I think a large part of our demographic, once again we are in Southern Illinois and some of our bigger clients, just as an example, they come from a power plant. They're your blue-collar folk that are working 50-plus hours a week, putting in overtime on the weekends. They've just worked hard to build they're money and they just want someone to take care of them. So they're not really into the portfolio reporting that some of these places offer.
Michael: Like, "Show me my account balance. Is it generally going up? I'm feeling pretty good."
Jeff: They just want to see last month's statement and this month's statement to compare the two and make sure it's a positive, that's basically all they really need. Even Blueleaf is, as simple as that is, that's more than a lot of them even care about.
Michael: And so what's the rest of the core technology stack then? Are you on a CRM system, financial planning software? What else mixes in for you?
Jeff: Yeah. So I guess at the center of it all we're using Redtail for our CRM, we use Blueleaf as our account aggregation software, we use inStream Wealth as our financial planning software. And other than that Slack is our intercommunication program or software that we use.
Michael: How interesting. So for your actual internal firm communications you're running a Slack?
Jeff: We are. That was, my goodness, such a game-changer when I finally realized what Slack was. Because we were e-mailing and Gchatting and texting. And it's like, "Okay, I know he sent me this message, but I can't find it." Now it's like, "Slack me."
Michael: Yeah. Because I know Slack has very little adoption in the advisory world, so how would you describe Slack to a financial advisor?
Jeff: It's funny because I tried to one time and I think I did a really poor job. But for me it replaces however you communicate with your team. If there's texting, if there's chatting, if there's e-mailing, it's all into one place. And we have different channels. So for example I'll just give you the basic one. We have our calendar channel, so any appointments that get booked or people that schedule online, so we can see everything that's booked there. And that's either me, Andrew, or Mary. We have our client channel, our marketing channel, and our prospect channel. So anything that's client-related goes in clients, anything that's prospect-related goes into prospects. So that way all that communication is that one channel. And you can do a quick search and find anything that you need to all right there.
Michael: Yeah. It's basically kind of for anyone that's used all of the various instant messaging platforms that are out there over the years, it's sort of that kind of thing, instant messaging/text messaging on steroids. But just it's built for the business world, so you can organize into channels. So, as Jeff said, rather than just texting everything in one continuous stream where then it's really hard to remember, like, "When did we talk about that thing from a couple weeks ago and where were we talking about it?," you can organize the conversation into channels. You might even, as the business grows, have only certain people in certain channels.
So we actually use a version of this for my kind of personal Kitces team. So there's just kind of a daily work chat channel of just all the team can communicate in one place and everyone can see what everyone else is talking about. Then we got a separate channel for marketing and only the team members who are part of marketing are in there. So not everybody has to see it, just the folks that touch marketing in our business. And then I've got one that's just for me and my operations manager because she keeps me on task with the never-ending series of tasks that I have to do. So she just has her own channel to ping me, and then we've got a separate one for the podcast. And just breaking up into sort of functional areas so that the people who need to be looped in are looped in and the rest are not.
But I found, at least for me and it sounds like it was the same thing for you, Jeff, is it put a quiet to the never-ending stream of internal e-mails. Because we don't do internal e-mails anymore, unless someone external e-mailed us and we have to forward it around. Like everything lives in Slack. And so now I don't get seven e-mails, and then have to open each e-mail and read each e-mail to go through the e-mail and figure out whether it's for me or not, and then scroll down to see the past conversation, all the stuff you have to do when you get added into an e-mail chain. It just lives in a channel in Slack and you take a quick look and I can instantly read up a conversation about what everyone has been chitchatting about for the day.
Michael: I don't have 17 e-mails in my box because there were 17 messages sent. I just see 17 lines of sets in one channel and I can skim it 30 seconds and move on.
Jeff: What you just said is a huge one. Because we've all been a part of those e-mail chains where you send out to one person and you CC two other people, and then that person hits "reply," not "reply all." And then you've got to forward it to your team. It's such an annoying thing. Whereas with Slack it's all there, so we all know.
And then we just started using this new app that connects with Slack called the Todoist, I think, or the To-Do List. And we're really enjoying that because now there's actually some accountability to say, "Hey, here's some client action items that need to be done." And we can see what's pending. We tried using Redtail for that, but it was just another thing we had to log into. And we already live in Slack, so we just liked using it and it's worked out really well.
Michael: Yeah. One of the things that's been fascinating about Slack, I know, in other industries is that everybody's software is building integrations to Slack now. So you can just push everything to Slack and the team sees everything in one central place. So like we spend a lot of time looking at who's reading what content on the site for my team that manages the website, and so there's just a Slack integration that posts a little message every morning that says, "Here are the three most popular articles from yesterday." So I don't have to do anything, I don't have to do any work, I don't have to go to some other software to load it up. Just every morning the Slack channel appears and just gives a little note of "here's all the latest stuff." And that was just a simple integration that we plugged in to push that there.
So that's kind of the core of the technology. Anything else in terms of how you guys run the business or what you use to run the business?
Jeff: No, not really. I've done my best to make it as simple as possible. Now having two custodians, it fails that test. But other than that we try to keep it as simple as possible.
Michael: And so can you talk a little bit more about just what that client process looks like, right? I guess even let me ask it this way. How do you frame the value of what you do for clients?
Jeff: I think when we get in that discussion, because I'm sure everybody can related to a client has their assets, they have their portfolio. But as far how do they take that portfolio and generate a revenue stream to fund their lifestyle for the rest of their life, that's a part that's just hard for them to digest, especially for folks that are using to having pensions and Social Security and that just being a bulk of their retirement income.
So we just to say, hey, obviously you can go online. We don't use the term "robo-advisor" where we live just because no one even knows what that means for the most part. But they understand there's the Vanguards out there and places they can get investment management for a whole lot cheaper than they're going to pay us. But I feel like most people when they even come to us they know that they don't trust themselves and they want a professional that's going to help them out, whether that be not just manage the portfolio but just manage them and making sure that they're spending their money the most optimal way possible.
And that's essentially just kind of what we feel like our value add is, is being there not just for the investments, just to make sure that you don't make any stupid financial choices that derail your retirement or have unrealistic expectations of how much you can spend based on how much you have. And I'm a storyteller, so I just love telling stories of past clients or even current clients, obviously not sharing exact details. But, "Here's just some examples of what we do and things that you may run into that you may not realize and how we're here to prevent you from making a financial blunder."
Michael: Okay. And, as you view it, are you an investment manager, are you a wealth manager, are you a financial planner? How would you characterize yourself and what the business does?
Jeff: I feel like I always just gravitate towards the financial planner description. And I think just being a CFP is just easier for that. Even though the firm is named Alliance Wealth Management, I think that when I see the private wealth managers at all the big New York firms, we're not even in that ballpark of helping those type people. So I just think financial planner. I just feel like just helping people make smart decisions with their money, pure and simple, I feel like is what we do. And we've been helping people for however long and at this point in time the only people that have failed in their retirement goals are the ones that didn't listen to our advice.
Michael: And so you mentioned that there was a time when you were charging a separate upfront sort of initiation fee for some of those, the starting planning, now you're not because you're screening them differently. Are you still firm, do you go through this comprehensive planning process and use planning software and all of that for every client or is that not really relevant for the folks that you serve?
Jeff: I would say anybody that has come to us new in the last few years. So ever since Andrew came on, and Andrew is kind of like a junior advisor that was recently promoted, we do the planning process for, I would say, 90% of them. And the only ones that I can think that we didn't, they just had way... When somebody has over a million dollars in their portfolio and they need $20,000 a year to live off of and they're 70 years old.
Michael: Right. Kind of like, "I can do this math, you're okay. Let's move on how we're going to implement."
Jeff: Right. We can run the plan for you, but you're going to be fine. But pretty much everyone else, yeah, we do that plan. And that's typically a three to four-meeting process of just kind of going through everything.
Michael: Okay. And is there a standard structure to that process of like, "Here's what we do meeting by meeting"?
Jeff: Yeah, so it depends. Now we meet with people obviously locally and also online, so it's always a little bit different dynamic between the two. But for online people and local people, if we can, we have our questionnaire that we try to get them to complete to kind of list all their assets and what they have and what they're trying to accomplish.
Michael: Classic data gathering.
Jeff: Yeah. So if we can get a lot of that done preliminary, that's huge. It's just kind of like going to the doctor and already having everything filled out before you get there. And that just kind of helps understand, "Okay, at least we have a decent understanding."
Michael: And do you just mail them a questionnaire, e-mail them a questionnaire, send them a PDF, do you make a little web form that they type stuff into? I've found there's a surprising amount of variability amongst us in the advisory world of just how we actually gather the data.
Jeff: Yeah, that's kind of what I've learned, too. So a few different things. We have our own PDF, fillable PDF, that they can complete. Blueleaf, they just implemented a neat little feature. So we can send an invitation to a prospect, just like an e-mail invitation, they register with Blueleaf, and then it basically probes them, asks kind of similar type questions to have them input all of their data so we can log into Blueleaf. So in a perfect situation they're already synced with Blueleaf, they've completed the questionnaire before we even meet with them for the first time.
Michael: So you send Blueleaf for account aggregation, they link up their accounts, now you've got the numbers because they account-aggregated them, and now you're well underway?
Jeff: And like I said, does that happen all the time? No. But it's happened quite a few times. And when it does, it's a beautiful thing.
Michael: This is one of the things that's always driven me nuts, that it's taken financial planning software companies so long to get to this point. And frankly most of them still don't do it, which I guess is part of why you're pulling it in through Blueleaf. But I see this future where there is no data gathering anymore. Data gathering is you send the client an e-mail to a portal, they link their accounts, and that's it and you're done. And there's no keying in information and details about their age and their accounts and their assets and where stuff is. Obviously you have to have a conversation about their goals because those aren't numbers you aggregate. But all of the other financial information, you just link the accounts and feed it all in and that's that. No one fills out a form, no one types stuff back and forth.
It still stuns me that planning software seems to be so slow to get there when, as all of us on the advisory end well know, the single greatest blocking point for most clients doing financial planning is they don't have the data and they don't want to take the time to get the data. Or they know they don't know where their data is and they're so embarrassed that they can't even answer your data questions that they don't even want to do planning because then they'd have to admit that they don't know what their own stuff is. And people get hung up on that because we make the data gathering so hard.
So you pull information in on Blueleaf or send them their fillable PDF. So you try to do that before you even go out for the first meeting?
Jeff: We do. If we can, if not then we got to spend that meeting kind of just having a discussion. Because obviously there's the numbers, but there's the story behind those numbers. So that's what we love, obviously. And that's the part that is just enjoyable, learning that story of how they built up their wealth and the good investments they made, the bad investments, and just everything that wrapped around that. So Let's just assume that we can get all that taken care of before we have our first meeting so that we can just kind of look over the numbers briefly and just kind of get that story.
The second part is something that I got from a Strategic Coach, and this was a coaching program that I was in for I think five or six years, something that I think that any advisor would benefit from. And I don't get an affiliate fee anymore, or referral fee, so just passing on goodwill. But Dan Sullivan, the Founder, he had this question he called the R-Factor Question. Are you familiar with this?
Michael: Yeah, I've heard of it before, but I suspect a lot of our listeners have not.
Jeff: So it's just a question, and it was a question that was asked of us in the group and it's a question that he basically encouraged us to ask to any of our clients. And the question goes something like this. So you've got the prospect in the office, you say, "Hey, Mr. and Mrs. Client, just have to ask you one more question. But if we were meeting in my office three years from now and we were reflecting on what has transpired over the past three years, what would have to happen both personally and professionally that you consider the last three years a success?" And you shut up and you listen.
So that's the beginning part. And when you get people, now we're not talking about numbers and...
Michael: Right. I suspect when you say that, not very many people respond like, "Oh, well, I'll evaluate if it's a success three years from now because your portfolio gave me at least 8.2% a year compounded annualized."
Jeff: It's funny, we still get some of that, but we make them give us more. Because it's just not, investment-wise, it's personally. If you're getting ready to retire and you're 65 now, what do you want to happen the next three years in your retirement? What are some of the goals that you have? So that just kind of opens up the dialog. And then taking it to the next step is, "Okay, well, what are the dangers, the opportunities, and the strengths that are either going to help or hinder you from reaching those three-year goals?" And then you just start figuring out, "Okay," and especially the dangers, you start finding out exactly what scares them, what keeps them up at night. And you just learn so much.
And that whole process, if you don't rush it, that could take an hour, and usually it does. I say 30 to 45 minutes if we're rushing it. And so we're taking notes the entire time. And then once we get done with that whole conversation, we take all that and we type it out into a letter and we send it to them. And we also have that in our CRM, so now we can see. And it's something that we always refer back to. Because when we start getting resistance on a recommendation or something, "Well, if you remember, here's your goals and here's some of the dangerous that you have. This is why we're looking at this as a possibility. If this is something you're truly concerned about, then this is why we're making this recommendation."
And once you have that, it's like you know them, like you know them and you took the time to get to know them on a much deeper level than, I would say, 95% of the advisors out there. And taking that time to do that, it's hard to quantify, but you could just tell that the connection is there.
Michael: So that's kind of that first meeting of getting the data, hopefully they gave you useful data coming in for the financial data, so you get to focus the actual meeting conversation on goals and the R-Factor Question. So what's the next meeting in the process for you? How do you take them through from there?
Jeff: Yeah. So after that then we have our next step of basically just going over the different financial plans that we put together, and we'll call it stress test or like the what-if scenarios. And this is really kind of where Andrew comes into play. And depending on the situation, I'd say at minimum we're going to have three or four, maybe five, different scenarios we want to run through with them. At the most, man, I think we did like over 15 to 20 on one client. And just to use them as a comparative between the two, like, "Okay, well, you want to retire at 62 with this income or do you want to retire at 60 with this income?" And to be able to kind of put all those together and just do that comparative analysis, it's fun and the client can actually see, get a visual picture of what that looks like.
So depending on how far we get, sometimes that may only take that one meeting to go through it and we get, "Okay, here is the plan we want to go with." Sometimes it's, "Hey, we're going to start with 10, let's get it down to two or three. Let's take some more time to think about it, just whether concerns come up, and then come back and we'll go through it again.
Michael: And so that's the second meeting, or does that kind of spill into the third if they want to come back for more?
Jeff: Yeah. It can be the second meeting, it usually is going to be the second and third.
Michael: Okay, okay. So kind of a plan present, and then a round two plan present with updates, whatever they want to change. And then what's the fourth, what comes at the end of this sequence for you?
Jeff: So from there it just talks about, "Okay, now we've got the plan, so let's talk a little bit about our investment direction. Let's look at what you have, what are we looking to accomplish. Here are some of the investment platforms that we offer that we have. How does it compare to what you're currently doing?" This is where maybe the annuity conversation comes up if it's something that they're interested in. And just kind of take it from there. And then at that point in time if they're ready to proceed, then we just begin the process of assets can be transferred in, if there's rollovers that need to be made, that would be the next step.
Michael: Okay. I'm just curious, what led you to inStream Wealth and not MoneyGuidePro or eMoney or NaviPlan or one of the others that are at least maybe a little bit more commonly used in terms of market share?
Jeff: I used MoneyGuidePro in the past and I liked it. And then Jason Wenk, who is also the CEO of FormulaFolios, the TAMP that we use, he was the one that turned me on to inStream. And I just kind of compared the two. Because it was either going to be MoneyGuidePro or them. eMoney at the time was still a bit robust for what I felt that we needed. So I have talked to other advisors, I've had tremendous success with it, but we just kind of felt with inStream and Blueleaf that's all we really needed.
How Jeff Has Grown His Business In A Rural Market [41:48]
Michael: So you're building this business in Southern Illinois. Or, as you said, a lot of the things I think a lot of us advisors in denser areas just kind of take for granted of like there's a big chunk of people with high income in professional services and small business owners and some corporations that have executives and people that have liquidity events and all of those sort of classic wealth creation factors that drive lots of assets and portfolios and retirees is not quite the world that you live in. So can you talk about what does marketing and business development look like in your world in a more rural environment? You said, what, your town is 5,000?
Jeff: Yeah. So, other than online, most of the marketing has been... Now in the beginning I did a ton of seminars, cold-calling, that was building the business. That all stopped after basically the fifth year. I think I've done one seminar since then, so one seminar since 2007. Marketing now, once again I'm not including any of the online marketing, so it has been really word of mouth marketing, I've been able to get on the local news pretty consistently when I want. I don't go on nearly as much as I should now. Well, I don't really have to. But I was going on probably once every two months, just being on the local news, so that was a good thing. Didn't really do much with Facebook, but then utilizing a CPA and also an attorney relationship, an elder law planning attorney and then a CPA, have also been a good stream of referrals.
Michael: Okay. So kind of that classic centers of influence or the leading professional services folks in town that can refer you some business for clients that are a good match.
Michael: And who your competition? Like I'm going to presume there's not tons of other independent RAs around town that you're going head to head against?
Jeff: Yeah, no. So I'm actually the only RIA within at least a 45-mile radius, maybe even further. Yes, I actually think it's even further, maybe like a 90-mile radius. As far as CFPs, I think there's only five of us within a 45-mile radius. No, actually one just moved away, so there's four of us. And two of them actually are with the firm that I used to be with that I was a cofounder with that we share the same office space, and that's a whole other discussion. But our competition basically is Edward Jones, banks, and there's a Wells Fargo advisor.
Michael: I just love that your CFP competition in a 45-mile radius is five of them and you actually know off the top of your head that one of them moved.
Jeff: He was one of my former cofounders, that's why I know that.
Jeff: Yeah. In our office there was four, four of the five were in our office at one time.
Michael: That's a small world.
Jeff: That's a small world.
Michael: So I know you've got this big presence in the digital world and that you've used it over the years to drive business, so can you talk a little bit about just the blogging and digital marketing world, like how did you get started, what is the connection to the advisory business? Just how did all of that come about?
Jeff: So this all happened in the beginning part of 2008. I had just left A. G. Edwards and went to LPL Financial on the independent side. And thought of, "Man, I can now market myself a lot more different than I could before. I'm going to have a lot more free rein." Which I had a little bit more free rein, but I still had a compliance department to deal with, as I quickly found out.
Michael: But in particular, so at A. G. Edwards you're very structured about what you can do and what you can't. You go to the independent broker-dealer side and, at least relative to a more captive employee-driven model, just a lot more freedom for you to come up with your own marketing strategies. It sounds like A. G. Edwards had you doing lots of cold-calling and seminar marketing?
Jeff: Yes, yeah. And at that point in time I definitely was done with cold-calling. I didn't really mind doing seminars, but I think by the time I had left I hadn't actually held one in a while. So I was just looking for something different. And I read an article in I think it was Financial Advisor Magazine and it just talked about how if you want to really stand out from other advisors, you need to start a blog. And I just remember that article just got my attention, and I think I've shared this if anybody has listened to my story before. At the time I didn't know what a blog was, you and I were not on Twitter yet, I definitely didn't know what Twitter was. Facebook was around, but I wasn't on it yet, it wasn't as popular as it is now. And when I read it I said, "Man, I need to start that, but I don't know what a blog is."
And from there I remember I think I went to Google and typed in "financial planner blogs" and realized that there was only a handful, less than five, that I could find at least, with that Google search.
Michael: Yeah, yeah. I mean there are some now, but in 2008 I would imagine there was not much that came up on that Google search even on page one of Google.
Jeff: Correct. So that was a light bulb moment of, "Oh my goodness, did I just discover something that no one is really doing yet? Did that just happen?" Because that has never happened in my life before. So that began this journey of wanting to start a blog, even though I didn't really understand what it meant. And that's really how it all unfolded. And so that was, I think, July. I think I read that probably in the spring, I'm guessing, that article, and it wasn't until July of that year when I finally launched it, which is because I didn't know how to really start a website at the time.
Michael: And so what did you do? How did you start it? How did you get this off the ground?
Jeff: Yeah. It was helpful, I remember a conversation I had, it was with a financial planner out in Iowa. And he just told me, he like, "Man," he's like, "I've been doing this for a while, I really don't know why I rank." Like he ranked, I think, number one at the time for "financial planner Iowa," which he doesn't now. But basically I just remember him saying, "I've got more business from my blog, my website, then any other marketing tactic I've tried in my career. And that's newspapers, that's seminars, that's radio, that's everything that I've done, I've got more business." And I was like, "Sign me up, sold."
So that's what I started. And I just picked a domain, I really wanted financialcents.com, C-E-N-T-S.com. I think it was not taken, but somebody was squatting on it. So if I wanted it, it was like $5,000. I didn't think I could justify spending that amount of money if I had no idea what I was doing.
Michael: Yeah, when you didn't even know what the actual purpose of the thing was yet, yeah.
Jeff: Yeah. So it was basically I added the word "good" in front of it and Good Financial Cents was born. And I started reading other person finance blogs and just started writing some articles that I thought were good. Reflecting back, they were godawful and I've deleted all of them at this point. But I'm trying to remember, at some point in time the thought was, "Okay." Because I knew then when I went to Google and typed in "Jeff Rose," I did not come up. And you think about if you're doing research on somebody, somebody that you want to give your life savings to, and, especially nowadays, if you can't find anything on them, that's scary, right?
Michael: Yeah, right. I feel like it's almost due diligence at this point. Even if you didn't find the advisor online, like, "Yeah, I got referred and all that," but I'm still just going to hop online really fast and type their name into Google and just make sure they weren't Bernard Madoff's slightly lesser known partner that comes up on the Google search. And certainly you want to type the person's name in and not have a lot of bad results come up. But if you type the person's name in and nothing comes up and you can't prove they're an actual bonafide professional because they don't exist on the Internet, it's kind of unsettling at this point.
Jeff: Absolutely. And I'm still surprised that advisors don't understand that or see that. There's a good amount that are now, but there's obviously a lot that are slow to adopt. So that was kind of like the first thing of, "Hey, I want people, if they type my name in, I want them to be able to find me." And was able to accomplish that pretty quick. And the next step, or next thought, was, "Well, if somebody doesn't know me, how in the heck are they going to type in 'Jeff Rose' to find me to hire them as their financial advisor?"
Michael: Because they didn't know to type "Jeff Rose" in because they have no idea who you are.
Jeff: So the next logical step for me was, "Okay, well, 'financial planner Illinois'," was what I wanted to ring for. Now, keeping in mind, I still at this point in time don't really understand what a blog is or what search engine optimization is or how people even rank for certain things. I knew that I could have signed up for a Google AdWords account and paid Google every time somebody clicked on my advertisement. But I didn't really trust that paying, I think it was, like $20 to $25 a click, I didn't really trust I knew what I was doing for that purpose. And at the time, so this is before, there's now what's called FinCon, which is the Financial Bloggers Conference which Michael and I attend. And if you're listening to this, you should attend, too.
Michael: And they have a track for advisors talking about blogging and social media marketing for advisors.
Jeff: So before this there was a forum that existed, I forgot the name of it, like the Money Forum or something like that. And another blogger I connected with said, "Hey, you need to check out this forum." And I was in there and I just kind of asked the question, like, "Hey I want to rank for this term. How do you do it?" And so people helped me out, told me what I needed to do, and that began that process of implementing that strategy. And the funny thing was that an SEO expert, and I wanted to take a screenshot of this, I didn't because the forum does not exist anymore, but he messaged me and basically politely said, "Hey, I appreciate your efforts, but there's no way, you'll never rank for that. You're in Illinois, you've got all these big firms up in Chicago."
Michael: Like, "This is a giant state. What are you thinking, dude?"
Jeff: Yeah. Just, "Hey, I appreciate your ambition, but"...
Michael: "Maybe go for financial planner in your town."
Michael: "5,000 consumers and the CFPs you can count on your hand."
Jeff: So that's what he told me. And I'm the type of person you tell me I'm not going to be able to do it, you just put on the challenge, right? So I think it was within less than three months I went from being nonexistent for that term that, I don't remember if I cracked number one yet, but I think I did. I know I was in the top three, organically.
Michael: Within just a couple months?
Jeff: Within, yeah, less than three months. And that was, I thought, a big win. Now obviously that doesn't mean that I had clients knocking on the doors and people throwing money at me, but it definitely was a nice win just to be able to see that. And I can actually jump to the first win or I could just...let me just say this.
Michael: Yeah, yeah. How long did it take before a result happened?
Jeff: Yeah. So that's the funny thing. So I always say this because, keep in mind, I'm really trial and error, just throwing spaghetti against the wall and nothing is sticking. Finally stuff starts to stick. It was over nine months, nine months of publishing, on average let's say, two to three times a week before I got anything from it. And my wife, she thought I was crazy.
Michael: How long has it taken you to create an article and to do that if you're doing two or three a week?
Michael: Are these like you can bang them out in 30 minutes and get it done or is this like a couple hours per article, a couple articles per week, times nine months?
Jeff: At that point in time I was actually sitting down and writing everything, which I laugh at now. It's like, "What a waste of time." But it would probably have taken me at least an hour to write an article. It's hard to remember everything, but yeah. And I will say there were some times that LPL had some of their market outlook reports.
Michael: Okay, so every now and then you'd leverage some of their content and plug it in?
Jeff: Yeah, it was so bad though. I quickly realized, "Okay, this is stupid, this is a waste of time." But I still felt like, "Oh, I need to publish, I need to publish." So I was trying to publish consistently. And whether it was stuff that I wrote or LPL provided. And then after a while I started getting approached from people that wanted to do a guest article on my site and I would publish their content, even though I wouldn't publish that crap now. But I fell into that...
Michael: "Must feed the content beast."
Jeff: Exactly. And so that's what I did. And my wife, I was spending a lot of time learning the blogging skill. Just up late at night reading and researching. There weren't a lot of podcasts back then, but I bought a few books I was reading.
Michael: Any resources you recommend at this point, maybe for an advisor who still hasn't done any of this stuff but is listening to this discussion and is kind of curious?
Jeff: You don't want me to plug my course right now, do you?
Michael: If you got a course, you can talk about your course.
Jeff: Yeah, there's the Online Advisor Growth Formula. That's basically I show exactly what I did from day one to build the platform into what it is now. The cool thing is that a lot of the stuff that I did, a good chunk of it still applies to this day. People think, "Oh, Google has changed." Hey, it has a little bit, but a lot of the same principles still apply. But that's my paid course.
Other than that, there are so many things out there. I can't really give one specific resource. I'm trying to think who I would go to now. But anything on...
Michael: You'd send people to FinCon?
Jeff: Yes, yeah.
Jeff: I can't tell you how many advisors I have recommended go to FinCon and when I see them there, and afterwards, they're giving me hugs because they are so grateful that they went because they got so much value out of it.
Michael: And we'll make sure we include a link out to FinCon in the show notes, as well. So this is episode 33, so go to kitces.com/33 and scroll down the page a little and you'll see the list of resources featured in this episode. So we'll include a link out to FinCon. It's still coming up, the conference is in late October in Dallas, I think, this year. So we'll make sure you've got links out there, as well, for advisors who want to get into this a little bit further.
The Turning Point That Started Landing Jeff Clients [56:50]
So after nine months of an hour-plus an article, a couple articles a week, nine months, so you're like 100-plus hours into writing content for no results, and then business shows up. So what happened when business finally showed up?
Jeff: So when I got this message, so I used a contact form on my blog. I don't think I still use it, I think it's not around anymore. But the cool thing with this contact form, so somebody came to my site, and then contacted me. It would show me what was the keyword that they typed in to come to my site.
Michael: Oh, yes, because back then Google didn't mask all of the keyword search results the way that they do today.
Jeff: So when I could see that they typed in "certified financial planner Illinois" and came to my site, that just... Now at the time I didn't know what was there, but it was kind of a message, "Hey, I found your website, I have a situation that I need to talk with you about my finances," blah, blah, blah. And I ended up scheduling an appointment with her. I scheduled on a Good Friday because I didn't know it was Good Friday, I forgot. But she came in, her husband had just passed away, he was a doctor at the VA and had a heart attack. And she was basically left to manage everything and it was over $2 million that she had.
Michael: Ew, that's a big number.
Jeff: So keeping in mind that at the time I think I only had one or two clients that over a million. And if they did, it was like $1.01 million, it wasn't $1.7 million or anything like that.
Michael: So like nine months of no results, and then suddenly you're largest client ever shows up.
Jeff: Shows up at the door, just like that. And now this is the funny thing because my wife was giving me guilt trips about all the time I was spending and I can't tell you... I didn't do this, but it was almost like a "in your face." I just want to come back and be like, "Check it!"
Michael: "What do you think about all my blogging now?"
Jeff: Yeah. But I think for her that's what she needed, she just that success to see all this effort I put into it was worth it. And that was just a huge milestone for me. Other than that through, before that, now there was no client results, but I got contacted by CNBC and flew out to their headquarters. Which didn't really amount to anything, but definitely it showed me that me living in Carbondale, Illinois, six hours south of Chicago, that you put yourself out there on the Web, people can find you. And that never would have happened a year prior when you couldn't even type in "Jeff Rose" and find me.
Michael: Once you did that and it worked, it's like, "All right, that's it, I'm all in on digital and off we go," or were you still kind of balancing between other stuff? Where did you go with it from there when the client showed up and it was suddenly like, "Oh my god, a $2-million-dollar client just showed up because of my blog post"?
Jeff: It's funny because I definitely could have put more effort into fine-tuning that process of people finding me. And in this process, as I mentioned, I befriended some financial bloggers. So these are people that typically have a 9:00 to 5:00 job or they used to have a 9:00 to 5:00 job and now they do blogging full-time because their websites generate enough revenue to support their family. So I got introduced to that world that I didn't know existed. I started the blog as a marketing tool for the practice, and then when I realized like, "Oh, I can actually make money from my blog? Wait, what does that mean? What does that look like?" And it became kind of like this fun game of, "Oh, I can make extra money." I looked at it as like my side hustle.
And I just came off, I forgot who it was. Oh, Carleton Sheets. My father-in-law had bought his real estate CD/DVD program, whatever.
Jeff: And I watched that entire thing and I'm like, "All right, I'm going to become the next Trump. I'm going to go out and I'm going to buy rental properties, I'm going to do all this, and put an offer to my first property." And quickly realized I had no idea what I was doing. Didn't lose any money, thankfully, but I just thought, "You know what? That's going to take up too much time, I need to focus my efforts on something else." And that's kind of when blogging came up. And I really looked at that as, "Okay, this is something that I could do on my spare time, it's going to bring in clients, it's a marketing tool that doesn't sleep." And then when I realized that you could make money from it, I became... If I became obsessed with blogging as far as the SEO side and ranking for things, I became even more obsessed on the monetization side of things.
And at the time though I was still limited with compliance and I'm really surprised that LPL compliance even allowed this, but they allowed me to put Google AdSense on my website.
Michael: AdSense? So your good old banner at the top of your website, I'm reading about Jeff's articles, and then there's an ad from Google for whatever the heck they serve up?
Jeff: Yeah. And the funny thing was that I had a lot of people had asked me this and I debated this for a while. Because, for example, if you typed in, let's just day, "401(k) rollover" and you came to my website. Well, there's an ad for Fidelity, Vanguard.
Michael: Yeah. Is that weird that you're now advertising your competitors on your site? Right? Because they target websites with financial content. Like they will pay Google to target your site if they can.
Jeff: You're absolutely correct. And that was the case. And I asked myself this question, "Am I really going to be a financial advisor to every single person that comes to my website?" Now you can make that justification if you want, I made a different choice. And I just thought, "You know what? If they don't become a client but I can make $5 to $10 to maybe $20 for that person coming to my website and we never talk, then I think I'll take that passive income for the most part."
So that was a choice that I made. And was it the right choice? I can say now that it is, where I stand today, but it was definitely one that I kind of teetered back and forth with.
Michael: Okay. Interesting. And so what happened from there? Like you put AdSense on and does any money actually starting showing up?
Jeff: Gosh, I wish I could remember. So with Google AdSense you don't get a payout until you've surpassed $100 in earnings. So I think it took me, I think, two or three months before I actually got paid from Google. And I'm sure that every financial advisor listening to this is like, "You just did all that work and you got paid $100?"
Jeff: Like, "Get a $100,000-dollar client and charge them 1%, you're going to make a whole hell of a lot more money." I agree. But there was something about the chase of this new thing that I didn't quite understand yet and all of a sudden I get a check in the mail from Google. And I had it that way for the first, I think, year instead of having direct deposit because I loved getting an envelope from Google with a check in it. It was just kind of this cool thing.
So it went from like $100 to $200 to $500. And then when I finally cross like $1,000 and $2,000, I think it was, let me think, 2010. Yeah, January 2010 it was almost $5,000 for that month.
Michael: $5,000 a month?
Michael: In Google ads?
Jeff: Google ads.
Michael: And you're just writing blog posts?
Jeff: And I'm just writing blog posts. So I go now from, okay, $100 a month to now I've got this thing that's yielding between $4,000 to $6,000 a month of extra revenue. At that time that was a big deal to me and my wife because now she's really seeing the results from that.
Michael: Yeah, yeah, yeah.
Jeff: And it was kind of that, really seeing that, and also recognizing that, with the limitations I had with compliance on the different types of advertising I could do on the site, I just kind of bit my tongue and did what I could do. But whenever I made the transition to the RIA back in 2011, that was not a, "Hey, I want to be a fiduciary, this is why I'm doing it," that was just definitely a strategic byproduct of making that decision. But it was, "I want to have more control on how I market myself online." I knew that monetization would come, but it was also I wanted to do more video. And doing video under compliance where you have to have your entire script pre-approved sucked. And I did it a few times and I didn't want to mess with that anymore.
Michael: So the broker-dealer compliance oversight. And that's an interesting juxtaposition, right? There's a lot of folks that complain you can't do any social media and blogging in a broker-dealer, and you built your whole platform while at LPL. But eventually you wanted more flexibility, I guess, or creative license and the compliance process was getting burdensome. I guess at least at the time, I don't know how much they've changed it now since that was six years ago.
Jeff: Just imagine on your blog that you had to ask somebody else's permission before you hit "publish" on a blog post.
Jeff: That's not your editor.
Michael: Yeah, yeah.
Jeff: And when I had to wait five to seven business days to publish anything. And not only that, but I really couldn't have an opinion. I just remember the one conversation I had with my compliance person there at LPL, I asked this question, "So I can't say, 'I love the Roth IRA?'" I was not allowed to say that. I could say that the Roth IRA is an investment tool that an investor should consider, but I couldn't say I love the Roth IRA.
Michael: It's not even a security. You put a security in it, but it's not even a regulated product.
Jeff: I know, but for whatever reason I could not make that comment. And, like I said, not saying that you can't succeed under that type of jurisdiction. But, man, I just think it has to have more of your personality and more of your experience in that. And I guess you could share your experience without violating the compliance side of things, but to me it's the personality. And you could even see, the blog post that you mentioned, the financial advisors I'd like to punch in the face, that was, I think, either the second or third blog post that I published after I went full-on IRA.
Michael: So you just needed to kind of exercise some creative demons or something?
Jeff: Oh yeah. Because it's like, "Man, I've been held back for so long." Because obviously they would never let me, like compliance would never let me publish that. And that was kind of a "ha ha, look at me now."
Michael: Well, and I think it's worth noting, as well, maybe for folks that are listening it's not that there's no such thing as compliance around these issues when you're on the IRA side, as well. The difference is, particularly in a small firm environment, you are your own Chie Compliance Officer. So if you still go out there and start writing stuff about how you guarantee 14% returns off a stock and such, the next time you get audited and an RIA regulator comes in and says, "Show me your compliance review and oversight process," and you pull out a file full of ridiculous stuff or, worse, you don't pull out any file at all and you show that you're not exercising any compliance thought process to what you do, you will still get in trouble and you may get fined and you may even lose your registration.
It's just that, I've often lamented this, when you actually read the raw regulations for what RIAs are expected to comply with and what broker-dealers are expected to comply with, just in terms of what you can actually say and not, it's not actually all that different at all. And in point of fact, the RAs are the ones that have fiduciary liability overhanging them, including specifically about how you advertise in market. The entire fiduciary obligation for RIAs actually comes out of the marketing section of the Investment Advisers Act about not fraudulently misrepresenting yourself.
So it's not that there aren't compliance rules on both sides, the challenge, and I don't envy what firms, particularly huge broker-dealer platforms like LPL, have to go through. There's some poor soul in that compliance department who's backside is on the line for whatever the one biggest knucklehead in the entire LPL enterprise might say if you don't fully supervise them.
And so if you're in a compliance department and you could get fired because you didn't successfully catch what the one biggest idiot might say and it slips through and a regulator finds you and you get fired for it, you write really, really stringent compliance rules because it keeps you from getting fired. And unfortunately that means good advisors who are responsible and know what they're doing end out getting dragged down to the lowest common denominator in the organization. Which is unfortunately why you end out with things like I can't say I love Roth IRAs, even though it's not even a regulated security product.
So was there some point here where the growth of AdSense revenue and the rest is outpacing the advisory firm? Has it continued to grow, or at some point does that growth slow down? Just catapulting up to $5,000 a month for writing blog posts, that's a big thing. Side income while it occasionally also lobs up a $2-million-dollar prospect every now and then.
Jeff: So I wish I could tell you that that trend continued. Unfortunately Google will have these occasional, what they call, I can't think of the name, algorithm updates that affect what comes up in the search results. And Google, they've always named them after animals. I think it was back in, when was this? I think it was 2011. Shortly thereafter, basically. They had the Google Panda Update.
Michael: Oh. Yes, Panda kind of nuked a lot of sites.
Jeff: It did. And let's quantify "nuked." So at the time I'd actually went from having not even my mom was reading the site, having 10 people on the site, 10 people a day reading it, to where I was getting over 100,000 visitors a month and was blown away, excited, pumped. Fast-forward a few months later, I lost 74% of my traffic.
Michael: Which means you basically lose 74% of your income. Like you're doing $5,000 a month, and then suddenly you're barely $1,000?
Jeff: Yeah. I don't know if it's an exact drop because it all depends on the keywords also you drop, but it was pretty significant. I want to say for while I was actually getting less than $1,000 a month for several months, maybe three months or so.
Michael: And just because Google changed the algorithms and you were on the wrong side of the change.
Jeff: Pretty much. And there was no complaint box to go to.
Michael: Nor any warning.
Jeff: No warning.
Michael: When they do the changes, they just do them when you wake up one morning and find out that your numbers are different sometimes and not in a good direction.
Jeff: And I kind of just went into this soul-searching mode. I remember for the first few days, I don't know if I've ever been legitimately depressed in my life, but I definitely think if there was a time that was the time. Because I'm like, "Oh my god." I spend how many years growing this thing and to get to this traffic level, and then all of a sudden whack. Kind of like 2008 all over again with the market drop. But I just kind of asked myself, "What was the intention of starting the blog?" Yes, it was a marketing tool, then it became this side income, but there was also this side of me that I truly enjoyed producing content that I thought was really helping people.
And that's kind of what I had to fall back on and I just began that journey of doing it. Not so much for the money, not so much for the clients, but just for the love of it. And I also started doing more videos at that time and really became passionate with videos for a while and just kind of rekindled that passion here this year.
So I began that journey again and it took me a while, I think it was almost nine months after that, after getting hit, to where I finally got back to that same traffic. The income wasn't as high, I think we were maybe doing $2,000 or $3,000 a month then. And that's kind of what it was for a while. And I don't know, I truly just enjoyed it more than anything. I was still getting clients. I'm trying to think after that. I didn't a get $2-million-dollar client, but got several in the half-a-million-dollar range, $750,000, $150,000, somewhere in that ballpark, just here and there.
But the funny thing was there was even a time when I redesigned my blog where I didn't even give people the option to work with me, like the "work with my" wasn't even there. And a large part is because the practice was growing on its own without me really having to do anything and I really just wanted to learn more about how I could monetize the website. So I really put it on autopilot for, I'd say, at least two years of not really focusing on firm growth and just focusing on the revenue growth. Not just the revenue growth, but also the platform growth of Jeff Rose and Good Financial Cents.
Michael: Okay. And so is it like trying to change your revenue mix? So when you went through this kind of getting slammed, what was the mixture of revenue for you at that point? You were making $5,000 a month, so about $60,000 a year, at least annualized on AdSense. How big was the advisory firm at that point?
Jeff: At the time it was, I'd say, about $100,000. Actually, my revenue numbers that year was $190,000. So $190,000 was from the firm, and then $60,000 from AdSense.
Michael: Okay. So it was a solid quarter of your income that got knocked on its backside. But your conclusion was not, "Well, then screw it, I'm done with this and I'm moving on." Your conclusion was then, "I'm going to come back and I'm going to just build the platform differently"?
Jeff: Yeah, pretty much. And make it more of a multichannel platform. So I still wanted to do the blog, obviously, but then I wanted to incorporate more video. I'm trying to remember when I launched the podcast, but the podcast became something later on.
Michael: Okay. What was your vision at the point? Did you come at this and say, "My AdSense just got crushed, I got to figure out how to rebuild"? Did you come at it and say like, "Well, then screw it. The Google gods giveth, but the Google gods can taketh away. So I'm just going to refocus on making this a marketing thing for my advisory firm and shift that way"?
Jeff: I'm trying to remember, but I don't think that I did. I felt as if I'm getting people that are coming even regardless. I'm still ranking number one for "financial planner Illinois," I'm still ranking for a lot of other terms that people could potentially hire me. I had my e-mail funnel so people signing up for my e-mail list, they'd get on my newsletter. It just went back into how can I grow the website and put a lot more focus and energy on a lot of those things that worked in the past and just kind of took it to the next level.
Why Jeff Has Focused On Digital Marketing [1:17:10]
Michael: And so what does it look like today? You talked a little bit earlier about the advisory firm, so $40 million of AUM with 1%-ish fees, so maybe we can do the math. The practice is doing $400,000 of revenue, maybe plus a little bit for LTC insurance sales and a little bit of income annuity business. So what does your overall profile look like now? Is the advisory firm still the center? Have you managed to rebuild back to $5,000 a month off of the blog from Google AdSense? What's the composition now?
Jeff: Okay, I feel like if nobody has been listening at this point, then when I say this out loud they're going to be blown away. Because they're thinking, "Oh, $100-dollar check, $5,000 a month." So this has all happened in the last, I'd say, 18 months or so. So I want to say like by 2013, '14 I'd grown it from that $5,000 a month to about $10,000 to $15,000 a month on the revenue side. And then in the last year and a half we've had explosive growth on the site.
So just to kind of put it in perspective, last month we did over $106,000 of revenue.
Michael: $106,000 of revenue from just the blog in a month?
Michael: Okay, so where does $100,000 of blog revenue come from? Just do like 9 bajillion Google AdSense clicks? Where does $100,000 of revenue from a financial advisor blog come from?
Jeff: Oh, that's such a great question.
Michael: That's a lot of money.
Jeff: Even when I say it out loud, it's almost like I don't believe myself because of being through Google Panda and other updates and seeing revenue all over the place. So now we don't even use Google AdSense, we use a few other different ad networks. I guess I need to break down the pie. But I want to say that banner ads, like those type of ads, represent about 15% of total revenue. Another revenue source has been we get a fair amount of people that are interested in buying life insurance, typically term life insurance. And it's been a combination of where I actually at one point in time was licensed in all 50 states and I had basically like a call center that was calling these people, anybody that had a quote inquiry on the site, and then following up. And then we would have a revenue share on those commissions.
It worked for a while, but it just became more of headache and I just got tired of having to keep up on all my registrations. So now we just sell them to a lead buyer that basically has a call center that he focuses on.
Michael: Oh, interesting. So you get people that search around for information on life insurance, they end out on your website, you've got a little button somewhere that says, "Do you need help to get life insurance?," and you don't even take the leads since it's just kind of a moderate term sale.
Michael: Maybe not great dollars for you to take those phone calls one at a time. But you resell them to a firm that just does life insurance business and life insurance leads and they hunt them all down and do business themselves.
Jeff: You got it. And that has morphed many different times, but at one point in time I had an advisor that used to work in my firm and he was the one that was calling these people. And you'd be surprised how much people are willing to pay for term life insurance, especially if they have some sort of health condition. I'm just amazed. I've talked to other insurance agents that somebody that has some sort of heart condition and they're a millionaire or multimillionaire and they've got to get approved for this. I've seen premiums in the $15,000 to $25,000-dollar point.
Jeff: It blows my mind.
Michael: Yeah. And a lot of term insurance pays 100% a first-year premium.
Michael: When you sell a policy that is $173 a year for cheap term insurance for a 27-year-old. But that's a big number when you do a big policy for an adverse health, table two multimillionaire.
Jeff: Yeah. And like I said, that kind of blew me away that that even existed out there. But, so anyway, that is a revenue stream on the site. And the others is affiliate revenue. And affiliates can be different online brokerage, it could be online savings accounts. I'm trying to think of other affiliates. But mostly in the investing side is what the main ones are for us.
How Affiliate Revenue Works In The Blogging World [1:22:02]
Michael: So can you give an example or explain how affiliate revenue works for advisors that aren't necessarily in that space?
Jeff: Yeah. So the big one in the beginning, which they don't exist anymore because they merged, I think, with TD, but Scottrade was one of my biggest affiliates. And it's funny how that came to be because that kind of goes back to what we were talking about earlier, having AdSense on the site and marketing for my competitors on my site. Obviously Scottrade is another competitor, or was a competitor, but I had so many people that were coming to the site wanting to start a Roth IRA, but...
Michael: Because you love them.
Jeff: Because I love them.
Michael: So you attract them in, yeah.
Jeff: And I just wanted a place for them to go to get it set up because I didn't want to work with everybody that wanted to start at $50 a month, $100 a month. And at the time I never opened up an online brokerage account. And when you come from the BD world, online brokerages are like the devil. They're horrible, their customer service sucks, they don't even compare to what we have. And I thought, "You know what? That's kind of like the Kool-Aid I drank a long time ago, I want to kind of put that Kool-Aid to the test."
So I opened up a Scottrade account. And I'll be quite honest, I was pretty blown away through the whole experience of how seamless it was. I got a phone call from a branch manager, which I live in the middle of nowhere so the closest office was like an hour and a half from me. But it was a very pleasant experience. And I opened my first account, I made a deposit, made my first investment, and then I basically recorded a video that just showed what it looked like and how it worked. And that's kind of how the first affiliate relationship began. And that's kind of what I started doing, I started opening up these different online brokerage accounts with different companies just so I could test is out myself and see what it looked like, especially if there was an affiliate relationship.
Michael: You'd go test a bunch of different platforms, see which one was good, find the one you like, and then contact them and say, "So I like your platform, I want to recommend it to all my readers. But I'd like you to give me a little bit of compensation when I send you all this business," right? Like kind of the advisory industry's equivalent of doing revenue sharing for referrals, but just you're sending referrals to companies where you don't even actually talk to them and do the hand-off. You wrote the content, you shared your expertise, they found it on Google, they find their way through the referral, and you get compensated because you were still the matchmaker that made the referral happen.
Jeff: For the most part. And I will tell you that if you were just starting a site and you want to write an article about some online brokerage and they don't have an affiliate program, if you have no numbers to say, "Hey, how many new registrations can you send us?," with most of these companies they have... There are these companies called affiliate networks, so they're basically like the hub between all these different companies. So that could be anything from in the financial space to in the clothing space to fitness space.
Michael: So can you give an example? Like if someone wanted to check out one of these affiliate networks, is there a particular one that you think is a good starting point or something for them to check out?
Jeff: Yeah. Commission Junction is the one that I started with and still have some relationship with. So cj.com is their website. So you sign up, it's free to sign up, and then once you log in you can see all the different affiliate partnerships, all the companies that they partnered with to have an affiliate program. So once you're in there, and then you just apply to these affiliates to see if you'll get approved. So in the financial space at one point in time you had Scottrade and you had Capital One 360 and, this is not through CJ, but we have Chase, banking. And there's been other ones, Credit Sesame or Credit Karma, check credit score, that type stuff. So there's those type of places out there.
Michael: So where do you kind of view the business overall now? Because you're now in a world where you're blogging and digital stuff is drastically larger than the advisory business, right? Like you're doing $400,000 a year in the advisory business and you're just shy of $400,000 a quarter in the blogging world now. Is this going to revamp your whole business?
Jeff: Yeah. It's funny because it has and it already is for the most part. I hired the junior advisor, or promoted to President, and his kind of main function is to handle any new incoming clients that are interested in working with us. So handling all the online prospect or lead request. And for the most part I'm getting to the point where if I never have to have another client meeting, I'm okay with that, and that's essentially what I'm working towards at the moment.
Michael: But you don't want to sell and dispose of the advisory firm, you just want to work yourself out of doing the client meetings?
Jeff: Well, so I actually am selling a minority equity stake in the business, so that's kind of like my huge, huge, baby step for me. Because I wish it was easier, but when you've spent 15 years building something, it's your baby. And to just hand over the keys and say, "All right, here you go," for all of it, it's hard. And I know even for my wife, even though she sees the revenue coming in and being deposited into our checking account from the online business, to her she remembers Google Panda and what that looked like. Whereas it's almost like the financial planning practice is the real business and the blog is like the "online business." I'm using air quotes when I say that. It's almost like it's not real, even though the checks clear.
Michael: The checks clear for business you did from people you never met because literally they just read about you online. It's kind of surreal.
Jeff: And it's fun. And it's funny because even with all the ads, even with all the affiliate relationship, we still get people interested in working with us because, going back to what we said, they want a financial professional that they can trust. And they read the content and I think as open as I am not just about those type of other options that exist out there, but just sharing a lot of my personal mistakes along the way, just trying to be as transparent as possible with that has really helped in that.
So yeah, as far as, "Has it shifted?" The cool thing about it is that there is this cool synergy between the two. Even though the revenue growth is definitely more exponential than the advisor side, it's something that's going to be there for a while. And I can continually drive people back to that and grow it. And so whenever I want to sell the remaining 70%, it's going to have a higher valuation than what it has today. That's the plan, at least.
Michael: Well, and I think it's an important thing to bear in mind, as well, that at the end of the day it's so hard to get clients. Right? For all of us in all ways. Just advising is a competitive space, it's hard to get clients. It's hard to get clients, which means having a platform, having a presence, having some marketing machine, whether it's a blog or a book or a seminar, marketing thing, just whatever it is. If you've got a thing that you do that brings in business, even if you also get paid for the thing, there's still a lot of value in being someone that can drive new clients and new revenue and new assets to a firm. Which means there's a lot of value to stay affiliated in some way, whether that's you go find a firm that you're going to refer the business to or whether it's just, "Hey, I built this advisory business, I'm just going to backfill myself with advisors and move myself into a full-time marketing role and not necessarily being the client-facing advisor in the business."
Jeff: And that's definitely the vision where I see it right now. And I think the other part, too, I just feel like if I, and this will probably change in a year from now, but I do enjoy getting the new story, new relationship. Even when they introduce me to somebody, just to learn, "Oh," about their story and how they have what they have, or something that they were told or mis-sold or something. I love hearing that because it's blog content for one, but it also just helps me stay in the loop of the financial planning profession. Yeah, I can get it from reading CNBC or The Wall Street Journal, but you just learn so much more working with people one-on-one. And I don't have to work with them one-on-one to still get that story and that experience.
Michael: So I'm curious, with all of this online activity stuff and the advisory firm with an associate that's taking over client relationships, what does a typical day or maybe a typical week look like for you in your business at this point?
Jeff: Now this is all getting ready to change because at the time of this recording my office is halfway packed. And we've talked about living in Illinois for this entire podcast and I actually am moving out of state, my wife and I are moving to Nashville, Tennessee, or just south of Nashville, the Franklin area. So I will be running the financial planning practice remotely.
Michael: Well, that's a big shift and jump.
Jeff: I can't really talk with experience on that because that hasn't happened yet, but I will tell you that prior to that one of my goals, was it last year? I think it was the year before last, I believe. At one point in time I didn't want to be in the office more than 12 hours a week. Like I set that as a goal, like, "I do not want to be in my office 12 hours." And I think maybe it was 16. Forget it, whatever. I think it was 16, it was two 8-hour days. So 16 initially. And then I was able, I think after the first however many months, I got it down to like 14 or something. And then my next goal was I don't want to be in the office more than eight hours a week. And I was able to accomplish that, basically for all of this year and a good chunk of last year.
How Jeff Remotely Communicates Effectively And Efficiently [1:32:21]
Michael: How do you do that? You've got a $40-million-dollar firm with 120 clients and $400,000 of revenue and you're in the firm one day a week. How do you make that happen? What did you do?
Jeff: A lot of trial and error. That's really where Slack became truly just a vital asset to our communication. I've got Mary there to answer the phones, I've got Andrew there to take care of any client needs. Now in the beginning clients didn't know who Andrew was, they wanted to talk to Jeff. So that was definitely a process of them getting used to him, me still sending out newsletters. And I typically will send out a video newsletter, so it's like me talking versus just trying to read text and just trying to make it more personal. But it was, like I said, a lot of trial and error. It was, "Okay, well, what happens when I'm not there? What are the things that are going to come up? What are things I have to sign that nobody else can sign?," or to answer questions.
I see so many times, and I'm still guilty of this, obviously not as much as I used to be. But I see a lot of business owners, not just advisors, where they're that person and they think that they have to be that person no matter what. And how many times are we answering questions or doing things that we don't have to do? We're the rainmaker, we're the CEO, "Why am I issuing a check distribution?" Is the CEO of a Fortune 500 going to cut a check to their office manager? No, that's not what you do. So it's just a matter of getting Andrew trained to where he knew how to do things, getting Mart trained. So that was listing out processes and things that I hate to do, but I knew that were a necessity if I was going to get out of the office.
So yeah, I was really just kind of removing myself and just kind of dealing with it as it came up.
Michael: And so where do you learn to do this or figure this out? You just go to Andrew and say like, "Hey, so I'm just going to start coming in less, and so let's just figure out how you can do more"? What does that look like?
Jeff: They didn't know I was moving. And I didn't even know I was moving, I think, when this all started. It was just a matter of I knew that I could be more efficient if I was not there. And it wasn't just so much those two having those hallway conversations, but I share an office with the firm I cofounded. So there's five or six guys there and I just found myself getting stuck in those Monday morning conversations. Which that's nice every once in a while, but I've got four kids now, I've got so many hours in the day. And as many things as I've got going on, I want to crank out some efficiency and get the shit done. I want to get it done, and I can't get it done when I'm wasting 45 minutes talking about nothing. So that was kind of my mentality and I just wanted to get myself out there.
Michael: Do you get afraid that when you're not there, this goes both ways, either Andrew makes a mistake and loses a client that's a lot of revenue that you can't save because you weren't there? Or I guess even at the alternate extreme is like, "Hey, Jeff, been cool working with you. But since all the clients know me now, I'm just going to leave and take them with me." Do you ever worry about that?
Jeff: I think those are all legitimate concerns, but I think that's, what we say, operating in the realm of scarcity. Could that happen? Sure. Could it? But to me it also was what brought me joy, what made me happy. Because I'm positive there are a few clients that are new clients that we could have got had I been there or was on that call. But I was kind of okay with it because this is also around the time that we had adopted our daughter from the Philippines, she's our fourth child, and that was also kind of the timing of me wanting to spend more time with her. And, man, I just thought, "Okay, okay. I didn't get this new account that would have brought an extra $1,500, $2,000 a year to the firm, but I got to spend time with my daughter and got to be here when I was never there for my other kids, time that I'll never get back." It's hard to put a price on that. I was definitely okay with it, obviously with revenue coming in from other sources.
Where Jeff Goes To Find Inspiration [1:36:54]
Michael: So where do you look for inspiration at this point? When you try to figure out where your business is going from here, because you've gone across all sides, right? You've got the RIA business, now this quickly growing and blossoming online business, as well. How do you even figure out where you're going from here?
Jeff: A huge inspiration was and will be Michael Hyatt, michaelhyatt.com. Former CEO of a publishing company, now he basically his, you could call it an online business, I think he calls it a publishing or an education company. And I was in his mastermind group, this was a paid mastermind group, last year. He called it the Inner Circle. Unfortunately he disbanded it last year, so it was only around for two years.
But when I got a chance just to see him operate with him and his wife and I think they have like five daughters. Every time his grandchild turns 13, he takes them on some epic trip. I can't remember exactly, but I think he took one to Germany like for a week or two, just as an example. He takes a one-month sabbatical every year, completely unplugs and goes somewhere. There's just so much about is life and his business that just inspired me, and I think he's doing like eight figures now.
And he just has this team. I think I shared this with you at FinCon. If I didn't, I'll just say it again. He has so many different people on his team, but the one I was most impressed with was his Chief Content Officer.
Michael: Okay. Chief Content Officer.
Jeff: Chief Content Officer. So basically this is the person that's in charge of... And not only that, so his Chief Content Officer at the time had two people underneath him that were on the content producing team. So these people are taking care of e-mails, blog posts, sales copy, everything. And that just intrigued the crap out of me, to be able to do that.
So that's kind of like the direction. The affiliate revenue obviously is great, everything we have is great, but now I want to have more digital products to offer, whether it be courses or e-books. Just basically to diversify the income stream, but to also put out stuff that I feel is really going to help people, even more so than what I could do on the financial planning side.
Michael: So as we wrap up here, to come to the end, this is a show about advisors that have had success. And one of the things we see regularly on the show is that success means different things to different people, sometimes even different things to the same person over time as our lives have evolved. And so you've got a successful advisory firm by any measure, many advisors never get to $400,000 of revenue as an independent RIA. And this million-plus dollars of revenue from the digital platform on the side, although obviously not so side anymore. As you look forward from here, how do you define success for yourself?
Jeff: Man, this has changed so much. There was definitely a time when success was purely metric-driven, "What was the growth in the firm? What was the traffic to the site? How much did I make in Google AdSense today?" There were so many different factors that I put so much stock in defining my success. And to me now it has just a lot to do just with my family and the legacy that I want to leave.
And I want my kids to be successful. They could become a teacher and I would consider that to be successful, if that's what makes them happy and if they're changing lives. But it's just making sure they understand what it means to be a good person. I'm Christian, so I want them to know God and have a relationship with Jesus and do the right thing, and just to be excited by life and to put others before them, having an amazing marriage.
One of the other projects that has been put on hold for the time being but something we want to pick back up, my wife and I have a marriage podcast. And we've gone through a lot of ups and downs through the years and we've been married now for 12 years. And that's another platform that I would love to grow just because we've had so many of our friends that have gotten divorced with kids and it just sucks and it's hard. And we've gone through so much stuff that could have derailed us and hadn't.
So just trying to impact as many lives as I can, but without sacrificing my own personal life and my family life while doing it. And I think that's the balance that I still, I won't say struggle with, but I get so excited about wanting to help other people that I have to realize, "Hey, you got a family here, too, that you need to help." And that's something that my wife has been really good at reminding me, giving me those friendly nudges when I need to hear it on that. But I think it's just success is my family knowing that I'm here for them, that I have been here for them, and I gave them the tools that they need to succeed in life.
Michael: Very cool, you're certainly on quite a path for doing it. Well, thank you. Thank you for joining us, for sharing your story here on the Financial Advisor Success Podcast.
Jeff: Yeah, it's been a pleasure, man. Been fun.
Matthew in Seattle says
Another amazing podcast! Thanks Michael & Jeff for being so generous to our industry.
Michael Kitces says
Thanks Matthew! 🙂
Josh S says
Jeff mentioned Michael Hyatt as his inspiration. I was recently introduced to his stuff by the guy who wrote “Cold Case Christianity”. Hyatt is a machine. Shoot, Jeff Rose and our own Michael Kitces are too. Not sure many of us have the capacity for that kind of output, I have to say. It’s amazing to behold.
Thanks for sharing the knowledge Jeff! And of course Michael too, as always.
Evan Levine says
Michael, are you kidding me? Forget relationship driven planning oriented fiduciary, in many respects this is worse than a 1980’s wire house stockbroker! Sending thousands of people you have never met or spoken with to ” affiliate links” for banks, brokerage and insurance? And then taking what is , in effect, an undisclosed kickback. It doesn’t even meet the suitability standard. What if a visitor clicks to the bank and rolls over 100% of their IRA to CD, even with a 40 year time horizon, because they don’t know better? Or they start day trading on Scotttarde?
Michael, as you know more then all of us, the spirit of the fiduciary standard is placing clients intersts first. With this approach, who’s intersts are being placed first?
And by the way, if i were a buyer valuing this ” business”, i would be very cautious on what number I put on it.
Have a good day.
James T. Larkin, ChFC says
Evan, I agree with you completely! Jeff’s path evolved in a way he didn’t anticipate — and into a field entirely incompatible with calling himself an “adviser.” I followed a “learn more” link on his website and have been slammed with shady financial product spam and aggressive telemarketing in a dramatic, shocking, and frankly, disgusting way. (I used a dedicated email address, so the spam is undoubtably from Jeff’s website.)
I respect Michael Kitces as much as one of the luminaries in our industry (alongside Wade Pfau, David Blanchett, Moshe Milevsky, Bob Veres, and other rg)
Meg Bartelt says
Jeff talked about asking the big questions in his prospect or Discovery meeting (goals, fears, etc), and perhaps both of you commented on how this puts you ahead of almost all other financial planners. Is this truly still the case? I hear this from almost every planner I hear interviewed (“getting to know the client really differentiates me!”)… Do most planners STILL not spend anytime getting to know their clients? (Perhaps the self selected group of successful planners who get interviewed on podcasts are all successful in part because of this thing they do, but Lord, I’d assumed it was rather table stakes by now.)
On a different note, I’ve been listening to interviews with a few successful advisors lately who have significant income streams outside their RIA, but from endeavors that definitely involved their reputation as an RIA. Jeff with his blog ads, Brittany Castro with corporate endorsements. It makes me… uncomfortable, and I’m not sure whether I’m on to something or whether I’m simply channeling a “change is bad!” curmudgeon.
Michael Kitces says
One of the reasons I’ve been highlighting advisors like Jeff and Brittney is to explore these stories of how advisors often end out someplace very different than where they originally expected with their businesses.
A key point, though, is that I don’t think Jeff nor Brittney had a PLAN for it to evolve that way. It just did, and the success they had with their platforms led them to go deeper down the path that was working…
Meg Bartelt says
Thanks, Michael. Discomfort is, well, uncomfortable, but it’s also a sign I should be giving something more thought.
Meg Bartelt says
Also, interested in Jeff’s use of Slack in his RIA. I come from the computer security world and, more importantly, so does my conspiracy-inclined husband. I’d love to use Slack with my soon-to-be first hire (having used it in other circumstances where privacy isn’t as huge an issue), but I’m not sure that Slack’s security and privacy (where is it archived? how? etc.) is very well known/understood.