Attracting And Retaining HNW Clients By Being More Available For Their Multigenerational Family Needs: #FASuccess Ep 490 With Liz Miller

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Resources Featured In This Episode:

• Liz Miller: LinkedIn | Website
• Summit Place Financial Two-Page Financial Planning Summary – (Download) PDF
• Summit Place Financial Advisors
• Advyzon
• RightCapital

Full Transcript:

Michael: Welcome, Liz Miller, to the "Financial Advisor Success" podcast.

Liz: Thank you for having me. It's great to be here.

Michael: I'm really excited for you to get to join us today and have a conversation about what it really takes to engage with multiple generations of the clients of the households we serve, and especially in the higher net worth context. Because I find industry-wide, I mean, this has become a hot topic for a couple of years now…we all hear about the great intergenerational transfer of wealth where tens of trillions of dollars will pass down the family tree. So, for some platforms, that's their, like, what's your next generation play to seek out long-term inheritors for those of us working with older generations? Sometimes it's a way to kind of play defense and retain assets and family relationships when the inevitable ultimately happens.

But I find the dynamics are a little bit different when we're not just trying to build a relationship with the next generation for the sake of, but because we're serving clients that are high net worth enough that their wealth creates actual family wealth issues to navigate. And being able to help multiple generations is literally part of the value proposition for the clients in the first place. So, I think just excited to talk today about what it looks like to build out, like, a service model and a value proposition for higher net worth clients where multiple generations of the family are supposed to be part of the value from the start.

Why Liz Decided To Leave A Partnership Opportunity To Start Her Own Firm [04:19]

Liz: Great. Yes, we've been doing that since the start of the firm. And my identification of that was sort of an evolution. Many years ago, prior to launching my firm, I really was working for what predated a lot of independent advisory firms, which is really just the independent investment manager. And I was a portfolio manager and I took care of some clients, but not in the way we do as full financial professionals these days.

And I remember overhearing a discussion between two senior partners. This was a client that I had met with a number of times I knew him, an older gentleman, and indeed he passed away. And this is a true story. I overhear the one say to the other, "So, have we ever met the son?" And I mean, I was gobsmacked. This guy had been a client, the stories I'd heard, 30 years at this firm. What do you mean, did you ever meet the son? And so, there was a light bulb moment a little bit to me at that point saying, how can you have a relationship with a client that is so limited you don't know much about their family? And that really stuck with me.

Michael: And just, like, timestamp for us, when is this conversation, when are you launching a firm to say, "I've got an answer to this?"

Liz: Yeah, so I probably heard that conversation a bit more than 20 years ago. Other thing that was going on is that I was very involved in the early days with what is now CFA Society New York. We used to call it NYSSA. And we had created one of the first wealth management private wealth committees. And so, it was a group of eight or ten of us who were in the investment business realizing a lot of clients wanted more. My firm primarily took care of institutional business. You know, 80% of what I did every day was manage institutional portfolios, but 20% was people.

And we were all realizing these clients we were seeing, who by definition were sort of mid-high net worth, right? Because they were coming to these independent investment firms. They were starting to ask all these questions that nobody was answering for them. How do I loan money to my son for their first mortgage? How do I talk to my kids about what they're going to inherit? And back then, the really big families were in the super-secret back rooms at JP Morgan and had a whole team doing this. So, this is what I was calling sort of the merely wealthy back then. They had, you know, call it $5 million to $10 million. In those days, that was an estate problem because remember the limit back then was $5 million.

So, they were, by all those standards, pretty darn successful, but they suddenly had all this complexity that they had no resources for. So, that's what was developing my mind that there was this market opportunity for the “merely wealthy” that weren't being served. They were typically the one largest client for some broker somewhere who was just thrilled to have them who had no expertise to really take care of all their issues. And, oh, by the way, probably wasn't allowed to by compliance.

Michael: Right. So, then what did that form into? Like, what did you create and launch originally?

Liz: So, I was starting to do some of that at the firm I was at, and they were sort of willing to support me without really doing anything specific. And very quietly, I was at that firm for over a decade. I rose to being a partner. I rose to leading their equity research effort. You know, they're still, basically, an investment firm, not advisors. And the two partners are getting into their late 60s and they're talking about retirement. And after asking me twice to go to dinner with gray-haired, 50-something year olds at the time, they're talking about, you know, handing, bringing these people in, handing them equity, for which I had to invest, to make them, you know, the next CEO. And so, there was a little bit of that light bulb moment. Hey, I've, I've been here all these years. I'm the most senior person of the next generation. I was in my early 40s. I should be the heir apparent. It was clear I was not gonna be the heir apparent. And I really think one of them just didn't see a woman leading his firm. I had had a wonderful career, wonderful relationship, no issues of feeling like I was at all discriminated against until that moment.

Michael: Interesting.

Liz: So, I started realizing, and certainly still the case today, if things "didn't work out", I was going to be a 40-year-old professional woman on Wall Street, which is never what you want to be looking for employment. And so, besides that, I'd been developing this whole view and realizing there was this market. And so, it all sort of came together that, you know, I've had a great time here. I love you guys. I've loved my career. And I'm starting my own firm to go after this market that I know has potential out there.

Michael: And so, you hung your proverbial shingle.

Liz: Yep. And so, the story there, just for fun, because I have to share it, because you can't make these things up, Michael. I'm planning this whole thing in 2008 and my husband is completely on board. We're both working professionals. We have young children. He knows we're doing this. I get ready. And our fiscal year happened to end September 30th. So, my plan was, on September 15th, 2008, I'm going to go in and resign. So, I walk into my office and at 8 a.m. or whatever it was on September 15th, 2008 the headline across the Bloomberg, right, is Lehman has just declared bankruptcy.

Michael: I'd say it was that Monday, right?

Liz: You know, and futures in 10 seconds are down 500 points. And it just gets worse from there. So, I shut the door and I'm staring at the screen and I pick up the phone and call my husband, and I'm like, "I don't know if you know what just happened." He said, "Of course, I know." And because of what he does, he actually knew what was coming, but of course, could never tell me. And I'm like, "What am I going to do?" And, you know, marriage still lasting, marriage going strong. He said, "Liz, you're going to go walk into that office and tell so and so you resign." And I don't know that I could have done that without that phone call. So, I resigned the day Lehman Brothers went bankrupt, and my SEC approval came through on October 3rd.

Michael: So, do you have any, or did you have any second thoughts in the moment? I mean, I guess, that was part of the call with your husband. Like, "Do I still want to do this while the financial world is melting down?"

Liz: Yeah. And I'm not even sure in that moment because I think we all were in shock sitting there. That it was such this big question of, can I launch the firm? Will I grow? It wasn't even the big things. It was, "Oh, my gosh, is this..." Yeah, I don't know what tomorrow brings. Looking back, the best thing I could say about it, and I think that lots of people can relate to this, even though it was such a horrendous market starting, you know, and I was on my own guiding a short list of clients through all this, I had a lot of friends who spent the next 18 months looking over their shoulder wondering if they were going to be fired. And what I knew for sure the whole time is I wasn't about to lose my job and all the upside was completely on me as anyone starting a firm feels, right? So, in some ways, that was the right fire in the belly to have in that market.

Michael: It's an interesting framing. Everyone else is worried about getting fired and you're hanging out at floor zero on the ground. Something, like, "It's literally only up from here for me."

Liz: Right, right. And so, that was the starting point and the premise.

Using Checklists To Show HNW That No Issues Are Slipping Through The Cracks [12:37]

Michael: So, help us understand a little more, what was the vision at the time? Like, what were you going to do? Who are you going to serve? Like, what was the value proposition, service model supposed to be at that point?

Liz: So, the vision was, I had this image in my head that I think we all can put in our head. It was never part of how we talked about it, but that, you know, these target clients who have been very successful, they're probably workaholics, some of them are entrepreneurs. But, you know, they've accumulated a lot of wealth that they should be able to enjoy. And instead they're sitting in the spider web where for everything that comes up, they personally have to pick up the phone and try to connect all these people around the spider, right? They have to connect what the accountant says to them and go back to the estate planning attorney. And maybe they let the investment professional know, right? They had no trusted advisor as we say today in the middle.

And so, that was my vision that we would in fact truly be that trusted advisor and we would coordinate with these professionals. And my first vision was nothing more than, you don't have to pick up the phone. You know, with shared permission, I'll pick up the phone, I'll lay the groundwork of what the discussions have had. So, then when you do have the conversation, you know, several people have shared their best thinking in the loop and you're not retelling the same story every time you're carving out time to talk to these different professionals.

Michael: Interesting. Interesting. And still in this market of back then, like, $5 million to $10 million households, like that wealth level. So, they've got significant dollars. They have a federal estate tax problem at the time. Like, that was the clientele.

Liz: Yes. And part of that, you have to talk fees at the same time because I priced it at 1%. And said, "You're going to pay for that service. But you can afford to pay for that service and you're going to get service that you've never had before in this space." And then that included, "Of course, we'll talk to your adult kids too, because knowing you have an estate planning problem, you also have probably a legacy issue you want discussed in some way."

Michael: So, I mean, just in practice, how did you price this? Was this planning fees, retainer fees, AUM fees, a combo, an asset minimum? Like, how did you do it at launch?

Liz: I did it at launch the same way I do it now. I set a minimum fee as that 1% on $5 million. And then we have high break points, and it's AUM after that. It's 1% to $10 million and then it's 75 [basis points] to $20 million and it's 50 basis points after $20 million, but it is all in. And so, that's part of the point I've always made, and I know today that's a little against the grain. Some people feel strongly that you should price things separately so they really know your value. And I agree that that meets certain firms. But certainly when I launched, the point was, you were going to have hidden, separate fees. We were going to give you all this white glove service, which some of it back then might not have even really been called financial planning, right? Because some of it is coordinating, some of it is just trying to ease a complex life and it's all in.

Michael: So, just in practice then, what did all in mean? I mean, what's in in the all in? What's included in my basket, my menu of services here?

Liz: So, that is a great question, Michael, because over the years, my team and I have done a lot to think about, how do you present that? How do you present all that's in that basket, right? Because we always want people to appreciate everything we're doing for them. And a lot of what we're doing for them is having proactive thoughts at our desk that they don't see because maybe we don't have to do anything. And so, that's always a challenge.

We probably still are investment centric once we're working with someone, in the sense that one of the first things we'll do is talk to them about their overall goals, their constraints, all the inputs to an investment policy statement because we are fully discretionary managers. And so, we will do that first and get that investment portfolio going. But we believe that you're not hiring us to be the best investment manager out there. Our investment philosophy is to give our clients the appropriate exposure to the market consistent with reaching their goals and their risk situation. So, we're not selling ourselves as, you're hiring us because you're looking for the next best investment manager. But we do tend to start there.

At the same time, we then kind of almost have a checklist with clients that we then start showing them regularly that kind of shows different items under cash flow planning and estate planning and risk management and employment benefits and college planning for cashflow and even digital assets and talk them through today. This is now because we've spent years trying to figure out how to do this. But this is one way we assure a client in every single client meeting that we won't let something slip through. We say, "Look, we're not going to overload you with this. But see all these items, we promise you we will regularly coordinate them with you, and we will make sure, in your busy life, that discussions about this don't slip through."

Michael: And it's literally a checklist, like, you made a physical document or a visual or something that you get to bring in and show a client.

Liz: Yeah, it goes into every client's regular meeting. And if we fully have talked through something that's likely not going to come up again, it has a little checkmark through it to make them feel good that, "Look, we've nailed that down. You just updated your estate planning. You just put in that spousal trust we talked about. Check, check. Now, we're going to remind you again in five years that we need to dust it off or if anything changes, but we don't need to talk about that again today."

Michael: And so, like, you pull this thing out every meeting to show them what you've done, to ask them what they want you to do, to ask a list of questions to them to figure out what else to do. Like, how do you actually use it in the meeting?

Liz: Typically, we use it rather late in the meeting. So, earlier in the meeting, it's our job to keep track of what we've talked about and know what needs to be discussed in terms of financial planning or a top-of-mind topic. So, typically, we put it later in the meeting book, as we say, but not at the end. And we use it to prompt if there's anything else they're concerned about that we missed. But typically, we are usually in a position because, the way we work and have the time to be very proactive with our clients, is it's a chance to say, "And just to remind you, here's the various things we've talked about. Here's topics that we won't let go through." And we get very positive feedback to it. There's a lot of comfort in visually seeing them. This is why I would evolve that we're going to make sure we take care of these things for the clients. We really work hard to sort of simplify what they have to be thinking about and assuring them that we'll think about it for them.

How Planning Deliverables Differ For Next-Generation Clients [20:07]

Michael: So, are you also a firm that does, dare I say, like, the good, old-fashioned, traditional comprehensive financial plan document, or is this more, no, it's an ongoing rotation checklist of the things that they're working on because their lives are too dynamic?

Liz: Those are two different things in our practice. So, this checklist is there for everyone. When we talk about our G1s [first generation], our target clients, we're rarely doing traditional comprehensive, you know, as you said, set piece financial plan because there's no issue there. But sometimes they like to just see it because they wonder, you know, "I'm afraid of my money running out," and we might use it to show them how difficult it is for their money to run out. But I would say, we definitely, for the G2s [second generation], the tier two that we work with, we will often run a traditional financial plan.

Now, this is our own choice, we never give a client the 30-page or whatever it is print out. We use RightCapital. We're very pleased with it. Years ago we used eMoney. We were happy with the move to RightCapital. We dig into the details. I'm someone who, you know, "Show me that 1044 because I don't believe how you got that number." So, you know, for us, our entry-level people are not putting numbers into financial plans. So, we do use it with a number of that second generation. They're in an age where it's helpful, it's useful. But what we do is we have summarized it into two pages that we present to client.

Now, we have the occasional client who's as nerdy as me, and we will certainly include the cash flows and let them have them. I'm not trying to hide anything from anyone. We just determined as a team that the 20, 30-page, you know, output does not serve our client and what they're trying to achieve. So, we have one page that kind of goes through all the assumptions, and we get to talk about it together. And then we have another page that has a visual bar chart of their accounts. It's a stacked bar chart of accounts. So, their wealth over time as well as at the bottom again sort of saying, "Here's how much this assumes you can spend in retirement. Here's how much you have left at various ages." And we use it then to talk through all the stress points because we're generally doing it early enough that we talk about, "Look, this is not a straight line. This isn't something we can hang our hat on, but this is an illustration for where we are today. Let's talk about how this makes you feel, what we need to think about preparing you going forward."

Michael: So, is this one of the outputs from RightCapital or is this your own, like, one-pager chart, visual summary that you've created yourself?

Liz: It's our own.

Michael: Okay.

Liz: We take one of the cash flows out of RightCapital, the account balances, basically. And, you know, we export that to Excel and then, you know, we just dump that into the chart format we've already created and it just updates the ongoing bar chart.

Michael: And all because you wanted to get it down to two pages and not have to bring in the full software, and didn't feel like you could get quite the right output directly, like, just from the standard screens in the software or the standard printouts in the software?

Liz: For how we use it the most. Now, in some of our pro bono work, I have worked with people…you know, I know a lot of people use these financial plans interactively on the screen. I've done that in some of my pro bono work, so we know how all that works. But that interaction doesn't really fit how we work with clients. So, no, the two pages we created specifically to show the output and frame the discussions that we typically have with our clients.

Michael: So, then walk me through further what those discussions are. I mean, what are you emphasizing and hanging out on these pages that you do from these pages and can't or don't do from traditional planning software?

Liz: And you could take it from the traditional software…

Michael: Sure.

Liz: Don't get me wrong. Of course, you could. A lot of times what we're doing, we're talking to a G2 that we know is someday going to inherit. And so, our job is to keep building good wealth habits with them, right? Let them see where they are, encourage them to be saving, helping them maximize retirement accounts. So, a lot of times what we're doing is showing them, "Here's how much you've accumulated today. If we never take an inheritance into account, here's what this is likely to play out for the rest of your retirement. And here's how much you probably could spend."

And often doing that, the money runs out at 95 years old, with some spending level that's often less than they're living on. So, some of that is a little bit of an eye-opener for them of where they are today. And often, they live that way because they subconsciously know there might be other money coming their way. But we use it to help build good and better, long-term financial stewardship, and ways to think about wealth and accumulating it.

Michael: Because all of this is in the context of clients, either G1 or the G2 that will inherit from them, where as long as you're not, I guess, profligate spending as it were, we don't have a “Will the money last” question. And so, all the financial planning projections and other things that we do that go with some version of, how much can I spend? How long will the money last? Just doesn't really crop up for your clients because they're spending less than the assets support and it's just going to compound and we don't need a fancy projection to make that point.

Liz: Most of the time, yes. I'm not saying there... You know, there's the occasional exception, but yes. So, that's why we're using it mostly and most often with a younger generation, certainly as a traditional planning tool, but maybe with a different goal. Frankly, I am always in awe of someone who can use a financial plan to get a couple to budget and spend differently. I find it very, very hard when someone really has to change their ways to make their money last. That behavioral change, as we both know, is so incredibly difficult, I will admit, it's much easier to show someone who's probably going to end up okay because of some inheritance that they need to be more thoughtful about it.

Michael: So, Liz, out of curiosity, is there a sample version of this you'd be willing to share with folks who are listening? Just want to visualize, how are you showing this to clients?

Liz: Yeah, oh, sure. I can't pretend that two PowerPoint pages are super proprietary.

Michael: I appreciate that. So, for folks who are listening, this is episode 490. So, if you go to kitces.com/490 and scroll down to the show notes, we'll have a link out to the two-pager just so you can get a further visual sense of what we're talking about here.

So, Liz, I guess, I wonder, if you build up to the two pages that you're bringing in for G2, and it sounds like even less so for G1 because they have even less of a pure financial sustainability issue, now I'm curious, why do you need financial planning software at all? What are you still doing with RightCapital that you want planning software in place? Which parts still happen there?

Liz: Well, I do think there's sophistication in there beyond what we used to just do on a spreadsheet, obviously. We like the way you can play with goals. We like being able to show scenarios to clients sometimes. I like the visuals we can get out of there. There are times where we use some of the confidence charts and some of the outcomes of the Monte Carlo. I just think anyone in this business today certainly should have a financial planning software. There's going to be some case where it's exactly what you need to show somebody.

Michael: So, then what brought you over from eMoney to RightCapital? What was RightCapital solving well enough that you said, "We'll go through all the hassle of switching planning software?"

Liz: Yeah, there really were two drivers. We ended up switching a couple of systems at once when we did that. The main reason I first chose eMoney is, right from the start of the firm, I have always believed in having a client-facing portal, as we call them today, that can aggregate. So, even at my old firm, I had a few clients who had other assets, and that's when I first started realizing this desire for aggregated reporting or aggregated information. And 20 years ago, we were a client of one of the very early versions of By All Accounts where there was a web-based page you could go to, and then we'd take a picture of that balance sheet and be able to share that with those clients who wanted it. So, I've always believed that that's important. When we first went to eMoney, I really liked the client-facing portal and how it showed information.

Michael: And they were the only player...

Liz: Doing that.

Michael: ...doing that at the time. The only player that had a portal and really built the account aggregation. Like, everybody else, it was a portal to see your planning projections, but having native account aggregation with balances that update. That wasn't a thing for anybody, but eMoney. They made that a thing 20 years ago.

Liz: And that's what we valued. And as they kept evolving it, it didn't evolve in the direction we wanted. It suddenly was like putting your insurance products front and center on the landing page instead of all your accounts. And so, it just was getting further and further away from what we wanted to be able to share with our clients. So, the first thing that happened is we're talking about how we probably need to be starting to think about a different client-facing portal. The number one move we were making was it was time to change our portfolio software. We had been on good, old PortfolioCenter workhorse for quite a number of years.

Michael: Oh, yeah, absolutely.

Liz: And so, we had undertaken a big research of everything out there to figure out what we were doing. So, in doing that...and that was probably, it was pre-COVID. So, at this point it's probably six or seven years ago. It might be a little bit less. But certainly where you had Black Diamond, you had Orion, you had BlackCircle, and you had Advyzon. And so, we were looking across them all what was going to make the most sense financially and functionality for our current base and scaling from there. We ended up going with Advyzon and they had a client-facing portal that we felt we could customize and be happy with. And so, then that set the stage for making a change to the financial planning.

Michael: Okay. Because now, suddenly, you don't need eMoney for the client portal because Advyzon is going to solve it. Now, we're down to, "We just need planning software to do planning analysis, planning calculations."

Liz: Exactly. And then so the next year, I had part of the team do a whole review of what they wanted. And that was interesting to see. As you know, the three of them keep leapfrogging each other and going back and forth. And at one point in the process, they came to me and said, "We're just going to stay with eMoney." And six weeks later they said, "I want to go to RightCapital."

Michael: Is that because RightCapital released something cool and pretty that pulled them across?

Liz: I don't know that it was cool and pretty. I think they dug into it more. The way RightCapital does goals fit us better.

Michael: Cool. How so?

Liz: We think of ourselves as rather goal oriented, now I'm digging into memory Michael, the way eMoney kind of had that, it had one module where you sort of would do the big color plates of, what is this goal? And you could do goals scenarios, but then it was in another place that you did basic retirement planning. We found we were always sort of finding back ways to get it to do what we really needed for our clients. Whereas we don't have that problem with RightCapital.

Particularly, I think one way to say it is the example I gave you. Many times, we're running a plan somewhat backwards. We're figuring out, how much can you spend over the life of these assets lasting the way we want? And eMoney very much you had to, at the time, kind of jigger it to allow it to go backwards like that, as opposed to your typical plan where you say, "Well, what are you living on now? What's some percentage? Here's the amount of money you need to save towards." We're generally flipping that. We're saying, "Here's what you have today. Oh, by the way, this is what it would support." We're not saying, "Here's how much you need to save every month to get to X."

Michael: Right. Because you've got higher-dollar clients. Like, we're not saving to achieve a spending goal. We have wealth and we're trying to figure out a reasonable spending rate or lifestyle.

Liz: Exactly. And eMoney may do that much more easily now. I can't speak to that. But at the time, that scenario fit the RightCapital set up better. And we've been very pleased with the additions they've made and the various things that are in there now.

Summit Place’s New Client Onboarding Process [34:03]

Michael: So, I guess, following on a theme, can you just help us understand what the financial planning process or just, like, the overall new client process looks like there? And I'm thinking more G1. We can come back to the G2 folks in a moment. But I'm G1, like, "Liz, this sounds great. Love the value proposition. Sign me up as a client. I'm ready to come on board." So, what actually happens now? How does this work?

Liz: Yeah. So, right from the start, even when I had almost nothing in assets, I believed in workflows. We were building custom workflows in old Junxure before any of this went on. And this wasn't Junxure in the cloud. This was the original Junxure. So, I was always a big believer that if we were going to scale this kind of concierge, comprehensive approach, we'd have to agree on how anyone does it as we add people to the firm and as we scaled. So, we have very robust workflows. So, a new client comes on board and we have seven different workflows that get launched along the way for everything with them. And it includes everything from the easy, "We're so glad you were with us," and we send them a welcome gift, which I think a lot of firms do.

Michael: What's your welcome gift?

Liz: We personalize it. We do have a variety of swag with the firm. But part of our whole thing is understanding…we work about 15 to 20 households to an advisor. This is not a high-volume firm. It is a high-touch firm. And the point always has been key to the culture that our advisors have the time to really be thinking about their clients. And we want that to come through in every way we do things. So, at the launch, we are putting together not only a paperwork plan of accounts, which everyone does, we're also putting together a paperwork plan of what other areas of planning are priorities for this person.

Rarely does a client come to us because they want a new financial advisor for their portfolio. We all get that sometimes, and it's usually about poor communication. But a lot of our clients are coming because something has changed in their life where they're realizing things are more complex than they thought. And they're really looking for a partner who can say, "We've done this with other clients like you. We have several solutions that might fit you. And we're not going to suggest that we know today what's most comfortable for you, but we're ready to work through this with you." So, we're documenting that right from the start. What was the top concern that we're going to start working on with them right away?

Michael: Okay. So, what's the meeting flow then that comes from that? Is there a standard of how many meetings, what you cover in each meeting as this process starts to unfold?

Liz: Over the first few months, there's typically three meetings. One of them is definitely going to be that discussion of specific goals. Coming out of that will be agreeing on the asset allocation and the investment policy statement. And then, typically, there might be two other meetings where we're going to focus on the other things. So, a recent, new client is close to selling their business. They have accounts five different places. They realize they don't have really any plan in place. They both sort of played with these accounts from a financial standpoint. And, oh, by the way, they just finished their estate planning.

So, there's a couple of things to unpack there. And the first was consolidating to simplify for them. But now, suddenly, they've spent a lot of time putting together an estate plan where everything, to avoid probate, is in living trusts, and then waterfalls eventually to irrevocable trust, but nothing is named that way. So, once accounts were open, the very next step was working through retitling, talking through, where do you want assets with these two titles? Do you want assets evenly between both your living trusts? Do you want certain things, certain places for a reason? Let's help you think why you might want things in a certain place. So, that was a very early meeting to really listen to how they're thinking about it so we can give the best solutions or multiple solutions that we think will really give them comfort.

Michael: So, if one meeting is investment oriented, and just you said, there are typically two others. Is there a typical or a planned agenda on what's the others? Or is the whole point, like, whatever the top issue the client showed up with, that's what the next meeting is going to be?

Liz: There's definitely going to be a meeting of a client's top issue. Even in our discovery meetings, we will start that meeting…we don't ask clients to bring financial information. Or first thing, we open our discovery meetings generally with a statement like this, "John and Jane, I first want to be very clear, this is your time to use as you want." I typically find, when we sit down with clients, there's something that's truly top of mind that has brought them here. And we have a presentation, we can walk through it, but I don't want you to have to wait until the end of your time to say, "I'm really wondering how you do what." And maybe you even have a list of questions with you. The first thing I want to do is invite you to go through that. And our answers may be all over the place, but let's let you get those concerns off your chest, because then we can really talk about your other thoughts and what you're interested in without those in the back of your mind bothering you. So, some invitation like that is how we start.

Michael: And that's a discovery meeting. I mean, that conversation is to talk...

Liz: That's a first meeting with a prospect.

Michael: Okay. So, we're still on prospect stage there.

Liz: Yes. Thank you, yeah.

Michael: Okay. Okay. And so, then as they come on board, meeting number one may be investment conversation because we need to get an IPS [Investment Policy Statement]. Meeting number two, maybe top issue. Meeting number three is whatever else we're working on as we're getting through planning issues.

Liz: Meeting number three might more clearly lay out, "Here's all the things," or, "Here's a number of things we talked about. We know they're on your list. Let's talk about a timeline of how we think it will take for us to get through these various things until we get to sort of steady state for now."

Why Liz Takes A Hands-On Investment Approach Centered On Individual Securities [41:07]

Michael: Okay. And what does investment process look like in your world? I know you've got a heavy planning component, you also have a CFA background, so I'm sure you can get very nerdy on the investment end. So, what does that investment process look like in practice? What do you do? What is your investment philosophy?

Liz: Yeah. We are a bit of a dinosaur in the industry and we're aware of it. We're always watching it. But we really do all the portfolios in-house still and not with third party managers and not with funds. We use some funds, we use ETFs, but we have a core equity portfolio that is individual securities. And we build that from a macroeconomic start. We funnel it down to sectors and industries that we think will be attractive. We do fundamental research to choose examples in each area. And that's all driven by sort of where we think we are in an economic cycle. We're not trying to stock pick. We're trying to do a typical portfolio.

And so, your question to me needs to be, "Liz, why in 2026 are you doing this?" And I have two reasons, one of which I think you've written a little bit about. The first is, at the end of the day, it's the absolutely lowest cost portfolio for them, because these days no one wants to charge a commission on a trade, and there's no fund fees or anything there. So, since that always was my expertise, it's not as if I'm doing something that takes me a long time or is hard to do. And my chief strategist I've trained over the years and came up right behind me. But here's the second reason, for our target clientele, what I have found, I totally believe in passive ETFs. I use them in often G2, G3, the younger generation accounts. I think it makes perfect sense if someone is regularly saving. But if I'm really going to talk about tax-efficient returns and extra returns that come from tax efficiency, I get that from individual stock portfolios for my top tier clients.

Michael: Because you can drill down into loss harvesting at the stock level, like, all of those types of tactics.

Liz: Absolutely.

Michael: So, essentially, the same reason a lot of advisors like direct indexing over funds for the individual stock holdings. But you can do it in-house because you actually have the CFA background and expertise.

Liz: Exactly.

Michael: Interesting. And I mean, is the vision at the end of the day, are you a firm that's trying to drive towards alpha? Are you a firm that's just trying to efficiently capture beta? How do you position yourselves from the investment offering end?

Liz: Yeah, we say we're trying to participate in the beta of the market. We don't use those terms with our clientele, but that's the goal. When we have that investment policy meeting, one thing we do that many firms don't is we agree on an actual return goal. And if we are doing a plan for somebody, we would use that in there to test that. That we say, "We think you will achieve all these goals you have in mind if year in and year out, you can make 6.5% on the total portfolio." You're 80 years old, we're down to 5%, whatever it is. And every time we send a report to a client, while we do show them equity performance versus the S&P and their fixed income versus the AGG [iShares Core US Aggregate Bond ETF], we do all that, the top line on the portfolio is always against that goal. And I really found over the years that really helps clients stay focused on what they're trying to achieve, regardless of what the market's doing.

Michael: So, like, I'm genuinely curious, how does that play out for you when you get to the bear market scenarios, the bear market cycles, when we get the COVID pullback or, what was it like, Greek debt crisis in 2014, 2016.

Liz: Yeah, all of those.

Michael: When you get to like, you know, "The market's down 15%. Great news, you're down 13%. Oh, but we had you at a plus 6.5% goal." And so, now all of a sudden, the client doesn't see, "Well, at least the market's down 15 and I'm down 13." They're like, "Well, you said 6.5% and I'm down 13. Am I supposed to freak out now?"

Liz: That is an awesome question, Michael. It turns out amazing in just those situations. Because here's what happens. You're right, when the market's down, the first thing someone wants to know is what you protected. We just came off an awesome quarter. Our approach does tend to protect a bit on the downside. It was just letting one client know this morning, you know, his equities were up. The only reason he was down at all is mid-quarter. He decided to margin an account for a short term private investment.

Michael: The client's gonna client.

Liz: The client's gonna be a client. That's all good stuff. But in that decline that you've mentioned, and, yeah, I've been in business through a few of them, what happens is when we've made that goal over time... And we show it to them visually as well as in the numbers. Showing it visually with, you know, your portfolio against that straight line goal, when they're down 13%, they can visually see, "Yeah, but last summer, you know, I was at 6.9% since inception, well ahead of that goal." And they get this visual picture that they have they have been below and above the goal at different times. And it does give them confidence that, "Oh, we're in that corrective market. But I've been here before and I know my portfolio is still showing it's on track long-term for that goal we all agree to."

Michael: Okay. Interesting. So, you're not just showing, like, the one-year snapshot, right, like, you're trailing 12 [months] is this, and our planning return goal was 6.5%. You're essentially showing this as a since inception report. So, I've got some kind of, like, straight line compounding at 6.5% of what I would have grown over all the years I've been with you. And then there's an actual line of where the portfolio has gone, which means, if it's been long enough, we've been doing pretty well. As you noted like, "I'll swivel a little above and below the line. If I get a good enough run early on, I'll be well above the line. And now, I can chill out with the market, pullback because I'm actually still ahead of the line."

Liz: Yep. I mean, we show both. Our reports certainly show quarterly performance and stuff. But, yes, we always include a long term visual goal.

Michael: So, I guess, for better or worse, you know, as happens for any of us, you know, woe to the poor client who gets a...

Liz: The wrong year.

Michael: ...horrific bear market in year one when the deviation just doesn't look pretty. Those aren't pleasant in any scenario. But I guess as long as you can get a few years in and nothing too problematic has happened, market cycles being market cycles, we may start working far enough ahead. That yes, you'll eventually have a bear market, these things happen, but markets go up far off and then they go down, which means most of the time when I get to that pullback, I'm just going to pull back closer to the line that I told you I was getting you in the first place. So, we're okay. You were up in the stars and you came back down to earth.

Liz: Exactly. And frankly, I told every client that last summer. I mean, you know, we've had a couple of great years. And we use that to also frame the expectations. Where we were with clients in the summer and fall, we were telling all of them, we're thrilled with the returns. We're thrilled how far you are above the goal. But remember, you're likely to pull back towards that goal over time.

Michael: Right. And so, I guess, connecting the dots as well, you know, per your comment that there's also just a cost savings layer. We don't have the ETF costs in here. I guess that's also what lets you keep a strong asset minimum and just a healthy fee at, I think you said 1% for the first $10 million. Some advisors have breakpoints somewhere between $1 million and $10 million. But a lot of the advisors that break points in there also are using funds and ETFs and things with other costs. So, you're all in probably deviates even less than others because you don't have a fund wrapper cost layer in the middle for most clients or, at least, most large dollar G1 clients.

Liz: Correct.

Michael: Okay. Does that actually crop up? I mean, is that a conversation with prospects talking about pricing, the difference of advisory fee versus all in and the distinctiveness that you don't have fund and ETF layers, or does that just not really come up? That's not why they're buying you.

Liz: There's always those clients, that I think all of us have advisors find, you know, certain clients who are talking more about the portfolio, or certainly want to understand why you do the portfolio management you do. But most of the prospects that come to us and are referred to us are coming to us because they are feeling like things have gotten complex, or they don't have the control they feel they want to have mentally over their wealth. And they've been shown, you know, or referred or recommended that we're the partner that really can help them bring all of this into alignment and help them have a very organized legacy when the time comes.

And for that, they're going to pay what may seem like a higher fee, but we're probably not going to get a prospect who's shopping on fees. And that's okay because that's probably the wrong fit for us. I have a client years ago who came with less than our minimum, but was paying the minimum amount. And he became one of my best, you know, people to call when someone wanted a recommendation, "Can I talk to a client?" And he loved talking to them and he would say, "Liz is expensive, and it's the best thing I ever did."

Michael: Yeah. Well, I do find there's a certain dynamic that crops up, particularly with some higher net worth households, where they are quite accustomed, in many contexts, to paying not the cheapest fee because they want higher service. They choose that in their travel arrangements. They choose that in their accommodations. They make those choices in a lot of scenarios. And so, they, at least, have to be clear, I think there's a greater service touch or other value for the fees that are being paid, but it's usually not a price shopping thing because they are quite comfortable to pay more for value. They just have to be clear that the value is there.

Liz: Yes. And that's certainly how I have positioned the firm and successfully grown the firm over the years, was with that central assumption.

Introducing Multigenerational Conversations With G1 Clients [52:24]

Michael: So, now, taking us all the way back to the theme at the beginning, so help me now understand how multi-generational dynamics come in. How does this get introduced at G1? Does it come, like, all the way back at the prospect discovery meeting? Does it come after the planning process starts? Where and how do the multiple generation conversations get introduced and the interactions with others besides G1 begin to happen?

Liz: That's a great question, too. It is absolutely in the prospect meeting that we bring it up. And some come knowing it. Some are referred to us knowing it. Earlier in the business, I used to have a page in the prospect book that was, you know, just think of a curve that looks like a typical curve of growing a business. It starts low, goes high on the right. And I called the page The Cycle of Wealth. It was by age and it's sort of just named four different points in time. And I used to use that as sort of showing the service model because I would show at different ages, the different things you probably most needed us for. But I would use that page to also always have an arrow down at the early age that said, "We will meet your children wherever they are."

And so, I'd use the page to talk to the prospect about where they are. But it visually said right away, "We are happy to work with your children. I don't care what money they do or don't have. We will meet them and their needs wherever they are if you would like us involved." And a huge percentage just love that. And I would say, two thirds, you know, they would be the one to proactively then tell their children they'd made a change, and that this person was available to meet with them. But I'd say over time we, I don't have a single client that I can think of where we haven't met with the children at some point.

Now, sometimes they wait a few years till the child's ready or they're ready to say, "Yeah, Michelle really could use talking to you." Sometimes they'll immediately say, "Ah, yes, Sydney and I have been talking about this. She'll be so excited that you'll reach out." And so, they'll do the introduction. But of course, we always ask them, "Do you want us to reach out? Do you want to reach out?" And then we do share with them, you know, if they're an adult, as generally they are. You know, of course, we'll kind of have a conversation with a teenager as many families like these days. But once we're working directly with an adult, we do say, you know, they are an adult so, you know, it's a separate relationship. We aren't going to share things, but there's a lot of ways we can be helpful understanding what your values are and what's important to you in conversations that we have with them.

Michael: And so, you have to actually set that expectation clearly upfront, like, they are a separate clients. We're not sharing information across the family.

Liz: Yes. And, you know, and there's some information you can share, and then there's information you know that you shouldn't. And I find that as clients are truly getting older and they do start thinking themselves more specifically about legacy transition and children inheriting, they're asking me and my team, a lot more specific questions about their children. And that's when, you know, you really need to use your experience in navigating that and helping them find the comfort they want without crossing any informational fiduciary commitments to the next generation.

Michael: So, how do you actually get them to engage, get them underway? I mean, do the parents reach out? Do you reach out? What's the initial meeting or ask or offer? Like, how do you literally get started with the client of the high net, or the child of the high net worth client?

Liz: It can happen a lot of different ways, as we all know. And certain people, certain children are more anxious to get involved than others. Certain don't want to have anything to do with you. Again, we don't reach out directly unless the parent asks us to be the first to reach out and shares contact information. You know, so much better when the parent lets that child, you know, which could be 40-years-old know, and then we reach out. And sometimes they're excited and say, "Yeah, I'd love to have a conversation." Sometimes they say, "I'm good." And what we'll do is we'll just regularly ping them. We have clients all over the country. So, one of my favorite things is to reach out to say, "Hey, I'm going to be in San Francisco visiting a number of clients. Would you like to grab coffee? Would you like to just say hello so we have each other's faces?" And that has been very effective at cultivating, you know, a stronger relationship and moving forward with the next generation.

Michael: So, how often do you find that they engage? Is there a barrier of, "Well, Liz, you're mom and dad's advisor." Like, is there a generational gap that shows up? Are they pretty willing to engage, or is it really hard to get them to really step into the process?

Liz: It varies a lot and it has varied over time. We had... If we go back a bit, 10 years ago, the 35 to 40-year-olds were happy to engage. The advisory business wasn't reaching out much to them. They didn't have enough wealth. They had kids. They're trying to figure things out. So, it was easy to engage them. But the 20-year-olds at that time were the Millennials who said, "I've got this. I can do it all online. I don't need you." They did not want to engage. Today, the 20-year-olds are thrilled to talk to us. They love that they have someone who will...

Michael: Oh, interesting.

Liz: ...help them look. You know, and...

Michael: So, this is, like, a Gen Z versus Millennial difference?

Liz: It absolutely is. We find the Gen Z, particularly the females, which excites me, want to be financially knowledgeable and independent. They welcome someone who says, "Hey, did you read that employee handbook? You want to get on Zoom and the two of us will look at it together. I can highlight to you the things, how to think about this. How have you set up your 401k?" So, a lot of times with them, we're Zooming and we're looking at their stuff together. They don't care about my portal. They don't really...you know, we will have a meeting to look at if they've got some savings, but really, we're helping them put in place good habits.

And what I hear all the time from the Gen Zs are, "Am I doing this right?" They love having that confirmation and someone saying, "You've got this. Yes, that was the right decision. Yes, you're doing this. Oh, congratulations on that, Ray. Should we talk about upping this? Shall we talk about upping that?" So, they're engaging pretty easily. And now that the Millennials have gotten further along and realize that, you know, the internet didn't give them all the answers, they may be waiting to see if AI does now. More of them are having deeper conversations with us. They would sort of sometimes touch base once a year. They weren't talking as much. And partly, they're just getting older that they realizing they might appreciate having a human they can go to sometimes.

Michael: So, the Millennials in their, like, 30s, early 40s today are engaging similarly, but I guess, would have been the Gen Xers, like, a decade ago at that stage. But the younger folks are different because the younger Millennials were not so interested and the younger Gen Zs seem to be quite interested.

Liz: Yeah. So, we're very excited that we are getting the 22 to 32 to be engaged these days. You know, we're able to be talking to them early. We're excited to see how that supports them 10 years from now. Because 10 years ago that age group, you know, would take a call and you could hear they were just, like, doing their parents a favor and you didn't get any follow up.

Michael: So, are there particular topics that you reach out about or try to engage on that are more engaging or better at opening the door?

Liz: I think so. Just, like I said, we, we started this conversation talking about that checklist we have in our client thing. We did some years ago, and we dust it off regularly, kind of think about for ourselves, what are the most important topics, you know, for the 20 to 30 something, for the young, married family? And so, we do have some handouts we'll use with them if they want something visual or just in our own mind. So, we do know, you know, if you're in your 20s, you're early in your career, there's so much you feel like no one ever taught you employment-related.

So, that tends to be a really good starting point. Let's not introduce new things. Let's help you make sure that you've got a job. "You're working for this company. Do you know the benefits? Did anyone explain them? Were you in a daze when HR spent day one?" Let us do it at your leisure. Let's talk through it so you feel like you really know what's going on here. And then we'll talk, you know, their 401(k) and how they might think about that and how they might, you know, contribute to that. How much can they contribute? Getting them to have a plan to get to the maximum contribution. And so, those are really easy first topics for that group. The next group we might talk about if they haven't...you know, we hear from them a lot when they've decided they want a home and we'll talk about, you know, the different steps of becoming a first time buyer and things to think about and things to look for.

Transitioning Next-Gen Individuals From Regular Contacts To Full-Time Clients [1:02:06]

Michael: So, when you think about this from a service, I guess it's like a service model end, so is the nature of the next generation engagement mostly around these sort of one off episodic conversations when they're in the moment, have the need, right? You know, we want to get house, please walk me through being a first time homeowner. Is it mostly episodic, or do you try to have a, you know, "We do a comprehensive plan and a one or two times a year check-in," I just call it the more traditional service model.

Liz: We try to transition them. What we do is we do make sure, you know, through our CRM and stuff, that we are tapping them, at least, quarterly. Having an excuse to say hello, pointing out something we sent out in a Constant Contact to that group, you know, just so we're in front of them and opening the door. And then when they start holding the door open for us, we will transition to a typical service model for them, you know, no matter what their wealth is, you know. Having that couple of time a year full on check-in. You know, "Do you want to sit down? Do you want to meet?"

What I will say is we find, and I'm sure everyone shares this now, where we used to visit them, take them out to dinner, bring them, take them out to the apartment, the ones with children these days, it's almost all gone Zoom. Because you don't want to be the one making their complicated life even more complicated. So, we're like, "Look, don't worry about getting a babysitter. You don't have to make changes. What's going to be convenient for you. Let us meet you where you are."

Michael: So, when they get to the point where the model is more ongoing service and there's, at least, some dollars there, like, how does it work from a fees end? I mean, do you have minimums? Do you aggregate them with the household? Do they get, like, mom and dad's marginal rates? How do you handle fee structures?

Liz: Family.

Michael: Okay.

Liz: Yes, they get...they absolutely... And I think that's part of the selling point too, right? We will consider the entire family, you know, into the fee structure. So, if mom and dad have gotten a break point, child's going to get a break point, for sure. And often we'll start with the 20-somethings with no fee at all. And, you know, by 30, we will be charging a regular fee, even if they don't have much money, just so they're used to it.

Michael: Okay. And then I've got to ask, like, how you've been doing this long enough, I've got to assume some G1s, sadly, have passed away over the years. So, how often, in practice, do relationships continue? How often do they still ultimately say, you know, "I'm out in San Francisco. I got a friend out here I'm going to work with going forward?"

Liz: The transition so far, knock on wood, has been fabulous. If we've lost someone, it was probably a sibling, you know, that wasn't as engaged, but those where we built the relationship over time did not go looking for another advisor. You know, they, they had been with us long enough. And often with different people at the firm, you know, if we feel like there's going to be this feeling that, "If this person's talking to mom and dad, I don't want to talk to them." You know, we're not a big team, but there are six of us. We have four advisors. We'll have a different person talking to G2 so they have their own relationship, and those relationships have not left.

Michael: And do you get the challenges of...and at least, I hear from some folks that do this, you know, you go from, you know, the, the client that had $12 million to three clients that have $4 million because it's split across three different children. And now, I've got three times as many clients to serve at the same fees and revenue that I had before.

Liz: Right. If we're doing it right, we were already taking care of the three of them, right? And our job now is to help those three with $4 million, grow it still towards our target and not go liquidating at all if we've done our job right. So, so far it's been working.

What Summit Place Financial Advisors Looks Like Today [1:06:18]

Michael: Okay. So, now, help us understand, I guess, just the firm overall and where it stands today. So, I guess, like, clients and assets and team and revenue. Like, just give us the snapshot of today.

Liz: Sure. So, you know, we started in the depths of '08, and I did bring, I think, 6 clients with me with about $20 million. You know, I was biting my fingernails to 12/31, right, when you have to, like, then do your SEC reports and see that we were going to have enough to stay SEC-registered. We pulled it off.

Michael: Oh, right, because back then it was still $25 million, was the threshold. So, like...

Liz: Which is mind-boggling.

Michael: ...$20 million, a little bit of market bounce back from the bottom, and a few more deposits, like, get barely over the line.

Liz: Right. We pulled it off. So, today, you know, I'm very proud. Like, so I said, we have a team of six, so I'm employing five professionals full time. We're just over $300 million, and that's about 37 households. So, the household could include, right, two to three generations. And we didn't even mention that the other trend we're seeing is we now have clients who come and say, "And would you take over for my parents?" So, we have a few families where there's actually four generations going on.

Michael: And where does revenue add up for this business?

Liz: Yeah. So, you know, we just put through fees. Our run rate is about, you know, $2.5 million, between $2 million and $3 million, you know, which does reflect that we don't play games with that fee. That's around 80 basis points, I think, or something like that, yeah.

Michael: Yeah, I mean, for all the advisory firms out there that say they charge 1%, when we look at the numbers all in, it's very common to see that actual revenue is more like 70 to 75 basis points. It's pretty common. By the time you get the exceptions and the deal and the one really big client that you just have, like, a separate, off-schedule flat fee because it didn't really fit for them. So, to me, like, that's very robust, healthy revenue that, like, just you've been able to be firm and consistent on pricing. And then that lets you have healthy staffing team economics. So, I often think about numbers, like, revenue per employee, $2.5 million to $3 million of revenue divided by six team is, like, $400,000 to $500,000 of revenue per employee, which is, like, a really highly productive firm. And I think it paints an interesting picture when you're, like, 37 client households, hyper-focused, high-value offering, great productivity metrics.

Liz: Yeah. And I've been adamant about that. I mean, not only do I get the P&Ls [Profit and Loss statements], but I have for years kept analysis of the KPIs [Key Performance Indicators]. And I keep an eye on that. And how is our productivity? How is our profitability? How are we growing? You know, to maintain the value of the firm. I think that that's important. I was just talking with someone today about, you know, how easy it is. We all know this when you're starting out, and even along the way after, you know, we are not someone who has continually brought in advisor with books, you know, 18 years, $300 million. This is this is just plodding, organic growth. And that's partly the firm I wanted to run.

Michael: Yeah, I love that.

Liz: But in so doing, there's certainly times where you feel like, oh, you really should take on that million dollar client that called, you know, that prospect. They were such nice people. And you do have to sometimes just grit your teeth and say, "I don't need that $10,000 so much to muddy the very clean firm I'm trying to build." And so, my feeling was really building that, yes, small, but very unique and valuable firm that could have a way to survive independently if I wanted, which so far I have wanted.

Michael: So, how do you handle those challenging situations where, dare I say, the mere millionaire arrives having heard that you do neat things and is nowhere near your minimums?

Liz: You know, when a client refers a friend that doesn't meet, we try hard to squint and say, "Do we think they can get there?" And so, we do take them because, you know, you have to value the friends of them and the circles your clients are in. So, I'm not going to tell you we don't take them. We do when we can squint and see that it could work out. But the other thing we've done a lot is, you know, we practice how to make someone feel really good about being told, "You don't need the range of services we provide and at the price point we do." And sometimes I'll even say, "Look, we could we could talk more about this, but it's not fair to you. What we deliver and how we deliver it is overkill for what you need." And then we try to refer a couple of them. You know, we try to have relationships with other firms that do that business and say, "I'd be happy to introduce you to one or two firms that I think might provide the kind of services that fit you well."

Michael: So, coming back for a moment just, like, team and households and overall capacity. So, as you know, 37 households, but a lot of these can be, like, multiple people across multiple generations. So, I'm assuming, like, client units is 50, 60, 70 or something.

Liz: It's about 60. Yeah, exactly. It's about 60 if you go to the to the client units. Yeah.

Michael: So, how do you think about capacity at a firm like yours?

Liz: We do measure it. We do follow it. I would say, we can be about a third bigger with the team that we have. But we would probably bring on, you know, an associate advisor earlier to do that. I have a senior advisor now who's been with me three years and, you know, she came on as we were moving towards this point. So, with her addition, we have capacity for a number of more families. I think of it, typically, about 15 to 20, you know, like, 15 households per person to give them the attention that they need. Now, with everything changing...

Michael: So, who counts as a person in that per person? I mean, it's, like, there are six of you. It's not 6 times 15.

Liz: So, we have four advisors. I have an office director and I have a portfolio administrator. So, for 4 of us, you know, 15 gets us, you know, to 60. And we're at 37. So, we should be good.

How AI Might (And Might Not) Impact How Liz Serves HNW Clients [1:13:03]

Liz: I also have to say, of course, I think that metric is going to change, don't you? We're all figuring out how AI changes that. We're certainly using it in different ways to start, more ways to come. I think we are the very expression of the higher-level human services someone looks for and what they value.

And when I think about how we spend our time... One of my advisors just this week was going to have a Zoom call, but the client called and there had been some issue where they lived and they didn't have Internet. So, the first thing she does is looks at me and says, "I'm going to go visit this client live because we're having a call with the attorney." The client had been updating estate documents. The only reason we are there, shouldn't say only reason, this is a very typical reason we're there, was to sit by the client's side during that call and help them ask all the questions that they knew they had. And help them, as we had helped them, highlight the parts of the document they still had questions about. And so, that's the high value a lot of our clients are looking for. And that's, obviously, not something AI is going to do in the same way.

Michael: So, where do you think AI does or doesn't show up in this, like, high-touch, high-service kind of firm that you've got?

Liz: Well, first and foremost, we're already using AI for parts, and hope to do even more, right, to have a more streamlined produce a client meeting document for me and get it printed out, right? I mean, I think everyone's thinking ways to do that. And once I do that, that frees up, you know, not tons of time, but some time for that higher-level kind of work. We very much work as an ensemble. To do what we do, it's not about us miraculously having four members with all this expertise. It's about us being willing to really doggedly do the legwork.

We had a client this year come to us. She is the guardian of sorts for someone who is falling deep in dementia. And that person had trust accounts that were being ignored by another advisor. And when we get to them, not only have they been ignored, somehow, none of them were updated before this person hit the point where they can't sign documents. And therefore, we're struggling to figure out how you even open accounts in this person's name because these accounts list trustees who no longer exist, right?

So, fast forward three and a half months, and we've accomplished it. And the way we did it is because we're willing to take the time to read them, to reach out to people, to collect the advice that this client didn't know how to reach for, and to find a change of attorney who could interpret this and understand how to, in a much more simplified way, get courts to approve an adjustment. And it's sort of about just being patient and dogged, which so many firms don't have the time to do.

Michael: So, I guess in that vein, though, then it sounds like your vision of where AI plays out is less, "Now, we have time to be 20 to 30 households per advisor instead of 15 to 20." It's more, "Now I've got even more room to go deeper and do more service touches and higher-level work for these awesome 15 to 20 clients."

Liz: I do think it will be both. I do think we'll get more capacity, but I don't think we'll get 50% more. I think we'll get 20% more because we'll get rid of some of those tasks. But when I think about everything in our industry, we know there's this huge evolution of the aggregators. We know there's a change in what it looks like. Again, for today, I want to still be that independent boutique firm. And to do that, I know I have to have a unique value proposition that someone will seek out and want.

What Surprised Liz The Most Building Her Advisory Business [1:17:07]

Michael: So, as you've gone down this path over nearly 20 years of building the firm, what surprised you the most about building your own advisory business to do this?

Liz: I think that I could. You know, I think we all start this...and I will admit, maybe more so as a woman too, where you have a vision and you kind of have confidence in starting it, but I think we all have a little bit of a question of, "Can I be successful at this? Can I grow this? Can I scale this from just me after my first assistant to actually employing and engaging and developing other professionals?"

Michael: And so, now, that you look back over 10, 20 years, what changed?

Liz: Certainly, you know, high confidence, I can do that. And I think more with that, even more experience to help others. You know, you learn about, what is your own secret sauce? I laugh, I spent the first half of my career in front of a computer. I was a financial analyst, a security analyst, a portfolio manager. I wasn't building relationships. And so, I think there's a lot you learn about yourself and how you're successful. And it's fun to pass that on to others and provide ideas for them to find their own success. For me, a lot of it was in integrity and authenticity. I know I'm a little geeky. And I was able to use that with the right prospects to my advantage. And so, I think I was able to build trust that way. Everyone has to find their own spot to that. But over the years, you understand what works for you. And there is, I think, additional fulfillment in being able to understand, you can teach it to others, too.

The Low Point On Liz’s Journey [1:19:08]

Michael: So, what was the low point on this journey?

Liz: Well, certainly it has to start with realizing after all those years of commitment to my old firm that I was not the heir apparent. That had to be it. I think in my own firm, I would say, the low point was learning to get the right people in the right seats on the bus. My husband likes to say, our team today is Summit Place 2.0. I did hire people in the past that didn't work out, or worked out marginally, but then moved on. And I think the low point there was not realizing that confidence in developing them the best way. We like to think about, can you hire the right person for the seat? I think that low point taught me, you can hire close to the right person. And particularly, as you're growing a firm where there are 6 of us and not 60, you need to make the commitment to develop that person to fit the seat just right.

Michael: So, I guess, I'm curious to hear more of what changed between what you used to do to get team on board that didn't necessarily land the right people in the right seats, and what you do differently now that's made it go better.

Liz: I think a more purposeful understanding of building the human skills and confidence first, taking the time to really make sure that there's confidence in all ways of working with clients or working as an associate with a senior person with clients, being a part of those meetings, and hearing it, before we start talking about how you might eventually also help bring in business. Because all of our advisors do both. And I do think I've had, saw earlier people be very stressed by that. And they were people that I knew could be successful. And so, I really took it on as a personal challenge that they got so stressed by it that...at least, one of them I think partly left for that reason. And so, I definitely flipped the script around that, yes, you will eventually need to help bring in business. But what we want you to focus on for the first year and a half, two years, depending on how much experience they have coming in, is our culture, our approach to clients, feeling really confident and good about that.

Liz’s Advice For Her Younger Self And For Newer Advisors [1:21:43]

Michael: So, what else do you, like, know now you wish you could go back and tell you from 15 to 20 years ago in the early years? What do you now have the wisdom that you wish you could impart to yourself back then?

Liz: I think taking the time to meet with a lot more outside professionals. I think early on, you feel you need to put so much time into your business. You don't have time to take some of those meetings or meet people from other firms. Like, we're not talking about networking for prospecting sake. I think that all comes back to you. But I think that would have been a lot. That would have been very valuable. I think when you're starting out, you don't appreciate how much those people, connections, their experience are available for you when you need a sounding board, when you're looking for someone, when someday you just want someone who might be in the business they're in. From the wholesalers, from the product people, to the other professionals, I wish I had done a lot more of those meetings early on and kept those people as part of the whole journey.

Michael: Are there particular folks or professions that you, I guess, like, networked with the most, or found the most benefit from networking with and building into your network?

Liz: I definitely think there's different categories. I would have liked to, early on, meet more and make an effort to meet more people also running independent firms. Just have that network to talk to. I think the accountants and the estate planning attorneys, that's easy. That was part of it. It's hard, of course, to find the ones where everyone clicks, but it's not hard to meet those people. And I think just other like-minded professionals, no matter what their job is at the time. We find so many people change in this industry over time. That's why when I look back, I feel like it would have been useful. Just when you have questions about, what's the next step I take with my firm? To have those different people. To call the wholesaler from SPDR who's calling on 15 different firms to say, "Hey, have you seen this? Do you have any people you talk to with a firm that's ever done this? I'd love to connect with someone where I could have a conversation."

Michael: So, I know you were also very involved with CFP Board. I mean, you did a cycle on the board of directors as the chair and with a lot of its workforce development initiatives. So, I'm curious, what advice you would give younger advisors looking to come into the profession and get started today.

Liz: Thanks. Yeah, the last six years, I was on the board of CFP Board, which was a really exciting opportunity to have a role in their growth and their commitment to future professionals. And when I was chair, we sort of amplified a lot of efforts to make young women aware of the profession and start changing the conversation to, instead of, what are the challenges, what's working out there? What can you do to ensure young professional success. No matter what gender, I think the challenges are somewhat the same.

And I do think part of it for males and females goes back to what I just talked about. I think there's something to today, particularly, building some community. You and I talked about my role early in my career where I was involved with CFA New York. Nobody does that as much anymore. They don't go to a monthly live meeting with other professionals. And in fact, they kind of say, "Why would I do that?" And I think starting out in this profession, building some community of others that you can talk to regularly at different points, it's different than the mentor you might look for or the advocate to work for. Having some peers to be able to talk to regularly, I think is really key to that confidence-building in the first couple of jobs.

I also think you need to then spend those first couple of years figuring out your own personal and business why, right? What jazzes me about what I'm doing? Why am I doing this? What is it that makes me get up every morning and come to this job? And if I don't love the job I'm doing today, what is it I love about the person at the next desk when I want to be at their desk doing that job? What is it I want to do that means something to me?

What Success Means To Liz [1:26:18]

Michael: I love it. So, as we come to the end here, this is a podcast about success. And just one of the themes that comes up is, that word success means very different things to different people. Sometimes it changes for us as we go through seasons of life. And so, as someone who's built a very objectively successful business as you're crossing $300 million of assets and have done the growth cycle with the business, how do you define success for yourself at this point?

Liz: Thanks. I think there's levels of success. I think, for myself, and I think particularly for many women, that there is a sense of real financial independence. Realizing that they're able to take care of themselves independently and doing that with this firm. Even though I have a fabulous husband and we have a great life together with both of us in careers, there's a lot of satisfaction of having built this both for the success and size it is, but also, the financial success that comes with it. Then there's the success from the recognition. You know, I've won a number of industry awards. I've been on a number of lists that, of course, has to feel good.

But I think the more I'm in this business and at this point in my career, it's a little trite to say, but I do think we start realizing there's a lot of little things that show real success that you don't always see from the outside. Like, running and growing this successful business while having a lifelong spouse and a marriage that still works over 30 years. I think that is success we don't applaud enough these days. Raising two healthy children who are comfortable with themselves and mentally healthy. I launched the firm when they were 8 or 9 years old. And in high school, one of them said to me, you know, "I was really worried when you told me you were starting this firm. that we weren't going to get to do certain things or you weren't going to be around. But I'm so proud that you have this business and I tell my friends about it."

Oh, my gosh, Michael, had I known that my girls were going to be proud and have a great role model when they were 9, right, I would have done it when they were 3, right? You know, if someone said, this is the way to raise healthy, independent, young women. So, raising just healthy, happy children, I think, we underrate today. Building a business that provides employment and a career path for five other people, it feels amazing to me sometimes. And I forget that one a lot. And then I think the bottom one we all know is all you have to do is start seeing, over time, the difference you make in your clients' lives, right? And that's when you know, you know, we're all doing something that really is successful.

Michael: I love it. I love it. Well, thank you so much, Liz, for joining us on the "Financial Advisor Success" podcast.

Liz: Well, thank you, Michael. This was great.

Michael: Thank you.