Welcome back to the 142nd episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Matt Oechsli. Matt is the founder and CEO of The Oechsli Institute, which does primary research into affluent investors and how they select advisors, and then provides financial advisor marketing and sales consulting and coaching on how to leverage those research insights to grow their firms by reaching more affluent clients.
In this episode, we talk in depth about how to reach and connect with affluent clients by forming better relationships with them. From why knowing the names of a client’s children and pets really is so important in the relationship-building process, to the reason why having non-business social lunches with clients, or what Matt calls a $1,000 per hour activity and are so effective to deepen the relationship and get more referrals, the importance of doing intimate events with a small number of key clients at a time, in addition to broad-based client appreciation events, and how in the end, the point isn’t merely to become friends with clients, but that social interactions with clients are really all about having opportunities to demonstrate that you’re worthy of their trust, to continue working with you and hopefully to refer you as well.
We also talk about how to bring better structure to your client relationship-building efforts. From developing a relationship calendar of the key activities you intend to engage them with your top clients throughout the year, why it’s so crucial to focus relationship building activities on a subset of your top clients instead of trying to reach everyone at once, why you should target one surprise and delight opportunity with key clients every week, the right way to ask for referrals without just asking for a referral, and how even as advisors try to engage in more social relationship-building activities with clients, it’s still important to go into those meetings with strategic intent for success.
And be certain to listen to the end, where Matt talks about what he calls the three C’s of good client communication: be concise, conversational, and confident, the reason that advisors tend to get stuck in their businesses, and his advice to new advisors entering the business on what it will take to be successful in the future.
What You’ll Learn In This Podcast Episode
- What Matt’s Research Has Revealed And How He’s Applied It By Helping Advisors [03:53]
- How Matt Helps Advisors Put Structure Around Developing Deeper Relationships With Clients [17:47]
- How Advisors Can Really Differentiate Themselves [25:09]
- Why Matt Started The Oechsli Institute And What It Looks Like Today [39:15]
- What Kind Of Advisors Matt Works With [47:06]
- Referral Marketing That Actually Works [51:53]
- What Matt Sees As The Most Common Sticking Point For Advisors [1:05:18]
- What Success Means To Matt [1:24:20]
Resources Featured In This Episode:
- Matt Oechsli
- Oechsli Institute
- The Art of Selling to the Affluent
- Winning the Inner Game of Selling by Matt Oeschli
- Never Eat Alone by Keith Ferrazzi
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Michael: Welcome, Matt Oechsli, to the “Financial Advisor Success” podcast.
Matt: It’s great to be here, Michael.
Michael: I’m looking forward to the episode today. You are I think one of the very unique people that I’ve come across in the industry over the years who kind of lives at this intersection of doing coaching and consulting with advisors and doing a good deal of your own research, your own kind of primary data gathering out to the world to actually really analyze and quantify and understand this thing that you’re coaching and working on. I know you spent a lot of years around what it really means to work with affluent clients. You’ve wrote a book on it, you’ve consulted on, you publish research on it.
And so, being the nerd that I am, run the Nerd’s Eye View blog, I always appreciate the fellow nerd that wants to go a little deep with the data and then figuring out how to apply it. And so just really looking forward to the conversation today and talking about all the things that you guys have done and learned from what you find in the research, and then what you put into practice with all the coaching and consulting work you do with the advisor world.
What Matt’s Research Has Revealed And How He’s Applied It By Helping Advisors [03:53]
Matt: The research to me is fascinating. And it really evolved. Back when I was getting an MBA, I did statistical analysis, and I used to do some of the…I was always fascinated by research. But I remember vividly sitting in a number of conferences years ago, almost 30 years ago, where I was getting ready to be introduced by a senior management, and they all talked about targeting the affluent, what the consumer wants. And they’d use the word “affluent” regularly. And I’d be sitting there looking around the room at the advisors, and I kept thinking to myself, “I wonder really what the affluent are thinking about all this.” And that was sort of the beginnings. And one was a group of insurance agents and the other one was a group…back then they called them stockbrokers. And that’s where I began this sort of…I started with the research on the affluent investor, the client, and then I quickly determined that I also needed to be researching the industry sales force: the insurance agents, the stockbrokers, which will now bundle together as financial advisors.
And it was fascinating because you see what the affluent are looking for, what their responses are, and year to year to year to year, not that much changes, but you see trends. And then you see what the industry is doing and you see what the firms are promoting and wanting their managed money. Remember those days everything was about fee-based business? Well, back then our research was saying that, and it still says it to this day, that the affluent wanted a financial professional. Someone such as yourself, or some of the advisors we coach, to really oversee the multidimensional aspects of their family’s financial affairs. They really didn’t care how that financial professional was compensated. They would pay fair value, fair price for fair value. And yet the industry is just pushing everybody into managed money. So you have all this…you have like an annuity coming in. You can come to the office, you don’t have to do that much.
Michael: So how do you account for that distinction then? I feel like you’re sort of making the case that the industry is pounding the table and say consumers want assets under management and these holistic relationships, and you’re sort of saying like, “Yeah, well, not really,” or like, they sort of want the holistic thing, but AUM is more like the cost of doing business than a consumer demand.
Matt: Precisely. And the best advisors that we’ve seen over the years understand that the firms are sort of…they have their marching orders, and they have their agenda, and each individual financial advisor really is a standalone entity. And they have to develop the relationships that they see fit, and they need to provide the services that they think their clientele will value to their clients. And not just necessarily how are they getting paid, but what’s the overall depth and breadth of that client-advisor relationship? And the best of the best have always done that. And they realize the money will come, the money follows.
Michael: Yeah. It’s one of the things that’s fascinated me is the industry has all of its debates around the shift to fee-based and sort of the concomitant shift to fiduciary models and the AUM model overall. And I feel like every now and then there’s…so we have all these industry discussions, then every now and then there’s a consumer study that comes out that just actually talks to consumers but like, “How do you want to compensate your advisor?” and like, “Which stuff matters to you?” And always stunned when these…well, I don’t know, “stunned” is not the right word, but it’s always surprising to me or shocking to me when these studies come out. And what you see in that research over and over again is, if you asked the average consumer off the street, “fee” is a bad word. No one likes paying fees. No one wakes in the morning like, “You know, I think what I need in my life is paying more fees.”
Fees, we hate. Fees are things that airlines and banks use against us to make us not do a thing. Like, you want to know how to get people to not bring bags on the plane, charge them a fee and make them pissed off, and then they won’t bring the bag on the plane. Fees are a way that we make things more salient, more tangible because we dislike them so much, we stop the behavior that usually the institution didn’t want you to do in the first place, or at least they make darn sure that if you’re going to bear the fee, they’re going to make a whole bunch of money off of it.
And so it’s only in our world where we’ve kind of tried to turn this label around or use it in different ways. Because the indirect effect to me that happens, which I think is actually more notable and more significant from the consumer perspective, is what does happen when I shift to an ongoing fee-based model is, if I want to keep getting my fees, I better do some good stuff for the client. And so you do create this pressure that says like, well, I can’t just say I’m holistic, I have to keep showing up every year and doing some stuff, or the client is going to ditch me. And that doesn’t happen when I get paid all upfront, because frankly, I got paid upfront, doesn’t matter whether I show up again.
And so I do think there is an incentive shift for the advisor to say, “You better keep coming back to the table and adding value to the client, or they’re going to fire you.” And that when we do that well, we accumulate clients. They don’t leave very often. You gather clients and keep a 97% retention rate. And after 10 or 20 years, you’re going to have a whole lot of clients and a whole lot of assets under management and a pretty sizeable business. But it’s not necessarily like a table-pounding consumer demand, “If only I could find an advisor where I can pay a whole bunch of fees,” it’s much more around just, this happens to be a model that works well for giving the advisor an incentive to keep doing lots of holistic stuff on an ongoing basis. And as you said in your research, it’s the holistic someone to oversee the multidimensional aspects of my family’s financial affairs that actually becomes the binding service
Matt: And you’re so spot-on. And the reality is, the firms have done a really poor job, or the industry doesn’t really understand the soft issues that are involved in true relationship management. They throw the verbiage around very loosely. But you can’t coach and promote what you don’t really believe in. And if you don’t really believe in it within your own personnel or your own swim lane, it just rings hollow. We have 20 years of research, Michael, that says when an advisor expands the relationship to include sort of an emotional connection, a personal relationship outside of the business forum, so I know what your children are doing, I know the names of your dogs, we have a cup of coffee once in a while that has no business involvement, that there’s three times more penetration into that sphere of influence. They’re six times more likely to consolidate assets. They’re far more likely to spread word-of-mouth influence on your behalf. And they become basically an ideal client.
And we’ve been singing this song now for years. And advisors, the real good ones get it, but it’s work. And they can put structure around doing a financial plan. They put structure around the professional side of the relationship, having review meetings, but putting structure around expanding the relationship so they have a book of ideal clients, that’s a little bit foreign to them. And they’re challenged with that.
Michael: So this kind of brings to mind two questions. The first is, I don’t know if this is a question as much as, I don’t know, maybe even a little bit of a lament. I’m reflecting back to my early days as an advisor. I wanted to go learn my stuff and get smart because I wanted people to hire me because I was smart and I knew some financial stuff that would help them get on track. And I think I felt some frustration early on, and I know a lot of other advisors with a similar frustration of like, I don’t know, it’s almost sort of this incredulous like, “Really, I have to know the name of their kids and their pets? That’s what’s going to get my six times wallet share, not actually just giving them better advice than the knucklehead up the street who knows nothing about finances but happens to be good with names of kids and pets?” Is this just the reality I have to accept? How do I reconcile this?
Because I think virtually every good advisor has had the experience of being in a competitive situation for a client with an advisor who is absolutely terrible at anything that actually has to do with advice and money, but they seem to be good at this other stuff that you’re talking about, and you can’t pry the client away.
Matt: Yeah. But you know what? That’s changing. That is dramatically changing. And especially in the world of the affluent, if you’re just good and you know their kids and you’re good with a smile and a joke, that’s great, but word-of-mouth influence is going to be, “Matt’s a great guy. He’s fun to meet at a bar or good to play tennis with, but I wouldn’t probably have him handling my family’s finances.”
So you’ve got to be both. You’ve got to be smart and really good at what you do and build that team around you. But once you do that, that’s the hard part. The soft issue, I say this very sincerely to advisors, the affluent have given you a gift. They’re basically saying, “Please mix business with pleasure, mix professional and personal.” And it’s not because they want their advisor to be a friend, it’s because it’s all about trust. They’re a very skeptical species. They don’t trust advertising. They don’t trust a lot of the professions. What we’re seeing now with all social media, fake news, politics, you name it. And so once they get to know somebody on a real personal level, that elevates trust. And it is just amazing how that relationship shift transforms the loyalty of the client. They become extraordinarily loyal.
And another thing, Michael, that has been fascinating to us, is the disconnect between financial advisors. We’ve been asking this question now for well over a decade, “How do you view the relationship with your affluent clients? Is it a good professional relationship or is it expanded to have this personal component with sort of an emotional connection?” And the data points change a little bit from year to year to year, but as a whole, it’s about the same gap. The advisors will come back and say anywhere from 68% to 75% have this expanded holistic relationship. You ask the clients, these parallel research the same question, and about 28%, 26% say they have this expanded…it’s almost like we define relationship differently.
Michael: I think you make a fascinating point here that, when you said like, it’s not literally about the social relationship. It’s not that your affluent clients need to buy another friend and they’ve chosen to buy you. It’s not actually literally a social dynamic per se, it’s about trust. And that the way we form trust with other people, or at least one of the ways we form trust with other people is by doing things with them socially, is by breaking bread with them. It becomes an opportunity to turn that relationship into a more trusted relationship by just literally showing up and acting like a reasonably trustworthy human being that begins to build those bonds of trust. And I think it’s a very interesting framing just to say like, not to ask, “How often do you go out and do social coffee or other events with your clients to have a social relationship with them?” but, “How often do you break bread with your clients as a way to reinforce the trust relationship that they have with you?”
Matt: Exactly. And then when you get into the neuroscience behind it, when you break bread like that and you’re asking me, “Hey, Matt, how is your son Patrick doing out in California?” He’s in San Diego, right? Well, you remembered my son’s name. You know he’s out in San Diego. It’s not like, “Hey, Matt, how are the kids?”
Michael: So you know who I am, you’ve heard me, you remember me…
Matt: And it’s personal domain.
Michael: …you pay attention, you care.
Matt: Exactly. And what that does, it stimulates oxytocin. We all have this. And that’s the trust vibe. So it’s stimulated by having a nice convivial breaking bread together, but it’s also stimulated by having these real personal, emotionally connecting conversations. And it’s fascinating.
How Matt Helps Advisors Put Structure Around Developing Deeper Relationships With Clients [17:47]
Michael: It is. So and the follow-on to this that you mentioned briefly earlier that I want to come back to is that not just this dynamic that being social with clients isn’t actually just about being social for the sake of being social, it’s because social engagements are on opportunity to build trust. And then you had mentioned like, so ideally, we don’t just do these things, we put structure around it.
Michael: So talk about what that means.
Matt: Well, we recommended advisors just the same way they handle the professional side of the ledger sheet. So if you draw a line down the center of the paper, on the left side you have all your professional touchpoints with your clients. You have the number…your professional calls, your professional face-to-face reviews, etc., etc. But on the other side, you have a relationship calendar. When was the last time that I sat down face-to-face with Matt and Sandy and had a lunch, a non-business lunch and asked them how Patrick, Heidi, and Amy were doing? Or talked about where they’re going on vacation. What’s their next big trip coming up? And shared a little bit of what my next big trip is going to be or my children are doing. So it’s having…we call it having a relationship calendar. So you’ve got to schedule these things. And you have to track it in the same manner. We created a relationship index, Michael. And I’d like to say everybody we coach uses this relationship index, but they don’t.
Michael: The joys of coaching.
Matt: Right. But those that do, it’s because of what it does, it’s on an Excel sheet, it moves the needle. In all these touchpoints that our data has said that strengthen the relationship, it moves the needle. And if you get that needle into the green, there’s a high probability you have an ideal client. And when you have an ideal client, if you asked that ideal client to introduce you to their business partner, they’re going to introduce you. In other words, they’re going to help you grow. They’re going to help you market.
Michael: So can you talk about what these behaviors are? We’ve sort of tossed around a few, like just have lunch with them. And it doesn’t have to be a review meeting. Just have lunch with them.
Matt: Well, it’s funny about lunch, and I’ve been saying this now for well over a decade, the number one social activity that has the highest direct correlation to a new affluent client coming into your business is a social lunch.
Michael: I’ve just got to ask, does it have to be lunch? Is there actually a phenomenal like lunch works but breakfast or dinner don’t work as well, or coffee doesn’t work as well as lunch?
Matt: No, no, anything. The second is, so 65% is a 65% hit factor on a lunch and a 59% on doing something social with the client. Now, it’s just probably the way we ask the question. And I get asked that a lot about breakfast. But think about the dynamics. Breakfast is usually quick, we’ve got to have a quick breakfast before we get into the office. Lunch is a little more relaxed. You’re getting out there. Once an advisor recognizes that a two-hour lunch with a good client is two hours of high-impact activity. We call it a $1,000 an hour activity. Because you’re going to strengthen that relationship, you’re going to consolidate assets, you’re going to be…they’re going to mention people that you should meet that could potentially become clients. It’s all good. But it’s just a different mindset. And we highly…we recommend one social lunch a week. What advisor couldn’t do that?
Michael: It reminds me of, was it…there’s a book out there, I think “Never Eat Alone.” Just the whole theme is like, whatever you’re doing, don’t eat alone. Find someone to eat with. It’s social and builds these relationships.
Matt: But you have to do it with, and this is another phrase that we use all the time, Michael, you have to do it with strategic intent. You just don’t start having social lunches. You go to that social lunch with a game plan. So if you’re having a social lunch with me, let’s say, and you’ve never really had a social lunch before with me and you don’t really know my wife Sandy, so your objective in this lunch is to make sure what’s Sandy’s favorite restaurant for lunch, and make sure she can attend lunch. And you’re promising it’s going to be no business because Sandy might not show, it’s just going to be…we’re all just going to catch up. And so your strategic intent is to connect with Sandy. That’s your game plan for the lunch, simple as that. And if you can connect with Sandy, and this is…one of the trends that we’ve seen is the gender shift. That most advisors haven’t done…the job they should have done is connecting with the woman of the household. That’s a big deal. But I’m using that as a for instance. Or you’re going there and you…
Michael: But most clients we have, we always see this, right? Some spouse is the dominant spouse in the relationship, the dominant spouse in the finances, at least age, gender stereotyped a little. We still see it for our retired clients, the husband managed the balance sheet, the wife managed the checkbook. Like just, that’s the reality we see a lot.
Matt: It’s sort of almost the iceberg too, though. In the surface, the macho man, he handles the finances, but behind the screen, “So how much money did we pay that guy last year and how much did we lose? You think this is really a good idea? Do you think that this financial advisor really knows what he’s doing?” That’s the conversation behind the curtain. But anyway, the strategic intent goes everywhere from maybe I have a good relationship with both Matt and Sandy, but I really need to find out who they play with, who’s in their spheres of influence, because I want to meet some of these people. So I want to uncover a name and just get… And so you go to those lunches with a game plan.
Michael: And I guess this is just sort of things we learn to do well socially over time. Like, how to go to lunch with a game plan and not make it so blatantly obvious to the clients like, “you’re just having me at this lunch because you’re trying to get the name of my business partner?”
Matt: Yeah, exactly. The reality is people love talking about themselves. They love talking about their family, they love talking about what they do for fun, and you have to be genuinely interested in it. And when they talk about what they’re doing for fun, they’re going to just as easily talk about who they do it with. And if you’re emotionally connecting like that, that’s a natural conversation. So it has to be done conversationally, though. You’re so right.
How Advisors Can Really Differentiate Themselves [25:09]
Michael: I was going to say social activities, but I guess just really it’s like trust-building activities. Are there other kinds of things we should be watching for of opportunities to reinforce this trust relationship aside from the social lunch for however many clients I can get out for social lunch?
Matt: Yeah. Oh, for sure. We highly encourage advisors. We have a Know Your Client, Know Your Center of Influence worksheets. And so you’re there trying to compile as much information, intelligence on that client. Everything from their favorite restaurants to the charities they support to, you name it, their alma maters to where their kids are in school, all these things.
And then we call it surprise and delight, but we highly encourage every weekly meeting for every financial practice, on the agenda, there should be a surprise and delight item. Are there any surprise and delight opportunities in the near-term? So whether it’s your top-tier client or whether it’s a CPA who’s a good referral source, or do they have…is somebody in their family just graduating from college? Is somebody just going off to college? Has a grandchild been born? Are they taking a major trip somewhere? Did they lose somebody in their life? Is there any trauma going on in their life? Did they lose a pet? Did they get a pet? All those things really garner up an opportunity to have a nice little personal touch.
And a surprise and delight would be if you’re talking to my wife and you’re asking her, “How are Mickey and Rusty doing?” Well, Mickey and Rusty are her two little Shih Tzus. And she’d tell you all about her two little Shih Tzus. And she’d tell you all about when they last were groomed. And if you asked, “Hey, text me a photo of them, I want to see them,” you’d have that photo in a heartbeat. And all you have to do is at some point, send her a couple of coffee mugs with those dogs on it. And that’s a surprise and delight. I wouldn’t be able to fire you if I tried.
Michael: Because you’re drinking out of the coffee mug with the picture of the dog saying like, “You want to fire who? Nuh-uh.”
Matt: Right. But that’s assuming you’re doing a great job, you see. Doing a good job of what you do. And this is what it’s important for advisors to process. That’s not a value-add. The fact that you’re really smart and good at what you do is no different than my cardiologist is really smart and good at what he does. I don’t want a bad cardiologist. And so it’s a hygiene factor. It’s not a value proposition. I expect you know financial planning. You’re a CFP, doggone it. I expect this is your expertise. And so what happens is that advisors go to great length trying to profess that they’re smarter than the next guy instead of just experientially demonstrating they’re better and more professional and more personal and more trustworthy, more relatable than the next guy. And the brains part of it comes out as well.
Michael: It does. And I think you make an interesting point around, right, the fundamental distinction between saying you’re better, more professional, more trustworthy, right? Like in our environment, more fiduciary than the other advisor, versus just actually doing it and showing it and living it.
Matt: This is what we do and how we do it. And this is why. Now, what’s important to you? And you know this. Most advisors talk too much and listen too little. And that’s just an old…it’s how to win friends and influence people. Dale Carnegie. We’ve got to ask more questions sincerely and listen.
Michael: Yeah, the old you have two ears and one mouth, use them proportionately.
Matt: Right. Right.
Michael: I’m just fascinated now by kind of listing these items of like what else you put in this relationship index of stuffs. So we have our social lunches, we have our surprise and delight items. What else am I putting onto my relationship calendar of things to do to support that side?
Matt: Yeah. So you have, let’s say, a non-business lunch, a social lunch, and then you might have…sort of quarterly, you might have some little fun events that you have with a hand-select number of clients. And so these people are also on your invite list for whether it’s a wine tasting, whether it’s a sporting event, whether you have tickets to the theater. We call these intimate events. And what our data has shown is back in the days where public seminars were the thing, well, the number one activity that an affluent client will attend is a fun, intimate social event. Not a big bash, but a small, intimate social event. And the number one venue that they will bring a good friend of theirs to attend would be a non-threatening, good, fun social event, whether it’s a wine tasting, whether it’s a cooking class, whether it’s just a backyard barbecue. You have to know your clients. And so that goes into the relationship calendar as well. What events are we having, who’s being invited?
Michael: So I’m struck by this because I feel like it’s, I don’t know, at least for the world of advisors that I see, that’s kind of the opposite of what I see a lot of firms doing these days. And what they’re doing instead is, if they’re doing events for clients, they’re doing big events for clients. They’re doing the proverbial client appreciation events. We’re going to get a nice restaurant in town, take the whole restaurant down. We’ll bring out 50 or 100 or 150 people, however many are in our practice. We’ll have name badges for all of them. The whole staff will be there to meet and greet. And it sounds like what you’re saying is very much not that actually.
Matt: It’s exactly right. And they do it, and they do it once in a while. They might do it once a year, once every other year. They’re expensive, they’re time-consuming, the logistics. And they obviously get good reviews. But if you put it in context, it’s the difference between you having a big bash and inviting everybody to your house that you know. And so you have 150 people in your backyard under a tent. How many of them are you really going to interact with during that evening? You’re going to meet and greet people as they come in, and by the end of the evening, you’re going to be stressed out, worn out. And you might have had a serious conversation with a handful of people if that. Yet if you had four couples or six couples over for two or three hours, you’d get to know each of them. You’d connect with each of them on a personal level.
And that’s the difference. Because the affluent, they can attend anything they want to attend. They might come to a fancy bash, but it doesn’t move the needle the same way. And we’re talking about moving the needle with strengthening the relationship on a personal, emotional connectivity level, and then meeting new people from your existing clientele or from your spheres of influence. That attorney you had over and his spouse to this event as well. We call it the relationship marketing, relationship management nexus. They’re inextricably linked. But the key word there is “relationship.” And so advisors are trying to do it sort of all at once. They have a big bash.
Michael: Well, because I think…right, I’m thinking about this in terms of our practice. Once you’re pretty well-established, we tend to have a pretty good-sized chunk of clients. You might have 50, 75, 100 clients you’re close with. Some people who have been doing this a long time have 200 or 300 clients, 150 of whom I haven’t seen in 2 years. So like, hey, at least if we do the client appreciation event, they show up, I can make eye contact with them once in the past year or two because they haven’t even been in.
Matt: But that’s fair. You do that for the bulk of them, but then you take your top 25 to 50 clients, which for most advisors are the lion’s share of the revenue and the clients they want to replicate.
Michael: Right, the 80/20 rule is 80% of our profits come from our top 20% of clients usually pretty often?
Matt: It’s not even 20%, usually it might be from 25 clients. So you’ve got to do your sort of inventory analysis, but you take that top tier clients, and they need to be treated special. Those are the clients you want to have that emotional connection with. Those are the clients that you want to turn into real advocates because they stimulate word of mouth. And by the way, word-of-mouth influence is the umbrella upon which all affluent marketing resides.
Michael: And so I think it’s an important distinction then. Like, you’re not talking about necessarily building the relationship calendar and doing all these social lunches and social events and wine tastings and such with all your clients, the whole point is like, just pick the ones that are actually the most likely to move the needle for your practice.
Matt: Yeah. And pick the ones you want to replicate. And rarely do we find an advisor who is…would not want to replicate their top 25 or 30 clients. And the reason they struggle with that is they don’t focus on it. They don’t understand the whole relationship marketing, relationship management nexus. They’re inextricably linked. You don’t just have one intimate event and all of a sudden you’ve penetrated their spheres of influence. It’s really a lot of little bits and pieces pulled together.
Michael: So for this top group of clients where I’m trying to go deeper, how often do I need to do stuff? Do I need to have something in my mind, like I’ve got to make sure I do at least one social lunch or wine tasting a year or two a year or one a quarter? At some point, I’ve got to do the rest of my client meetings as well, and they’re going to get sick of me. So where do I draw this line?
Matt: Well, it really depends on…every one of these clients is different too. So you’ve got to know your clients. So it’s not like one size fits all. And this is where you have relationships. And you can have a lot of real strong relationships, but every one of them has their own unique flavor. And so it can’t be one size fits all because then everybody is just another number. So for instance, if I’m your client, you know how busy I am traveling this, that, and the other, you don’t want to be wasting my time trying to get together for multiple non-business lunches. You find out what I like to do, what my wife likes to do, and every once in a while, we might like to go out to dinner with some friends or you and a friend or a sporting event. So that’s what you do with us. But you know us well enough to do that.
And then your other little touchpoints might be an article about San Diego that you found. So you just texted me, “Hey, I wonder if Patrick has seen this,” or something about Shih Tzus, or whatever it might be. And those are a little, just, personal touchpoints. So you have your Know Your Client worksheet on me and your other top 50 clients, let’s say, and every communication, you’re sending me an email at the end of that email postscript, “How’s Amy doing with her pregnancy?” Well, you know my daughter, Amy, is pregnant. That’s the postscript. That’s an emotional connectivity point. You’re texting me, “Hey, when again are you going out to San Diego and visiting with Patrick?” That’s a touchpoint. So it’s just a different way of thinking. So the guts of that email or the text might be professional, we’re confirming a meeting. I’m giving you a follow-up on what we’ve talked about, but then the postscript has an emotional connectivity touchpoint.
Michael: And so I guess you guys built worksheets around this, and today’s environment, I would imagine to some people are tracking it in their CRM system to do the same thing.
Matt: Yep. Yep. And it has to become sort of part of your own DNA. Once advisors really get the aha, they realize there’s no turning back. It’s a wonderful thing. But getting them to put the structure around it and getting…just because you’ve put the structure around it, that’s step number one. Step number two is having realistic expectations. You don’t build trust and have an ideal client with one lunch. It’s baby step, baby step, baby step, baby step. And it’s a multiple things that are the cause and effect.
Why Matt Started The Oechsli Institute And What It Looks Like Today [39:15]
Michael: So talk to us a little bit about Oechsli Institute and kind of what you do, the context that you’re coming to the table and talking about all this research that you’ve done and what you’ve found that works with advisors. So what is Oechsli Institute, and what do you guys do there?
Matt: Yeah, the Oechsli Institute is a research-based coaching firm. We were doing research before we started doing coaching. We were doing research because I just didn’t want to be a talking head singing the same song out there. And I have a curious mind, and it just always would bother me with…you get these industry speakers, and they have the same joke, and they tell the same story, and it’s a 35,000 foot sort of feel good, but it’s more like Chinese food, it’s here today and gone tomorrow. And I just wanted to dive deep. And it started off just so I could satisfy my own curiosity, or maybe my own insecurity that I wanted to know what I was talking about. I wanted to have a platform to stand and talk about things that could really help the understanding of financial advisors and what they needed to do to develop stronger relationships with their clients, what they needed to do in marketing their services to gather more clients.
And that then led to advisors way back in the day, Michael, I remember this first group, they were with Alex Brown. They came up to me and they said, “Could you be our…?” They didn’t even use the word “coaching” back then, “Our personal consultant?” I said, “Well, gosh, I don’t know about that?” And they said, “Oh, yeah, yeah, we would like to team up together and hire you, and we want to gather and have…get $30 million in assets under management.” And I remember looking at them, I said, “Well, I don’t really do that. And I’m not going to work with you. You’re not thinking big enough.” And they looked at me, and they said, “Well, what would it take for us to work with you?” And I said, “Well, if you target $100 million and you let me sort of guide you, I’ll work with you.” And that was before we called it coaching.
Michael: That’s kind of gutsy. So when is this?
Matt: Gosh, this was maybe 1990.
Michael: In that context, $100 million is a huge, huge number relative to firms at the time. I think even the Moss Adams studies in 2000 were showing the average advisory firm had like $20 million of fee-based assets. And that was after the run-up of the ’90s.
Matt: Now, these were two who were coming together as a team, but still, they were so far out of their comfort zone. But I worked with them. One of them was even calling me, called me one New Year’s Eve a couple of years later thanking me for changing his life. My mistake was, I let them go on their own. After a couple of years, they had $250 million, $300 million in assets. They were a huge success story. I didn’t stay on top of them.
And then they ended up having a very, very ugly divorce, and they called me in to be sort of the marriage counselor when there was already…they had called each other too many names. Where one guy was saying, “I have the most expensive sales assistant in the world,” because he comes in late and leaves early, and he lives in the same house and doesn’t…and the other guy is saying, “What the hell, I don’t need any more money.” And the other guy had been divorced twice and needed every dime. And they were, “I’m bringing in all the money and sharing it with this…” So it was my bad, it was my learning experience that you need to sort of stay involved. I should have been meeting with them once a year to take their temperature even after I didn’t need to be speaking with them every week or twice a month or what have you.
And that evolved into coaching. I have a counseling background, so it was sort of natural for me to listen to people. And I had the…I was doing the research, so I sort of…that enabled me to begin to create what I called a critical path, that we’re going to coach on this critical path of, “This is what the affluent are looking for, according to our studies, so we’re going to coach to that. And this is the marketing that they respond favorably to, and we’re going to coach to that as well.” And it became…really, I kind of stumbled into a very simple formula.
Michael: And so what does that look like for you today?
Matt: Well, you talk about the iceberg illusion. The first couple of…we had a lot of different people who wanted me to sort of…industry people who wanted to become a coach way back before. And it was not fun when you watch people trying to steal your business, steal your ideas, set up their own shop. And I realized, “This is a dog-eat-dog world.” So I had to get legal on it. We had to legally have couple cease and desist orders with…
Michael: How did you end out with cease and desist orders in a coaching business?
Matt: Well, when you have a coach who’s trying to steal your…I had a coach basically telling clients it was his business, not mine.
Michael: Oh, so like, in the same manner as advisors. We hire an advisor to work in our firm, and then the advisor tries to break away and steal the clients that the firm handed them. You had a coach come on board and do the same thing to you?
Matt: Exactly. And he was a former wholesaler who sort of understood the industry, said all the right things. And he was pretty good. Other than the fact, there was an integrity gap there, obviously. And that kind of spooked me. And then I realized, “Okay, I can only handle so many coaching clients myself with all my travel and speaking.” And so we just started gradually very systematically building. And when I was able to bring in Stephen and then Kevin, and I created sort of a…I had created a process for basically certifying training and certifying coaches to what we believe is our critical path, it just blossomed. And so now we have 25-some-odd coaches. We have social media coaches that coach in the social media world. We run the self-help desk, the LinkedIn self-help desk for Merrill Lynch right out a little old Greensboro, North Carolina. So it’s all evolved.
And I’d like to say it came out of a master game plan from my brain, but it was just doing things with a curious mind and trying to do the best you can do at every step of the way. And learning from your mistakes, whether it’s how to hire or connect with the right coaches, making sure expectations are realistic with people who are hiring, one of our coaches having our workshops for the advisors when we bring them in live, all that pulls together.
What Kind Of Advisors Matt Works With [47:06]
Michael: And so what are the typical advisors that you’re working with at this point? Who’s the typical clientele?
Matt: There’s really two typical advisors. There’s an advisor who is, really just wants to get to the next level and they really want to get better at marketing, and then there’s the advisor who’s already…who’s on a team, already fairly successful but really needs to fine-tune their team. So you have team coaching, which ends up being, you’re dealing with multiple personalities on the team. You’re dealing with a real…all the issues with multiple players on a team and as well as the team being in a growth mode where people are held accountable for doing what needs to be done, and the reviews of team members, etc., etc. And then we have the social media, which is, the social media is a separate component, but a lot of our coaching advisors, we coach on social media coaching as well. Because, as you know, Michael, social media, it’s not the future, it’s here now.
Michael: And what does that look like in the context of your research around what affluent clients want? Because I think there’s always been this, like, a questioning look at social media, specifically around affluent clients. I still hear these jokes a lot like, “Have you found the tweet yet that brings in million-dollar clients?” What does your research show about what affluent clients or affluent prospects actually do or don’t care about or engaged with with social media? How should I be thinking about this from a marketing perspective?
Matt: Again, that’s a very good question. You think about social media from a marketing perspective is really about relationship management and relationship marketing. So remember, you’ve got media and you have social. Social really connotates relationship. And just to send out a tweet and expect to get business from it, or connect with somebody on LinkedIn and expect to get business from it is really being very, very naive. The whole idea here is, you want to be connected. When you establish that emotional connection, we get back to what I was talking about earlier, there’s a high probability your client is then going to connect with you. You’re going to suggest this, “Hey, by the way, let’s connect on Facebook.” Or, “Do you use LinkedIn? Let’s connect on LinkedIn,” depending on the…and you’re going to get that level of connectivity.
When you get that level of connectivity with your top-tier clients, then you have to manage it. You’ve got to be involved with it. You’ve got to give them likes, thumbs up when they post a photo of their grandkids or make a comment on that. You’re in there, you’re listening. It helps strengthen those relationships. And at the same time, you’re seeing who people are connected with. So the next time you’re talking to me, you’re saying, “Hey, man, I saw on LinkedIn that you’re connected with Dan Vana. He used to be the national sales manager for this digital marketing company. How well do you know him?” “Gosh, he’s one of my closest friends.” “Oh, great. So what would be the best way for you to…? I’d like to meet him socially at some point in time.” So you go from online to offline. So it’s a tool.
Then when it comes to kind of what you do so well Michael, content marketing. And then not all advisors can do this, depending on their broker-dealer. But content marketing is now we’re using YouTube, we’re using videos, and we help advisors put together little videos. And not just like an infomercial, but it’s a video of, “When you’re dealing with a financial plan, these are three things that you really need to focus on,” or, “The most common mistakes people make when they’re thinking of their financial future.” Just giving out some salient information is content marketing. And it’s short and sweet, four minutes, three minutes. And all of this sort of pulls together.
Referral Marketing That Actually Works [51:53]
Michael: I’m struck by the…you’ve used this example a few times of I want to prospect and network my way to a particular key prospect. So I go to my client and say, “It seems like you know Johnny, do you know him well?” “Oh, yeah, he’s a good friend of mine.” Like, “Great. Can I get an introduction to him? What would be the best way to connect with him?” That for a lot of advisors I know, that doesn’t feel comfortable. The industry is, I think for a long time but increasingly lately, having this debate about, is it appropriate to ask for referrals? Should you need to ask for referrals? Is it socially awkward to ask for referrals? If you’re doing a great job, shouldn’t the referrals just come to you anyways?
Matt: But let me give you some clarity on that because you’re exactly right. Do you think the affluent like being asked for a referral?
Michael: No. No. Having started in the business with, after you do business with them, you ask them to write down five names on a piece of paper that you were supposed to actually give them along with asking for the contact information, that was actually how I was trained, yeah.
Matt: That’s the old insurance ploy. They hate it. It’s awkward. Our data has said for years they feel awkward when you ask for referrals, so they’ll basically tell you, “I don’t know anybody offhand, I’ll get back with you.” But for the last now going on 20 years, at the top of the heap is the same baseline. You’re their go-to person, they trust you, respect you, etc., etc. If you ask for a referral, it’s uncomfortable. Seventy-eight percent, 80%, about 8 out of 10 feel that way. But if you ask to personally meet somebody who you’ve identified, you’ve done the homework, you’ve sourced the name, you know they play golf with them, you know they’re connected on LinkedIn and you ask to personally meet them in some sort of social capacity, you have a 75% to 85%, depending on the venue, probability of getting that personal introduction. And your client knows what you’re doing, but you’re emotionally connected to that client. They’re an advocate. They’re happy to introduce you in a social context. You just can’t embarrass them by jumping down this person’s throat.
Well, you said something that I hear it all the time, “Well, I’m not really comfortable doing that.” And my comment back to them, and this might sound a little bit cold, but I’m not really concerned about your comfort. If you want to master marketing in the affluent world, relationship marketing in the affluent world, you better start getting used to getting personally introduced in social venues and uncovering who you want to meet. You need to be doing the work, helping the client to help you.
Michael: Well, and I think the other interesting point, again, that underlies all of this is that you’re doing these social activities, these social events, these social engagements to build and deepen the trust relationship in the first place, right? Like, if you take it out of the advisor-client context, just put it in the “I’m hanging out with my friends” context, if I need help with something and a friend of mine knows someone, like I said like, “Hey, can you introduce me to John? I want to touch base with them about something,” in a social and friends context, it’s very normal, in a businessy context, it feels weird because I feel aggressive, I’m asking for referrals.
And to me, the point that ultimately makes is, well, that means you haven’t transitioned from a business relationship with the client to a social trust relationship with the client. Because that’s why it feels like an awkward businessy question, instead of a thing you would ask a friend that you have a trusting social relationship with. Like, “Hey, I think I can help out a friend of yours. Can I have an introduction to so-and-so?” Like, if I’m in a trusting relationship and I’m a helpful person, that should be a really, really easy thing for my clients, my friend, to refer me and pass the honor.
Matt: Yeah. And you don’t even have to say, “I think I can help them out,” you just say, “Hey, listen, I’d like to meet him. He sounds like somebody I should get to know.” And your client knows, if things work out between you and this person you’re going to meet socially, they would love for that person to eventually become a client. If it doesn’t work out, it doesn’t work out. If there’s no need, there’s no…it’s really not complicated.
Michael: Yeah, it strikes me that just, it becomes perhaps the best representation of, even from the advisor’s end, like, “Do you feel like you’re in a real relationship of social trust with the client?” Because if you are, that question probably wouldn’t feel as awkward. And if you’re not, that may actually be a reflection on how much social trust you’ve actually built with the client or not, right? A businessy relationship is very professional, but a businessy relationship when you have to ask for a referral is asking for business.
Matt: Yeah. And you’re asking for business and you’re putting all the work on the client when you ask for a referral. We have so much data on this. So let me give you an example. So if I ask you for a social lunch and I say, “Oh, by the way, could you bring your colleague, Rachel? I’d like to meet her at this social lunch,” I have a 74% probability you’re going to say, “Yeah, let me check with Rachel,” and we’re going to have that lunch. If I know that you’re going to be at this gala event in town and you and I are chatting and I’m asking…and I know that your colleague Rachel is going to be there and then I see you at that gala event, I have an 85% probability you’re introducing me to Rachel at that gala event, because it’s easy.
Michael: I’ve kind of lobbed my own introduction at this point.
Matt: Exactly. It’s easier. The easier we make it for ideal clients that we’re really connected with to help us, the more they’re going to help us. And that’s something that really needs to be processed by advisors. And a lot of them haven’t developed that relationship yet. And that’s where they’re still asking for referrals.
Michael: So the other challenge to this, right, kind of the other I go and just sort of ask generically for referrals is because I don’t know who my client know, so I may particularly not know who my client knows who has money who would actually be a good prospect for me, because I work with affluent clients who have money, and it’s kind of awkward to say, “Who do you know who’s got money?” In this world where I’m supposed to try to ask for a specific meeting with a specific person they know, how on earth am I supposed to figure out who the specific meeting…who the person is I’m supposed to ask for a meeting with in the first place?
Matt: And you know what? That’s a great question. And we track this. And it’s really, the core of affluent marketing boils down to two activities. Number one, sourcing names. In other words, when I’m talking to you as a client, I have to broaden the conversation and find out what you’ve been doing and who you’ve been doing it with. Now, you don’t recognize I broaden the conversation, but that’s my objective. If I do that in our conversation, I’ve sourced a name. And I find out a little bit about the Dan Vana or the Bruce Brody. This is a lifelong friend and yadda yadda yadda. And I just let it be. I’ve sourced a name. You don’t even realize I’ve sourced the name, but I have.
And so we know that when an advisor sources, because we’ve practiced in the advisors we coach, they source three to four names a week. Now, that’s almost…if they try to source one a day, they’ll source three to four names a week. And then they circle back within a two-week window or thereabout after sourcing the name. So I’m circling back to you and I’m having a conversation, and I’m reminding you that last time we mentioned…we talked, you mentioned this buddy of yours, such-and-such. And I asked to meet this person in some social capacity, asked to be introduced. Advisors who’ve done that have brought in 20 new relationships and $21 million on an annual basis. Just those two activities: sourcing names, circling back and getting personally introduced. So it’s a core exercise. It’s fundamental. It’s beyond the intimate events. It’s more core than referral alliances.
Michael: And so how do I know which names that come up in these social conversations are supposed to be the names I want an introduction to?
Matt: Yeah. Well, that’s a good question too. You get better, your instincts get honed by doing it. So when you’re talking about find out who this person is and you ask a little bit about it, about that person, you’ll get sort of a feel for that person, then you can do your own social media, Google search.
Michael: So a little cyberstalking is permitted in a modern world?
Matt: It’s permitted, right. And you do a little bit of… And what happens is, it’s still a numbers game, and we tell advisors it’s always going to be a numbers game, but you increase your likelihood of having somebody who’s qualified by doing your homework, by asking the right questions when you uncover a name, and then doing a little more homework on top of that.
Michael: But I get it, I’m sort of thinking through this in my head, right? The client we ask like, “So, yeah, great to see you. You had a trip, I know, coming up when we last met. How did the trip go?” Like, “Oh, it was great. I was off with my buddy Dan. We’ve known each other forever, and we do this thing once a year.” And it’s like, “Oh, that’s really cool. Does Dan live around here?” Like, “No, no, he’s got a business out West, and he stays out there.” It’s like, “Okay, Dan’s a business owner. Okay, got it.” “Oh, cool. Did he found the company himself or he came a little later?” “No, he founded it. He did it 20 years ago.” Like, “Okay. Dan’s been growing a business for 20 years.” I can now start checking off by like, this is becoming a very, very qualified prospect. Just by getting a little background.
Matt: And you get better at doing it by doing it. The whole idea, and we talk about three C’s of communication. Advisors need to be more concise. They need to be more conversational. And when they’re conversational, they need to be better at asking questions, and then listening and asking follow-up questions. And they need to do it all with a nice, natural confidence. And it can’t be robotic, it can’t be scripted. And the reason advisors are uncomfortable, Michael, with this, is that it’s just sort of new to them.
Michael: So you just have to practice it. It’s literally what builds the confidence.
Matt: You got it. I can’t tell you, we roleplay with this all the time with coaching clients, advisors. What words to use, what’s the situation coming up. And the real good advisors who master this, no detail in talking with one of our coaches is too minute to discuss.
Michael: So for the advisors that you coach, should I think of this as predominantly and kind of a marketing business development kind of coaching? That’s where you’re focused, as opposed to like helping me…practice management and pick my technology systems and clean up my P&L, or are you coaching the full range of everything at this point?
Matt: It’s the full range of everything, but we’re probably most noted for marketing. But I wrote a book 20 years ago on practice management before they called it practice management, “How to Develop A 21st Century Financial Practice,” all about practice management. But it’s practice management, as you know Michael, is easier because there’s structure to it. You follow the dots, do A, B, and C. Technology, you get some IT person to get you set up, use your CRM system. People are always asking, “What’s the best CRM system?” I said, “You know what? The best CRM system is the one that’s used properly.”
Michael: The one you use. That’s the one that’s good.
Matt: Yeah. The first book that I wrote was titled “Winning the Inner Game of Selling.” And I’ve been thinking about it, I need to rewrite that book. And it’s about 30 years old. Because it’s a mind game. This game is won and lost on a seven-inch playing field, you know this only too well, right between the ears.
What Matt Sees As The Most Common Sticking Point For Advisors [1:05:18]
Michael: And so, sorry, I was just going to ask like, so what’s the…what are the most common blocking points that you see for advisors that get them stuck so they don’t get through this?
Matt: I think a lot of the…it’s the law of inertia, they’re kind of stuck. And it’s also comfort zone expansion. We’re making a decent living. I make more than my brother-in-law, who’s a professor, why do I really need to do A, B, and C? I don’t know if it’s laziness as much as they’re not really as ambitious as…once it comes to earning a certain amount of money. And it shouldn’t be about the money. It should be always being in a growth mode. How can you be in business and not be in an ongoing growth mode? Because the business is either growing or is dying. And you’re either learning or you become stagnant. And to continue learning and then applying that knowledge, whether it’s sales skills, marketing skills, planning skills, hiring a new specialist, or connecting with new specialists to help your clients or expanding the relationships with your clients, change requires going out of your comfort zone. And that sometimes is…I think it probably is the biggest challenge.
Michael: And so for advisors that you work with on a coaching basis, can you give us a sense as to what cost is? For advisors that want coaching, what kind of expectation should they have around the cost to get help with stuff like this? And how do you work with advisors? Like, six-week intensive monthly calls for a year?
Matt: It’s a year contract, because you need a year to facilitate change. And basically, most of our advisors we coach, it’s usually it ends up being a three-year-plus relationship. Because then it becomes truly transformative. They have biweekly coaching calls for the…first we have to identify what their needs are. We interview them. They fill out a needs analysis, then they interview a handful of our coaches. And we’re really pretty good at pairing all up with the right coach.
Michael: That’s the nice thing about being the size that you’re at with 25 coaches. It’s a wide range of people, and I’m sure different communication styles and personality styles that you can just match people up with someone that’s a natural fit.
Matt: We have a psychiatrist who’s a coach. We have a former national sales manager that’s…it’s a whole spectrum. And then we have our coaching retreats. Our next one is in September, end of September, I believe in Charlotte. We had one in January or February. And where were we? I think that was in San Diego.
Michael: And so these are like a day or two intensives on something practice managementy?
Matt: These are, yeah, two days. Yeah. Practice management is an update. They feed off each other. We’re always…we’re sharing with them our latest research. And that boils down…it’s basically about $1,000 a month. There’s a down payment, and then I think the payments are less than that after the…
Michael: Sure, a little more upfront for the onboarding process averages out.
Matt: Yeah, a little more upfront for the onboarding process. But it’s been our experience, it pays for itself quickly. Because, and this is where the marketing part comes in, even when you’re helping somebody with practice management, rarely do you find somebody who says, “I’ve got too many affluent clients. I’m bringing them in too fast.”
Michael: Usually not my primary problem. Yes.
Matt: Yeah, “I’ve got too many clients, and they’re driving me crazy. And I don’t know if I have the right people in place. And I don’t have time to get out there and do what…” Well, that’s all part of coaching.
Michael: I’m always fascinated by some of the, I don’t know, the cost and ROI on coaching. That certainly, when you get to the kind of costs you’re talking about, your firm has to be at a certain size just to have the revenue for the math to make sense at all. But once you get there, it’s what, one or two good clients for a year’s worth of work completely pays the cost of coaching, never mind the rest of the adjustments that you get of better team structure, better alignment. I’ve increasingly become a fan of coaching. And just it’s amazing how small of a change sometimes it takes to alter the trajectory of your business.
Matt: Yeah. And it seems like everybody’s become a coach of late. But at the same time, if you get the right coaching relationship and you really create a critical path, and you’re not just saying nice platitudes or having advisors going off making brand-new brochures and things like that. And reason I say that is, I’ve had consultants email me very nastily because our research has said for 20 years that brochures have zero impact on an affluent client or an affluent prospect becoming a client. Zero impact. That doesn’t mean you don’t have collateral material, but spending all that time on a brochure or going out and have somebody ghostwrite a book for you. Why don’t you take a client to lunch? Be real.
Michael: So what have you found like…what do advisors not understand about building and growing advisory businesses to the mass affluent? Is there like a most common gap or lack of understanding of what you found by doing on the research versus where the typical advisor mindset is?
Matt: The biggest gap is in that emotional connectivity and looking for immediate gratification. You’ve really got to put your time in. You’ve got to commit to this. This is why we have coaching relationships for a year. That’s the minimum. Because you’ve got to be able to put your time in. You’ve got to be able to commit. And you just can’t…you can’t have ADD and expect an immediate result, or, “What’s the good word to use?” Or, “Hey, what’s the value proposition?” You know what I mean? You listen to it. You just have to take a step back and retool. And once they take a step back, this is not rocket science, they don’t have to learn a new language, they just have to sort of rewire their brain. It’s almost like taking an old historic house that once was a great house back in the day when cold calling was in, back in the day when door knocking was in and public seminars. But now we’ve got to rewire that house so we can have broadband access and we put new windows. It’s a major project. And so it’s really, it’s the rewiring.
Michael: And I guess part of the key point that goes with that is, when you’re going to do these more proactive social activities and try to build deeper trust, like, get specific about who you’re going to try to do this with, because you can’t do it with all your clients. So are you doing it with intent?
Matt: Exactly. Oh, for sure. Yes, exactly. And so it’s a whole process. But it’s fascinating, and it is not as complicated as advisors from the outside looking in might think it is. And what we have found is truly transformative. Because we’ve never had an advisor say, “I want to go back and be the old way.” They realize, “Gosh, I’m hanging out with my most affluent clients, and I’m meeting their friends and getting new business accordingly. And I’m good at what I do. I’m proud of that. Enjoying myself as well, but providing a very high-level quality professional service.”
Michael: I’m always fascinated that folks that build coaching businesses like you have, where ultimately you’re selling your expertise, you’re selling the knowledge between your two ears and how to apply it for people, the business you run itself is actually quite similar to what the advisors do that you work with and coach, right? It’s the same kind of thing. We’re in a knowledge business, an intellectual property business, an expertise business. So I’m curious, as someone who has to live a version of this trying to reach fairly affluent advisors so that you can do business with them as a coaching research business, what surprised you the most about applying this in your own firm and trying to reach the advisors you work with?
Matt: It didn’t surprise me, it was sort of the reason I did the research anyways, my either insecurity or curious point of mind, I just was instinctively a content marketer. I put out content. So I would write with content, I would give my research away. I never sold it. Sort of like build it and they will come. And it was just maybe my personality that led to that. I’m not the aggressive bang on the chest, I’m the best consultant coach firm out there. I’m just little old me who is very focused on what I do and what our firm does, and very committed to do it with excellence. And I let the content speak for itself. I defend myself when somebody is trashing me about the fact that I make fun of brochures. I didn’t make fun of brochures. I just answer back. I said, “Well, sorry, buddy, but I’m not in the brochure business. This is what the affluent tell us. I’m not selling brochures.”
So the content marketing now, it’s just become a natural part of what we do. But I started out doing it because, in my psychological profile, that was the way I wanted to sort of make a mark for myself. I wasn’t sure it would work. There was a lot of lean days back in the day, but water reaches its own level.
Michael: So what was the low point for you in the journey of building the business?
Matt: I guess the low point was when I was having trouble with this one coach that was trying to basically steal my business, and I had to get legal involved. I couldn’t believe I was so naive and trusting. It took me sort of a year to sort of process all that and then say well…it’s like having one bad girlfriend and saying you’re never going to date again before I could sort of take a breath and say, “You know what? I can build this thing out. I just need to be smarter about it and better about it.” So I really got into creating a coaching process. This is the protocol of what we do. These are the steps you have to do, go through before you’re working with us. This is the legal contract you’ve got to sign and all those bits and pieces. It was sort of a wake-up call, yeah, a big wake-up call.
Michael: Out of curiosity, in retrospect, could you have seen it coming?
Matt: Yes. Yes. And there was too much flash, too many compliments, and too quick to get started without really knowing what the Oechsli protocol really was. And so there was a lot of signals that I just wasn’t paying attention to. You learn through it.
Michael: Yeah. Well, you don’t realize the red flags until after they blow up once sometimes.
Matt: Yeah, until after they…right. And that’s not to say we didn’t have it happen again. We had it happen a few years ago, but this was…we had legal take care of it. This is one of our coaches was having checks sent to him.
Michael: Oh my. Yeah, that’s kind of not good when you work in a large coaching business.
Matt: Oh, shapers. And we found out about it from a major firm that says, “I think you’ve got a rogue coach who’s stealing clients, because we’re co-funding some of these, and it’s kind of bizarre.”
Michael: Like, “We’re cutting checks, and it’s for your services, and it’s not to you.”
Matt: Yeah. But that wasn’t as traumatic, because that was just a rogue out of 20-some-odd coaches who 3 or 4 years ago just a total… And again, I saw the red flags on this guy, but I wasn’t monitoring the coaching the way Stephen and Kevin were. And it was sort of on them with this guy. But still, it wasn’t traumatic. The first guy was, for me, it was ugh.
Michael: It strikes me, though, that the response to it that you had was, “Well then, let’s systematize the process even more so we can train into a standard thing, and then we’ll figure out much more quickly whether someone is sticking to the script or off-book.” And I guess if they flake out, you can always switch them to another coach. It’s relatively easy because everybody is doing the same process.
Matt: Right. And everybody understands it’s all about relationship management and relationship marketing and practice management. We have all the practice management, we have all the tools for social media, and we have the assessment to find out what the advisor really wants, he or she wants to work on. We have a team assessment, what are the needs of the team. So, all of that has evolved as a result of that unethical guy that tried to walk all over me 25 years ago.
Michael: And it strikes me, there’s a very direct parallel, I think, for advisors as well, that for some advisors I know, they try to bring the young advisor or just another advisor, and it doesn’t work out, and the person leaves, and they lose clients with them. They say, “Well, heck, then I’m not trying that again. I’m just going to hunker down and hold on to my practice myself.” And you went the opposite direction, which is, “Okay, then I’m going to so systematize my practice to the point that I don’t have to worry about that if that happens in the future because the clients are going to bind to my process instead of just the person. And if the person leaves, I’ll just move them to another person that does the same process because I’ve got a standard process.”
Matt: And you’re so right. And the remarkable thing was, the last rogue coach we had was turned in by the firm and advisors he was being rogue with. They were loyal to us, not him.
Michael: So what advice would you give young advisors looking to come in and get started today? Where I don’t have any existing clients and people to build referrals with, and credibility is hard enough with the affluent, never mind being young.
Matt: The young advisor, first thing I would tell him right away is just what you did, Michael, you need to get your expertise. You want to become a Certified Financial Planner. You want to know more about planning than some old advisor who has had a CFP but not really done it for a long time. You also want to be out and about in the community. You want to be knocking on doors. You want to be involved in organizations. You need to dress for success. You need to really master sales skills. And the sales skills you need to master are affluent sales skills. They need to be invisible.
And you need to put your…give yourself a three-year play to do this. Sitting in a corner cold calling all day is going to end…you’re going to end up with another career. But if you get smart about this whole thing and put yourself out there and invest in this process, all those little things count. You have to be very disciplined. You’ve got to be working seven days a week. You’ve got to be working 30 hours a day. And I’m saying this facetiously, but it’s not a part-time job. And you’ve got to be dedicated with your heart and soul. And you don’t want to just try this stuff out and see if it works.
Michael: The thing that always strikes me is, even when it goes well, for so many advisors that we’ve had on the podcast, it’s horrible for everybody in the first two, three, four years, everyone.
Matt: Oh, absolutely. And you have to be willing to starve for three or four years and work like a dog.
Michael: Because it just takes time to build trust.
Matt: And I’ll give you this example and then I’m going to have to run. So I have a buddy of mine who’s one of the premier doctors in the Carolina healthcare system here. And I was helping him with a party for his interns, half of the state’s interns. He had all these…we’re grilling out in his backyard and we had cars parked around the neighborhoods, and they were all beat-up cars because they’re not making any money yet. So I’m asking him, I said, “So what are these interns?” He says, “Oh, man, they treat them like dogs. If I could do anything, I’d make it more humane. They work seven days a week. They do stuff that nurses won’t do. It’s horrible. And they end up with $100,000 and $150,000 in debt by the time they were out there and become a licensed physician.”
I said, “Well, how long does it take from beginning to end and hang out their shingle?” “Yeah, it’s a good seven years.” I said, “How many of them quit?” And he goes, “Oh, shapers, nobody quits. They were groomed by grandma, papa, Uncle Bob, mom to be a doctor. They don’t quit.” If a financial advisor approached it with that same mindset, in seven years, they’re going to have a better income than these physicians. They’re not going to have all the debt that these physicians have, and they’re going to be in a continual growth, but they’ll have a lifestyle that’s beyond what the physician is.
What Success Means To Matt [1:24:20]
Michael: So as we wrap up, our final question is always that this is a podcast around success, and one of the challenges is always that just the word “success” means different things to different people. And so you built this successful coaching business and helping advisors find their success, I’m just wondering, how do you define success for yourself?
Matt: I think success is, it involves family, it involves your health, it involves your business or your profession. And in my profession, I’ve always wanted to do everything I did the best I could possibly do. I set goals of writing books, I set goals at times for speaking at different venues, challenging myself to do that. And at the same time, I wanted to be a good father. I had three children. And I needed to stay healthy. And knock on wood, so far, sort of that…all three of those have worked quite well together. Ask me how I pulled it all off, I’m not quite sure.
Michael: Sometimes you just kind of hold it together by the seams as best you can.
Matt: Yeah. And I’m not a monetarily motivated person. I’m a son of a…my father was an artist and a children’s book author. And my mother was a social worker. She got an MSW from Columbia back when women weren’t even going to college. And she dedicated her life outside of New York City to the underbelly of society. So that was my background. So it’s just pulling all these pieces together. And I think I just had good parenting, and that was sort of my beacon.
Michael: Well, very cool. It’s an amazing path and journey that you’ve had. And really appreciate you taking the time to just share it with us, Matt, on the “Financial Advisor Success” podcast.
Matt: Oh, Michael, I’m happy to do it, and anytime. Let’s not be strangers.
Michael: Absolutely. Thank you. I appreciate it.