Welcome back to the 221st episode of the Financial Advisor Success podcast!
My guest on today’s podcast is Miye Wire. Miye is the founder of her eponymous hybrid RIA based in Reston, Virginia, that manages $200m for about 250 young professional families.
What’s unique about Miye, though, is how she’s developed a referral engine around her work with Microsoft employees, hosting several unique and memorable client events throughout the year to instill a sense of community amongst her niche client base, and how that also ends out driving even more referrals from clients who are excited to share that they’re a part of Miye’s community.
In this episode, we talk in-depth about how Miye has become the go-to benefits and equity compensation expert for Microsoft employees at their hub in Reston (and even gets to provide benefits training for their new hires who have recently graduated from college), how Miye’s clients’ challenges in finding the bandwidth to manage their nearly monthly Microsoft stock events has led her to make her own main client deliverable a simple one-page financial planning summary that just lets her clients know where they stand in relation to their goals and includes her planning recommendations, and why Miye structures those recommendations to be so detailed that clients could even implement them themselves if they wanted (although most have still hired her to do it for them).
We also talk about how Miye structures her fees, starting with a $300/hour fee for creating an initial financial plan for new clients (and how she communicates that fee so clients don’t feel like they’re “on the clock” during the process), why Miye feels that structuring her business as a hybrid-RIA on the AUM model allows her to best serve her clients (even though less than 5% of her revenues are generated from commissions), and how Miye ensures that all client-initiated communication gets a prompt reply from her team by setting up a catch-all “Team” email address that goes to everyone’s inbox at once.
And be certain to listen to the end, where Miye shares the mindset shift early on in her career that helped her to stop worrying about trying to “fit the mold” of a “typical” financial advisor, the key insight around what her value was as an advisor that prompted her to outsource many of her firm’s back-office functions in order to spend more time on client-facing activities, and her ongoing recognition of (and appreciation for) how the hard work that she put in the early stage of building her practice has had a tremendous compounding effect that is now paying real dividends.
So whether you’re interested in learning how Miye has developed a niche of working with Microsoft employees, how operating as a hybrid-RIA allows her to run her business more efficiently and do more for her clients, or how she fosters a sense of community amongst her clients, then I hope you enjoy this episode of the Financial Advisor Success podcast with Miye Wire.
What You’ll Learn In This Podcast Episode
- What Miye’s Practice Looks Like Today And The Types Of Clients They Serve [2:14]
- What Miye’s Business Model Looks Like [10:20]
- How Miye’s Financial Planning Process Is Structured [22:27]
- How Miye Utilizes Regroup Meetings [35:43]
- Miye’s Investment Management Process [42:49]
- How Miye’s Team Is Organized [49:31]
- How Their Fees Are Structured And How Miye Positions Fees With Clients [58:26]
- How Miye Developed A Niche Of Working With Microsoft Employees [1:00:10]
- How Miye Fosters A Sense Of Community Among Her Clients (Which Also Helps Generate Referrals) [1:09:48]
- What Surprised Miye The Most About Building An Advisory Firm And The Low Point Of Her Journey 1:17:25]
- What Miye Would Tell Her Younger Self An What Success Means To Her [1:21:00]
Resources Featured In This Episode:
- Miye Wire
- MiyeWire, LLC
- Our Process
- MoneyGuide Pro
- Redtail CRM
- Advisor Group Equipt
- Buckingham Strategic Partners
- Woodbury Financial
Michael: Welcome, Miye Wire, to the Financial Advisor Success podcast.
Miye: Thank you. Thanks for having me.
Michael: I'm looking forward to today's discussion. And one of the themes we've had on the podcast in recent weeks and months is all the different ways that we find the clients that we end up focusing on and specializing in. Some advisors start out from scratch, like, "I've got a vision of who I'm going to go after and I'm going to go after them," and they define their niche and plow in from the start. A lot of us who've been doing this longer don't start that way. In fact, very few of us who've been doing this for a long time ever started that way because the way that we started was like, "Here's a phone book, start calling people. See who you can find and meet. If they can fog a mirror, then they're prospects." And, so, we start out really really general and broad with anybody we can possibly get. And then, over time, we do or do not find our way into some more focused set of clientele.
And, so, I know you've lived a version of that journey, having started out more broadly and now having the largest segment of your clients working at Microsoft. And, so, I'm excited to talk about what that evolution and journey look like in a business, in an advisory firm of...well, starting out as so many of us are starting out, figuring out how you have something more focused, building through referrals into a community that way. And all the other stuff you have to do in growing and scaling the business along the way as well.
Miye: Yeah, absolutely.
Michael: So, just going to say that, to get us started, can you just share with us a little bit about your advisory firm as it exists today and just paint a picture for us of Miye Wire Financial Advisory?
What Miye’s Practice Looks Like Today And The Types Of Clients They Serve [2:14]
Miye: Sure. At this point, there are six of us. And two of us...I have a business partner, Maynur Karluk, and she also is part owner of the firm. And she and I are the main advisors at this point. She's been with the firm for 11 years. And then the rest of the team mostly is helping us with client services and support and so on.
There are...let's see, there's five of us who are local to the area. We have one team member who has always, for the most part, lived and worked remotely from Arizona. And then, pre-pandemic, the rest of us worked in our Reston, Virginia, office. But now that we're, I guess, mid-pandemic, hopefully, towards the end of the pandemic, we have another team member who started working from home remotely when the pandemic first happened. And she actually really prefers it. And, so, obviously, especially in our industry, pretty much anything that you can do, you can do virtually, so, I think she'll probably remain virtual. And then there are four of us who mostly work in the office but we take turns, most of us work from home maybe one day a week.
And, I would say our client base is definitely...I don't know, I guess, when I talk to other financial advisors, I think the biggest difference that I see between our client base and a lot of other financial advisor client bases is that our client base is very young. Most of our clients are probably between like 25...and it's pretty broad, 25 and 55, but we have mostly working families, we don't have a huge, huge segment of clients who are already retired.
And we have a big initiative, I guess, I've always been very, very enthusiastic and motivated to work with younger clients just because I feel like what you hear so much, as an advisor, when clients come and see you is, "Oh, I wish we would've met you 10 years ago," "I wish we would've met you 20 years ago," "I wish we would've met you 30 years ago." So, from day one, we've always had a big initiative where we tell our clients, "Look, if you send your children in to work with us, we will do their financial plan..." Normally, we bill by the hour to do the initial plan. We'll do their financial plan for free, if they're a client's child. And most of our clients, when their children get their first job, the first thing they do is they send them over to us. And we want to get them started on the right foot. And, even though they aren't big-dollar clients, we just feel like it's good practice. And, of course, everyone gets older and makes more money and saves more money is the goal. So, we consider it an investment in the future of our business.
And then, so, other than that, I would say, our big focus is we're definitely planning-focused. Every client that comes in, as a new client, we do a financial plan upfront. These days, I feel like we have a lot more clients who are interested specifically in financial planning, we've been getting a lot of that over the last maybe 18 to 24 months.
Michael: Because...so, just getting more inquiries for financial planning, is that tied to what's going on with the pandemic? Or you said 18-24 months goes back a little bit further than that, is that a broader shift that you just feel like you're seeing that consumers are getting more aware of wanting a financial plan?
Miye: Yeah. I feel like it's been more pronounced more recently where...I'm sure you can't be a financial advisor these days and not notice that...the message I feel like that is being put out there, especially to the younger generation, is anybody with a phone and an app can be an investor and become a millionaire by trading on their phone. So, but I feel like even those investors get to a point where they realize...and most people, in the last year or so, have done extremely well, regardless of how they're investing, just because the market has been very cooperative. But I feel like even those clients, especially if they're fairly...in this area, we have lots of clients who are high earners and fairly affluent, even if they're pretty young, they realize, "Okay..." maybe they think they can do a great job trading stocks on their phone, but that doesn't really help them make decisions about, "Should I be doing my Roth 401(k) or pre-tax?" Or, "Am I saving enough for my kids' college? Should I use a 529? Am I going to be able to retire at 55 or am I going to have to work until 65?"
So, I think we have a larger number of clients, in recent years, coming to us saying, "I feel like I'm doing a good job, I'm," quote-unquote, "investing my money but I really don't have a plan and I don't know if I'm doing things right." Whereas it used to be that the typical process, 95% of the time, was they come in, we do the plan for them, and then we manage all of their assets. I feel like, more recently, we have a lot more clients where they come in, we do the plan, they pay us for the plan, and maybe we invest their assets, but maybe we don't. And some of it is that a lot of our clients are younger and some of them just don't have a lot of assets to manage.
And then, frankly, a lot of them, especially in this area, a typical DC-area family, two spouses working, kids, parents, kids at home being schooled now because of the pandemic, right, they're like, "I literally do not have the bandwidth or the time in my life to do this, even if I had the desire or the knowledge." So, we have a lot of clients, they're like, "I need to offload this." At Microsoft alone, their benefits are so complicated that between RSUs vesting, which is quarterly, and ESPP, which is also quarterly, they have a stock event occurring 2 out of every 3 months. And that's not even thinking about the 401(k) and the after-tax and all the other stuff they have going on. So, a lot of them are just like, "Look, I just need help with this. I don't have the bandwidth. I'm getting 1,000 emails a day and I'm working 60 hours a week." Those are our ideal clients. We like working with really smart people who save well, they get it, they have a plan, we come up with a plan together, we all agree on it, but they want to offload or outsource some of the day-to-day management because they don't have the desire or the time to do it on their own. So, that's our bread and butter I guess.
What Miye’s Business Model Looks Like [10:20]
Michael: So, help us understand the scope of the overall business at this point. You'd mentioned six team members, but how many clients are you serving and what does the business model look like in terms of are you assets under management, or charging planning fees, or doing commission-based business? How many clients are there and then what does the business model look like?
Miye: So, we work with about 250 families. And, basically, the way it works is all of the clients are clients of the firm, most of what we do is advisory. So, I would say, as I mentioned, every new client that comes in, we always do a financial plan, we bill hourly for the plan. But, at the end of the day, you can only...onboarding new clients takes a lot of time and energy, and, so, you can only do it so quickly. So, planning fees still represent a fairly small percentage of our overall revenue. Probably 90% of it is from advisory fees, from managing assets.
The only situations where we typically have any commission-based business are...we live in Virginia. Virginia has a CollegeAmerica 529 plan, which is run by American Funds, which you can't do in an advisory type of model. So, in that situation, if we're managing a 529 for someone, we have that commission-based structure with American Funds.
And then, the second thing is, from very early on when I got into the business, I had my insurance license. And there was a period of time where...I know lots of advisors like to advocate for to be able to say "fee-only," but if we say "fee-only," then, obviously, we have to outsource certain things like the CollegeAmerica life insurance. And I just found that, if I outsource my life insurance or long-term care insurance and other insurance business to someone who sells life insurance or insurance for a living, well, guess what, they're actually going to sell insurance for a living. Which may or may not line up with what I was recommending to the client.
So, in certain situations where the client has a need and we can help fill it, we do also do life insurance and long-term care. We actually do a lot of long-term care, not because I like it, having long-term care insurance conversation is one of my least favorite things to do. But I've found, over the years, that, if we weren't having that conversation with clients, nobody was having it with them. Except maybe their captive insurance agent who is trying to make a commission by selling them a policy, but... So, yeah.
So, that's also a very, I would say, small percentage of our revenue from insurance-based products. But where we see a need, or a client has a need, and it's something that we can help with, then we'll do that as well. But, I'd say, 90% advisory at this point.
Michael: And then what's the total AUM base of the firm if you bill mostly in an advisory context?
Miye: It's about $200 million.
Michael: Okay. So, just doing rough math, about 200 million roughly, 250 families, so, that average client is, call it roughly, $800,000...obviously, with some bands around that, but is that fair to think of in terms of who's the typical household, kind of around that half-a-million to million-dollar-house clients?
Miye: Well, we have a pretty big range because, as I said, I consider kids of clients also part of that same client family. But we have individuals who have very small accounts with us, mostly children of clients. And then, obviously, we have a few outliers who have very large portfolios with us. But, yeah, that's probably pretty close
Michael: So, I'm curious more about this model of how you're doing planning and how you're charging for plans. You said you're charging...every client goes through a planning process, they're all billed separately for the planning, they're billed on an hourly basis. Can you share with us a little bit more just how that works? Literally just, "We're going to do a plan for you and, at the end, I'll send you an itemized bill for X dollars an hour and track how many hours we did"? Do you set up a flat planning fee upfront, or are you just literally billing by the hour and, "We'll see what it comes up to"?
Miye: Yep. We give people a quote. And the biggest difference, I think, in the quotes that we give to people are...obviously, if it's a single person, usually, it's going to be less complex and take less time. If it's a Microsoft person, it's going to take less time because we don't have to do any research on the 401(k) funds or the HSA, that's all stuff that we already know. But, basically, we have a process that we go through for every client, and it's on our website. But, in the initial meeting, we explain to them, "Okay, this is how we work for every new client that comes in. Our big thing is we're planners first, right? So, we want to make sure that you have a plan, you know where you're going, you know how to get there, everybody's on the same page."
So, when we do the initial plan, we bill by the hour for the time it takes us to do the plan. One thing that we did from the beginning...because I always hate it where you send an email to your attorney, or you're on the phone for 5 minutes, and, a week later, you get a bill. I never wanted to have that kind of feel for my clients because I always wanted them to feel like, if they're in a meeting with me...we have an intake meeting where we ask them a lot of questions and gather information about their goals and all that. I never wanted them to have that clock ticking over their head where they're like, "Well, I better get through this quickly because I'm going to get a bill for it." So, I always tell them, when we have our initial meeting, "Look, we don't bill for emails or for meetings or for phone calls, we basically just track the time that we spend working on your actual plan."
We did find that, because we have more clients now than we used to who just do planning...and planning takes time. Even though we have team members who will do the data entry into MoneyGuide and that sort of thing, so it's not like the planners in the firm are doing all of the leg work, it's still a fairly time-intensive process. So, we did increase our fees a little bit...and we used to loosey-goosey track our time and I think we were consistently under-billing people. So, now that we have more clients who come in who do the planning process or may or may not have us manage assets, we definitely have been a lot more stringent about making sure we actually do bill them for the time that we spend. Because it is so labor-intensive and we are not necessarily, as often as we used to, going to be managing assets for those same clients. So, yeah, we basically track our time that we spend, while we're working on their MoneyGuide. We use MoneyGuide for planning when we're working on the recommendations, when we're doing research.
And then, when we do the delivery meeting, which is when we go through MoneyGuide with them, we give them all of our recommendations, we give them an invoice. And it's just broken down into like two parts, time that we spent on the software part of it, with MoneyGuide and all of that, and then as a separate item for the time that we spent doing research and putting together recommendations, that kind of thing.
And then they just pay us. We have a system through our broker-dealer and they pay us online for the planning. And then we tell them, at the very beginning, down the road, when we decide, after the delivery meeting, the next meeting that we have is called the regroup meeting, and that's where we basically say, "Okay, how are we going to go forward?" And that meaning we tell clients, at the beginning, "If you just want to use this for planning services and come back once a year and we look at your 401(k) and rerun your numbers and so on, we'll just bill you. In that case, we will bill you for the meeting time, as well as the back time that we spend preparing for your meetings and so on. If you have assets that you want us to manage, then we're going to switch to an advisory type of situation," we tell them about our advisory fee. And then we, typically, in that situation, are not going to be hourly billing on a going-forward basis.
Michael: So, out of curiosity. What are you doing just to literally track time when you're doing this? I know this is a challenge for some firms of just remembering to track it or where you track it. Or I've seen some firms start trying to get the software, the lawyers, and accountants use for their time tracking.
Miye: Ours is much less...when we sit down and log in MoneyGuide and go through it, we just...usually we take a sticky. We put down, "Okay, MoneyGuide, it's 4:20. This is when we started working on it and then we finished working on it this time." We just track the actual minutes.
Michael: Why the breakout between...I think you said you invoice in two segments, time that you were in the software and then time that you were doing the other research and putting together recommendations. I'm just curious where did that come from, why two lines and not just one big number. Or four lines and itemize it more.
Miye: We have had that invoicing system literally for years. And, if I'm trying to think back to how...honestly, I probably just came up with it at the beginning. I felt like just having one category was too vague. Right? If I was a client and I'm just like, "Okay, well, so, they spent 3 hours on my plan," I don't know, it feels a little bit like we're obscuring information somehow. So, I feel like more detailed is better. Usually, when you get an invoice from your attorney, it says, "Okay. Answered Client Emails, this many minutes. Researched this or worked with a colleague on this," and it's fairly detailed. Ours is not that detailed, but I feel like, having it split out, at least the client gets an idea that, "Oh, okay. That software program that they went through with us, they spent this much time inputting data and working with that software program. And then they spent this much time researching our investments and our asset allocation, putting together the recommendations," or whatever research we had to do. I think I initially thought that that was a good...in my mind, the way of how I split out the time working on it. So, that's probably how I came up with it. Have we revisited it recently? Not at all. So...
Michael: Well, if it's working and they're not complaining, it's working and they're not complaining.
Miye: Yeah. This is true. This is true. It's not broken.
Michael: And is there a standard rate that you're billing at, X dollars an hour?
Miye: Yeah. We bill at $300 an hour. And we usually quote people 3 to 4 hours for a plan.
Michael: So, that's typically 3 to 4 hours for gathering and I guess...so, is that including the meetings, gathering the data, and then presenting? Or it's the number crunching...
Miye: No. That's just the actual working in MoneyGuide, putting together recommendations, that kind of stuff. So that's what I'm saying, we don't...I have considered it more recently, like, "Should we start billing for..." because I'm not the one, it's usually our team members that are emailing the client to make sure we have all the data. And we have another team member who does the initial data entry into MoneyGuide. And we don't bill for a lot of that time, but again, now that we have more people coming to us for planning, I have been spending a lot of time seriously thinking about adding in billing for more of that time that...because it's time that the team spends that they're not spending doing other things, right? So, and I feel like...
Michael: And do you bill for just the data gathering, meeting upfront, the presentation meeting at the end? Or only for the time between...
Miye: No. So, for the first part, we don't bill for any of the actual meetings. If the client decides they're just going to use us for financial-planning services and we're not managing assets for them, then, after the initial deliverable when they pay us for that initial plan, then we start billing for the meetings.
Michael: Okay. So, either way, the initial planning process, you're going to bill for the in-between time but not the actual meeting time? If they want more planning advice engagements after your initial process, then we're actually billing by the meeting?
Miye: Exactly, exactly.
Michael: Okay. And I guess that was under the auspices that, at least historically, they were becoming ongoing advisory clients by the end of the meetings anyways, and so you weren't as concerned about billing for the meetings?
Miye: Exactly, exactly. That's how it started out.
Michael: But the more that they're being planning-only, the more that you're looking at billing for all the time increments?
Miye: Right. Because we're not getting compensated any other way. So, yeah.
Michael: And then how do you actually handle billing? You said you've got an online system.
Miye: Yeah, Advisor Group, who's our broker-dealer owner, has a system called eQuipt. And, so, as a courtesy, we email nowadays, because it's all virtual, we email a PDF of the invoice to the client and we just tell them, "This is for your records." And then we go into the system eQuipt and it electronically sends them a financial-planning agreement that they can electronically sign. And then it sends them an electronic invoice, so they can pay it online, they can pay it through an ACH from an account, if they have one. Or they can use a credit card or e-check or whatever. So...
Michael: Okay. Okay, and that's all part of the broker-dealer system that's part of the Advisor Group system that they make available to you?
Miye: Yes, yes. It used to be people would just give us checks.
How Miye’s Financial Planning Process Is Structured [22:27]
Michael: So, share with us a little bit more what your financial-planning process looks like. If I'm a client, I say, "Miye, I want to come onboard and work with you. It's go time, let's go," what happens? What's the actual process?
Miye: So, the actual process is, if we all mutually agree, "Yes, we're going to do a plan and work together," then the first thing that happens is Shippy, who's on our team, she's the one that's in Arizona, she sends them an email with a list of the information that we want to have, your typical copy of last year's tax return, your most recent pay stub, your 401(k) statement, yada-yada. We use a secure Smarsh encrypted secure email. And, so, most clients just reply all to the emails and PDF things and send them over to us. Some clients will use a secure Dropbox or something instead. But, so, the clients will get us the information. And then, once we have...and, usually, Shippy in our office keeps track of like, "What information do we have?" and, "are we missing anything?" and that sort of thing.
And then it used to be that what we would do is we would wait until we had all their information and then we would send the calendar link for them to schedule their intake meeting. Our calendar has been so booked up lately that what we've been doing now is we've been sending the link when we send the list and telling them, "Go ahead and pick a date." And that gives them time, in the meantime, to send us the information.
Michael: And I guess the nice extension of that is they create their own deadline to make sure they get their stuff in because they just scheduled a meeting with you?
Miye: Yep. And, if we don't have the information by the week before the meeting, we just reschedule the meeting. So... But, yeah, usually they know, "Okay, I have to have the information to them by this date," which is great. So, once we have all their data, then we have the intake meeting. And the intake meeting is when we ask all the questions that are not in their financial information. So, that's when we have those conversations with them about, "When do you want to stop working?" and, "how much of college do you want to fund?" and "if it's between working longer or paying less for college, which would you rather do?" and all that soft data.
So, intake meetings I love because that's the fun part, right, where you get to really engage with your clients and find out what they really want. And people are so different, that's what I think makes working in this field so interesting is to see how different people are, as far as the way they think and how they think about money and what they want to do in life and all that. And then the deliverables and the delivery meeting for us are we go through MoneyGuide with them and then we give them...basically, we try to fit everything onto one page because our whole mantra is “simplify”, right? Clients don't come to us because they want 20 pages worth of stuff they're never going to look at. So, we do a one-page summary. The top part is our conclusions where we're like, "Okay, you are in fantastic shape," or we're like, "your goals are completely not realistic and you're never going to reach them," or whatever. We give them what our basic conclusions are. And then the second part of it is our specific recommendation. So, I always tell people like, "My goal for the delivery meeting is I want you to have..." you hear all the time, as an advisor, like, "How are we doing? Are we okay? Are we on track? Are we not?" So, we always tell people that the two goals of the delivery meeting are, "We want you to have a really good feel for where you stand or how you're doing, are your goals realistic. And then we want you to have a very specific list of action items that you can take, or we can take with you, or we can take for you, to put you in a better position, get you where you want to go, etc."
So, then Maynur and I get together and we go through MoneyGuide together. And then we go through all the conclusions and the recommendations together. It's funny, we do this together in the office, and the other ladies in the office always call it "The Lucy and Ricky Show" because they listen to us going back and forth...it's a collaborative process, right? And we're always trying to figure out good recommendations and best solutions, whether he really wants to retire early, what if we did this, what if this... Anyway, so, it's the fun part. Right? It's the fun part of financial planning if you're one of us financial-planning nerd people.
And then we have the delivery meeting. So, in the delivering meeting, we...nowadays it's all virtual, so, we log in, we share screen, we go through MoneyGuide with them. We always go through...if you're familiar with MoneyGuide, we go through current scenario, recommended scenario, and then we go through that one-pager with them, "Okay, this is what we came up with. Your goals are in line. Your goals are out of line. Realistic. Not realistic. You have a lot of work to do. You have no work to do." And then we go through all the recommendations. And I always tell people, I'm like, "Look, you're paying us to give you objective financial advice. The recommendations, the goal for us of the recommendations at the delivery meeting is that they should be detailed enough that, if you are one of those do-it-yourselfers who's going to implement everything yourself, that they're detailed enough that you can implement them yourself." So, we get all the way into, "You should be putting 12% of your pay into the after-tax option with the in-plan Roth conversion. You should have 15% in the International Value Fund, and 10%, and this one..." We try to cover pretty much everything that MoneyGuide covers.
We do, obviously, investments and savings and retirement and college, but we also do insurance, if it's a family situation, which most of our clients are, estate planning, long-term care insurance. We try to cover all of the taxes, tax planning.
Anyway, so, we go through the recommendations. And then we usually tell them, at the end of the delivery meeting, because it's a lot of information, we give them the login to MoneyGuide, so they can log in on their own, and then we email them all of the recommendations that we put together, that we go through in the delivery meeting. And then we usually try to schedule ahead of time now the regroup meeting to be about a week...or not more than about 2 weeks after the delivery meeting. And the regroup meeting is where we all get back together and say, "Okay, let's review everything. Let's go through each of the recommendations one by one and figure out the way forward."
So, some clients come back to the regroup meeting, they're like, "Oh, I reallocated my 401(k) and I changed this and I did that but I need some help here, there." And then there are other clients that come back to the regroup meeting and they're like, "Oh, everything sounds fantastic. Can you just do it all for us?" So, the regroup meeting is where we figure out, "Okay, how is our relationship going to progress forward? How much of it do you want us to do for you or with you or just have an eye over your shoulder while you do it yourself?" or what have you. So, that's our whole initial process. And the delivery meeting is when we give them the invoice.
Michael: So, I've a couple of questions here. The delivery process itself, just I'm struck that, you said you're building plans in MoneyGuide Pro but you're not producing any of the output from MoneyGuide Pro, if I'm understanding this correctly. You're not printing MoneyGuide plans or the output sheets or any of that, the actual client interaction with the MoneyGuide output is the screen share, looking at the results, not, "Here's a printout or a PDF."
Miye: Right. Yeah, and I would say...I think the output, the reports...and we produce a report and we upload it and we save it, but in most cases...depends on the client, we do have a lot of very, I'm going to stereotype here, but techie engineer types who want all the granular details. So, in those cases, we'll especially go through...in the MoneyGuide, there's reports that actually show the number charts, every year, in the flow of dollars. Which I think, if you're interested in that kind of thing, is really helpful. But I think what we found is that, again, going back to...clients come to us because they want simpler lives and they want less work. And, so, I have found that giving them a deliverable...and those MoneyGuide reports, some of them are like 100 pages. If you're a financial advisor, it's fantastic, and you can look at it for hours and it's fascinating. But, if you're a client who just wants to get stuff done and wants to be on track financially and make smart decisions, it's not necessarily something that is going to help you.
So, we take it case by case, but, for the most part, we go through the MoneyGuide program with them, give them the login so that they can go into the client side of it. But we, most of the time, do not go through the reports and, most of the time, don't send them the reports. They're available on the portal. But just because we find that, again, so many times we've had clients who came to us and said, "Oh, yeah, we paid somebody and they did a plan for us 10 years ago and they gave us this big book and we never looked at it again." Or, "They gave us this 50-page thing and we didn't understand it." I remember younger, being earlier in my career, hearing that a lot. And I just got to that point where I realized people don't want a big fat booklet or 20 or 50 pages of information. They want somebody to be like, "Hey. Here's what you need to do, here's why," and either, "I can help you do it, I can do it for you," or, "I can give you some instructions and you can do it yourself." They come to you because they want it easy. They don't come to you because they want more information that they have to sort through.
Michael: But I find it striking as well that...to take the other extreme of this, right, I could also say, "Great. Well, then just literally just produce the one-page output of the conclusions and the recommendations," and let's just tell them the punchline and move on from there. But I'm struck that you are still showing MoneyGuide output, I guess, if only for the...you do still have to prove it to them that you did the work and did the analysis, even if they're not going to take it with them and do anything with it. You got to, at least, prove it in the meeting so that, when you give them the one-pager at the end, they can actually trust that you did do your homework.
Miye: That I didn't just make it up. Right. And that's why I think I like going through MoneyGuide with them because I like them to see...we tell them, when we're delivering, we're like, "This is the exercise that we go through, as advisors, to come up with these recommendations." We want them to see, like you said...because sometimes we go into a delivery meeting and tell clients, "Hey, you guys are doing a fantastic job, you can..." I'm oversimplifying, but, "You can make these tweaks or rearrange this stuff and you're going to be great." And then we have other delivery meetings, like we had one this week where the husband wanted to retire at 65 and we were like, "Look, we tried every way to the moon and back and we don't see any possible way that you can retire at 65, outside of winning the lottery. But they can't just take that on faith, they have to actually see “why is that?”
Michael: You want to blow up someone's goal and dream, you better come with some proof.
Miye: Yes! You better have something to back it up. Or they're going to be pissed off that you are telling them they can't retire. So, yeah. So, we go through the exercise with them. And sometimes I feel a little bad, those people, we did their current scenario and I think their probability of success was like 4%. And we were like, "Okay, this is how we knew that's not going to work." But then we could go through the recommended scenario and say, "Okay, if you make this change, this is what happens. And if you make this change, this is what happens." Some of our younger clients, they're 30-something-years-old, we're like, "Look, this is what happens if you do your 401(k) pre-tax for your whole life and max it out. And then here's what happens if you did Roth instead," and they're like, "wow." So, I definitely believe in the value of going through the program with them because I think it really does help them understand why we made those recommendations.
But most of our clients don't actually go back in and log in to MoneyGuide afterwards. Some of them do but vast majority...because we get an email when they log in, vast majority never go back to it. But they come back to that regroup meeting and they come back to meetings after it with that one-pager printed out in their hands. "Okay, here's our to-do list." They refer back to it, they check stuff off on it, that's their bible, so to speak. And that's why I always did that way because I was like. "They just want a checklist, they want a to-do list." Yes, they need to know that you did the work to come up with those recommendations, but, once they have that faith that these work and there was work done and these are good recommendations, they just need the to-do list. And that's what they're going to go back and refer to. And most of them aren't going to go back and log in or read the 20-page report or whatever.
Michael: And I guess, on the flip side for that subset of stereotyping, for that subset of engineering clients who really actually do want to tinker with all that stuff, like, "It's cool. Here's your MoneyGuide login. Have fun engineering yourself. Let us know if you got questions."
Miye: We get emails, "Oh, your client saved this favorite scenario," and, "your client..." I think most of the clients don't know that we get an email every time they log in. We have one guy… not making this up, who logs in every single night. And I think if he knew that we get an email every time he logs in, he would be mortified. And I think he needs some professional help outside of what we do, but yeah... So...
Michael: But I think it's an interesting thing as well because I know, for a subset of advisors, what you just described would be anxiety-producing. If the client's logging in that much on their own and doing all their own analysis, do they even still need us? Isn't it my job to run the software and do this stuff for them? And, so, I'm struck that...I feel like you boil that down to its essence, like, "Yeah, still a client and still paying me for the planning fees," even though they're logging in for all this stuff because they don't need us to run the calculator, or at least that client apparently doesn't need us to run the calculator, he can log in and run the calculator every night if he wants. They're paying us for the one-page plan and conclusions and our professional recommendations about what they're supposed to do.
And then help me understand more about this regroup meeting. That is not something I often hear in the process for firms, that you get through your plan-delivery meeting and then have a separate regroup meeting. It sounds like not long thereafter, like a week or 2 thereafter.
How Miye Utilizes Regroup Meetings [35:43]
Miye: I tell clients, in the initial meeting, "I think the regroup meeting is one of the most important meetings that we have because that's where we figure out how we're going to work together going forward." And, in the delivery meeting, you're giving them so much information. Most of the time you're telling them things they didn't know. Right? Like, "Oh, you could actually retire at 55, never mind 60," or, "no, you can't retire at 65, you're going to have to work until you're 67," or whatever. And then we're going through MoneyGuide and then we're giving them the conclusions and the recommendations. And it's a lot of information. So, we always tell them, at the end of the delivery meeting, "Take the information, let it sink in, talk it over amongst yourselves, and then we're going to get together for the regroup." And the whole idea of the regroup is to say, "Okay, what is the path forward?"
And like I said, some people come back to the regroup and they're so jazzed up and excited, they're like, "Oh, we did items 1, 2, 3. We have some questions here and we might want you to take care of this for us." And then other clients come back to regroup and they're like, "Okay, we talked everything over and we're on board and everything sounds great, we just really need you guys to do the implementation part of it for us." So, in regroup, we sit down and we go through those recommendations one by one and we say, "Okay, you need to reallocate your 401(k)." And some clients are like, "Oh, I did that," and other clients are like, "I have no idea how to do this." So, we get on Teams and we share a screen and they log in and we show them how to do it, we do it together. And, so, we go through each recommendation one by one, and that's where we figure out, "Okay, you have this IRA or this 529," and they say, "we know that you guys said it was all concentrated in U.S. large-cap and it needs to be diversified better. Can you guys manage it for us on your platform and we'll pay you an advisory fee?" Or, "Hey, can you give us some more specific allocations, so we can do it ourselves?" The regroup meeting is where we really figure out how we're going to work together going forward. And that's why I think it's such a critical meeting, because that's how we start the definition of our advisory relationship.
Michael: Well, I'm struck as well. I think for a lot of firms the traditional process was, "We do the plan presentation that has a bunch of recommendations," and then right there at the end it's, "so, would you like to work together with me to implement all this stuff going forward?'" And that moment of decision of whether our paths are twined together going forward or not comes at the end of that plan-delivery meeting. And so, I'm struck that you have separated that out. Most firms I see I feel like go one of two ways, it's the moment of truth is at the end of that meeting and we're going to decide here whether you want to work together with me to implement these recommendations or not. Or for advisors that say like, "That's too much of a hard close," they do, "go home and think about it and then let me know in the next few days." And they leave it open-ended, which I think probably is sometimes too open-ended. And only the most motivated clients manage to come back together after that and say, "Yes, we'll move forward." I think you have a really interesting structure to say, "Look, there’s going to be an information overload by the end of that.” You may or may not have rocked their world about what they thought their reality was going to come into being versus what it actually is, whether it's they can retire sooner than they thought or later than they thought. So, give them some time before they have to make a decision but don't leave it open-ended, literally say like, "We're going to have a regroup meeting and we're going to come together and decide what comes next." And, "If we're just wrapping up the relationship and you've got your list of things, you're going to move forward on your own, more power to you. If you want us to help implement, we'll talk about what that looks like, if you're still not sure. We'll get to talk about that in the regroup meeting." But you've literally created a conscious space for when they come back to make that decision and that they're going to come back and make that decision that they don't have to make it on the spot but that decision is getting made.
Miye: Yeah. And it's interesting, I was just thinking about it. Because we've had a couple clients, in the last couple months, where they have indicated that they wanted us to manage their assets but they weren't a good fit and we knew they wouldn't be good clients, high-maintenance or out of whack expectations or whatever. And, in the regroup meeting, we basically were saying, "Hey, we believe that you should continue to manage your own assets but we still have the regroup meeting because that conversation needs to be had."
It's interesting, just in the last couple months, it's funny because I was telling you that these days I feel like we have more people who don't have us manage their assets but we also have more people whose assets we don't want to manage. Partly because of the way things have been, over the last year or 2. One of the people that we flat out, I guess two of them actually where we basically had to say, "We don't want to manage your assets," or, "we aren't willing to manage your assets," it's because they've been doing a lot of this individual stock trading and, "oh, I made 4,000% on Tesla last year." And we felt like the way that they thought investing should be done and what their expectations were, based on just their experience maybe in the last year or so, made them not good candidates for, "Oh, we take a passive approach. It's the tortoise, not the hare," and we're asking for trouble to try to manage these people's assets the way that they think investment-management is supposed to go. But, obviously, we still have a regroup meeting and we go through all the recommendations and say, "We're always here. If you want to come back to us for planning work or you want us to rerun your plan or what have you, we're happy to do that and bill you by the hour, but we're not going to manage assets for you." But the regroup meeting is part of the process and every client has that meeting. And I think just to leave it open-ended feels unfinished to me somehow.
Michael: Interesting. And I do like that point as well that the challenges of younger clients who have literally only invested or picked stocks in a bull market, unless they managed to try to get their GameStop right at the peak...right? For a certain subset of younger clients in particular, you may have to wait until they have whenever that first blow-up event that's going to eventually come and humble them a little bit, as the market pretty much does to everyone at some point. And then they may say, "Okay, I've given a second thought about my personal investing genius and my ability to generate 4,000% per year annually compounding returns." But if that's literally the only thing they've ever done, you're not likely to convince them that it's not going to work because it's literally only ever worked for them.
Miye: Right, right, right. Yeah, we had one guy who wanted to have us manage the cash portion and then he was going to try to...we had recommended a certain split, and he's like, "Well, the stocks I'm managing over here will be part of that stuff..." and we were like, "no, it doesn't work that way." And we said, "That would be like the too many chefs in the kitchen analogy. It's really stressful for everyone in the kitchen and the end result's usually not very good." So, we were like...and we tried to explain to him, for him it was more of a personality thing. He just was too interested in having his own hands in the pot. And we were like, "That's fine." It's money, it's a very personal thing and some people are not going to be comfortable saying, "You know what? I'm going to offload that," or, "I'm going to outsource that part of my life." And we get that. Our solution is not the best solution for everyone.
Miye’s Investment Management Process [42:49]
Michael: And, so, then talk to us a bit about the investment-management process for clients that do decide to come on board and work with you. How does that work, what do you do?
Miye: So, we work with Buckingham Strategic Partners, which was with us...we were originally with Loring Ward for like 15 16 years.
Michael: Was with Loring Ward sucked up by Buckingham Strategic Partners with their acquisition 2 or 3 years ago.
Miye: So, almost all of our assets are on the Buckingham/Loring Ward platform. And, so, it's a very passive, hyper-diversified asset class strategy, regular rebalancing. And we basically outsource all the administrative and the billing and the rebalancing and everything to Buckingham. We have one-offs here and there, like 529 accounts and some emergency fund type of service type of accounts that we set up for people, but other than that, it's mostly all on the Buckingham platform.
Michael: And, so, you said you were with I guess Buckingham and Loring Ward for almost 16 years. So, by TAMP standards, that was actually pretty early to be into TAMP world, back in the mid-2000s. What led you down that road to decide to go that route and not build portfolios yourself?
Miye: You know what did it for me? So, when I first came into the industry, it's what you were talking about, people, clients came to us, or we went out and found them, at that time, to basically “sell them mutual funds.” Right? And, as you said, it was building portfolios, it was doing research on Morningstar and trying to pick funds that had good track records with good managers, even though everybody knows past performance is not indicative of future results. And we spent a lot of time trying to pick and choose funds and fund managers. And then, when things don't go well, then you're defending performance or lack thereof. And that, for me, was a challenge because, of course, as time went on and the internet became more prominent, clients had access to the same information that I had access to for doing the research. So, I was like, "Where am I providing a value?" Right? This was before we did a lot of really comprehensive planning. So, clients were coming to us for investments and I was like, "Well, where's my value in providing investments to clients?" that was the first thing.
And then the second thing was, in 2000, 2001, 2002, the market was tanking basically every year, 3 years in a row. And the clients that I had that were nearing retirement I was a little bit panicky about, "Okay, I don't really have a system in place to help clients who are nearing retirement to..." I knew they needed more diversification, I knew they needed a more systematic program that incorporated things like rebalancing and income portfolios, but I just was basically picking mutual funds. And, after going through those 3 years where the market was basically declining in double digits every year, multiple years in a row, I was at a loss that there's got to be some better way to do this.
And I was on an advisory council for Woodbury, my broker-dealer at the time, I don't even remember if they were Woodbury at that time, we went through a bunch of iterations. And some of the guys I was on the council with had worked with Loring Ward for years. And they were like, "Oh, you've got to talk to these people. They have a great program and system," and that's how I got introduced to it. But it's like the whole drinking the Kool-Aid thing, once you get the program and the system and the research behind it, it all makes sense. And I started out by just moving my clients who are nearing retirement over to that platform because I thought, "Oh, this makes a lot of sense for those people." And then, when the market started to do really well, my main motivation, at that time, was to help protect them from some of the downside that they had experienced during 2000, 2001, 2002.
But then, even when the market was doing well a lot of my portfolios that I had with Loring Ward were actually outperforming the ones that I didn't have for younger clients. And, of course, when you're working with asset class portfolios, you don't ever really have to have a conversation about defending underperformance or lack of performance because you're invested in the market. So, you're invested in your benchmark, so, you don't have to spend time trying to defend management or performance. So, anyway, over time, I just gradually ended up transitioning almost all my assets over to that platform after that. So, that's how it all got started.
Michael: And do you ever look, in today's technology-driven world, saying, "Hey, I think I can just buy some rebalancing software and do this myself internally." Do you ever look at bringing it back in?
Miye: Nope. I have colleagues, obviously, there's people in our industry that do it. Right? And then I see what they go through every quarter, billing, rebalancing all the work. Even if you're using “software” for me anyway, I have no desire to take that stuff in-house. I'm a control freak about many things, but I want to maximize, at the end of the day, the time that I can spend doing what I love, which is working with clients. Because people ask me the same thing, like, "Why are you with the broker-dealer and why aren't you just an independent RIA?" But, in my mind, that's just more work, compliance, all of those things. And I just really want to...Woodward has been very, very good to me for more than 30 years. And they pretty much let me run my business and do my thing but offload some of the compliance and the back office and all of that stuff. And, for me, working with Buckingham is the same kind of thing. They take a lot of that administrivia that you can outsource off of my plate. And, even today with a team of six, managing people is not my forte, and I don't enjoy it at all. I just want people who are very self-motivated, that can do their own thing, that don't need somebody looking over their shoulder. So, the more things that I can get off the plate of what we do every day, so we can really focus on clients and client experience and anything that I feel like is getting us closer to that, is something that I'm going to want to do.
Michael: Interesting. So, I'm struck even that you...to me, you framed very similarly the value proposition of a TAMP, on the investment side, and the value proposition of a broker-dealer on the advisory firm side. Both of these are, effectively, outsourcing solutions for you. The TAMP outsources the investment team and the broker-dealer is basically outsourcing the compliance team.
Miye: In a nutshell, I would have to agree with that. Yes.
Michael: And, so, your team then functionally, internally, the six of you are client-facing and planning work and just the meetings and support requests that come in for clients?
Miye: Yep. Yeah. And even the time that I end up having to spend on compliance stuff just irritates me because I'm like, "I shouldn't have to spend time doing this."
How Miye’s Team Is Organized [49:31]
Michael: So, what are the roles of the six people on the team then? Who does what? Because, given the amount of stuff that's outsourced and external, what's still internal that you have...
Miye: So, Maynur and I are pretty much spending all of our time doing planning work and client meetings. And we pretty much do the same thing. The only difference between my role and her role is I also have to do some of the running the business stuff that she doesn't have to do. And then everybody else is slightly nuanced, slightly differently. So, Shippy, who is the one who always worked remotely from Arizona, she does all of the scheduling and she does all the paperwork, which now of course is electronic but we still call it paperwork. And everyone does some client service. The way we have it set up, we have a team email. Every email that comes in from a client goes to the whole team. So, that way, whoever is best equipped to handle it or who is free at that moment can handle it. Clients aren't waiting around.
Michael: And literally they email like [email protected]
Miye: Yep, [email protected] And clients are trained from day one "You always email the team." And they'll write an email, "Hi, team," you know, "hey, team," because that's always how we've worked. And there are days where Maynur and I are at meetings all day and don't have 10 minutes to look at email, but that way a client's not sitting around waiting for a reply to an email.
Michael: Interesting. And, so, I'm just curious literally how you manage that internally, some kind of giant shared mailbox?
Miye: No, no. Smarsh sets it up so that every email that goes to the team email, I get it in my inbox, Maynur gets it in her inbox, Deb gets it in her inbox. And then we use Signal. We used to use WhatsApp but now we use Signal, and, so, we have this thread that runs all day, it's our office thread. And, so, Deb might say, "Oh, hey, I have Joe Blow's email," she'll message. And then everybody else is like, "Got it," or, "thanks," or, "whatever." Most of the time, we know, if an email comes in and it's about a 401(k), then usually it's a Maynur thing, Maynur will say, "Oh, I got that one." Or if it's about a form, then Shippy might take care of it. But usually we'll message on Signal, like, "Hey, I got this one," or, "I got that email," or whatever. But, a lot of times, Maynur and I aren't even around, and, so, Deb and Ange and Shippy and Adeline will know that they need to take care of the emails because we're at meetings or whatever.
Michael: And I'm struck as well that there's a certain, I don't know, I guess relief for the team that you don't have to worry about whether you individually are getting back to that message right away, or whether you're around at your desk to get back to it because something may be bouncing back and forth the client that they're going to be emailing in to [email protected] And, so, you've got teammates who can help make sure that this gets covered promptly in a timely manner?
Miye: I feel like it's probably the single best thing I ever did for the business. Because think about it. My big thing is travel, right? Obviously, not the last 12 months, but if I'm going off to Europe for 2 weeks, I'll put an "Out of Office" on in case somebody forgets or someone happens to send an email into mine. But I really just don't sweat it because I know that everything is getting covered while I'm gone. And same thing, like you said, if I'm in meetings all day or I'm out sick or I get in a car accident or I get hit by a bus, there's not really much that's going to go...not that it's not going to go wrong but that's going to go unanswered anyway. And if clients consistently...sometimes clients will forget and they'll send an email to me and, when I reply, I always CC the team and I just always put in the email, "Hey, make sure you always CC the team, that way, if I'm stuck in a meeting, you won't be waiting around for somebody to get back to you." And clients realize they get much better service because of it.
Michael: Yeah, you just have to point out like, "This is just literally so that you get a response faster," and then they do, like, "no offense," right, "we're caught up in meetings for a while." At some point, they realize like, "Oh, I sent an email to Miye and CCed the team and team replied before Miye." It doesn't take that happening very often before they're like, "I'm just going to email "team" because that's who always gets back to me fast.
Miye: It's fabulous. And it's great because I always wanted to train them. I tell people this funny story all the time but it's so true, I had the light bulb moment when I was pregnant with my daughter, who was my first child, and I went in to see my OB. And, every time I went in for a checkup before I had this baby, they would have me meet with a different doctor who wasn't my OB. And they would say to me, they're like, "Look, we don't know which doctor's going to be on call when you give birth, and we want you to be comfortable with all of the doctors and we want them to all know you and your situation, so that, when the time comes, you're taken care of." And I was like, "You know what? That's genius." I don't want to be on vacation having my team, or anyone in my office, emailing me, like, "Oh, hey. This came up," or, "this person had a question." That's not my goal. Right? I don't want to be irreplaceable, I want to be absolutely replaceable.
So, I started trying to "train" the clients, from that point, to be comfortable dealing with Maynur or dealing with Deb or dealing with Shippy, so that our clients don't care. If they have a question, they don't care if I reply or if Deb replies or...and that's the goal is to make it a whole team thing so that you have that flexibility to be in a meeting all day, or to take off on vacation for 2 weeks, and you don't ever have to worry about it. And, like I said, that's probably one of the best things that I ever did. And I know a lot of people like the idea that they're irreplaceable, but I want to be replaceable. I want to be able to say, "Hey, you know what, I'm going to go live in Italy for 3 months and take some time off and not have to worry about it." So...
Michael: Well, and I think you make a really interesting point in how you frame that. I think, for a lot of advisors, there's this feeling of individualized personalized service, which means, "You Mr./Mrs. Client have Debbie, and Debbie will personally attend to all of your needs and concerns. And whenever you've got a concern, just email Debbie and you're going to have this personal relationship with our client service associate that will support you." And we have to put a person on the pedestal as this point of personal connection to the client. Where I think some firms would maybe have a gut response of like, "Emailing [email protected] seems very depersonalized and not as connected." But, as you frame it from the other end, a lot of that is an expectations thing. If you set the expectation, "You're going to have this one person," well, then yes, people expect the one person. When you set the expectation, "Hey, I want to make sure that you get the fastest, quickest turnaround no matter what, and the way that we do that is we've got an entire team that knows your situation, is up to speed, communicates internally so that you've always got someone who gets you the answer you need the fastest," people adapt to that pretty quickly. And if, at the end of the day, if the doctor's practice can rotate the doctors because they're not even sure who's going to deliver your baby and get you comfortable with that, then clients are going to be okay with the team of client-service associates.
Miye: Absolutely. And the thing is everybody does, we use Redtail, because of Redtail, and we are super, super detailed about putting very very detailed notes about everything in Redtail. I feel like everybody on our team does know all of our clients really well. And I'm glad that you brought up that analogy, about the whole doctor's office thing, because I have always really tried to run our practice like a professional services firm. So, for example, no one on our team is allowed to have email on their phone. I leave the office, I don't get client email anymore. And, before the pandemic, nobody took their laptops home, we locked them up in the office and left them there. When we went home on the weekends and on the weekdays, and even if I log into my email and I'm doing some work on the weekend, if I'm replying to a client's email, I schedule it so it goes out on Monday morning. And we're not heart surgeons, right, we're professionals and there's no financial emergency. So, work-life balance has always been really, really important for me and for my team.
So, I'm like, "I don't want you guys working when you're home..." well, these days it's a little different. But like, "I don't want you working outside of office hours. I don't want you getting emails on your phone from clients. I don't want you emailing to clients." If it was your lawyer or your doctor and you sent them an email on Sunday afternoon at 3, are you going to expect a response? I don't think...because I have heard colleagues and other advisors be like, "Oh, my clients have my cell phone number and they can call me anytime and this and that." And, in their mind, that's how they provide great service. And that probably works for them fantastically, but for me, I want to have really great service, really personal service. I want to have a team that is super responsive and knows my clients really well. But we're still, at the end of the day, a professional firm and we're not going to reply to their emails at 9 o'clock at night or Saturday afternoon at 2. But that doesn't mean we're any less...I think it makes us more professional. It doesn't make us any less good or personal, it just means that we're professionals who have families and kids and lives outside of work. And we're still going to provide a great service and be really personal and responsive, we're just not going to do it Saturday morning at 10 o'clock.
How Their Fees Are Structured And How Miye Positions Fees With Clients [58:26]
Michael: And, so, the one piece I'm wondering particularly with this outsourced TAMP structure as well, how does the fee structure work for you? What's the AUM fee and how do you handle a TAMP fee? Like your fee plus the TAMP fee? Or you charge a full fee and then you pay the TAMP out of your fee? What do fees look like and how do you position it for the client?
Miye: So, actually, the way that you can do it I guess with Buckingham is you can have it so that you have your fee and then there's the TAMP fee. And even Advisor Group has their own advisory platform, and that's how their platform works too. But I found out, a long time ago, because it used to be that I would do the math and, if it was cheaper for the client to do it with the two separate fees because they're at a certain asset level, then I would explain that to them and do it that way and blah-blah-blah-blah-blah. But what I found out, at the end of the day, is that, A, clients don't mind paying for good service, first of all, and, second of all, they don't like feeling that they're being nickeled and dimed. And having multiple fees makes clients feel like they're being charged more, and perception-wise, they don't like it.
So, most of the time, we charge one fee and the TAMP gets paid out of that. Just because, again, our mantra is “simple”. And even in the case where, in the past, where I've had clients paying two fees because it was cheaper, I spent a lot of time explaining to them why they were paying two fees and that it really was cheaper. And, again, they didn't feel like it was cheaper. So, most of the time, we try to go with the least expensive but also the simplest fee structure. And, in most cases, that means the client is paying one advisory fee and then we're paying it out of that.
Michael: And what is a typical AUM fee for your firm?
Miye: Typically, up to the first million, we do 1.2%, and then 1 to 5, we do 1%, and then over 5, we do 0.75%. That's our typical structure.
How Miye Developed A Niche Of Working With Microsoft Employees [1:00:10]
Michael: And, so, talk to us now about where do clients come from. Where has it come from that you billed 250 families and 200 million of assets under management?
Miye: Honestly, these days, I feel like they're just crawling out of the woodwork. I don't know if everybody's having this phenomenon, but I always track how many new contacts do we have. And our average rate, for the last couple of years, it's normally about 36 a year, so that's about, on average, 3 new people reaching out to us a month. And since I think maybe about December of last year, November-December of last year, we're literally running at like double that rate. It's almost two a week. And I'm like, "Where are these people coming from?" and some of them are even people that came to us a couple years ago and did an initial meeting and then we just never heard from them again. And now, all of a sudden, they're like...there's always that group at the beginning of January, like, "Oh, one of my new year's resolutions. I'm going to get my money in order to get a bunch of new people at the beginning of the year."
But we get a decent number...people just call us or email us, a lot of them are Microsoft people and they'll say, "Oh, I just started. Everybody said I need to get in touch with your team, our colleague at work."
Michael: So, then take us back to the early days. Because, obviously, our referrals flow a little bit more, once we have a base of clients to refer us and we've been doing this for a while and gotten known in our communities. How did you get clients going in the first year, in the early years when you were getting started?
Miye: It's interesting. When I first started with Woodbury, I was with a small MGA that was called DFC, Diversified Financial Concepts, which ended up being bought by Hartford, which owned Woodbury, at the time, this was a long, long way back. But they trained us, literally from day one, to ask for referrals. But it was the kind of thing where it was like, "Okay, you finished the meeting with the client and you get out a piece of paper and you ask for 20 names." That's how I was trained from day one.
Michael: Okay, so, asking for referrals. But a pretty direct and strong way to ask for referrals.
Miye: Yes, yes. Not like people emailed you because they heard that you were great but that you actually said, "Hey, is there anybody that you know that could benefit from my services?" kind of thing.
Michael: And then you actually slide the paper and pencil...
Miye: You write down names and phone numbers, yes. This was in the days before we could email people, yeah. And it's always been referral-based from day one. I used to have to really literally ask for referrals, which we never do anymore, it just happens. But that's how the business was for me from day one was referrals.
Michael: And, so, how did this whole Microsoft focus come about?
Miye: That was a random thing actually. We had a client, many years ago, she worked at a defense contractor, and her husband worked at Microsoft and he was our first Microsoft client. And, fortunately for us, he's one of those people...you have people that are total cheerleaders for you, and he just became one of those people. And I didn't know it, at the time, he… Microsoft's a huge company, but in the local Reston office, he's very well respected. And I think actually the first person he referred us to was a colleague of his at Microsoft who is even more well respected… very, very well respected at Microsoft, and he became a client of ours. And it was one of those things where he referred a lot of people. He's referred many Microsoft people and many non-Microsoft people. Random things. He went and bought a motorcycle and somehow got into a conversation with the owner of the motorcycle dealership about financial planning. That guy that owns the dealership has been a client of ours for like 5 or 6 years now. So, this guy has referred us to all kinds of different people.
Michael: Oh, it's amazing. He is a very passionate referrer. That's impressive prospecting.
Miye: Right, right. Some guy calls us and is like, "Oh, hey, I sold a motorcycle to a guy who said you're a great financial planner. We really need a financial planner." Talk about random, right? Isn't that really interesting? So, he's a brilliant guy and, again, very well respected at Microsoft. And, so, when he would tell people, at Microsoft, to come and see us, literally they would come. They would contact us and be like, "Well, Steven says that you guys are really good," so, it's like, "where do I sign?" It was that kind of referral.
And that's how it got started. And then, over time, obviously, it just grew. And then we became very very familiar with all of the benefits in the 401(k) and all of that at Microsoft. And then one of our clients ended up being one of the people who runs the training program for the new hires programs at Microsoft. They have a new class that comes in every year from college, which is now called like the Aspire group or something. And she would have us come in and do a presentation every year for the new class about the 401(k) and how it works. Because even a humongous company like Microsoft doesn't do a very good job of sitting new people down and explaining the benefits and the HSA and the ESP and the RSUs and all of those things. So, she started having us come and do a presentation every year. And those clients are mostly really young, don't have a lot of assets. But, so I don't know, we just, over the years, developed a reputation I think. Especially in the Reston office among Microsoft people that, "Hey, if you need help, especially if you want to work with someone who really understands what's going on at work and your benefits and that can also help you with your financial planning in general, then it's a good place to go." So...
Michael: It's a striking thing to me. We often talk, in the industry, about building referrals usually comes from one of two places, either we get client referrals, right, we work with clients who give us referrals, or we have so-called centers of influence. Right? The key influencer people who can drive and refer a disproportionate number of clients in our direction. Which, historically, was in roles like accountants and attorneys and people who themselves see a lot of clients and might generate cross-referral relationships. But, to me, your story makes an interesting point that not every COI has to be an attorney or an accountant, it can be a really influential person, at a particular company, who ends up opening the door for you for more opportunities at that company. Which then leads to more opportunities, which then leads to more opportunities. And then lo and behold, that's a thing in the plurality of your clients or Microsoft employees.
Miye: Right, it becomes its own thing. And, to your point, when you talk about COIs, it's funny because I have never had great success with getting clients referred to me by attorneys and accountants and things like that. And I have ones that I work with and I send them plenty of clients but I have never had a huge amount of referrals coming back my way from that. But I think, like you said, a big part of what we have at Microsoft started with one or two people. And now it has its own /life, but it definitely had its origins in just a couple of people who were just big advocates, who really sent a lot of people our way and got the whole thing started.
Michael: And, so, what is asking for referrals look like for you, at this point? You said you got trained in the, "I appreciated working with you, I would love to work with some of your friends and family," slides over the piece of paper, "If you could just list your friends and family here. Oh, and make sure you put their phone numbers. Don't forget the area code," that whole thing we did so long ago in the dark days. If you've been steeped in this world of asking for referrals, what does that look like for you?
Miye: We don't ask anymore. We don't say anything and they're just...it's crazy, right? It used to be a thing, when we first started with the Microsoft thing, we had a dinner every year for our Microsoft clients. And it was like a reunion for them because a lot of them work on the client sites, so they don't see each other that often. But, obviously, most of them know each other because they've all been referred by each other. So, it was nice at our Microsoft dinner every year, it was like a big reunion for a lot of them, they'd be like, "Oh, hey. I haven't seen you in ages." And I want people to know that we really enjoy working with clients like them because, obviously, you want to replicate your best clients. And our Microsoft clients are clearly some of our best clients. Intelligent people, high earners, very busy, it's a good client profile for us. And we offer a lot of value because we know their stuff really well.
So, I used to make jokes, at the dinner, when I'd get up, at the beginning, and just thank everybody for coming and all that. And I would make a joke about, "Okay..." we filled the room at the restaurant because our dinner would sometimes be like 40 or 50 people, and I would make jokes like, "Okay, our goal is to have to fill up the entire restaurant." So, I think I always, not so much anymore because now we don't see people in person as often, but I always tried to make it a point to make sure that those clients knew that we wanted more clients like them. But I think, when you get into a situation when you have a really good niche and you know that market really well, you don't have to ask anymore, because we don't ever ask anymore, but we get people contacting us every week saying, "Hey, we were told we should come see you," or, "we're looking for a financial advisor. Can you help us?"
Michael: "You're the person. We heard you're the person." Because when you're the person in the community, you're the person.
Miye: Yeah. And it doesn't even have to be like a Microsoft thing. The clients who contact us, who are not Microsoft people, they're just, "Hey, my brother said you guys were great, and I need a financial advisor. So, can you help us out?" or, "our friends," or whomever. Once you have that, just like you said, when you have that reputation, then I guess it just gets easier. I don't know.
It's crazy. I remember talking to somebody, the other day, about just the whole career path. And the career path these days is completely different than the career path was when I first got in the business. But it's just amazing to me how hard you have to work at certain things, at the beginning, and then how you don't really have to later. And it's just such a stark contrast.
How Miye Fosters A Sense Of Community Among Her Clients (Which Also Helps Generate Referrals) [1:09:48]
Michael: It's one of the things we've always observed, and even we see every time we do some of our Kitces Research on this is, notwithstanding all the other factors out there of the things that drive advisor success and how some end out a little bit faster on the success pace than others, the single number one determinant of advisor income is “number of years being an advisor.” Literally just time in the business is literally mathematically the number one most predictive thing of advisor income. Because we just...expertise accumulates and compounds, relationships accumulate and compound, reputation accumulates and compounds. Assets accumulate and compound. Just all of these things add up, that, when you've been doing it long enough with enough time, at some point, a lot of outbound efforts turn very inbound and a lot of growth starts compounding with bigger numbers, because that's how compounding works. And, all of a sudden, the results become very outsized in the out years.
I'm sure you've talked to plenty of advisors yourself over the years who are not seeing the flow and pace of referrals that you are. What is so different about what's going on there? Because we all say, "We give great personalized customized individualized advice to our clients and we have great service," we all say these things, not everybody's getting referrals the way that you're getting referrals. What's different?
Miye: I feel like, for a lot of our clients, they feel like they're part of a group, part of a special group. Do you know what I'm saying? It's like that belonging thing. And I think part of that is client service, part of it is client experience. Not so much this last year, but we do tons of client events, usually like 8 to 12 a year, where 90% of it is just purely social. We do a cherry-blossom picnic every year where we charter buses and get bento box lunches and bus everybody down to the Tidal Basin to have a picnic and eat sushi under the cherry blossoms. And we do pumpkin picking at Great Country Farms out in Bluemont, and we do wine tastings and just fun stuff. A lot of our clients have kids, so, we do a lot of family stuff. But I think that, besides just great client service, I think clients feeling like they're part of something is part of it. And I think, when people feel like they have some kind of experience or some part of a group that they're in, then they think it's a great thing, they want to share it. And I think that's what makes people enthusiastic about...anytime you have a great experience at a restaurant or whatever and you want other people to have that same feeling, or that same experience, then you're going to tell them about it. I think it's that same like, "Hey, this is something really cool and we're part of it," or, "we get to have part of this experience." Some of our clients have gotten to know each other at our client events.
Michael: Because you're actually doing them regularly enough that it's literally like a regular community gathering. And you're coming together monthly...
Miye: Oh, we have people who email us. Yeah, they're like, "Oh, wait, we haven't got the invitation to the cherry-blossom picnic yet. When is it?" Yeah, so, I think that's a part of it. And it's not something that's really easy to put your finger on, but I think that, and then combined with...I'm very much one of those people who figured out...it took me probably 10 or 15 years, but I figured out, somewhere along the way, that people work with you because they like you. And you don't have to be like the typical financial advisor, you don't have to be a certain way that you think people perceive that you need to be. And I think, if you just are yourself and your own personality, assuming you have a decent personality, then people are going to like you for that.
And I think that one thing that our team does really well is that we really show to our clients that we really care. We really, really honestly care about our clients. And we'll give advice that's completely financially going to not be in our best interest but, obviously, if we believe that it's in the client's best interest, for whatever reason...I think clients get a really good sense for that we really care about them in so many different ways, like we show it in many, many different ways. And I think that goes a long way towards making clients very likely to refer us. Because I think they feel that from the beginning and they're like, "These people really want to take care of us and they really care about us." And again, it's a very loosey-goosey thing, but it's a feeling that people have. And I think that's what keeps them here and makes them more likely to send other people to us.
Michael: Well, I'm struck as well because, for a lot of advisors I know, particularly I think ones that have a community of clients they serve, right, like a niche like yours where the clients may know each other as well, or may not, or may or may not want to get to know each other as well because they've already got these other overlaps, that I feel like sometimes there's a fear of, "Will it be awkward if I mix all these clients together and they all know each other and now they'll know that they're all my clients as well and that we share this thing in common?" And, so, just I'm struck that that doesn't seem to be...well, that doesn't seem to be a concern for you, if anything, it actually sounds like the opposite, that that's an asset and a benefit that you're bringing together all these Microsoft employees who are your clients and they're all going to see that they're your clients and that they know each other and that they have this overlap. And that's not a problem or a negative, that's...
Miye: Oh, no, I think it's an absolute positive.
Michael: ...builds the community.
Miye: Yeah, absolutely. Absolutely. Obviously, we never share any information but I think, for our clients, they're like, "Oh, hey, didn't know you guys worked with Miye's team," and they're all excited. I feel like it's a definite plus. And I think the clients that we had that are at Microsoft, people that come and see us, they'll be like, "Oh, yeah, they've been telling us for years that we needed to come and see you and asking us why we weren't already seeing you." And I think that they see it as a positive and we see it as a positive for sure.
Michael: Interesting. So, for all of us who are feeling anxious about that, I guess that may be in our heads or we need to...
Miye: I think so, yeah, I think so.
Michael: We need to get over that because...
Miye: Yeah. I think it's absolutely a positive because I think you want your clients to be so excited and enthusiastic about your team and what you provide that they want everybody to know and they want everybody else to have it too. Do you know what I mean? It's like if you go to an amazing restaurant, you get the best service ever and it's the best food ever, you go tell, "Oh my gosh, have you guys ever been to this restaurant? It's amazing. And, not only was the food great, but they did this and that." You want other people to share it. And, so, I think that's how we want our clients to view their experience with us, where they're like, "Oh, it's amazing. They make my life so much better, I'm so glad I found them, and I want you to have the same great thing that I have." And then everybody's part of this community, "Oh, we all work with Miye Wire's team, it's fantastic," one big happy family.
Michael: Right. Well, because that's part of the thing, right? If you've got a good thing and other people aren't part of it, we...in fact, we want to share and it's not that I share it because I want to help Miye’s firm grow, I want to share it because it's a cool thing. I want to be the one that's known for having found the cool thing. I tell my friends because I found the cool thing, not because I'm trying to help you. Although, in the process, I'm going to help you.
Miye: Right. And it's because they want to help their friends and their colleagues, not because they're trying to help our firm. It's like, "Oh, Miye's team has done so many great things for my financial life. I want my friends and colleagues and family to have the same benefit." That's how I feel like it goes and should go in their head. It doesn't have anything to do with helping my team, it has to do with helping their friends and their colleagues...
Michael: So, you don't do that whole, "We get paid in two ways. The first is the fees you pay us and the second is the referrals you give to your friends and family.
Miye: No. No, we want them to be so enthusiastic about helping their friends and family that they're sending them to us.
What Surprised Miye The Most About Building An Advisory Firm And The Low Point Of Her Journey 1:17:25]
Michael: So, what surprised you the most about building an advisory firm, over your career?
Miye: What surprised me the most? I think the first thing is what we just talked about, how, after a certain period of time, it's not that you don't have to put the effort in...because absolutely, you work hard every day, but the things that were the hardest for you "way back when," you don't even think about them anymore. And I feel like it reverses itself. At the beginning of my career, I worked so hard and made so little money. You know what I mean? And I still work hard but it's so different now. The things that stress me out before, it was like, "Where's my next dollar or my next client going to come from?" and now it's like, "okay, how do I make sure we have the bandwidth on the team to handle all the work that's coming in?" It's such a different place to be. And the thing that stressed you out the most, trying to find clients, is now something that you don't even have to think about. They just come. That never ceases to surprise me.
And I remember I used to have conversations about it where I was like, "Sometimes I would feel guilty, oh, it's almost like..." not like it's too easy but it is too easy, in a way. And then I have to remind myself, "Okay, there were many many years where I was working every weekend, nights, driving in people's houses, doing whatever literally to make less than $20,000 a year," when I first started in my career. So, it's not like I didn't put in the work and the energy and the effort and the whatever at the beginning. But it does always amaze me how, like you said, just by being there and doing it, it just gets easier and easier. So, that definitely doesn't go by unnoticed.
Michael: So, I guess just the reminder for everyone that's in that earlier stage, when you stick with it, it does get easier. Right? The whole nature of compounding is it never looks like it's going anywhere when you're early in the compounding phase because those compounding elements are so small early on. But, at the later stages of compounding, big numbers get bigger really quickly.
Miye: Yeah. And in an amazing way, it never ceases to amaze me.
Michael: So, what was the low point for you through this journey?
Miye: I don't know that there's a single low point, I think, to this day, what I struggle with the most is managing the team. For me, for my personality, even though I have amazing team members and I love them so much and I always feel so lucky to have them, I still struggle with...managing people, staff team is not my forte. And even to this day, it's something that I really struggle with. And I think that's always been...there are so many days where I'm like, "I just want to do my work. I just want to work with my clients or answer my emails or whatever," and always training, and hiring new people, and succession planning, and just all of those things that come with running a business and managing a team will always be difficult for me. And I think that's never going to change.
Michael: But I guess that's part of the appeal for you and everything, from what a broker-dealer platform provides to what a TAMP provides, it's not literally the in-source versus outsource as it more cost-effective to hire and train the staff versus having it done externally, it's, "My practice got bigger, so there needs to be more people doing more things. I just don't want to hire them and manage them and train them, so y’all deal with this.”
What Miye Would Tell Her Younger Self An What Success Means To Her [1:21:00]
Michael: So, as you look back, what do you know now that you wish you could go back and tell you from 20-something years ago when you were getting started?
Miye: I think two things. I think one is the point that I made a few minutes ago about...when I came in the industry, it was 30 some years ago. It's still a very male-dominating industry, but at that point, I would go to broker-dealer conferences and I was a 21-years-old female in a room of like 800 50-plus white males. Woodbury is a Midwest firm, so, very stark stereotypes. But I tried really hard, in the beginning, to “fit the stereotype.” And it was difficult because I was in my 20s, and a lot of the prospective clients I was talking to were like, "My kids are older than you are," which was true, they were. Right?
So, it took me a long time to figure out that I should just be myself. Right? Just be true to yourself, show your true colors, don't try to be stuffy and professional or talk the talk and walk the walk. Just be yourself. And if clients, in my mind, can see and feel that you really care and that you're doing good work and that you're a trustworthy person, which is something that comes through in your personality, then that's what's important. And clients work with you because they like you, and it's for who you are, it's not for who you think you should be or who you're trying to be. So, I think, if I could've figured that out faster, I think that would've been better. I wouldn't have wasted a lot of time trying to be something I wasn't.
Oh, and then the second thing was I used to take, for every client that left or somebody who didn't use my services or whatever the case was, I used to take it really personally. And now I understand so much better that there's nothing logical about people's relationship with money. Right? It's all about emotion and it's all about how you grew up and what happened to you in your childhood and your relationship with money. And it's complicated, and it's personal and it's emotional. And now, if it doesn't work out with a client or somebody decides not to work with our firm or we end up firing a client or whatever the case is, I never take it personally anymore. And if it doesn't work out and a client decides to leave, for some reason, I always tell them, "Look, you need to do what you believe is in your best interest." And we're not going to be the right fit for everyone and I need to...it's very freeing to upfront acknowledge that and be like, "You know what? We're not going to be the right solution for everyone, and that's okay." And we're going to choose to say no to some clients and some clients are going to choose to say no to us, and that's good. Right? That's all good. Because life is too short to work with people who aren't a good fit or that cause you stress or whatever. Work with people that you enjoy, who see a benefit from what you do and who value it.
And I think a lot of us, as advisors, struggle with that because you want to feel like, "Oh, we're so great and our services are great and our products are great and our client service is great and everybody should want to work with us." But it doesn't really work that way. And you know what? That's okay. And I think there's something very liberating about that. So...
Michael: So, any advice you would give to younger or newer advisors coming into the business today about how they can get started on a better foot?
Miye: I think what I would probably say is that, given the way the industry's going, obviously, I think it makes sense to focus on planning and really dive deep into providing value in the areas that you can provide value. And don't waste a lot of time and energy...clearly, we outsource most of our actual investment management because that's an area where we feel like, "Okay, we can outsource it at a good price. It's a great thing for our clients, and it frees us up to do the things that our clients are paying us to do." And I think that's an important thing to figure out. I feel like a lot of advisors who struggle these days are struggling because they're putting themselves out there as investment managers. And I don't think there's a ton of value for clients in that, and I think that's going to continue to be the trend. So, I would say planning first.
And then I think...because I think, for me, what has worked so well for us is really having that great client experience and that community of clients. I think if you can try to build that...and again, I remember struggling reading, over and over again, as a young advisor, "You have to have a niche and you have to narrow it down," and always having that fear, "what? Am I going to exclude people or am I going to have fewer clients because they think I only work with this niche?" And all those things that always run through your head. But then when you actually get there and you have a niche and you realize, "Wow, people are just drawn to you like a magnet because now you are the person for that niche." And it doesn't mean that people that aren't in that niche aren't going to come to you, it's just going to give you something extra. I think getting there faster and building that sense of community or being part of something special around that can be super valuable. And I think a lot of people miss that, and I think it's a much slower road if you don't have that.
Michael: So, as we wrap up, this is a podcast about success, and one of the things that always comes up is just the word "success" means very different things to different people. Sometimes different things to us, as we go through our own stages of life. And, so, as someone who's built what I think anyone would objectively call a very successful advisory firm with several hundred clients and several hundred million dollars under management, how do you define success for yourself at this point?
Miye: I would say two things. One is, I have always really enjoyed working with clients. And, so, waking up...I love what I do and I get up in the morning and I'm excited to go to work and I love my clients and I love my team members. And I think, for me, part of success is still really enjoying what I do. And I think, when the day comes and I'm not enjoying it anymore, it means it's time for me to go. So, having that and also having what I consider to be a really great work-life balance. I raised a family with two kids and did the whole thing, all while building a firm, and was able to do it. And everybody has bad days but I don't feel like I work harder or have more stress than someone who does something in a different kind of career than I do. And I feel like I was able to build the firm because it's my firm and I'm the one who structured it in a way that worked for me and that worked for my life. And when my kids were young, I worked from home and did my client meetings around my schedule, and that kind of thing. And to this day, having a good work-life balance...when things get busy, you do extra work, but for the most part, I feel like...like I said, I'm not working...some of my Microsoft clients, I look at how they're working 9 o'clock at night or weekends or whatever. And, most of the time, I'm not. I'm choosing when I'm working, and when I'm not working, I'm not working. So, that, to me, is part of my success definition.
And then I also remember, when I was much earlier in my career and I think I maybe only had one or maybe two people on my team, when I first started, I didn't have good salaries and a 401(k) with profit sharing and health insurance for my staff. And I remember setting a goal, at that time, and I was like, "I want to get to a million dollars in revenue because I feel like, when I have a million dollars in revenue, I can have a nice office space, I can have good health insurance for my team members, I can have a good retirement plan with benefits." And I felt like I could have a, quote, legitimate business that I could build with team members. And that was a goal that I had and I feel like getting to that was...for me, it was where I feel like, "Okay, this is a legitimate business and I have good benefits and a good structure and it's a company where people would want to come and work." That was a big deal to me. I didn't want to be like the advisor with an assistant thing, that wasn't my goal.
And I want the firm to live on. I have a great succession plan in place. We have tons of clients who are in their 20s and 30s, I have no doubt that, when I'm long gone, the firm will still be here and will still continue on for, hopefully, generations after I'm gone. And that was a big goal for me. And having put that into place and having great confidence that the firm will continue after I'm gone is another thing that I feel good about.
Michael: Very cool, very cool. Well, thank you, Miye, for joining us on the Financial Advisor Success Podcast.
Miye: Well, thanks for having me.