Welcome back to the 199th episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Morgen Rochard. Morgen is the founder of Origin Wealth Advisers, an independent RIA based in Austin, Texas, that oversees nearly $35 million in assets under management for 25 affluent clients. What’s unique about Morgen, though, is her barbell approach to doing good, with a focused practice that deliberately works with no more than 30 clients at a time.
Which, at a minimum fee of $12,000 per client, allows her to generate $300,000 of revenue working only 10 to 15 hours a week so that she can both raise her family as a 30-something mother and create a book and a podcast to also help the masses that can’t afford her high-service solution. In this episode, we talk in-depth about how Morgen has structured her advisory firm, why she deliberately crafts an approach of working with just a small number of high-value clients to whom she can provide a high-touch service. The reason she structures her fee based on net worth but views investment management as an essential service in the solution, and how she structured a financial coaching business to be entirely separate from her RIA entity.
We also talk about Morgen’s actual financial planning process with clients – why she structures her financial planning approach to start first with what’s important to the client, and second, about what’s important to financial planning itself, the way Morgen has integrated financial life planning into an initial three-meeting process with clients, why Morgen’s focus with clients in their 30s and 40s is all about what they will accomplish in the next 12 to 18 months and not 20 to 30 years out for retirement, and how Morgen’s shorter-term approach has fueled her financial planning referrals.
And be certain to listen to the end, where Morgen shares her own journey through the financial planning industry. Why she felt she had to go back to get her CFP certification despite already having her CFA marks, the way she rigorously structures her days and weeks to stay focused, and why Morgen’s secret to hyper-efficiency is all about deliberately scheduling less time than she thinks she’ll need to accomplish a task, and then challenging herself to get it done in that limited time window, anyway.
So whether you’re interested in learning about why Morgen decided to limit her firm to no more than 30 clients, how she uses George Kinder’s Three Questions with her clients as part of her “Vision Meetings”, or how she structures her week to maximize her productivity, then we hope you enjoy this episode of the Financial Advisor Success podcast.
What You’ll Learn In This Podcast Episode
- What Morgen’s Firm Looked Like Getting Started And Her Other Business Ventures [05:04]
- What Morgen’s Firm, Origin Wealth Advisors, Looks Like Today And The Clients She Serves [10:04]
- The Fee Structure That Morgen Uses And How She Calculates Her Clients’ Net Worth [14:41]
- What Morgen’s Client Onboarding Process Looks Like [26:57]
- How Morgen Structures Her Client “Vision Meetings” [36:39]
- How Morgen Helps Her Clients Set 12-18 Month Goals [41:50]
- How Morgen Transitions Her Prospects Into Clients [46:29]
- What Morgen’s Ongoing Financial Planning Process Looks Like [50:48]
- How Morgen Uses George Kinder’s Three Questions With Her Clients [58:52]
- Morgen’s “Money Owners” Podcast, Her Coaching Program, And The Other Projects She Is Working On [01:07:18]
- What Morgen Will Be Focusing On Going Forward [01:16:48]
- Why Morgen Keeps Her RIA And Her Coaching Business Separated [01:21:37]
- How Morgen Attracts Her Clients [01:24:59]
- What Surprised Her The Most About Building Her Advisory Business And How She Structures Her Week [01:34:22]
- What The Low Point Was For Morgen And What She Wished She Knew Starting Out [01:42:21]
- The Advice That Morgen Would Give New Financial Advisors And How She Defines Success [01:48:04]
Resources Featured In This Episode:
- Morgen Rochard
- Origin Wealth Advisers
- Money Owners
- Money Owners Podcast
- Personal Finance QuickStart Guide: The Simplified Beginner’s Guide to Eliminating Financial Stress, Building Wealth, and Achieving Financial Freedom
- XY Planning Network
- eMoney Advisor
- Registered Life Planner (RLP)
- Life Planning For You
- Episode #15 of Financial Advisor Success with George Kinder
- The Importance Of Creating Small Financial Planning Goals
- FA Bean Counters
- Fee Only Network
Michael: Welcome, Morgen Rochard, to the “Financial Advisor Success Podcast.”
Morgen: Thanks so much, Michael, I’m really excited to be here.
Michael: I’m excited to have you on and talk about what I feel like I’m starting to see as a new theme around how some advisors craft their firms. It’s something I’m starting to call “the barbell approach.” Maybe you could help me, today, come up with a better name for it. We’re all familiar with, sort of, the barbell image, right? Like the thin bar and the two big lumps on either end. Here, we often talk about that and things like making bonds…bond portfolios with the barbell approach of very short and very long duration.
And I feel like I’m seeing a similar phenomenon start to occur with certain firms that take a similar approach to how they try to help consumers and serve the marketplace. And at one end of the barbell, you have this subset of usually fairly affluent clients that pay some pretty good fees, do a lot of work for them, deliver a lot of value, but run a very profitable practice from it. And then at the other end of the barbell – because we now have a small subset of high-value clients that pay very well and can really drive the business within a limited amount of time – at the other end of the barbell, then, we can go do broad good.
I’ve seen people do it with coaching, and courses, and podcasts, and content sites, and all these different things that are built to be ‘one-to-very-very-many’, very broad-reaching, often with people that pay very little or may pay nothing at all or may not even be able to afford to pay an advisor. But the math works because we’ve got the other end of the barbell to balance it out with this subset of high-value clients.
I’ve seen – kind of from afar – as your firm has been building that you have moved yourself into, I think, this kind of barbell approach as well with a focused practice of high-value clients, and then this sort of large ‘doing good’ arm that’s reaching out there as well. And I’m just fascinated by both the evolution of it and kind of the strategy of it, to say that you want to build this way, and then be able to have the focus to do it. So, looking forward to the discussion and would love to just, in kicking off, have you share a little bit about the spectrum of what you do. What are all the different things that Morgen does?
What Morgen’s Firm Looked Like Getting Started And Her Other Business Ventures [05:04]
Morgen: All the things I do? I mean, I do quite a lot. How much time do we have?
Michael: We’ve got a little while, we can just tuck in and get ready for the ride.
Morgen: So my firm started six years ago, and it wasn’t…it definitely wasn’t the barbell approach, right? I didn’t have any money; I didn’t really have any clients. I even moved in with my parents to make the math work so that I could have an extended runway to get my firm running up for two years, and I pretty much did everything that I advised my small business owners to do. Cut your expenses as much as possible, and then just try to drive revenues in really any way that you can.
And that was…it was successful at the beginning, for sure. I was able to take on clients. But they weren’t really the right clients for my firm. But I kept them on, right? Because for the most part, I still needed some income coming in to get the business kind of going. And so my firm, over the last six years, has made many, many different changes and evolutions to be what it is today, and then to finally be its…well, not in its final form, but the form it is right now where I have a successful financial planning practice and I also have a second business that does coaching, has a podcast, is releasing a book, and I guess doing all the things about the barbell approach that you just mentioned.
But really it was, there was a change in my mindset around year three where I realized that if I didn’t raise fees and didn’t start going after the clients that I wanted to go after, then I was going to drown, really, and then I was going to be pretty unfulfilled in something that I found super fulfilling. It was a lot of, I guess, ‘soul-searching’, for lack of a better word, just because I didn’t want to go back to working at these large…at the large firms I had been at. I worked at Merrill Lynch for a couple of years, I was also at UBS for a while, and I like the work, I just didn’t like where I was doing it, and so it made sense for me to start my own firm.
And there are actually…there are certain things about that model that make sense that at the time when I first started my firm, I didn’t think were true. And one of those is actually going after a higher…like a higher net worth client. And the more I focused on that and really trying to add – not the Merrill Lynch kind of value – but real true financial planning value for these clients, the more I realized I can charge a premium for that service and serve just a really good group of clients who I love and who love me and who I can be really close with.
And my practice is now super high touch. I talk to my clients at least three times a year, sometimes four. They pretty much have access to me whenever they want, there are emails all the time, there is texting, there are phone calls, there is off schedule stuff that happens. And I can do that because I only have 25 clients in my practice, and I probably will never have more than 30 clients in my practice, and that’s by design.
And that took, really, the last three years of me honing everything that I was doing and making sure that I was picking and choosing who I really wanted to work with to create what I have today. And on the other side of that is, my other business, which is Money Owners, and that was like…it’s like a need I had where I realized I couldn’t serve that many clients in my financial planning practice while still having the time to be with my family and spend the amount of time that I wanted to spend with my clients, while also reaching a wider group of people.
I feel like I have a lot of good knowledge and things to share with, really, the world, and I wanted to do that in a way where I could reach as many people as possible. So, out of that, my podcast was born, and also my coaching practice, because the other thing I realized was that people would come in for financial planning, but they didn’t actually need financial planning, they just needed a little bit of coaching to kind of get themselves on the right track.
So, people who come in through Origin maybe who find me on NAPFA or find me on XY Planning Network who really aren’t a good fit for Origin Wealth Advisers, I always mention Money Owners, and I say, “Hey, look, I’m not trying to sell you on anything here, but I do offer this other service that you’d be really great for. And I like you and want to work with you. What do you think about that?” So, that’s kind of how that all came about, and that’s a lot easier for me because there are no compliance headaches behind the scenes in that practice.
I don’t have to report on those clients, it’s not like the same RIA had an overhead that we all have, and it’s just kind of a really simple way to disperse knowledge to people who really need it and want it.
Michael: And very cool, very cool. So, I’m really curious to dig further on kind of both ends of this barbell. Let’s start on Origin, which is on the advisory firm side, and what you’re doing there. So you said 25 clients.
Michael: Which I would imagine perked up some years of… Is not a huge number, right? We know advisors out there have dozens, hundreds, or once in a blue moon, 1,000 clients. Probably most of them they haven’t talked to in 10 or 20 years, but we tend to accumulate a lot of clients. So talk to us more about this focused 25-client practice.
What Morgen’s Firm, Origin Wealth Advisors, Looks Like Today And The Clients She Serves [10:04]
Morgen: Yeah, so I have 25 clients, my median fee is about $12,300 per client, and net worth is usually around $2 million. Somewhere around there is average net worth in my practice. I’m going to gross $300 grand this year, and I only work…I really only work, on average, about 10 hours a week. So on a net basis I will…I’ll basically make $400 an hour – an actual $400 an hour when I’m working – which is really nice.
That’s actually the metric that I always use in my practice. It’s like, “Okay, what’s my true hourly rate after expenses?” What’s the rate that I’m reporting for tax purposes, basically. And that number really matters to me because that number shows really…to me it’s like…that’s the golden number because it shows me how hard I’m working and what I’m receiving in exchange for that. And when that number starts to go down, I realize I’m putting in a lot more hours, and then I start to reevaluate whether or not those hours are things I want to be doing, or if there are things that I could be outsourcing, or if I need to actually bring in a new client to raise my hourly rate.
So these are all kinds of things that I think about. I have a relatively young practice. The median age of my practice is 41 years, and I have really tightknit relationships with all my clients. So I’m the…one of the first calls when a client is pregnant, or they want to buy a new home, or they’re getting married. My husband and I have gone to clients’ weddings where we’re part of the family, it’s not just, “Oh, this is my financial advisor that I call.”
It’s more than that, and these are really deep relationships that I’ve formed with my clients to the point where one of my clients and I were pregnant at the same time and she gave birth before me, she even gave me a bunch of her newborn clothing because she was like, “Oh, you’re having a son too and he grew out of all this. Here, take this.” And she sent us clothing for the first six months, which is really sweet, and she totally didn’t have to do that. But that’s just the kind of relationships that I have in my practice, so…
And I want to keep it that way, which is the other reason why I focus on my hourly rate and how many hours I’m working, and it’s because I want to also spend time with my family. I have a 2-and-a-half-year-old son at home, and we have another baby on the way, and I just want to make sure that I’m also the mom that I want to be, and not just the business owner.
Michael: Very cool, very cool. So, I’m fascinated by this model: 25 clients, $12,000 plus per client. So, $300,000 a year, right? The math is pretty straightforward. But as you’ve noted, for most advisory firms, at the end of the day, the biggest constraint is the number of clients. We service them to varying degrees, and some firms are higher touch than others, and obviously yours is very high touch.
But at the end of the day it’s just the sheer number of clients is the biggest driver on time limitations for most, and so when you’ve got this structure of, I’m simply focusing on 25 high-value clients, $300,000 of gross revenue is higher than the average, and I think every single independent broker-dealer except Commonwealth, who’s a little bit higher than that average. So, you’ve got 25 focused clients that are driving more revenue than literally the majority of advisors at all broker-dealers – I suspect, for RIAs as well, but we don’t have as good data on RIAs and the aggregate – just by getting super focused on, “I’m going to find my 25 great clients”.
Morgen: Yeah. It’s kind of just the function of how long I’ve been around, I think. I think the more years that I get under my belt, the more confidence I get in charging more fees and searching for the appropriate clients. I’ve kind of gotten to a point where I love the 25 that I have, I don’t really feel like I need to add another client, so if somebody’s going to come in and work with me, it has to be a really interesting case and be worth my time.
So at this point, my minimum fee is $12,000, but I almost don’t even feel like taking somebody on at my minimum unless it’s a really interesting, special case, it doesn’t even feel that it’s worth my time. Or unless that person is just really special and we connect really well, right? So, it’s kind of one of those things where it – I guess the habits kind reinforce. The more you do it, the more you keep doing it, and then the more you get into a place where you’re able to really hold the line and say, “Okay, this is what I want for my life and my practice.”
Michael: Interesting. And, well, I guess, sort of two questions. How did you arrive at $12,000 minimum fee, and just what does the fee structure look like? Does everybody pay a flat $12,000 rate or varying rates as you move them over time? How does pricing actually work for you?
The Fee Structure That Morgen Uses And How She Calculates Her Clients’ Net Worth [14:41]
Morgen: Yeah, there are varying rates. So right now, if somebody were to come into my practice today, it’s a flat fee based on net worth, it’s assessed annually, and the minimum fee is $12,000. Two million dollars is my breakpoint, so above $2 million you pay 0.6%, and below, you would pay the flat fee of $12,000. Most of my clients are on a similar structure to that. For the most part, everyone is pretty close to being on that flat fee based on net worth. I have a few left over from AUM when I first started my business where it just didn’t make sense.
It would actually be more expensive to switch them over to the net worth, or we don’t gather enough of their financial planning data to justify doing the net worth every single year and everything like that. So there are some clients who – they came at the beginning because my practice was investment-focused and that’s kind of what they’re here for – and they didn’t really want any more services and we didn’t move them over. For everybody else, they’ve moved over.
When I first introduced the flat fee based on net worth, I had a sliding scale where it started at 0.65% and it started go down as net worth went up, and then I changed that because I just realized it was just too – I couldn’t remember who was…what their net worth was what and what the fee structure was, it was hard for me to explain. And it’s really bad when you’re in a meeting trying to get somebody to come work with you when you can’t even explain your fee structure.
So for me, the most important thing was, how can I keep this simple where I could just say, “Hey, this is what I charge,” and say it with confidence, and take it or leave it? If you don’t want to work with me, great. There are plenty of other financial advisors out there. If you want to work with me, this is what I charge. And that’s kind of how it’s been. So there are some clients who are below the $12,300 mark, and then there are a bunch that are above that too, so the fee definitely…it averages out, of course, but…
Michael: And so when you talk about charging 0.6% of net worth, how does that work? How are you getting to that number? Once a year you go through and update their plan and try to estimate asset values? What happens when they’ve got businesses, or real estate, or things that are not always the easiest to value? What does this look like in practice to actually create a structure where you literally build 0.6% of net worth?
Morgen: Yeah, that’s a great question. So, I’m not about nickel-and-diming people. That’s just not how I do it in my practice. So, basically when a client buys a piece of property, unless we have true data to show otherwise, we pretty much just use the price that they paid. And I do that for a number of reasons. Just because, A., we don’t really know what they would get in the market, B. – right? There are expenses associated with them actually selling their real estate, and C., I never want a regulator to be like, “Where did you come up with that number?”
So, it’s one of those things where we slide the net worth across the table or email it to a client, they agree on the numbers and we agree on the numbers, and then we always round down a little bit. Same thing with businesses. Unless the client has an appraisal on their business, we generally…I just don’t include it because I just don’t want to be in a situation where we’re making up some number and I can’t explain it.
So if that means that my fee is a little bit lower, it’s a little bit lower, but I feel like I’m still charging enough to justify the work that I’m doing and to feel like I’m being well compensated. So I’ve never felt like I’m in a situation where clients are underpaying me just because we didn’t charge on their stereo system that’s sitting in the next room, you know?
Michael: But it’s a really rare boombox from the 80s. You can’t get those things anymore. That’s a high-value item.
Morgen: Totally. I actually do have a client who has those pinball machines that are the vintage pinball ones, and he always wants to always include them in his net worth, and I’m like, “Okay, okay, but you’re going to pay more.” And he’s like, “Yeah, I don’t care, they mean something to me, so we need to…”
Michael: I need credit for my pride of ownership. A high-quality Addam’s Family machine can run you almost $15,000.
Michael: There are some really nice pinball machines out there.
Michael: And so you’re updating this, did you say annually? Once a year you’re trying to go through and sort of peg appropriate values to everything and then put this back out to them?
Morgen: Yeah, exactly. So the idea behind annually is that we do it, anyway. I do it anyway in my practice. I was going to show them their net worth annually, regardless. The difference between me showing it to them and assessing the fee on it is that we have to agree on it, and that there’s usually a little bit more of a back-and-forth of, “Hey, can you look at this? Can you make sure that everything on here is accurate? What do you think about these numbers? I’m super happy.”
I always round down to the nearest $100,000, just because cash comes in and out, so we don’t count the $30 grand that just came in that’s going to go out and go buy something, basically. And we do include liabilities, even a client’s credit cards on the bond there just because they are linked up through eMoney, which is what I use in my practice.
So that stuff kind of changes day-to-day, so I never want a client to feel like we’re doing it to the penny, just because that’s not a really good experience, and everyone always likes when, “Oh, hey, I’m worth $2.85 million.” Don’t worry, I’m going to round you down to $2.8 million. It’s like, nice, here’s a couple hundred bucks off.
Michael: All right, very cool… I think you make an interesting point of just, yes, we all want to make sure we get…we charge our fees and we get paid what we’re worth, and obviously the dollars have to add up to make it work for the business, but there comes a point where you can have, I’ll call it “more complex and precise fee schedules,” but it takes on time, there can be more hassle, and clients potentially even get frustrated when they feel like it’s too aggressive and they’re being nickel-and-dimed for everything.
Or you can just get to a, “Look, I know we’re in the right neighborhood. The math is working just fine. I don’t need to figure out how to calculate, round it to the nearest $50,000 so the nearest $100,000 because, oh, then I can get an extra $172 per client.” There comes a point where it’s working well enough that there is just value in the simplicity, there’s value in, I think as you said, just being able to confidently and easily explain to clients, “Here is how it works. We pretty much always err in your favor, and the values can be so awesome, you’re not going to care.”
Morgen: Yeah, definitely. That, and it’s also that client experience. I try to imagine being on the other side of that of like, “Here’s your net worth. By the way, your fee’s going up.” It’s like, “Aw, man, my net worth went up. Oh, but I’m supposed to be excited about this, you know?” It’s like, it’s not pleasant, right? You’re kind of linking something of what – like charging fees – which has a lot of friction around it, and unpleasantness with something that’s supposed to be really pleasant, like, “Hey, your net worth actually increased by 15% this year.”
So when I had that in mind of how I would want that information to be presented to me, that was kind of how I thought about presenting it to a client. It was like, “Hey, I still want you to be really excited about this, and here is why – because you did all of these awesome things throughout the year and we…” And I usually include certain things in email, like specific things that they did that were really great, so they feel good about it, and then it’s not just, “Hey, I’m charging you $300 extra dollars this year.”
Michael: And then how does it actually work from a billing perspective? How are you drawing out $12,000? Is this paid monthly? Is this paid quarterly? Is this paid annually? Are you doing it from investment accounts? Are you doing it from bank accounts? How do you administer this fee?
Morgen: Yeah, so it’s quarterly for pretty much everybody. I have two clients left on a subscription service that I used to offer that I no longer offer, but everybody else is quarterly. Some clients like to pay it directly from their investment account, so that’s where we do it. Some clients don’t want to do that, they want to use AdvicePay, and therefore I offer AdvicePay as well. I’m super happy to do either one.
I also have clients who – they’re business owners and they pay part of the fee from their business, because we do a lot of business planning, and it just makes sense because they could deduct it. So we’ll do that, I’ll do that as well where maybe the client will pay part of it from AdvicePay just because they’re paying it out of their business and they’ll pay the rest of it out of their investment account.
Morgen: It’s not scalable, right? It’s not like the advisor who has 1,000 clients and they’re just deducting the AUM, there is a little bit more thoughtfulness, especially because the fee changes every year. So I have a process in my CRM that my employees know about, and we have basically a workflow of what happens when the fee is going to change. Because basically, if we assess net worth every year for somebody on, I don’t know, July 7th, let’s just say, we have to make sure that every year on July 7th we are assessing that net worth because I don’t ever want a client to think I’m cherry-picking a date, for starters.
I also don’t want a regulator to think that, so we just do it on the anniversary every single year of the first net worth. And then also, we have to have in our CRM basically when the next fee is going to be charged, because sometimes the fee will get assessed, but for one reason or another they might have one more quarter that’s left on the old fee. So, we don’t want them to pay three quarters on the old fee and then one quarter on the new fee because that’s not the right way of doing it; they were supposed to pay that fee – previous fee for a year.
So there are certain things in there, it’s not so simple, and it does take time, but because we have processes in place… I don’t think about it that much, but the processes did take time to get into place of like, “Oh, hey, I’m looking up the same thing 100 times, maybe we just need a workflow for this.”
Michael: Right. And so you’re not necessarily…not all clients are necessarily on an annual cycle because they’re actually running…starting on the anniversary date from when they joined you and then going forward on those anniversary dates.
Michael: Is that just when you reset the net worth, or is that literally when you bill? So different clients are getting billed on different days or different months throughout the year, because it’s all based on their anniversary dates.
Morgen: So, clients all get billed on the same schedule, it’s basically just a quarterly January, April, July thing. Yeah, July? Yes, July. Sorry. Mom brain, you know? October, and then…but the net worth might be assessed in between those quarters. So sometimes it creates just a little bit of an overlap depending on when it is, that the new fee might start the following quarter after that. And then also, when people join my practice, they pay the first quarter upfront, so it doesn’t matter when they join.
Let’s say they join in November, even though technically the first quarter would be a shortened quarter, they still pay the full quarter upfront. We actually discount or rebate the fee back in the second quarter that they would pay. So they would…they pay when they first come in, and then they pay six months later, the smaller portion of the fee that makes up for that smaller period of time that they were in, that way they can be on the…an annual schedule with everybody else. Otherwise, it honestly would be, I think, a nightmare.
Michael: And so rather than trying to prorate the first quarter’s fee in real-time and then you’re like, “Oh, shoot, it took them an extra week to do the paperwork, so I’ve got to adjust it by another week’s worth,” you just bill the first quarter upfront, and then the following quarter, do the true up of, “Hey, you were actually 72 days into the quarter, so next quarter we’re only going to bill you for the last 18 days.”
Morgen: Yep, exactly.
Michael: And get them back into sync.
Morgen: Yeah, because I found doing it the other way, it would – for exactly your reason – maybe they didn’t sign the contract on the exact…on that date or whatever that we originally thought that they were, and then the fee’s not right, and then I’m adding it the next night. It’s just…it was a headache.
Michael: Interesting. And do you get anyone that balks at that…? You’re not talking about writing a check for $3,000 plus upfront first quarter’s free out of the gate. Do you get any pushback or concerns from clients about, why do I have to do that…so much upfront?
Morgen: Generally, no. No, I haven’t. I had one client where it just didn’t make sense because she had gotten her money from a settlement, so she didn’t actually have money to pay her first quarter’s fee, so we just charged her like we normally would, but with the exception of that… Again, I’m not here to make a client’s experience terrible, so if it really doesn’t make sense for them to pay the upfront quarter fee, we’re like, we don’t do it.
I do like to do that, though, because it kind of gets the fire going. Once you pay, you’re like, “Oh, I’ve paid, I need to start sending my stuff.” Otherwise, what I found without doing that is that you might sign up a client, let’s say, I don’t know, in March, but they don’t send anything until October.
Michael: So talk to us a little bit more, then, about what happens when a client comes on board. What are you doing for a minimum fee of $12,000 a year? What does that process actually look like for them?
What Morgen’s Client Onboarding Process Looks Like [26:57]
Morgen: Yeah, so I recently got my registered Life Planning designation, so the process has changed, for sure, for new clients coming in, they all go through the Kinder process now. So the first call, though, is a 30-minute call with my employee, who is a financial planning associate, and he basically screens all the prospects now. So, when somebody comes in, they talk to him first for a half hour, if he thinks that they’d be a good fit for the practice, then they talk to me for either an hour and a half or two hours, depending if it’s a single person or a couple, and they go through the exploration process like George Kinder intended them to, where it’s really open-ended. I barely talk.
It’s a lot of asking, “Anything else? Anything else?” You know? Really just letting them focus on what they want to get addressed and what’s really important to them, and giving them enough time and space to really come up with all of the things. And then after that, they get Kinder’s three questions to answer at home, and in the second meeting, which is vision, we read them together, and then I present them with a vision. And that is usually…it’s so…it’s such a magical meeting. Honestly, I love that meeting so much.
It’s funny, because I was so nervous about doing the first couple, just because I hadn’t really done it before, but now it’s like – my favorite thing is delivering the vision, just because you could see it on the clients’ face. You’re just telling them exactly what they told you, just in a more descriptive way, and it really gets them excited about what it is that they want to do.
Michael: So help me understand just the flow here. You’re asking them all these questions of…in the first meeting of just, “What do you want or what are you trying to accomplish?” And I guess just more about them, “Anything else? Anything else?” You’re giving them Kinder’s three questions as homework. So then they send that homework back before the next meeting, or they bring that homework with them to the next meeting?
Morgen: Yeah, so there’s a little portal that George Kinder offers that we use, it’s called Life Planning for You, and they literally fill it in in the portal and you can assign the different exercises in there, and I like that also because I can see it, and then I can review it before a meeting. I’ve had it be, though, where a client just…they didn’t do it, and then we did it live. So, I don’t like to shame a client if they don’t do their homework, you know?
So I think it’s a more powerful experience if clients are willing to do it on their own, because when you’re sitting there with your thoughts and you’re actually writing it down, you generally…you get more out of somebody than if they’re just sitting there kind of telling you off the top of their head, “Oh, this is what I would do if I had all the money in the world. Oh, this is what I would do if I knew I was sick. Oh, this is what I would know what I would do if I had one day left,” you know?
Or what I’d miss out on. It’s a little less powerful than when they read the question and they’re like, “Oh, what would that be like for me?” So in some regards, if they don’t do it, they don’t get the full experience, but it still…we can still do it, for sure. And, yeah, that is actually something that I had talked to Louis Vollebregt about because he was my mentor in the program, and I had canceled a meeting with one of my clients because she didn’t do her homework, and he was like, “You don’t need to make it such a big deal. If they don’t do it, be empathetic. They probably had a reason why didn’t do it.”
And I’m like, “Oh, right, of course, empathy. That’s what we learned. Like he goes, ‘Let’s be empathetic when somebody can’t do their homework.’ Ah. It’s not about me, it’s about them.” And that’s kind of the biggest thing I think I…the biggest takeaway I’ve had from Kinder in general – it’s like, it’s never about me, it’s always about the client. And I think that my practice has always been about that, but it took it to a new level of, this is really about the client and everything…we have to really be empathetic with…
They have busy lives just like I do, you know? They have other things that they want to do besides financial planning with me. They don’t necessarily want to gather their documents and do all these things that are really kind of a heartache, and uncomfortable, and make them have negative feelings about the things that they were previously doing with their finances. So, yeah, I think I sort of took your question off the rails, but…
Michael: No, no, I think it’s good. I think it’s powerful just reflecting, be careful when we get caught up sometimes in the homework of, ask clients to gather this information, bring it in. They don’t bring it in, so I tell them, “We’re not doing the meeting because, hey, the meeting’s not going to be productive so you didn’t give me the data that you need,” without, I think as you put it well, reflecting… They did hire you, they were going to go with this somewhere. If they didn’t do the homework, maybe there’s something else going on that actually would be good to talk about.
Michael: Like, why? What’s going on? I still remember an early – very early client situation that I’d had had with someone. Was supposed to be doing planning work for them, and they didn’t send in the data-gathering material they were supposed to send. Said they were going to and didn’t. Said they were going to and didn’t. Said they were going to and didn’t. It dragged out for two plus months. Finally ended out getting them on a phone call, just trying to find out what’s going on, and it turned out she was almost in tears because they were so not organized in their financial life, which was part why they needed a financial advisor.
She was so not organized in her financial life, she couldn’t find the information. She just literally had no idea where her own stuff was, where her own money was, and the fact that we kept asking her made her feel humiliated. Because apparently everybody else just fills out this form, but I don’t know where my stuff is, so apparently I’m horribly bad at this stuff and probably shouldn’t even work with an advisor and should just go hide in my hidey-hole of shame.
And so she didn’t want to talk to us, interact with us at that point because she was so embarrassed that she was financially disorganized, when the whole point of the process was to help her get more organized. But we got so stuck on the, “You got to fill out the form and get the form back to us so we can get the numbers in the planning software and do this thing,” that we sort of missed, hey, maybe if the client seems to be dragging their feet after they said they wanted to work with us, maybe something else is going on, and that might even actually be the more important conversation.
It made me way more understanding for all the different reasons that clients don’t do the homework and get us their information. And often, that’s actually where the real planning conversation is, the first planning conversation is.
Morgen: Totally. I’ve also noticed – I mean, I have clients who are super busy. Right? Basically, I feel like if you look at my practice; it looks a lot like me. They are people with families, and they’ve got businesses, and they’re running around like crazy, and they’re trying to get it all done while still having balance and also wanting to have a good financial life. Right? So, there were some clients that I just know they’re never going to be prepared for a meeting, we’re never going to get stuff in advance for them, so the meeting is about getting the information. It’s a good time for them to just set aside and then, you know what?
So we’ll get them a plan later on. So I’m not delivering it in the meeting, I’m delivering it via email, and then asking them if they want to discuss it in a…just a quick phone call because they don’t have time for another meeting. And I think that’s kind of the beautiful thing about having 25 clients; it’s like, I know who those people are, and I know how to deal with them, right?
Morgen: And also, I can take that time because it’s like, okay, so fine, so I don’t do prep work before the meeting but I have…I know I have more stuff to do after the meeting. And that’s just the way it is. And we have that for really a lot of clients because they don’t always send us in advance what it is that they want to talk about at that meeting, we always ask, “If there’s anything on your mind that you want to add to this list, please do.” And sometimes they don’t send it in in advance, sometimes they just come with it. And that’s okay, because we have a…I have plenty of time to do that stuff for them.
And I think that’s kind of…that’s really a nice thing, and definitely a huge value add, because if you have so many clients, you just can’t do that. If they don’t come with the stuff that you are prepared to do in that meeting, that’s all the time they get, and that’s kind of it.
Michael: Why, that’s the distinction, right? If you’re trying to get to your $300,000 of revenue by doing 200 clients at $1500 a plan, the trains have to run on time. Everything has to run like a well-oiled machine because you don’t have a lot of room for additional time and things to extend out when you are trying to drive the same revenue from 25 clients doing $12,000 each, and now you can make the math work spending 20 hours per client, not trying to figure out how to cram it down to 5 hours per client.
All of a sudden there’s a whole lot more flexibility to say, “Hey, if this is where the client needs to go and what they need to do, that works for them. You know what? We can totally make that work.” You know, if they can’t find the time to gather the information so we’re going to make our meeting the meeting where we actually get the information – okay. Okay. That’s a good outcome. The client will exit the meeting feeling more organized than they were when they came in, so it’s positive.
Morgen: Definitely, yeah. And then also, because I have an employee who helps and who comes in all the meetings and everything now, and clients are starting to get to know him but they don’t always copy him or include him on the loop and stuff. But it’s fine, right? Because it’s, I have 25 clients, so if somebody sends me something and they don’t want to include Mark, I just send it to Mark, I don’t chastise them for not having included him. There are certain things that are…it makes everybody’s life easier, and it makes it a more pleasant experience when you’re able to just spend the time, even behind the scenes, even if a client doesn’t know that you’re doing it.
Michael: So now talk to us a little bit more about this vision meeting. At least for the subset of clients who do a reasonable job on their homework and go through the Life Planning process and get you this stuff in advance, so what exactly are you building up to and delivering at this second meeting?
How Morgen Structures Her Client “Vision Meetings” [36:39]
Morgen: Yeah, so I actually read their three questions back to them, and they usually – when you read a client’s words back to them, they reflect on those words. So they’ll add things, which is really nice. So maybe they only put, I don’t know, 10 sentences on the page, but if you stop after every single sentence, they’ll add something – a little bit here, a little bit there – and the next thing you know, you have the whole picture of what’s going on for each of the questions for them.
And then after that, I have a really good idea of like, “Okay, here is the vision that I want to present to you.” The thing that’s nice about the three questions is that it takes everything from exploration – like all the things that they listed that were important to them – and it kind of…it creates a funnel, really, for the client in and of itself, where the client really starts to prioritize, “Okay, yeah, maybe gardening’s really important to me, but actually spending more time with my children is more important than me being out at my garden by myself.” So just an example, I don’t know.
Maybe for somebody else, it would be vice versa, right? But that funnel kind of happens when they go through the three questions because the first one kind of lets them dream a little bit more and cast the net even more widely because they have all the money in the world. But then when you start to constrain down the time, once time is the limiting factor, all of a sudden the things that are really important to you start to really come out. And when I did these questions myself, I noticed that for sure.
And I even had a conversation with my husband when I got home from the training, and he read my questions, and he was like, “Well, in question number 2 where you only have 5 to 10 years left to live, you put ‘Spending more time with the kids.’ You didn’t really put anything about your business in here.” And I was like, “Huh. Yeah, you’re right.” And he’s like, “Well, the kids, they’re going to grow up. You really only do have 5 to 10 years with them whether you die or not, you know? Of this age.”
And when he said that, I was like – it was like a light bulb went off in my head. I was like, “You’re so right. Yeah, you only have a limited amount of time with your kids at the age that they’re at.” Obviously, you…we all hope to live a really long life, and that our kids do too, and that we know them for 60 plus years, but you don’t get to know them… You want to make sure that you spend the time knowing them at every stage in their life. That’s the nice thing about constraining down time.
And I’ve seen that over and over again with clients when they go through this question, it’s like, once time is a limiting factor, did…the thing that’s most important always comes out, and then that’s the thing that I present to them in the vision because that’s the thing that they want to be working towards rather than all that other stuff that kind of gets in the way.
Michael: And so the idea is, your…you’re trying to put…weave together their stuff into a vision of what you think they want to work towards that, hey, and if I’ve got this right, then we will work toward that together? Is that a good way to frame it?
Morgen: Mm-hmm, yeah, of like, I’m just…I don’t know, let’s say traveling to the top of Machu Picchu, and then also playing the guitar up there, and learning the guitar – even maybe somebody who doesn’t know how to play. It’s like, that’s their vision, their dream, so we come up with a way to give that to them, basically, in the next year to 18 months. And then when you know that that’s something that’s on your horizon of, okay, I want to learn the guitar and I want to be playing it on top of Machu Picchu in 12 to 18 months…
Michael: Or bring it together, we can play the guitar to the top of Machu Picchu and…
Morgen: And learn up there, right?
Michael: …strum while we’re up there, absolutely.
Morgen: Exactly. Then you know, okay, this is what I have to work towards. And if you present it in a way where the client can really even see themselves up on that mountain with the mist, and the clouds, and maybe the beautiful blue sky, and they’re looking out there and they’re holding their guitar. Right? And you maybe even include a smell in there – now they’re there, and now they’re excited, and now it’s something that they really want to work towards.
And I found that if you can boil that down into something where you present that in 20 to 30 seconds, then it’s even better, right? Because we have short attention spans and we don’t want to listen to somebody telling us a long-drawn-out story about something that may or may not happen to us in a year. But then the client is seeing it and they’re kind of even living it in that moment, and then they get the energy from that of like, “Oh, I want that. Okay, what do I need to do to get that?”
So after that meeting, I always say, “You got to live in that moment and really imagine yourself being there. Don’t think about all the stuff that’s going to get in the way, we’re going to address that at the next meeting, but really just imagine what it would be like for you to live like that for the next two weeks until we meet again.” And I’ve noticed it’s sometimes hard for clients to do that, but if they really want it, they will think about that vision basically every day, and until they meet with you again.
Michael: So, it struck me that as you were talking about this and setting this vision, I feel like for a lot of us – under the traditional way that the advisory industry does this – usually this vision essentially culminates in some form of retirement, and walks on the beach, and Adirondack chairs, and lighthouses, or all the different ways that we visualize retirement and these long-term goals, and I’m just struck – you just sort of mention it in there – “And this is something we’re trying to give them in the next 12 to 18 months.”
How Morgen Helps Her Clients Set 12-18 Month Goals [41:50]
Morgen: Yeah, well, I think the best way to think about it is, how easy is it for somebody to be excited about something that’s going to happen to them in 30 years versus how easy is it for somebody to get excited about something that they could have in 12 months? Or even not…three months, right? We have trouble delaying gratification, right? As a human race.
Morgen: It’s kind of just part of our evolutionary biology that we want…we need food, and we need shelter, and we need all these things kind of more immediately, and immediate gratification is really a lot more exciting and important to us than delayed gratification. So, the way that you get a client to work towards that 30-year plan is actually by helping them get to some part of that plan sooner, because the more that they’re able to hit the goals sooner, the easier it’s going to be for them to get that ball rolling down the hill. It’s like the opposite of Sisyphus, I guess?
Instead of pushing that boulder up the hill that’s super heavy, sometimes getting that ball just going down the hill, because it’s so heavy, is so hard, and getting it where we want it to go. And I feel like the importance of setting short-term goals is actually the only way to motivate behavior because the more we focus on super long-term esotericals that are out there that we may or may not meet, the less our brains are actually just able to even understand how we’re supposed to get there.
Michael: Interesting. So, and knowing someone that talked about this as “the small wins approach” to financial planning. Sort of the same framework, like going after these big, giant, long-term goals like retirement just gets so long-term and distant and overwhelming that it can actually become demotivating because it’s just such a huge boulder to lift up such a huge hill, and their whole philosophy was, “I just want to string together a constant list of small wins that we’re making that all keep moving towards whatever that long-term big goal thing is. But we don’t even really focus on the big goal, we focus on the small wins, because the small wins feel good, and when they feel good, you want another one. And if you keep racking them up, you will move quite far.”
Morgen: Totally. That, and if you’re working with a financial planner, they’re going to set – I set pretty stringent kind of guidelines that… I mean, obviously, the client can decide whether or not they want to follow it. But there are certain financial planning principles that when they come in, we talk about, “Hey, you’ve got to save at least 20% of your pretax income, and we’ll help you decide where that money goes, so…”
And it’s just kind of getting a client to a place where, “Hey, I’m spending less than I’m making and I’m saving. I’m doing all the things that I need to do, right?” So us planning for something happening in 6 to 18 months just helps them do it more, right? It just helps them maybe use the money that they were going to…that they were setting aside now in a way that really is meaningful to them, so that the other money that they’re not using that’s going to grow and do all the things that it’s supposed to do will be there for them when they retire.
And sometimes just giving somebody the thing that they want now actually helps them do the other stuff that they’re supposed to do, quote-unquote, from a financial planning perspective.
Michael: Because I was going to say, do you now get problems where you’re spending so much time trying to help people figure out how to take business sabbaticals to go to Machu Picchu, that we never actually get back to the whole, “Oh, you do actually have to save for some of those long-term goals as well, because if you keep blowing your savings on big trips every 12 to 18 months, we’re not going to get there.”
Morgen: Yeah, definitely. So I think the other part of the process is, okay, we talk about obstacles, which is the next meeting. That’s another hour-and-a-half to two-hour-long meeting, and we kind of knock out all the things that are getting in their way of them having what they want. But after that, it’s kind of more traditional financial planning, where we weave that stuff back in because we know what’s really important to them, but we also – not that I mean it’s de-emphasized because it’s not as important to them, but we’re still planning for it.
And it’s still really what people in – they expect when they come to a financial planner is, “Hey, hey, talk about how much I’m saving for retirement, and whether or not I’m putting enough away for my kids’ school, and whether or not I’m saving enough in general, and how maybe the mechanics of my business are working so that I am putting enough money aside, because cash flows are kind of lumpy instead of smooth like they would be if I were a W-2.” Things like that. All the regular financial planning stuff does happen, it just doesn’t happen until meeting four.
Michael: And so, where is the transition in this from prospect to client? Because you had said the first meeting is just…it’s a screening call, your associate’s doing it just to try to figure out if they may even be a good fit. Then the first meeting, you’re asking lots of questions, and presumably, you’re also just trying to suss out fit. So at what point do we get to the, “Oh, and by the way, here is what I charge. And do you want to work with me and engage me?” When does that part come and we transition from a prospecting process to a client process?
How Morgen Transitions Her Prospects Into Clients [46:29]
Morgen: Yes, and my associate always lays out fees in the 30-minute call, so if somebody is already like “no” in that call, then obviously they are not going to be a good fit, it kind of doesn’t matter what we’re going to do in the next one. The first call is designed to be really open-ended as well. It’s not me doing it, but Mark is really trained on how to just kind of sit there and listen and see what a client wants, and then also always sends a really nice recap email of like, “Hey, these are the things that are important to you, these are ways that we can help on those things. This is our fee structure, let us know.”
And if a client says “yes” to that, then they schedule with me. At that point, we have the two-hour-long meeting or hour-and-a-half-long if they are just a single person, and I then also decide whether or not I want to work with them. And usually they are doing the same thing too, because I am the lead planner, right? They need to know whether or not they want to work with me, I need to know whether or not I want to work with them, and by the end of that meeting we usually have 15 minutes set aside to just talk about whether or not we’re a good fit, how…what next steps would be.
If they want to work with us, then we have them sign a contract and we send over the homework, inspirational work, and it really pretty much goes from there, and we…I don’t really start any work until a client signs a contract and pays. So it’s one of those things where it’s, “Okay, if you want to work together, great. But you have to do the things that we require in order to get work started.”
Michael: So I’m struck, though, that you have your…your associate is laying out the fees in the initial screening call. Do you get any worry of just – $12,000 dollars is a pretty sizable number – that if you don’t get to explain and talk through that fee with them, some people are just going to balk because Mark’s doing a screening call, he’s not necessarily the firm’s lead salesperson to develop new business, and that you’re going to lose some people because you didn’t have an opportunity to discuss fees and talk about the value on the spot?
Morgen: Yeah, so I definitely…I’m sure I lose people. I guess there’s not really a better way of saying this. I don’t really care whether or not I lose people, right? If somebody wants to work with me, it’s usually because they either were referred in by a current client who said raving things about us and that they want to work there. So they kind of already know maybe what the fee structure is, has probably already been to the website that has it on there, we’re pretty open about it, so a client can balk. If they want to balk, then they are welcome to balk, and we normally…I’ll just give them referrals to other people.
There are a lot of good planners out there who are charging less than me, and I know that, and I’m super happy to refer. That said, though, Mark is really good at what he does, and he’s really personable, and he’s really empathetic, and so I am confident that in that half-hour call, if they like Mark, then…and Mark likes them, that they’re probably a good fit, and the people that he’s been able to pass through have been really good fits for the practice. And the reason why he takes the first call is because my calendar is just too constrained.
A prospect will, if…like when I used to have my calendar up there, would look at the calendar and they would literally be like, “There is Thursday at 1:30, and then there is two Thursdays from now at 2:30 and 3:30.” And it was just getting to the point where he couldn’t even schedule people because I’d keep my calendar so tight, I block off my time of when I’m doing things, when I’m doing client work, when I’m with my son. My calendar, if you looked at it, my…both my VA and Mark think that my calendar is crazy.
And it also has stuff on there that my husband’s doing because we trade off time that we are with my son, and when the nanny’s here, and when she’s not here. It’s crazy on there, you know? So for a prospect who is excited and wants to do financial planning, and then they see that the next appointment’s three months out, it’s not really going to work, either. So, that’s why Mark takes the initial call, and generally people do ask about fees in that call. So, if they don’t ask about them, I imagine he doesn’t mention them, but if they…if they’re going to ask about them, we’re not going to not tell them.
Michael: So this planning process then, Mark does the screening call, your first three meetings are sort of discovery, vision, talking about obstacles, and they come on board through that if they’re enjoying the process and want to work with you to move towards that vision that you’ve set out. You said then, after the third meeting, it goes into sort of, quote, more traditional financial planning. So what does the planning process look like for you at that point?
What Morgen’s Ongoing Financial Planning Process Looks Like [50:48]
Morgen: Yeah, so at that point, we address top concerns first. So, right, it might not be really exciting or even important to a client to address estate planning, but we know we have to address it, so maybe we don’t do that in the first meeting, maybe we do that in the second or third meeting financial planning. So after those first three meetings are done and we start with the financial planning meetings, usually a client has another two to three, sometimes four meetings with us in the first year.
So the first year’s really meeting-heavy and it’s something that I’m really upfront with a client about of, “Hey, we’re going to spend a lot of time together this first year, and that it’ll taper off, but the reason why is because we want to really get your plan right because we want to do this with you for a long time and we don’t want to be making changes every year because we didn’t get it right in the first year.” And so, that’s kind of how it works. So the first meeting is always what’s super important to them, the second and third meeting is usually what’s more important from a financial planning perspective in general, and also still tying up loose ends about what’s important to them.
And, yes, so just making sure that the regular stuff is taken care of, of like, okay, what does retirement look like? What does insurance look like? What does estate planning look like for our client? Do they have all the stuff that they need in place? Are they taking measures to make sure that they’re doing the things that they need to be doing? Do we need to have discussions about what’s important? Do we need to have a budgeting call because they’re really not saving enough? And these are all things that are…they’re really client-dependent, right?
It’s hard for me to tell you exactly what goes on in these meetings without having a specific client to model it off of. But again, the kind of…the nice thing about having 25 clients is, there isn’t really a specific process, we just know that we’re going to go through these 3 to 4 meetings and we’re going to do what needs to get done for the client.
Michael: I like the framing, though, of the first meeting diving deeper into planning is, what’s important to them. The second meeting can be what’s important to financial planning. Like, “Hey, I know that other things are important to you, but you’ve really got to pay attention to this thing over here. You have young children and no wills and no life insurance, we need to fix this in your next meeting. But, if it’s not your concern, you’re just not going to really likely tackle it with energy in the first meeting, so we’re still going to start with your thing first, but we are going to get to the other important things a fast second.”
Morgen: Yeah, and I do that exactly for the reason that you said. If you come out of the gate after doing three meetings that are Kinder-type meetings, and then you’re like, “Hey, by the way, none of that stuff that you just told me over the last six hours is all that important, you need to get your life insurance in place,” a client is like, “What the heck kind of bait and switch just happened to me?” You know?
Morgen: “You just told me that everything was going to be focused on me, and now you’re like, no. I need to go get disability insurance.” Right? And also, insurance is never… I’ve never had a client come through – unless they’re kind of super cautious and risk-averse – wanting…that insurance is the most important part of their plan, right? Usually, people don’t really want to think about that thing, so even though it is urgent and something that needs to be addressed earlier on, they’re already walking around without a will and life insurance.
Is another month going to kill them? Maybe, I guess, right? If they stepped in front of a bus, it would be a problem. But, having said that, the…most of my clients are young, it’s okay, they’re…we tell them, “Don’t text while you’re walking across the street and pay attention while you’re driving, and you…we’ll get to it when we get to it.”
Michael: And so, as you go through this part of the planning process, are you in what we call “traditional” financial planning software as well? Are you still taking in data, and doing the financial projections, and printing out and walking through plans as well? Or, is this still more the Kinder conversational-driven approach?
Morgen: It’s very conversationally-driven. I do use financial planning software, I mostly…we mostly use all of our tools behind the scenes. I give people access to eMoney, which is the financial planning software that we use, just because people like it. They like to be able to log in and see all of their accounts in one place, it’s also the place that we assess net worth every year, so they need to know how to use it and how to update their connections. That way, on the anniversary date, we’re able to actually have a good picture of what net worth is.
But with the exception of that, there is no meeting where I’m in eMoney, doing things. eMoney is really there from a financial planning perspective as a number check. I use it, and then I’m like, “That number doesn’t seem right,” and then I do it in a spreadsheet, and then I cross-reference. There’s a lot of that stuff going on behind the scenes. I have a lot of in-house planning, just financial spreadsheets that we use as templates that we crosscheck against eMoney.
It’s kind of one of those things where, if you put the wrong inputs in, you get the wrong inputs out, and you don’t know what’s going on, and I find it really difficult to present a plan to a client when I don’t even understand the numbers. So, a lot of that is also just making sure that I know exactly what’s going on so that when I’m giving it – a number to a client – and confident. So especially for life insurance numbers, obviously you don’t have to get it to the penny like everything else in financial planning, but you do need to get it pretty right. Right?
And the numbers need to make sense, and there are some clients who are really…I have a few clients who are really into the math and we show it to them. And I don’t do that in a financial planning software setting because they are not going to be able to see what’s going on, I could barely see what’s going on behind the scenes in the financial planning software, so we do create spreadsheets for clients who want to see the numbers and how we run the numbers.
Michael: And so once you get through the first-year process and you’re in an ongoing process, what does ongoing financial planning look like for clients at now $12,000 plus dollars per year?
Morgen: Yeah, so at this point, all of my clients are assets and/or management clients. I do manage assets for them, so there’s definitely ongoing investment management that occurs for all of my clients. There are also just regular check-ins on other things, so I have certain clients who, they’re my business owners and they have cash flow-related issues all of the time. We’re always working on making sure that we’re saving the appropriate amount when the big lump of cash comes in, and paying taxes, and doing all the other things.
So there are certain clients that have intense planning needs throughout the year, and then there are other clients where it’s kind of light and easy, but we’re still there to check in and tell them what’s going on with their investments, and tell them what’s going on with their plan, and why they’re on track. And then also we do Kinder type meetings basically every 18 months or so, so a client will go through that process again, that way we can set a new goal of something that’s going to happen in the next 12 to 18 months.
Michael: And the Kinder type meetings are going back to the three questions and asking them again, and just saying, “Hey, let’s reflect on these answers once more and see if they’re the same”?
Morgen: Yeah, exactly. Because they usually aren’t, right? If you think about how…your own life, right? Or if I think about my life, I am pregnant with a baby girl now, she’s due in January, so that’s really top of mind for me, so maybe when I’m doing the questions today, I’m going to write a lot about that. But once she’s born, right? If I re-did it – those questions, they’re going to look a little bit different. Yeah, the principles of them, right?
The things that are super important, that are in…deeply ingrained in my life of that or my family, that’s not going to change, but the way I answer the questions still will, and they’re still going to be different things that I want to work towards because I’m a human being and we change over time. So, it’s the same thing with our clients, I think sometimes we forget that. We were like, “Okay, when they come in, they tell us their hopes and goals and dreams, and now we know them.” We never go back and reassess to see whether or not those hopes and goals and dreams have changed.
And they usually have – especially if they’re shorter-term in nature. Because for instance, I had a client who came in four years ago and the main focus was on catching up on taxes, because they were always behind, and we caught up on taxes. We did that within two-and-a-half years. So, that’s not going to be a goal of theirs anymore so it doesn’t make sense to be focused on that anymore, it makes sense now to go back and revisit and say, “Okay, hey, what do you want to work on now?” And they came up with very different things, believe me. They didn’t want to focus on taxes anymore. Who does?
Michael: And for those who aren’t familiar, what are the Kinder three questions? I realize we’re talking about them a lot, but not everyone is actually familiar with them. If folks want the full deep dive on George Kinder, you can go back – we had him on the podcast a few years ago. So kitces.com/15 for Episode 15. But can you give us just a recap? What are the three questions that we keep talking about?
How Morgen Uses George Kinder’s Three Questions With Her Clients [58:52]
Morgen: Yeah, definitely. So the first question is: if you had all the money in the world, what would you do? Who would you be? How would your life be different? And the last part of me being kind of the important part of, how would your life be different? What would change because you had all this money?
Michael: That’s essentially kind of the financial freedom question.
Michael: If you had financial freedom, and you were no longer constrained to the things you do because of the money you have to earn, what would that life look like?
Morgen: Exactly, yeah. And then I have had clients be like, “Well, how much money do I have?” I’m like, “You have infinite money.” And one guy was like, “Well, I could buy a baseball team kind of money?” I’m like, “Sure. You can dream as big as you want, right?” The whole point of that question actually is to dream as big as you want and to get excited about all of the things that maybe you could have if you had all of the money in the world.
Michael: Yeah, just if you think about with…I don’t know, a client you’re sitting across from and they’re an architect and working up the firm and trying to make partner, and we’re like, we’re having all of these conversations about moving up, and just the fact that they would ask, “Wait, is this buy a baseball team kind of money?” is like, “Huh, I just learned something really interesting about where your goals and properties and excitements are.” That’s a big deal discovery to even have that as the question, even if that doesn’t become their goal, right? I’m just thinking through…
Morgen: Yeah, totally.
Michael: …that’s a really interesting glimmer of perspective about someone, because not everybody would say that or come up with that.
Morgen: Oh, definitely not. That would never be on my list, but it was really important to have him. So then it was like, “Okay, how do we get you to more games? How do we get you more involved?” Yeah, you don’t have the money to go buy a baseball team, but it doesn’t mean well you can’t experience the feeling of being part of something, right?
Morgen: Which is being part of the sport that is so important to him, and then it came out that he played in high school, and that he wanted to play in college but he wasn’t good enough, and all the stuff that comes out when the client says something just kind of off the cuff of, “Can I buy a baseball team?” You would never think that that was…that had so much meaning and feeling behind it, but it…but these things do. And I think that’s kind of the number one thing I have learned as a planner is, everything a client says is important to them. Pretty much everything.
Especially in the meetings with a financial planner, because they don’t come to waste their time with you. And something so small as even the client asking about me, I have noticed that there are certain clients to ask a lot of questions about me, and it’s not because…they’re not just doing it to be nice, it’s actually kind of part of them, but…and it’s come out in the way that they express their goals and needs.
It’s like, they care so much about what other people are doing, and how other people are living, and what kind of…how they can contribute to that, that that’s actually part of their plan. So I feel like sometimes we just have to be a lot more up on what a client is saying and really take everything that they’re saying seriously and evaluate it as, “Oh, this is actually who they are. They are not just being nice to you.”
Michael: So, right. So question number one is sort of this financial freedom question. Then what’s the second question?
Morgen: Yeah, the second question is, you go to the doctor, and the doctor gives you bad news and says that you have 5 to 10 years left to live, and you won’t feel any pain during this time but you also won’t know the moment of your passing. And then the question asks you basically, what will you…what will change about your life if you know you only have 5 to 10 years left? How would you live then? And this question is obviously way more serious than the financial freedom type question.
You go from exciting, happy, throwing money everywhere, to, “Oh, okay, this got serious.” Then the question I always get after that is, “Well, do I have the old money from the first question, or do I have my money right now?” And I’m like, “No…”
Michael: Are these mutually exclusive, or are we going sequentially?
Morgen: Yeah, exactly. I’m like, “No, you have the money you have right now. You have your – It’s you in your current financial picture, you go to the doctor and this was the news that you get.” So, yeah, it really…it kind of really puts into perspective, okay, these are…this is what I’ve done so far, this is how much I’ve accumulated. Okay, now what do I want to do if I know I only have 5 to 10 years left?
Michael: Now you really start getting to what’s actually important in your life, right?
Michael: I imagine this is where you get a lot of the, “Oh, well, I would really want to spend more time with my kids, because right now I work 70 hours a week slaving away in my company, and I’m not doing that corporate job if I’ve only gotten 5 to 10 years. I’m focusing on my kids, or my family, or my community, or something else.”
Morgen: Exactly. Yep, exactly, I think for some people it almost gives them permission to free up their calendar. Because it is possible, right? That any one of us could now only have 5 to 10 years left to live, right? We don’t know. We don’t know when we’re going to pass away. It doesn’t mean that we can have this kind of YOLO attitude where we throw all caution to the wind, but it does mean that we should always be prioritizing the things that are important.
Michael: Right. And then what’s the third question?
Morgen: So the third question is, you go back to the same doctor and they give you the worst news, and he says that you have one day left to live. And the question is not about what you will do in that day. The question is, what did you miss? Who did you not get to be? What do you regret? And that question – that question is obviously the heaviest. And usually what I’ve seen is that whatever was in question two is really in question three.
Michael: Right, it starts getting amplified, because now we quickly get to, I just started talking in question two about the things that are really, really important to me that I may be partially ignoring and not really doing to the extent that I want to do now, and now all of a sudden I just realized that the opportunity slipped away because I have one day to live. And so I go really quickly to my regret of the stuff in number two that I didn’t get to do.
Morgen: Exactly, yeah. And usually in question three, people mostly…they prioritize three things that are really important to them, and those were the three things that end up in their vision. I guess you could just do question three and do a vision off of that. I kind of like to have it all because, in question one, there are fun things in there that you can sprinkle into a vision so it’s not so heavy and so that a client is really excited about it.
Because there are actually a lot of things that do come out in question one that are important, they are just not like if the world was ending and my life was over, something I would focus on, but it doesn’t necessarily mean that it’s not something that they want to do.
Michael: And so likewise I feel like it gets clearer about why you update these every 18 months, just a year and a half goes by and the priorities start to change.
Morgen: Yeah, totally.
Michael: Like I’ve discovered a new hobby, and it starts showing up in goal number one. And there is a change in the family, I guess that could be a birth or a death, and suddenly some of the priorities for number two look different if only because just life has moved and it looks a little bit different now.
Morgen: Yeah, even think about just the regular financial planning events that happen in people’s lives. Like a couple gets engaged, they get married, they start a family, maybe they have multiple kids, right? All of this stuff happens. Every month or so something new is coming in there.
Michael: Well, I guess particularly because you said your median client age is 41, I think it would be one thing to be doing this with 68-year-old retirees, where I don’t know if life looks all that different at age 68, and 70, and 72, and 74 short of maybe a health event rolls through. We’re sort of in our stable retirement and then not as much is changing, but when you’re in your 30s and 40s, life comes at you real fast.
Morgen: Totally, yeah. I’ve also found it’s really powerful, though, for people who are about to retire, and then you do it again after they are retired, because it’s a huge change, and the things that they wanted for their retirement are…they’re usually done now that they’re retired, and they are looking at other things. So, a lot of times the question is focused on what they maybe would be doing in retirement, but the things that are really important are how they’ll retire rather than the things that they’ll be doing after they retire.
Michael: So now talk to us a little bit about this whole other side of the business thing you’ve got with Money Owners, and a podcast, and a book that’s coming, and you said you’re doing coaching, which is a whole different type of engagement, and pricing structure, and scope and the rest. So help us understand more about what’s going on at the other end of the barbell.
Morgen’s “Money Owners” Podcast, Her Coaching Program, And The Other Projects She Is Working On [01:07:18]
Morgen: Yeah, definitely. So, “Money Owners Podcast” was always intended to come out every two weeks, and then this year happened for me.
Michael: And then there was a pandemic.
Morgen: Yeah, then there was a pandemic. So we moved from New York to Texas in January, then a pandemic hit, then I got pregnant, then I was in the midst of writing my book – furiously writing my book over the summer while I was basically super nauseous and vomiting every day, so that was fun. And so every time I would start my podcast, I was like, “I know this is late, I’m so sorry, thank you for keeping us…to keep us listening to this. I really appreciate all listeners out there. They’re going to come out, I promise.”
But, yeah, the intention there was always to just put out good financial advice for free to people who wanted it and who were willing to listen to me talk for a half-hour, which I know sometimes could be hard. And it’s also kind of nice for me, I think, to collect my thoughts and be uninterrupted for 30 minutes on a financial planning topic. I don’t really get that with a client, I never talk at a client for 30 minutes. That would be the worst possible client service, ever. So, it’s usually the client that we let talk for 30 minutes, right? Not the other way around.
Morgen: And when we’re talking about financial planning concepts, we are boiling them down in a way that the client who I am facing can understand, not just some sort of general, “Like here…” Trying to make it a little more exciting and with…like long-winded for the purposes of entertainment, really. So, that’s actually just been nice on a number of levels. Also, it’s helped me brush up on certain topics that maybe I haven’t looked at in a while. I did an employee stock option episode, and that was fun to look up all the little rules. Same thing with the book.
So, the book is also part of Money Owners and will be released on that side rather than through my financial planning practice, just for a multitude of compliance-related things. But my book that’s coming out – well, I think by the time this is published, it’ll be out – but October 19th, it’s called “The Personal Finance Quickstart Guide,” and basically it’s a – start to finish – I think something that if somebody read it, they actually could create their own financial plan. It combines the behavioral side of finance with personal financial planning principles.
And that’s what the podcast has always been about too. It’s not just the numbers, it’s also about the human element of all of this that gets in the way of us just being kind of robots who would do things based off of a spreadsheet, which none of us ever do. So, the fact that there are so many personal finance books out there that focus mostly on that, I felt like were lacking in kind of the human side of it. And really, I guess now having been through the Kinder training got kind of…definitely got a Kinder tilt on it. So, probably not what the publisher was originally looking for, but the end product is definitely something that we are all excited about.
Michael: And then talk to us about this coaching direction as well.
Morgen: Yeah, so when Money Owners originally started, the coaching program was intended actually to be a group coaching program. So for the same reasons that a client can maybe pay 100 or 200 bucks a month for a short-term coaching engagement and that they would do it with hopefully 5 to 10 other people, and then it would be worth my time, because I would be spending maybe an hour or 2 per week with people helping them with their finances, and they can learn from each other.
That was the original goal of the program, and it was also to get people who were similar together. So the focus is actually going to be on female business owners when I first opened, and then I went through the Kinder training and I was like, “Nah, I don’t want to do that anymore. Now I’m just going to offer…”
Michael: What happened? What happened to it? Does George not like group coaching? What happened to it?
Morgen: No, it’s really more me. I was like, “You know, I just like this Kinder stuff so much so I’m just going to offer the first three meetings to people in a coaching engagement and they can go through exploration, vision, and obstacles like my clients do, and they can pay for just that. And if they need a little financial help after that, we’ll do it on a…we’ll work something out on an hourly basis that makes sense for them.” And, yeah, so now that’s what I offer there, and it’s one-on-one, and I have found that the one-on-one is actually…it’s just nice and people just want…they want personalized attention. They just do. There’s something about it.
Michael: So, the financial coaching element you do is – well I was going to say just three Kinder’s questions, – because it’s not just through Kinder’s questions but it’s the three-meeting process you have around Kinder’s questions.
Michael: Stuff of discovery and learning their situation, the vision meeting, and talking about obstacles that they have to overcome and change, and then hopefully if they have been aligned to the vision and have clarity about the obstacles that are blocking them. Then you can get out of the way and send them on their way, and they will go clear their obstacles because now they know exactly what they need to change to get to the vision that they just said they were really excited about.
Morgen: Definitely, yeah. And if they feel like they still need directed financial planning advice, they can get that, they just can’t get investment advice there because it’s not a registered investment advisor. So, generally people that I point through there are people who really…they really don’t need investment advice, they just need maybe a little bit of budgeting help, a little bit of tweaking, they need a little motivation. Which is what Kinder’s questions are great for, and the Kinder process is really great for.
And my practice, year three and on, was always focused on behavior change, but I’ve never seen such good results with clients until we really start implementing the Kinder process, just because there’s something about getting really excited about something that’s going to happen in the short term that really gets people moving that you can’t really do in any other way. You have to figure out a way to generate energy for somebody, and then also remind them of different motivators that they can use along the way that they come up with, not to me.
I can’t tell them what’s going to motivate them, but they have to decide what’s going to motivate them along the way because the energy wanes, you know? And day 31 is very different than day 3. And so you could imagine what day 265 looks like, right? If they don’t have that trigger that’s going to motivate them, that’s really going to remind them of, “Okay, hey, what are the results I want to have?” then they’re not really going to get what they…where they need to go. So a lot of really what happens in Origin and also what happens in Money Owners is just helping people find those triggers to help them stay motivated.
Michael: And so what do you charge for this coaching process?
Morgen: Yeah, that’s a good question. I actually don’t know that off the top of my head, I’m trying to think… I think I was $2100 for a single person to go through the 3 meetings? And then I think it was $3900…or, no, $3500, maybe, for a couple? Sorry, I should have looked that up before I came on the podcast.
Michael: So I guess it’s…it has not been as active lately.
Morgen: Yeah, it’s not as active, for sure. I definitely know my Origin pricing a lot better. And then hourly after that is…I do charge $400 an hour, because that’s all I make, so if they need an extra hour or 2 after that to sort out some financial planning stuff, then they can have it, but yeah, it is…it’s definitely at an elevated price.
Michael: So this isn’t even necessarily your “reach the masses” element, I guess this one is sort of one extra bar on the barbell that is a little bit further towards the middle. You’ve got the podcast, and the podcast is free, the book is a couple of dollars for a book, Origin is $12,000 plus at the other end, and then it sounds like this is actually still a little bit in the middle, but not necessarily a high volume for you at this point.
Morgen: Yeah, exactly. And it’s not high volume for a number of reasons. Origin really is the thing I poured my heart into for the last six years and made what it is today, and when I released Money Owners, it’s two years old now. My son was, I think, 8 months old, maybe? Or 6 months old? Something like that. It wasn’t the best timing on my part. I don’t know if there’s really ever a good time to launch a business when you have young kids, but the whole reason why Origin was born when it was is because in my head I was like, “Okay, if I can get my business to be three years old by the time I’m ready to start my family, then everything’s going to be great.”
And I really had that three-year number in my head, and I was like, “Because businesses are great at three years, you know? I’m going to be great.” And I get to year three and then I’m like, “I am so much busier now than I was in years one and two. I have a booming business now. What was I thinking?” I probably could have actually had a kid in year one. Now obviously I wouldn’t have the kid that I have, but yeah, it was like I had this moment where I was just like, “Okay, maybe there just isn’t a good time to ever do this, you just kind of have to grit your teeth and do what you have to do to get it done.”
And then I kept getting these unqualified prospects through Origin and I kept being like, “These people, they don’t need financial planning. They just don’t. They need other stuff. Yeah, they need…maybe they need a little help with student loans, or they need some budgeting advice, or maybe they just need a quick overview on how to invest, but they don’t need specific investment advice from me.”
And that’s why Money Owners came to fruition, for sure, and when it did, because I was just like, “I wanted somewhere to put these people,” and I didn’t even want to send them to a financial planning on…another financial planner because they didn’t need financial planning.
Morgen: Yeah, and then the podcast was supposed to bring people in, but then I was inconsistent with that because I have a 2-year-old. Well, at that time I had an under 1-year-old. And so, yeah, you can kind of see why one has succeeded more than the other, for sure.
Michael: And do you intend to shift that or try to change that? Are you happy with where that is? Do you look at the coaching stuff and say, “Hey, I’ve got to get back to that and build that up?” Or do you look at that and say, “Or I guess actually the practice is in such a good place right now that I’m just going to go broad with the book and focus on my clients at Origin, and that’ll be the deal?”
What Morgen Will Be Focusing On Going Forward [01:16:48]
Morgen: Yeah, it’s definitely the latter, at least for now. I think that when my kids are both older that I will probably have more time to devote to both businesses, just because they’ll need me less. But before that, I just…I don’t want to miss…I don’t want to miss anything with my kids. I just don’t. Right now I have part-time help, she comes two mornings a week, and then my husband sometimes helps in the afternoons if I really need it or if I have a call that I just can’t take any other time with a client.
I try to be accommodating with the clients who are already in my practice, but it’s just the time constraints that I have are…they’re just…they just are what they are, and I just don’t have the time to turn Money Owners into what I think it will eventually be. And I don’t even really want to. I want to be there for my kids. I got to see every little thing that my son Alex has done since he was born because I really haven’t missed anything.
Michael: And just, I think that’s powerful, and that’s just “despite” – I’m putting that in air quotes – but despite running a $300,000 revenue practice.
Morgen: Yeah, yeah, in spite of myself I have somehow still managed to have…I guess have it all in a way. I’m not immune to feeling frazzled, right? I’m not perfect and I don’t always have the balance I intend to have, but I try really hard. And the thing that I want most is the…my kids look at me as kind of…as a rock, somebody who’s always there for them no matter what. That’s what’s most important to me. And my clients are really important to me, too. My practice is really important to me. My family’s always going to come first, and my clients kind of know that because that’s the kind of people they are too, for the most part.
And if I’m not there for them, that’s why Mark’s there, right? That’s why I have a full-time employee. I mean, I don’t think people really need a full-time employee with 25 clients, let’s be serious.
Michael: Right. But you’ve got him there because that’s part of the redundancy, and the failover, and the safety for clients, and additional flexibility for you because you can step in for something.
Morgen: Yeah, definitely. And he does a lot of behind-the-scenes work that I would otherwise be doing, that I would need to hire a nanny or somebody else to take care of my kids to do. So instead, he does the work, and I check the work, and we bounce numbers back and forth when I don’t…we don’t…when I don’t think it makes sense or he doesn’t think it makes sense, and it’s kind of…
It’s also really nice, I think, to have somebody looking over my shoulder with the numbers because we’re not infallible, we’re all human, and even putting something into software, you could still have a number that doesn’t make sense, so…and not realize it at all, and then show the wrong thing to a client. So on all fronts, it’s nice to have a full-time employee in my practice.
Michael: And it frees up your time on a tax-deductible basis.
Morgen: Oh, totally, yeah. That was definitely a part of it.
Michael: There is a benefit about having it through the business as opposed to hiring help on the other end to try to free up more of your time. There’s a good tax arbitrage to this as well.
Morgen: Totally. When I did the math on it I was like, “Look like I can base…I basically could pay the same amount because on…you pay your nanny on an after-tax basis, you pay your employee on a pretax basis. I can get way more hours out of my employee, basically. I mean, not way more. But more hours from my employee on a pretax basis than I could with a nanny on an after-tax basis, and then I have more freedom and flexibility to be with my family.” It was like a slam dunk, it was all around… And my clients have somebody else that they can rely on who…and talk to, and know, and be there for them. Yeah, it just made so much sense.
Michael: So, I do want to go back quickly, though, and just…there was another piece I was wondering about in the coaching business, that you had mentioned a few times about how you keep this separate from your RIA. And I just want to understand a little bit further because I know a lot of folks out there are starting to do financial coaching, some are even trying to do financial coaching-only businesses.
We’ve had a few people on the podcast who are doing coaching, no investment advice, and don’t register as an investment advisor because they’re not giving the specific investment recommendations that trigger RIA status. I don’t know very many that are literally doing both at the same time, though, so I just want to make sure I’m understanding this right. If you have effectively got two entities, like Origin Wealth, the RIA entity, and if you want financial planning advice, you contract over there with all the usual compliance stuff.
And then Money Owners, this nonregistered entity – well I guess the entity is not a registered investment advisor entity, where you’re doing the podcast, and the books, and even the financial coaching for some substantial fees because you’re still not doing anything that is specific investment advice or recommendations that would trigger RIA status. And you just have to figure out, “In which capacity are clients engaging me?” and they get that paperwork and they pay those fees to that entity.
Why Morgen Keeps Her RIA And Her Coaching Business Separated [01:21:37]
Morgen: Yep, that’s exactly right. So two entities, there are definitely…there are advantages and disadvantages to two entities, for sure. The main one I could think of, right? As I…you have to manage…I manage two LLCs, I have to do the paperwork on two LLCs every single year; I have to…I do the accounting for two LLCs every single year. Thankfully, I have FA Bean Counters doing it for me in Origin and the accounting on the other side that’s not so difficult, that it doesn’t take that much of my time. But, yeah, I manage two different websites, so they’re all…they are separate, there’s two different scheduling applications there, two different email accounts, two different everything.
Michael: Because you really want to keep them separate because the whole point is not layering on all the RIA compliance to non-RIA activities, particularly things like podcasts and books that can get a little bit compliance-heavy with the RIA side. You keep them as…those external because they’re not giving advice, and if it leads to a client, they contact you on the Origin side, and then you have that conversation on the Origin side in appropriate registered form.
Morgen: Yeah, definitely. And I would say for sure I get more traffic into Origin than I get into Money Owners, believe it or not. And I think it’ll be different after my book comes out because that’ll…I have an actual publisher who is doing marketing and other things, and I…and I’ve been doing the podcast rounds and everything else.
So I think Money Owners will get some more traffic, but for the most part, hasn’t really been a compliance headache because people really do come through Origin to become clients, and then they come…they get pushed to Money Owners, basically, when they’re not an Origin fit versus the other way around, which does create some solicitation issues. But that said, if a client is looking for…maybe they found me through Money Owners but they really are looking for financial planning, and that’s not something that I offer there, I can say, “Hey, I do offer that here if that’s something that you want,” without it being a huge solicitation issue.
The real thing, though, is the reporting at the end of the…every year. So, anyone who has an RIA, you report on all your clients; you report on what they are, their… Are they high net worth? Are they individuals? Are they a business? Are they an entity, right? All that stuff takes time and effort at the end of every single year, and either you do it yourself or you pay a compliance consultant to do it, so the only difference between what I have… I report on my regular 20, 25 clients like I normally would, and then I just report some small outside business activity, and that’s pretty much it. Because I mean, I…my business isn’t really the…a big deal yet.
I think when it becomes a bigger deal, it’ll be a little bit different of a compliance issue. For now, it’s not, though, and that’s something that I’m also loving kicking the can down the road on. But, yeah, there is something really nice about, okay, if I have another 25 people come through Money Owners, that I don’t need to deal with anything related to them on the compliance side, and reporting on them, and saying what I did for them, and justifying my fees and everything else.
Michael: So, and I do have to ask particularly if your…either your drive right now is actually Origin is driving activity in Money Owners more than Money Owners is driving activity to Origin. Just it’s all well and good, I think, for a lot of advisors to say, “Hey, I just have a practice with only multi-millionaires who pay $12,000 plus dollars per client,” then the math gets really good. Small asterisk, don’t know 25 multimillionaires to go pick up and grab business from in order to make this work. So where did the clients come from? How did you get to the point where in a couple of years you’re at your 25 multi-millionaire clients paying an average fee of over $12,000?
How Morgen Attracts Her Clients [01:24:59]
Morgen: Yeah, I wish I had a really good, straightforward answer for you. I don’t. I have always been referrals-based, and I guess part of that has been luck, for sure, and some of that is just meeting the right people at the right time and impressing them in one way or another, and then they’ve sent me clients. But I feel like the longer I am around and the… The net worth has kind of grown with my practice, right? I started with a lower net worth, and over time it…it’s increased to where it is today, and to where I’m talking to just a different client group because of it. It didn’t start that way, though, for sure.
The first person that I had to pay me in my practice paid me $375 a year, to put into perspective, right? That is like, “Oh my gosh, I need money so badly that I’m going to discount, discount, discount, super discount you.” And I worked really hard for that $375 a year.
Michael: Particularly now when is…as you said earlier, you price your hour at more than $375 now.
Morgen: But people refer, right? She referred somebody, and the person that she referred, referred somebody else, and they referred a group of people, and then the next thing you know, the… It’s usually one or two…I have a handful of people in my practice that refer everybody, and to the point where my mom was even kind of laughing because she was like, “Oh, did you take on any new clients this year?” And I was like, “No.” And she goes, “Oh, what’s going on?” I’m like, “Well, my biggest referrer, she’s on maternity leave. I probably won’t get clients for six months.”
And sure enough, when she was back at work and doing stuff, she thought of me and she sent people. It’s just kind of one of those things where there are certain people that refer and I know, and if they’re busy, we’re not going to get clients, and if they’re not…and if they do meet the right people, they are always going to send them my way. And I’m okay with that, I think. I think one of the things that has been really important for my practice to be where it is is that I’ve always managed my personal finances very strictly so that I could be in a position to wait for the right people, and to say no to the ones that have been wrong.
Because it’s not like these 25 people just fell into my lap, there were many conversations with people that really…that weren’t right, or conversations with people that weren’t right who ended up in my practice who I then had to let go, which is never a fun conversation. So, I obviously…I wish that I could take that back and that I could only work with the people that I always wanted to work with from the beginning and that were a right fit from the beginning, but it’s kind of not…that’s just not how it works.
Instead, you end up with a couple of wrong fits, and then sometimes they send you the right fits, and then sometimes you have to let go of the people who even sent you the right fits. And it’s not pleasant, but sometimes it’s mutual. And I’ve noticed that when I have a conversation with somebody that were not…you know, were not really fit for each other anymore, maybe they want to go talk to somebody else, they were usually feeling it too. And there’s a reason why, and it’s because we really aren’t the right fit for each other.
And so I think sometimes as planners we have to recognize that, though. Whatever you’re feeling on your side is probably what the client is feeling too, because you’re just not in that relationship the way you should be.
Michael: So, I am wondering, though. I think a lot of us talk about building through referrals, and giving such great service and advice to clients that it’s remarkable and they want to tell everyone. But in practice, that just doesn’t actually happen that way for a lot of advisors. Well, I guess I’m just wondering, why is this working so well for you when it doesn’t seem to work as well for some other advisors?
Are they just not actually giving as much high service as they think they can, so it’s just not really as referrable as they think it is? Is there a particular way that you’re asking for referrals or trying to drive them? Why is this working so well for you and not so well for a lot of others?
Morgen: Yeah, I love that question. I had an original ask for referrals; I guess it was in year…end of year two when I realized I needed to do something, that was my first ask for referrals, and I crafted a really nice email and I personalized it to every single person I sent it to, which is…it was very time-consuming. And I did get referrals from there. And then those people, what I focused on the most with the referrals that I got from that was having the initial meetings be so wow and exciting and something that they wanted to talk about, that they talked about it early on in their financial planning process with me.
So, it’s like you go to a…I don’t know, we’ve been using baseball. Like you go to a really exciting baseball game, what do you do? You come home and you tell somebody about it, right? “Oh, I was at this game and this happened, and that happened, and it was amazing, and I could see super well.” I kind of had that in my head of like, “Okay, I can make this so awesome that when they go out to dinner with their friends, they actually talk about this,” then it would kind of be a way for people to refer. So the initial meetings have always kind of been crafted that way – to be exciting.
Michael: And I guess that’s part of why it becomes so appealing to have this Kinder three-step process around the discovery, and the vision, the obstacles early on. It’s certainly not the conversation they’re going to have with most other advisors, so it is sort…it is remarkable in and of itself. It becomes worthy of remarking because it’s not an experience they’re necessarily going to have anywhere else.
It strikes me as well that just the nature of what you’re doing and focusing in on, sort of higher impact, shorter-term goals, you…I just imagine the conversation with someone who’s sharing out to their friends on Facebook the picture of strumming the guitar from the top of Machu Picchu and people are like, “What the heck? You were trying to make partner at your firm. What are you doing on top of a mountain strumming guitar?” It’s like, “Well I got this awesome financial planner, and over the past 18 months we’ve figured out how to make this happen.”
Morgen: Yeah, that’s exactly…
Michael: And some of us are like, “Well, I want that. I mean, not that Machu Picchu is my thing, but if you can do that kind of transformation over the past year or two, I want to know who you’re working with because I’ve got some dreams that aren’t being fulfilled right now, and apparently your person knows how to make those happen.”
Morgen: Yeah, definitely. I had a specific example of this. I had a client who worked at an advertising firm, and we figured out how to get her to retire early, basically. And then actually she’s not even a client anymore, which is kind of funny about it, because she’s like, “Eh, I can do this now, I know what I’m doing,” and she left. And I was like, “All right, great.” But somebody at her firm was like, “You’re leaving?”
She’s like, “Yeah, I’m retired now.” She’s, mind you, 42. And he was like, “What do you mean you’re retired now?” So she sent…she referred him, and he has been one of our best clients. We went to their wedding, they’re going to have a baby soon, they’re really part of our family, they’ve referred people, he and his wife have referred people. They’ve invited us to places to meet other people who could potentially be clients. So it’s just, sometimes these things just happen.
Michael: I guess that’s the one interesting thing – no one gets to talk excitedly, like, “I’m working with a new financial planner now, and in 27 years when I retire, this is going to be awesome. Call me back in the 2050s and I’ll tell you about how it’s going.” Nor does it get exciting like, “Oh, this is so awesome, I knew he with…I’m working with a new financial planner and we’re saving so much more. Let me tell you all the things I used to enjoy that I don’t get to do anymore because my planner has me saving more.”
Morgen: Totally, yeah.
Michael: Right? The traditional approach doesn’t exactly generate the kinds of things that people get excited to talk about, whereas when you get down to these…the stuff that surfaces from Kinder’s 3 questions – I’m sure there are people that are listening to this who were reflecting on those questions for themselves as they went – when you start getting to question number 2 about, “If you only have 5 to 10 years to live, what would you be doing?” And of course, the natural cue up is like, okay, so if you’re not dying, maybe you should still be spending some time on those things.
When we start hitting that stuff that has a nearer-term time horizon and is really high-impact and transformational for our lives, and our meaning, and our purpose and fulfillment on Earth, it’s pretty hard not to start sharing those wins with all of your friends and family and everyone you know. And that’s just a whole other type of referral than, “You should work with Morgen, we don’t…we’ve lost 17% in that recent market drawdown, and we’re already up 1.7% over benchmark.”
Morgen: Yeah, totally. And then for full disclosure, I get…probably about 20% of my practice has come in through internet type leads. Either people found me on LinkedIn, found me on Twitter, found me on NAPFA, Fee Only Network, or also XY Planning Network, so I’m not 100% referrals. I do have a web traffic…presence too, I’m just…I’m not as active as I think other advisors are on there, so I don’t want to…I can’t give you marketing advice if they…I think maybe somebody else is a better fit for that.
But, yeah, we do…I do get people from there, for sure, and I have ticked my Twitter up a notch because I’m trying to sell my book, so I’ve been trying to have good one-liners and things to get people excited and interested.
Michael: You’re not selling your book of clients, you’re selling your book-book.
Morgen: Yeah, yeah.
Michael: The paperback book, book.
Morgen: My paperback book. No, no, no, no, my…and, yeah, all my…
Michael: Her personal finance quickstart guide book, not 25 clients book.
Morgen: Yes, not my 25 clients book. No, I definitely wouldn’t want to do that on Twitter, I probably want somebody who was a little more experienced.
What Surprised Her The Most About Building Her Advisory Business And How She Structures Her Week [01:34:22]
Morgen: Probably how much I have changed over the years. So, yeah, I mean my…I started my career as an equity options trader, and then I worked at two large wealth management firms, so there was a huge focus on investments. Just unbelievable focus on investments. And I got my CFA during that time, and I was just like, “I want to be a portfolio manager, I’m going to do anything to be a portfolio manager even if it means I’m going to go start my own firm and be a portfolio manager.”
Michael: And was that the original vision when you actually went and hung your shingle?
Morgen: Yeah, yeah, it was.
Michael: “I’m going to be a portfolio… I got my CFA, I’m going to be a portfolio manager and manage my own way as a registered investment advisor. Let’s go.”
Morgen: Yep, exactly. It was basically a Fee Only wannabe hedge fund manager; I guess is how I would put it. And then it just became clear from working with people that that’s just not…A., not what I should be doing with my time because I wasn’t really…I wasn’t generating alpha. I was matching the market, and sometimes not even matching the market, making bad decisions. And so I was like, “Okay, maybe markets are efficient and I should go reread that section.” And then it was also, clients, they don’t care about that.
They don’t care about the R-squared on their portfolio and what that percentage drawdown…they just don’t care about that stuff and that it wasn’t important. So how we frame investments, and how I present a client their performance, and how we look at asset allocation is very different now than what it was when I first opened my firm when there was a huge emphasis on it. And now it’s not that we don’t discuss it. For sure, it’s still important, right?
Clients entrust me with a lot of money, and I don’t take that lightly, and I don’t just say, “Investments aren’t important and we’re not going to focus on it,” but they are secondary to somebody’s life. The personal part of personal finance is the most important part, the investment support, the personal. And the investments are there to make sure that they can be on Machu Picchu with their guitar, right?
Morgen: They’re not just going to get there… I mean, maybe some people will be able to just get there by putting it in a savings account, but for most people, they want those assets to grow and to be working for them so that later on in their life they can do other things. Go to other mountaintops and play guitar, right? It’s important, and I think de-emphasizing it actually makes it be so that a client can’t talk to you about it the way that they want to. One of the reasons why clients come to me is because they want investment advice, right? That’s why they’re going to a registered investment advisor. If they didn’t need investment advice, then they can go to Money Owners, but…
Michael: Right, you’ve got a coaching business for the non-investment side. They’re hiring you for this one and paying you some pretty good fees to have that be part of the service.
Morgen: Totally, so it is important. Yeah, not every meeting is going to pull out their portfolio and start talking about it, but any time that they want to talk about it, for sure, I’m there to talk about it. Absolutely. And I worked around the clock in March and April of this year taking client calls, reassuring people, talking them through why their investments were doing what they were doing.
It doesn’t matter to them because of X, Y, and Z part of their plan, why that percentage…why that portion of their assets were invested like that, and why it’s declined, and why, “Hey, you’re not touching this for 20 years, because in 20 years, this is what you want to do with that money, not… The money that you want for Machu Picchu is over here, and it’s still there, don’t worry about it.”
So things like that where a client wants to know…they don’t want to know the returns necessarily, or the Sharpe ratio on their portfolio, but they do want to know why we’re invested the way that we are, and how it’s helping and working for them, and what…how it affects them specifically. And that’s the…I think the biggest change of what…of who I’ve become as a business owner and as a financial planner over the years is being able to recognize when clients want…what they want to talk about in regard to their investments, and what they need to talk about in regard to everything else.
Michael: So what’s a typical week look like for you at this point? Because I am struck with this juxtaposition of this kind of talk…like 10 clients and only 10 or 15 hours a week that it takes to do the stuff and the…and work. But one of your problems with prospects was they wanted to schedule time or meet with you, and all they could get was 1:00 on Wednesday or something through Thursdays from now. What does your calendar look like? How does this work? How is it scheduled? It sounds like it’s very structured, so I’d love to understand what that structure looks like.
Morgen: Yeah, definitely. So, Mondays in general are completely off, I almost never take meetings on Mondays. That’s, I think, also something that’s just been deeply ingrained in me as a child. My dad never liked Mondays, on Sunday night as a kid he would always just be like, “Man, Sunday night sucks because I have to go to school on Monday,” so when he started his own dental practice, he decided not to work on Mondays. And I don’t know why, but I agree.
I don’t like Sunday nights feeling like that. I know that you end up feeling like that on Monday nights, I don’t feel like that because I don’t work that much. But I’m sure some people probably do on Monday night, there is Tuesday’s the day that they start their week. But, yeah, there is just something about it. So Mondays I really don’t do very much. If I need to, obviously I will, but I’ll do it typically during nap time for my child.
So, if a client needs something, they’re probably not going to hear from me until 2:30 Eastern, because my son naps at 1:30 Central. So, yeah, Mondays are off. Fridays, the same thing, usually. Fridays are completely off. Occasionally, same thing, I’ll do something during nap time. Tuesday and Wednesday mornings I work and I schedule everything that I do pretty much. I try to get client calls in on Tuesdays and Wednesday mornings, and I pretty much have from 9 a.m. until about 3:30 to take care of things on Tuesdays and Wednesdays.
That doesn’t mean that the whole days are filled with anything, it’s just the amount of time that I have child care. So I try to split that between actually working, getting a workout in if I want to because I also want to take care of myself, napping lately, because I’m pregnant. You know, fitting all that stuff in. So, that. And mostly on Tuesdays and Wednesdays, that’s when the stuff gets taken care of, and then Thursday afternoons I need it.
So, especially during quarterly reporting time, because around every quarter we send invoices to clients, so that they know, “Hey, this is what you’re being charged. We’re not trying to be nontransparent about that stuff. Here is also your quarterly performance report, here is also a summary of the markets, here is also, hey, a nice short snapshot about the stuff that we’re working on from a financial planning perspective.”
And I put that out for clients every single quarter. I do that, Mark doesn’t do that. And I just feel like it’s a good hands-on way for me to stay involved with all my clients and know what’s going on, and also show them that, “Hey, we’re here for you.” And so during those times, I work more, and I either need more time from my husband or we have more time from our nanny. With both the exceptions of those weeks, I’m usually really more at about eight hours a week in work.
Michael: And I guess I’m just trying to… Is this ever a challenge with clients? “Hey, Morgen, we’d like to meet with you next month. We’d like to meet with you on Friday.” “Oh, no, sorry, I don’t work on Fridays.” “Oh, okay, I guess we can start next week. Can we meet with you on Monday?” “Oh, no, I don’t work on Mondays, either. You can’t get me until Tuesday.” And does that come up? Is it get…
Morgen: It does, yeah.
Michael: …awkward with that? Does at some point be like, “We pay you a lot of money, it seems like you don’t work a lot.”
Morgen: No, that’s a good point. For some clients, it never even comes up. There are certain clients I know that need Mondays, they get Mondays, right? There are certain things where I’m just like…I say to my husband, “Hey, I have a call from 9 to 10 on Monday morning. Can you just help me for that hour?” And he does. And that the difference, though, is that I don’t open my calendar up at that time, so a client who’s been with me for a long time, who I know likes Mondays, gets Monday.
Same thing with a Friday. A client who’s been working with me for a long time gets a Friday. See, like a client who works a lot during the week gets a Saturday, even, just because I know them. So my schedule is not always the same. The thing that’s the same, though, is that when these meetings happen in random spots, the time gets blocked somewhere else…off somewhere else for me to do other things.
What The Low Point Was For Morgen And What She Wished She Knew Starting Out [01:42:21]
Morgen: Oh, gosh, only one?
Michael: It’s all glorious to get you 25 multimillionaire clients.
Morgen: Yeah, it’s so glorious. No, I think…well, the first low point was definitely when I realized I needed to get a CFP. I’ve told this story on a lot of podcasts, but I’ll tell it here too. A woman came into my office, a good referral, and she wanted a profit-sharing plan and I literally didn’t know what that was. That’s how little the CFA curriculum covers that kind of stuff, and I was like, “What the heck? How do I not know what this is?” And obviously, I didn’t get her as a client, and I went home and I signed up for the CFP, and I was…It was so demoralizing, it was so…it was like, it’s such a shameful point in my life, I feel like, to leave that meeting just not only…
Michael: Because you put so much into the CFA. That is a high-stakes, hard-core, multiyear – actually takes longer than the CFP – program.
Morgen: Yeah, and then to just… And not only that, but it was…I know my face in that meeting was just…it showed, because I couldn’t even hide how mortified I was that I didn’t know what she was talking about, you know? I couldn’t even pretend, I was just like, “I’ll have to look into that for you,” with a straight face. But also, I could feel my face just getting so hot, and I left that meeting being like, “Ugh. Ugh, stupid. Ugh,” you know? Like, “Ah.”
So, yeah, that was a… that was definitely a low point. There are other low points through that. So after my son was born was a really hard time, I didn’t have the help in my practice that I have today. I didn’t really take a maternity leave because I couldn’t. I was working while I was in labor. I mean, I don’t know why I thought that that was a good idea…
Morgen: …but I decided that I was like, “Well, I’m just going to get as much done as I can until he gets here.” And that’s not what you’re supposed to be doing in labor, you’re just supposed to be relaxing so that you have a good experience when your child…when you meet your child. And we…my husband…we didn’t have the best experience, I think, probably because of that. So that’s definitely not going to be repeated this time. But it was also after he was born, it was like I had…I still had client work, it was February when he got here, we had to make sure that all the clients…I had to get all the 1099s to them and make sure that they could file their taxes.
Meetings were delayed for sure, and people were understanding about that, but there were still day-to-day things that had to take place, and it was very obvious to me that I needed help. And leading up to that, I did hire a virtual assistant, but I didn’t train her enough and I didn’t recognize that she…she’s very experienced, and she’s still with me, and she’s fantastic, and…but she wasn’t experienced doing it for my firm. And I think that this is something that a lot of advisors don’t recognize, you think that if you hire somebody and they have experience, that you’re just going to put them in and they’re going to do everything that you want in your practice, and that’s just not how it works.
You need to be a leader, and you need to show the person why it is that the thing that they are doing in your practice is so important. And I had to hit a really low point before I realized, “Hey, I’m not a good leader for this employee. I’m just not. And I need to step up my game, because it’s not her fault that these things are going wrong, it’s my fault.” That was definitely another low point and a learning experience for both of us. And Mark, my other employee, is now definitely a beneficiary of the things that Tracy and I learned together, because Mark and I didn’t have those issues from the beginning because I worked them out before he got here.
So, I think that was definitely…it was a huge learning experience for me; it was definitely an ego crush of – I don’t know everything. I really don’t. And I need to recognize that a lot of the time.
Michael: So, what else do you know now that you wish you knew then? What do you wish you could go back and tell you from six years ago when you were getting launched?
Morgen: Oh, God, that’s great. I think time management. Maybe this is something that happens to parents when they have kids, and you’re just like, the things that used to take 20 hours a week, I can fit into 10. It’s actually kind of amazing, and I think, honestly, if I can go back, I would really be able to prioritize a lot better. A lot of what happens is that you just don’t prioritize because you don’t have to. If you have all the time in the world, it’s like when you…if you give yourself 6 hours to do something that really only takes 10 minutes, you take 6 hours to do it, it’s kind of like that.
And I have learned over the years that if I give myself 15 minutes, damn, do I work hard in those 15 minutes, because it’s got to get done, you know? And it’s the only time that it’s going to happen. So I time block a lot, I underestimate how long things are going to take me on purpose, because I know myself and I know that if I give myself too much time to do it, I’ll take all the time in the world to do it. And I don’t need that time, I want that time for some…for other things.
And I think that in some ways, people probably think that that makes me a little bit crazy, but in other ways, it makes me hyper-productive and it has really led to the success I’ve had today, and I think I probably would have had a lot of that success earlier if I were able to realize how to do it.
Michael: It’s interesting. So deliberately scheduling yourself for narrower time blocking and scheduling yourself for narrow time blocks because it pushes you to get it done efficiently.
Morgen: Yes, definitely. And that’s the whole reason why I’m able to work 8 to 10 hours a week, it’s not because there are 8 to 10 hours… I’m sure I can fill my schedule with 40 hours of work. I definitely could. But I don’t want to, right? So, I deliberately crunch it down. And I think you can do that, anyone can do it. You don’t need to have a kid running around in the background to be able to prioritize, you just have to have something that you want to do just as badly, and have competing…really, competing priorities.
The Advice That Morgen Would Give New Financial Advisors And How She Defines Success [01:48:04]
Morgen: Yeah, I would say you have to be authentic to the vision you have for your own firm. It’s something actually you and I discussed before this podcast. It’s like you hear things…you hear the success of other advisors and you think, “Oh, well, if I just do X, Y, and Z thing, then I’ll be just as successful as them,” and that’s just not how it works. And I talk to a lot of people and a lot of different business owners while…throughout this whole process and I hear about the different things that people do, and a lot of those things just aren’t things that I can do. They’re just not. They don’t fit with my personality, they don’t fit with the client base I want to have.
I’m not trying to create this very large, scalable business, right? I purposely created this small, niche-y kind of business that I have. And I think that the more you are true to yourself and what you want, and what you want not only in your business but outside of your business, the more of the…your practice is going to look a lot like what you want it to look like even if you don’t know what that is.
Michael: So as we wrap up, this is a podcast around success, and one of the themes that always comes up is just the word “success” means different things to different people. And so you built this incredibly successful, as you’ve termed it, lifestyle practice makes a great income for a wonderful number of hours – but that’s on the business side. And I’m wondering, how do you define success for yourself at this point?
Morgen: I love that question. For me, it’s balance. I don’t always achieve it, but it’s the thing I want the most in the world, of making sure that I spent enough time with my family, making sure I have enough time with my clients, making sure I have enough time for me to do other things, making sure I have enough time with my spouse, and balancing all of these things in a way where I still feel like I am doing it all in a way that is…that I could be proud of, really. In a way that I’m proud of and that I can just feel good about.
And every day is not like that, for sure, but I do try, at the end of the day, to think about it to think to myself, “Okay, what are the things I did today? Did it get me closer to the goal that I want to have of living this balanced life? Or, maybe am I erring too much one way or the other?” And sometimes it’s not even a daily evaluation, sometimes it’s just looking at the whole week and thinking about it, but I think the little check-ins are actually the thing that motivates me and keeps me kind of grounded and coming back to my real true purpose.
And that’s what makes me feel successful. And I feel really good about what I’ve built because of all of the stuff that I’ve taken along the way to ensure that my clients are happy, my family is happy, and that I am too.
Michael: Well, and I just…I love the way that you built with purpose for what you’re doing. Specific clients, targets, revenue goals, and time goals, and all the rest. I think a lot of us, we talk about trying to have better work-life balance, but we don’t necessarily then do the follow-on things you have to change to make that happen.
But I think one of the fascinating things about your story and your paths, you did to change them, like, “I need a different focus for my business, so I went and got my CFP certification. I need a different structure for how this is working, so I’m going to rework my clients and I’m going to change my fee schedule.” And you make the alterations that it takes to actually move towards that vision.
Morgen: Thanks. Yeah, I think that that’s kind of the nice thing about being a small business owner, is we can be so nimble. So if we don’t take advantage of it, what’s the point of even doing it?
Michael: Amen. I love how you put that. I love how you put that. Well, thank you so much, Morgen, for joining us on the “Financial Advisor Success Podcast.”
Morgen: Yeah, thanks for having me on, Michael. It was a pleasure.