#FASuccess Ep 440: Making Client Meetings More Consistent Across Multiple Advisors By Utilizing A “Money Personality” Assessment, With Nina Hajjar

Resources Featured In This Episode:

• Nina Hajjar: Website | LinkedIn
• Nitrogen Wealth
• StratosCA My Money Personality Assessment

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Full Transcript:

Michael: Welcome, Nina Hajjar, to the "Financial Advisor Success" Podcast.

Nina: Hi.

Michael: I really appreciate you joining us today, and looking forward to digging into, I guess I would frame it the topic of financial psychology or how we adapt the way we communicate with clients and interact with clients based on their style and how they show up. Because I find the industry has spent a lot of time in the past few years talking about behavioral finance or as I think about the economics research that shows all the irrational ways that real human beings failed to behave the way that economists predicted that they were supposed to rationally behave.

And I do think behavioral finance has done a great job of cataloging all the so-called biases and heuristics, but tells us remarkably little about what to do about it. Am I supposed to tell the client who's overconfident and has too much company stock that they're being overconfident and they should stop being overconfident and that'll make them stop being overconfident? I haven't tried it. I'm fairly certain that conversation won't go well. And so, it leaves us in this strange place where I feel like as advisors we're still stuck in this, "Well, what am I actually supposed to do to adapt myself and the way I interact with clients based on the way that they behave around money?"

And I know you spent a good amount of time on this, thinking about this and actually building tools in your practice to better understand how clients are going to behave around their money and then how to adapt your services and style around that. So, I'm excited to talk today about what you, Nina, have actually found that works when it comes to delving deeper with clients around their financial behaviors. And as I view it, how you're going beyond traditional behavioral finance approach in the industry to say, how do we really adapt to serve clients better?

Nina: Yeah. Very well put. I'm very excited about it. Behavioral finance, I feel is actually very underrated, kind of as a topic in our business. Everyone always wants to talk about investments or that new stock or the latest AI that's able to build investment portfolios. And there's a lot of noise always around the investments and what's making money, but realistically, it's like what really helps a family accumulate wealth is how hard they work, what they earn and how they spend and how they save and how they invest over time. It's really very basic. But what we do in the good times and what we do in the bad times actually really affect our long-term plan. So, we'll be creating an awareness around that from a client's perspective, but also I've used this to kind of teach other advisors on my team how to have better, more meaningful client conversations. Diving into the psychology part of it is really interesting to me and exciting.

What Stratos CA Looks Like Today [05:52]

Michael: So, I think to start, I'd love to just understand the advisory firm itself, like the business you have, as it exists today, and then we can kind of get a little bit further into how are you applying some of this in the business. But tell us about the advisory firm.

Nina: Sure. So, I am affiliated with Stratos Wealth Partners. They're a registered investment advisor, and we are hybrid where I'm also registered with LPL Financial as my broker-dealer.

So, Stratos is a large RIA. They're a top 25 Barron's RIA with over $30 billion of assets under management. I have a small practice underneath their umbrella. We manage around $500 million in assets, and I have a team of 7. So, I have two junior advisors, admin staff, and then I recently hired an additional paraplanner on my team. So, we're kind of a smaller office underneath their larger umbrella based in Southern California.

Michael: So, help me understand again kind of the seats on the bus as it were of the team of seven. Who does what? What are the roles for your team?

Nina: Right. So, I am in business development, kind of lead financial planning, driver of new revenue to the business. I have a partner, Charles Shapiro, also does business development, but he handles all of the capital markets, investment management portfolios. We have a COO. She's been with our team, been in the business for over 30 years. She's been with our team now for about two years. And underneath her, we have two admin, and then now I have a paraplanner. And then I also have two, I would say, servicing advisors. I don't want to use the term junior, but just two other advisors who help take care of our firm's clients in addition to myself.

Michael: Okay. And how many clients is it?

Nina: So, we have around 300 clients to about... I actually looked at it earlier today. So, it's 300 to about 325, if you count some kids that could be their own household or not. So, about 300 households.

Michael: Okay. And can I ask what is revenue for the firm?

Nina: It's around about 4.5. We're tracking $4.5 million this year. We did about $4.2 million in revenue last year.

Michael: Okay. So, just sort of visualizing, pretty healthy assets per household or revenue per household. You're north of a million, almost north a million and a half of AUM per household. Fees are more than $10,000 per household. So, just like you've got a good chunk of dollars per client household that you're servicing and working with.

Nina: Correct. We're very fortunate. Also, we live in Los Angeles and Southern California, so it's usually a little bit more expensive to live here. So, we're fortunate in the way that you need more money to live here. We have great clients, healthy clients. And we've worked with some of them now since we started with Stratos. And we've grown a lot by referral. We've done a couple acquisitions, but we still get many referrals every year from our existing book of business. So, that makes me happy because that tells me that we're doing something right.

The Ups And Downs Of Three Acquisitions [09:31]

Michael: So, when you do acquisitions, what are acquisitions for you?

Nina: So, I've actually purchased three other financial planning practices. So, I acquired…the first one was in 2013, a very small practice, maybe $20 million of assets under management. Then in 2020, I purchased another book, which was about $40 million of assets under management. And then in 2022, I purchased a practice that had about $200 million of assets under management.

Michael: Wow. Okay.

Nina: So, that was a big catalyst in our growth was the last acquisition. But even prior to that, we just had great, healthy clients. So, it's been good.

Michael: Interesting. And so as you do these, how do you... I guess, I'm trying to envision, how do you typically structure acquisitions and who are you acquiring? Are these a retiring advisor that you just do a revenue split for a few years? Are these "I bought the entity and merged entities in"? What do these acquisitions look like for you?

Nina: So, the first one and the third one, the advisor was retiring. The first advisor was affiliated with Stratos and LPL. So, that was a very natural, smooth transition because it wasn't very many clients…not very much change. And the advisor was in his 80s and had a health scare. So, the clients were happy in that aspect because they wanted somebody younger to come and help them.

And then the third one is very similar situation, but obviously though much bigger practice in size. But again, LPL advisor. I heard about this internally through LPL. I never thought I would be chosen. So, I'm filling out LOIs [Letters Of Intent] and going through the whole interview process and really trying to provide as many details about why we would be the right fit to partner with this advisor. And at the end of the day, he chose me, one because he liked me, two, local.

And at that size of a practice you could sell it and really monetize and really cash out, but he didn't care so much about the money. He really wanted the right fit for his clients. And so he's actually still on board as an advisor emeritus, involved with the clients...

Michael: Oh, nice.

Nina: ...helps us as a consultant. So, wants to drive in new business and new revenue. So, it's actually been a really great partnership and a really great fit.

The second one was more we bought the entity. So, to answer that question. It was a harder transition. They were at a different broker-dealer. It was a lot of alternative investments within the practice. The nature of the way that this advisor did business versus the way that our team has done business is completely different. So, it was very challenging. And honestly, it was really hard. I regret that one. I probably if I had to rewind, would I have bought that book of business? No. But everything's a learning experience. So, the term, fit, really does matter when you're interviewing to buy a practice.

Michael: So, I'm curious to understand more. What didn't fit? Or what did you miss in retrospect that you wouldn't have done it had you known?

Nina: So, this actually ties along to our behavioral conversation a little bit. I did know, and I knew that it probably wasn't the right fit. The selling advisor, I just didn't have the best vibe from her. And I didn't trust my gut, so I should have followed it more.

So that was kind of one of my harder acquisitions. Bought the entity, merged the practices. So, it's not as beautiful as it sounds, "Oh, I acquired this practice..." It's actually a lot of hard work. It's a lot of personalities. It's a lot of egos mixing. It's a lot of financial advisors thinking their way is the best way, trying to come together and figure out how do we meet in the middle to really service the client at the end. So, it definitely was challenging times, but, yeah, that's part of how we've grown the practice and everything along the way.

Michael: And do you typically have to finance these by taking out bank loans and going that whole route? Just how do you manage one acquisition after another from the cash flow perspective?

Nina: So, I use the analogy, it's very similar to buying a house. So, you put money down, you figure out a down payment. And I was fortunate enough that the sellers in each situation were willing to carry seller notes with interest amortized. So, realistically, the advisory business and the business still pays off that advisor over time. So, the cash flow from the business pays the installment note over the remaining period of years…so, kind of very much like a mortgage, right?

But for us, we still have staff to pay, rent to pay, and now we have so many more clients and workload that are taking your time. So, it's a lot of sweat equity at the initial phases and why you really want to make sure that the person who is selling the practice is the right fit, especially if they're going to stay because that's somebody that you're in essence paying a multiple, a very high price for their time. So, if they can stay on to help you service those relationships over a period of years, I always think that that's helpful, especially in the early years just because of the sweat equity part and capacity issues in running a business.

Structuring Deals To Protect Both Parties' Interests [16:06]

Michael: So, was there a typical structure of how much you did upfront versus financed? How many years you would finance it. What did these look like for you to make the cash flow work?

Nina: So, the last one, because it was the biggest, I think, is the best example to use. We had to put 30% upfront, and then the seller was willing to carry a note for the remaining price over a 10-year period at a very reasonable interest rate around 4%. And this was right before the year...so, this closed 2021, so it was right before the rates turned.

Michael: Okay. Good timing. Good timing.

Nina: Great timing. But then you worry, okay, 2022 was a down year, right? So, revenues dropped significantly. So, it was just also knowing that I had a healthy practice and we had healthy clientele prior to this. So, we had the cash flow that could cover it if we needed and to always pay those notes. But it was really just pen to paper. Like, this is what the assets are today with this advisor. You never rely on 100% of the clients moving over. So, kind of just I backed it out, and I said, "Okay. If 80% to 90% of the clients come."

And then we factored in, I want to say a 10% to 15% drop in revenue was part of our kind of stress test, based on the amount of debt and everything we were taking out, like could this work? And then it did. And then I had enough, like I said, cash flow and reserves on the other side from our prior business. I've always kept my businesses lean and healthy, just from an expense standpoint to kind of weather any of those storms. And it's helped especially in times like this when you need the financing or just the cash flow to cover operating expenses for everything.

Michael: Interesting. So, is there a typical profit margin or percentage that you try to target just to keep that safety flexibility from market downturns?

Nina: Honestly, I'm definitely more the risk taker. My partner, Charles, is the more conservative one. So, I'm very fortunate that I have the other person on the other end who looks at...he's the doom and gloom of what if the sky falls down kind of scenario. So, he was really nervous about this last business that we acquired. He wasn't, I don't think, so much nervous about the money in a way because the cash flows worked right. But I had my second baby right when it closed. So, it was you are buying a $200 million practice that closed in December, and I had my second child in January. So, that I think was also maybe part of the concern.

But again, this is why we have partners, this is why we have a team, because you always need the coverage. But also it was good just, I think, for us both to have the...there were many discussions about, do we do this or do we not? And to be fair, I don't think that when we applied to put our name in the hat to get picked, I don't think either one of us really thought that we would. I think it was more a big firm's going to come in and write a much bigger check than what we can afford. So, let's just try. And if we get it, great. And if we don't, we tried. And so then I think when we realized we were getting it, it was kind of like an "Oh shoot" moment. Like, "Oh, wow. Okay. Now we really need to figure this out." But luckily we did, and the business has grown. The assets are up almost 60% to 70% since we initially acquired it. We've grown.

Michael: I think you said you're running these models assuming, what if only 80% or 90% of clients come over? Now that you've been through three of these, in practice, how many clients do tend to come over? How does that work out in practice for you?

Nina: So, actually, the first and the third acquisitions, about 95% of the clients came. So, that just shows that they had really great relationships with their advisors. So, if their advisor told them that this is what was happening, they had no problem signing on.

The second one was more of a challenge just by the nature of the assets of the business. But also, I think the clients that worked with this person, she didn't have all their money. So, I think a lot of those clients, they used this as an opportunity to cut ways with her, and they did not come over. So, that one was maybe... But still, it was still about 88%-89% of the assets came over that we were anticipating. So, it wasn't bad realistically.

Michael: And so, did you have terms in the deal that would adjust what you owe based on how many came over, or that was just part of the financial risk of the deal and the way it got valued?

Nina: No, we definitely had parameters. So, we had parameters on both sides. I believe that if I'm asking something of somebody, I need to be willing to go the other way as well. So, if the assets dropped after a two-year period, then the business was revalued by a certain percentage. But also if the assets grew over a certain period, that two-year period, then we would pay more as well. Right? So, there were parameters on both sides. So, it really incentivized the seller to want to transition assets but also want to continue to work with us and grow the business over time because they got to participate in that upside. It wasn't just a, "I'm selling and I'm done. You get to reap the benefits of all the future growth." We included them in that.

Michael: So, you get to the end of the two-year period, and, essentially, the remaining balance, the remaining eight-year balance on the ten-year note gets revalued up or down based on which end of the guardrails may have been hit over that two-year period?

Nina: Exactly. Based on the terms and the contract and the formulas that we set at the beginning.

Michael: So, do you recall... I'm just fascinated with this. What kind of parameters did you set? How far up or down does it have to move before you're actually going to make an adjustment?

Nina: I want to say it was 10%. So, on the $200 million, it was 10% of that…is $20 million. So, 180 on the downside and 220 on the upside, but it was of net flows. Money in versus money out. It's not just only of new money in.

Michael: And it was an adjustment based on flow, so not necessarily where assets are in the future because that could have market adjustments and others. It was directly if net flows over the 2 years are more than $20 million on the upside, we adjust up. More than $20 million on the downside, then we adjust down.

Nina: Exactly. And the sellers actually are the ones who didn't want to include any market adjustments, which was interesting to me. But it was also the timing, right? The deal actually closed in 2022. The numbers were valued based on 2021 market valuation. But then I think after the 2022 drop in pretty much all asset classes besides cash, they were nervous that...the seller was nervous to really reevaluate based on market because we all know the market goes down, that can hurt us more than the upside. So, that's where we worked together to come up with the terms of that agreement.

So, it's definitely when you're doing a contract like this, it's a negotiating point, and it's something that we definitely went back and forth on. But I look at it as we all want to be rowing in the same direction. And if we can build that together where everyone wins at the end of the day. We want to buy the business to grow, but if we can have somebody who helps us and works for us and they can participate in that upside, I'm all about it.

Michael: And so thus the "We're not going to include literally market performance-related adjustments because that's out of the seller's control anyways." But you did want a net flows adjustment to make sure, "Look, if I buy the practice and a bunch of the clients leave or don't come over, we have to adjust."

Nina: A hundred percent, yes. There has to be some protection in place.

Michael: And then how did you figure out what price to acquire at in the first place? Because I'm assuming this isn't just a "We're cutting a deal together, and we're going to go get a third-party valuation and do a deal at the valuation" if you've got LOIs and other people doing bids as well. So, how do you figure out what your valuation is, what your offer is?

Nina: Right. So, the seller hired...both being LPL advisors, it made it a bit easier. But the seller hired a broker, in essence, through LPL to help him sell the practice and take it to market. In filling out the LOI and creating all of the documents, we initially just did an interview. Money wasn't talked at all. Like, "Let's just see if you're the right fit." And based on that, I made it to round two.

Then we did another interview with, Charles, my partner, because he couldn't be on the first one. So, then after he met Charles, we then made it to round three. And then in kind of working and trying to figure out the valuation we had, through Stratos they did an internal valuation for us. And I think we actually had another third-party firm do a valuation for us, and our first initial offer came in relatively low. And so the people at LPL, the guys who were the brokers just I was very fortunate, they picked up the phone and called me and said, "Nina, we really like you, he really likes you, but you need to get the price to this." So, then it was, "Okay. Let's just then take..."

Michael: Interesting. So, the broker's like, "We want this to go through with you, but we kind of know where the seller is. You're going to have to get to this number if you want to see the deal close."

Nina: Exactly. And it was probably $2 million above what all both valuations came out prior. So, it was higher than expected. But remember this was 2021, So, the market at that time, this was people were buying practices at an elevated valuation. So, then it was kind of like, "Let's work backwards. Can I afford this?" And then it was, "Okay, this is the money. Where are we going to get the money?" And then with the debt and then the interest and everything, "Can we afford it?" And so it was then at that point just kind of working backwards. And the profit margins based on working backwards were not very big. In the first year it was maybe like $100,000, but that's not a ton of wiggle room if markets drop, right? On a $200 million acquisition.

Michael: On a $200 million acquisition you can lose $100,000 of revenue in a bad week.

Nina: Exactly.

Michael: Or a bad day given certain recent volatility days. So, yeah, that's a little scarier.

Nina: But that's, again, I think just the different personalities right within our team. And I also think that you never really get...no advisor, not myself, we never have 100% of every client in our practice's money. Right? We don't. They have other advisors or they have a 401(k) plan. They have money in the bank they're accumulating. I look at that as an opportunity. If I can get in front of somebody, how do I... I'm very good at having that conversation of "What else do you have? What is outside? What is that low hanging fruit that we can maybe bring in to help?"

And so I think I just kind of believe in the process and the model of everything we do is financial planning based initially. And just by going through the basic questions of financial planning, you're able to uncover and profile so many outside assets and really get to know the clients. That's where I'm like, "Okay. I think this can work even if it's a down market." My partner was more nervous than I was, but ultimately, we did it, and it worked out. So, here we are.

Michael: So, it sounded like you were sort of banking on the idea that "We're a more planning-centric firm that's going to go deeper with these clients, so we're anticipating some amount of net flows that we can attract in because we may be able to go deeper with these clients than they got in the past, and so that buoys the deal upwards."

Nina: Exactly. I truly believe that. And many of the clients were older, but the older clients had a lot of money. So, that may deter some advisors. But for me, I look at it as, "Okay, if we have the account, the clients and the beneficiaries have to contact us. We're going to be in front of them or have a conversation with them one way or the other. So, if we can keep that money and potentially get more money from beneficiaries or multigenerational planning, or can we do a really great job and put them into our existing service model and start getting referrals?" I look at that all as an opportunity. The more people we're in front of as advisors, the more business we can close.

Michael: Yeah. Interesting. So, from your end, you were not as concerned about age of client base?

Nina: Not so much. No.

Michael: Okay. And then so take me back once more. Just how did you find all the different people that you're acquiring?

Nina: The first one was through my business partner, Charles. He knew him, and he had actually worked with him and recruited him to Stratos. He was an advisor under our arm. The second one we found through a recruiter. So, a recruiter referred her to us. And then, the third one I ended up getting more involved with LPL and kind of some of the business solutions they offer. So, I went to a conference like a few years ago and said, "How do I get on these lists?" And I kind of inquired more. And so, I actually found through an email blast that LPL put out to all of the advisors kind of through the seller. When the seller hired the broker service, they kind of sent it out to all LPL advisors.

They also sent it out to outside advisors too. So, it wasn't only just in LPL. He wasn't only looking at LPL advisors. He was looking elsewhere as well. Obviously, to not have to repaper clients is always a benefit just to keep them on the same platform and custodian. But we are actually…and another benefit of being with Stratos is I'm multi-custodian. So, I can work with LPL, Charles Schwab, Fidelity. So, then also in kind of having client conversations and meetings, if clients have an account at Fidelity or Schwab, it's very easy for us to then become the advisor on those accounts and have access to just more.

Michael: So, now that you're three acquisitions in, is this a ongoing growth strategy for you that you want to do more or "Had my fill. Got to good numbers. Let's grow more by referrals now"?

Nina: I think right now I'm at the point of we need to manage what we have. I just hired another person to help with the servicing. And, yeah, maybe ask me in a year, it might change, but right now I'm okay. I don't need to buy another business. I know our service model works. So, remember we probably bought about $250 million of assets, or let's call it, sorry, 260 to 270, but I had a practice of around 200 without that that I grew organically.

So, when I first joined Stratos in 2011, I left JP Morgan, and they sued me. I was like one of the only advisors that they served papers to when I left. All of my friends had gone independent months before me, nothing happened to them. But when I left, I actually got sued, and I had a restraining order put on me. And I really only brought about, I think it was, $4 million of assets under management when I first went independent.

Michael: Was that anticipated that you weren't going to be able to bring clients, or was that an unpleasant surprise when they decided to get aggressive on it?

Nina: Oh, an unpleasant surprise.

Michael: Okay.

Nina: To be fair, I was very young, and so I don't really think that I understood exactly what was happening at that time. And Stratos was great. And I remember they supported me, and they just said, "It's going to be okay." And we had legal support, and I had a great attorney. She was like, "You're going to be okay." I think everyone just kind of wanted me to remain positive and not really realize what it entailed.

But anyway, so I got the restraining order just enough time for JPMorgan to call all the clients and tell them that I was being sued and to not move their assets with me. So, I really had to get strategic and figure out, "Okay, how am I going to build this practice? How am I going to grow? How are we going to survive?" And I just went back to, "Okay, let's go back to basics. What did I learn in the early years of my career that works?" And I just kind of started doing really just overservicing clients, providing good service, providing financial planning, providing... Whenever I said that I would do something, I did it. And so then that just built trust. And over time, we got more and more referrals along the way and was able to grow the practice.

I'm very blessed in a way that I can connect with people very well. So, from the initial meetings it's we can create a connection, and most people, not all people like me, but you can be very likable and I can explain financial planning in a basic way to whoever I'm sitting across from.

So, it's like, okay, if I'm with an engineer, I know I need to go into the details. If I'm with a teacher or somebody who's never invested in their life, you want to keep it maybe...you want to take it in small bits and keep it more high level. And so I think just doing that over time and then getting the positive feedback. And always, like I said, responding and calling people back, and having an exemplary service model that it's just very, very fortunate it's grown over time.

How Nina Started Applying Behavioral Finance Concepts In Her Practice [36:18]

Michael: So, then going back to the beginning of our conversation, so when did behavioral financial psychology start showing up in the picture for you and how you work with clients?

Nina: It's interesting because when I first started independent, I was doing everything to go get new business too. I wasn't just sitting around waiting for referrals to come in. I was doing networking events. I was putting on seminars. I was cold calling. I was doing everything to hustle to try to get new clients. And at one of my networking events at UCI, another financial advisor actually said to me, "Oh, I'm sure your parents are so proud of you. This is great. You just went independent. You have your own firm." And my response was "Thank you. They both passed away, but I'm sure that they would be very proud of me." And he said, "Have you dealt with it?" And I said, "Yes, I've dealt with it." And he said, "No. No. No. No. No. Have you dealt with it?" And he said, "You haven't because I know by your response." He says, "I'm going to pay for your first three therapy sessions with..."

Michael: Wow.

Nina: "...a doctor. In order to do this job, you have to..." Pretty much I needed the therapy, but in order for us to do this job, in order to relate to people, but really understand where people are coming from, he's like, "You have to know this stuff." And so I was very, very fortunate that that happened to me.

I then of course went to therapy and realized how much I probably needed it. But also it really gave me an insight to kind of client conversations of how to dive a little bit more vulnerable. And then from there, I also hired a business coach. And so it was diving down, being more vulnerable, getting to know people what really makes them tick. What's their story? Why do they do the things that they do? And it really, really intrigued me.

And so by having then that little bit of extra knowledge, it gave me so much more insight in talking with clients, but also then gave me the skills, I guess, to also set boundaries, right? Like, "This is how we work." And not to be afraid to stand up for how our firm runs. But it really kind of was the kickoff to the behavioral finance part for me.

Michael: That's an incredible journey. So, this all started because another person, another advisor said, "You need to process this in therapy. I'm going to buy you your first three sessions."

Nina: Yes. Yeah. So-called competitor, right? Another financial advisor. You're now a financial advisor. We're both at the same UCI networking event, right? Trying to meet people and get clients initially just out of...that's where it goes a long way like what a wonderful person because I don't think he realizes really what he's done for me in his life.

Michael: And so I guess I'm also trying to process, I think you said started working with the therapist and also hired a business coach. So, what were you drawing from the therapy side? What were you drawing from the coach side as it pertains to all these changes in the practice?

Nina: Okay. So, the therapy side. So, I went independent in 2011. And so, kind of as I've already said, I brought $4 million of assets under management. At that point too, I was trying to do whatever I could to grow. And there are different other advisors underneath Stratos that we could partner with to get business. Kind of there're so many different ways which people do it. And one of the other mentors I had early on said, "Just try everything."

Well, I think through the therapy, I realized that I was kind of lost because I was trying everything, but nothing was really ultimately what I wanted to do for me. I partnered with this other advisor, who was a great advisor. He had a great business model: how to target employees at a company. I was doing that for a little bit and then thought about maybe teaming up. Ended up our visions never really were aligned. And so as I was doing the therapy, it was always kind of struggling and coming out. So, then my therapist actually recommended that I hire a business coach. And then so they were separate.

And the business coach was great in a way. He wasn't in finance, which I actually thought was interesting. His name was, Greg Campbell. He ran Coldwell Banker Offices. So, very familiar with...

Michael: Oh, interesting.

Nina: Yeah. So, he was real estate but just familiar with kind of the structure of a hierarchy and different offices. And the one thing he had said to me was, "I want you to take out your best clients to breakfast, lunch, or dinner, but don't talk finance to them. Get to know them. Like, why are they doctors? Why are they attorneys? Why do they do what they do?" And I started doing more of that. And obviously, then you develop deeper relationships with your clients.

But then I really liked it. And then as I realized these weren't just people that I were getting that were going to pay my bills and that I was going to service as clients. They're not just another name on a roster. They're actually people, and their stories are pretty awesome. I really respect them so much more when you know their story. They don't just have money because they have money. They have money because they worked hard, and they have great stories that tell either from family generational wealth.

And just, I don't know, I really loved that part of the job. So, it's like once he tasked me with that, then he would have me break down, "Why do you think this person..." So, then after I learned that about the client, then my business coach would have me break down, "Okay. So, how do you think that that affects how this person deals with money?" And then he's like, "So, in managing their portfolio, even though they say that they want high growth, but if they make comments they're afraid to lose it, manage it on the more conservative side." Right? It kind of gave you that wherewithal of even though they say something, doesn't necessarily mean that's how they truly are underneath.

And then as time goes on and as you have down market cycles, you learn really how people really are as investors. You really do realize what they can stomach and not. But it was really interesting. And then when I went back to kind of that exercise, I was so glad we went through that because it had given me that extra insight to actually how to handle their money and how to have conversations with them through the tough times by kind of bringing it back to their story, bringing it back to how they feel, bringing it back to the psychological part of why they do what they do, not necessarily what they see on the paper statements.

Nina's Hiring Progression And Identifying The Staff She Needed [43:49]

Michael: So, then what came next as you're trying to systematize or institutionalize this into the firm as what you do?

Nina: Okay. So, then my business was a mess. So, I had done all of this, and then COVID hit. And then actually I bought the second business. I bought that nightmare of a business. So, that really derailed everything. And that derailed pretty much kind of the business model and the process that I was trying to implement at that time.

And then at the same time, I hired this really great servicing advisor to be on my team. I look back and I made so many mistakes with hiring the servicing advisor. Number one, the timing. Number two, the complicated comp structure. Number three, just not realizing that everybody doesn't necessarily have the knack for client conversations. Each advisor is going to have different ways of handling a meeting with people.

And so I learned so much just in that time frame. So, after 2020, after I bought the practice, well, that was a mess. And then the other advisor, she ended up leaving because she wanted something more consistent and just to go work for an already established RIA, where I think my business was still kind of in that systematic building phase.

Michael: So, she being not the advisory firm you acquired, but the servicing advisor you hired to support for capacity?

Nina: Yes.

Michael: Okay.

Nina: Yes. So, she ended up leaving, and then that's kind of where I took a look in the mirror and was like, "Wow. This last year was really probably not the best business-wise," and kind of derailed everything, I would say.

Michael: So, I'm curious to understand more. What didn't work with the associate advisor? Nominally the business is growing. You need capacity. You hire an associate to get capacity. So, what didn't work?

Nina: Well, first of all, I think I wanted to make her an owner of the business and to have ownership within the firm. And I really, to be fair, probably didn't really have a clear vision for her. At this point, it was, Charles, myself, and two admins. And my one admin, I was actually sharing then with another advisor within Stratos that was in the same office. So, not even just a full-time dedicated admin. So, number one, I think that was my first mistake is I needed to have probably a better operations person, a more experienced operations person, I should say. And then I think then that more experienced operations person would have helped me manage the transition better for the servicing advisor.

Michael: Okay. I guess, so in retrospect, you had only partial admin support by the time you got the servicing advisor. In retrospect, you wish you had gone deeper on admin support first and built a little further before you got to the servicing advisor. Done the sequence the other way around.

Nina: Exactly. I think in hindsight, right? Hindsight is 20/20. I started from nothing, so I knew how to do be an admin. I knew how to open accounts. I knew what it was like to not have an admin. So, I didn't realize... I wasn't mature enough to understand how important really having the business and the structure and the systems all in place at that time were. I think I just kind of figured that with Stratos and LPL, everything would fall into place, kind of like it did for me when I started.

But it was eye-opening because I then realized the advisor came from Fidelity. We can custody assets at Fidelity. And they were very simple conversations to have had with clients on removing you from retail to institutional. But there is still a disconnect in being able to teach and have this advisor have those conversations. So, that's when I kind of look back and I'm like, "How could I have done this differently?" Because I was included in client meetings. I was included in client conversations to a point, but it was almost like there was an unsaid competition of she felt she wanted to move her clients over herself. And she didn't move as much as she needed to to really hit the full pay that she was going to get by having ownership and everything to pay her bills. She maybe moved, I think, $10 million of assets, and I think the goal was around at least 20. So, wasn't even extremely high.

Michael: So, these are assets you were hoping that would convert or follow her from the people she knew previously on the retail side?

Nina: Correct.

Michael: Okay. Okay.

Nina: But, anyway, it didn't happen, and then it kind of created this, I think she didn't have the confidence. She was worried about how she was going to pay her bills and wanted just more security. So, in hindsight, I should have just paid her a flat six-figure salary to be a servicing advisor irrespective of if she moved anything. But we live and we learn.

However, watching these meetings and being a part of this really then made me go back and put pen to paper. And I realized then I need to bill out a servicing model. I need to get the servicing model and the systems in place. And in doing so, it was we did have some of it built, I should say. But in developing this, it was how do I train another advisor to work with clients and implement the same? A lot of the things we do are more left brain. It's the emotional side. We can connect with people by really just caring about them versus necessarily only about their finances. Both go hand in hand.

And then I kind of started to write the art of the meeting. The meeting is the art. How an advisor holds that meeting is a skill set that's developed in our business. And I then kind of said, "Okay, how can I help teach somebody how to be better at that initial meeting and be confident and to know what to say to a client when they say this, to reassure that client that they know what they're doing?"

And that's kind of when I went back and thought about the art of the meeting. And then that's when it kind of all goes back to the prior coaching and everything that I had, which was really more of just you got to just dig into the behavioral part. What drives them? What do they like? What do they love? Is it their kids? Is it their grandkids? Is it their school? Is it charity? And I think so many advisors lack that part of the initial meeting. And there are very many that are great at it too.

Michael: So, I'm fascinated by how this came together with the advisor that you'd hired. So, it sounds like sort of the flow realization was, or at least in retrospect, "I don't really have a standardized servicing model, so I don't have anything to train them in or clients I can give them. So, I'm just going to bring them on and have them develop their own clients under my umbrella and have a path to ownership if they bring in enough clients. But it turns out if I haven't been able to train them well, then they can't even hit their own numbers. And so then the whole thing fell apart and the path separated. As opposed to if I have a servicing model in the system, I can teach the system, and then I can hand off clients to service to the advisors who learn the system. And then I can just pay them a salary, and it'll be more stable for them. And that's how I'm going to grow."

Nina: Yes. Because initially, I was going to match her. Like, whatever she brought over, I was going to match her in assets. So, it was more of an old school kind of commission structure way.

Michael: So, if she brought $20 million in assets, you would hand off $20 million and then she'd be at 40.

Nina: Right. That was just initially. And then as we bought this new business, she would service a chunk of them for 50% of the advisory fee. But again, it was volatile. It was also tough times. It was also post-COVID. So, it probably wasn't the right time to have her move and leave her stable job.

In hindsight, I wish I never did it and I could actually have her come back and work for me now because in retrospect, she is knowledgeable. She's detail-oriented. She's a CFP, so she's smart. She's female. I think I could teach the other stuff over time, but I think it was really the lack of stability and the lack of structure, which definitely, yeah, it made it all fall apart. You need structure in your business. You need structure in everything or it falls apart.

Michael: I guess particularly just for anyone who came from a large firm environment, right, Fidelity, or any other big firm like that, for better or worse a structure they're good at. They got a lot of structure. So, if you built your career with that level of large firm structure, it's just like a really big adjustment to go to independent channels that don't have the same level of structure.

Nina: Exactly. They had a department for everything. We had two staff members. One part time. So, realistically, exactly, it was a culture shock, and I learned a lot from that mistake. Definitely.

Michael: I guess I am just trying to process, though, for so many of us as advisors, I find we grow up in these sort of 'eat what you kill' environments. If you can't bring in enough business to pay yourself, then you can't bring enough business to pay yourself. That for a lot of firms, I find that if we hire someone who doesn't work out, the question becomes... If we hire someone who can't bring enough business to keep it going, then the question becomes, "Well, next time I'm going to find someone who's better at business development who can." So, I'm fascinated. Your conclusion was, "In hindsight, I should have had fewer business development requirements for them and paid them a salary."

Nina: Correct. I needed somebody to free up my time. I'm good at business development. We don't need two people to be good at business development per se. We need them to be competent. We need them to not lose clients. We want them to gather assets from the clients they're working with.

Michael: Oh, okay.

Nina: But more so just that more servicing role. But it was eye opening to me to see how much stability and structure mattered.

Michael: Okay. Which then actually becomes appealing for you when you're good at business development, like, "Oh, you really just want stability and structure while I hand you clients and then you'll free up my time to get more." I can do that if I'm confident in my own business development process. That sounds like it becomes a very comfortable handoff.

Nina: Right. So, that's where it was really I needed time to get out of the weeds of probably running the financial plans and doing the work per se that somebody else was able to do and understands to do that.

Michael: I guess with the caveat that it was hard to even get out of those parts until you had more added support depth to be able to hand off the admin stuff to get to the point that you could hand off the rest.

Nina: Correct.

Michael: Okay.

Nina: So, then that's when the first change I made is I actually hired then my now COO. She started working for us shortly after that because I needed somebody strong, somebody stable, somebody who understood the business, somebody that could handle all the moving parts kind of on the independent channels.

Training Advisors On The 'Art Of The Meeting' [56:46]

Michael: Okay. Interesting. So, then what came next as you're trying to develop this on the training, art of the meeting, behavioral finance side?

Nina: So, the art of the meeting. So, then I just got on my computer and I just started typing. And I then thought about it as like, okay, if you're building out a team or even in thinking about what clients I would pass off to her, let's say, is many firms look at it based on revenue, and they draw the line of revenue. And I don't disagree with that, right? There's a part of it that you obviously want adequate revenue assigned to the right advisor. But it was also a personality fit.

Then I really started thinking about this from a personality standpoint who would I give? Because there were certain people that were difficult. There were certain people that would love her. There were certain women that I knew wouldn't like her. They're kind of difficult. So, it was interesting to go through that part of it, the process as well. And so then that's when I started thinking, "Okay, the art of the meeting. How can we teach them?"

And I also witnessed so many other advisors that when they would talk, when you do an intro meeting with a client, the advisor goes first. That's one of my biggest pet peeves. I always want the client to go first and to tell them about me first or themselves first versus me telling them who I am, how I can help them, blah, blah, blah. Because who I am and how I can help them I don't know yet until they've told me what they need.

And so I've kind of witnessed this from some of the other advisors that I shared office space with at Stratos and it was a pet peeve of mine. And so I also just kind of said, "Okay, how can we teach this? How can I teach this?" And I really wrote this out in 2021, and it's just kind of I labeled it the art of the meeting, and it's like, "Profile the client. The client always goes first. Give them an opportunity so you can build that connection. And then ask them questions that dive deeper."

So, one of my clients is an ophthalmologist. And I said, "Why are you an ophthalmologist?" He said, "Well, my dad was blind." And I said, "Oh, wow. Okay. So, I'm really sorry about that. Tell me about your father." He tells me a 45-minute story about his dad. "Okay. Well, tell me about your mom now." Ends up his mom was one of five children. Ended up also being an orphan. She was kind of treated like didn't have anything. Almost kind of wasn't treated very well during her childhood. She's literally worked hard and has saved money and has accumulated a real estate portfolio probably over $20 million from nothing.

And so, then there tells me, okay, how this client, he respects his family. Culturally, he wants to keep the money within the family. It told me so much more about him than what...if that's a good example. So, it's the way you have conversations with someone like that. He knows what fees he's paying me. He knows what fees he's paying our firm to the penny. So, he needs to feel that he's getting value for those fees for what he's getting. Right? He knows. Because somebody like that, their mother has taught them how to be very aware of their money. So, it's really then we have to over deliver that value.

So, then it was like, okay, more about how they feel. And then it's getting into that qualitative data, building that out. Then you go into the financial piece. But then let's say it's the grandkid's birthday. You send a note to your client, "I hope your grandchild has a great birthday today." And that's going to make them really feel like you care about them. And then that's going to make them trust you and listen to you, and then we can help guide them because we do care about them. That's not fake. It's real.

And then that's when it's like the psychological part is it's more like the left brain stuff. It's the stuff that matters that our firm reaches out to our clients about. We also now reach out to our clients about their investment portfolios, and we've had many of those calls this year, trust me. But the clients feel more comfortable about listening to us when I tell them, "You have to stay the course," or, "yes, this is a downturn." "No, your Social Security is not going to be spent by our president." It's really people are afraid, and our job as their advisor is to bring back the reassurance to them.

So, that's kind of this was step one of kind of how we build out the behavioral part. It's like, what matters to them, how we make sure we follow-up with them on what matters. We manage their finances in a way that we're over delivering on everything. And from a service standpoint, we obviously can't control what the markets do.

And then kind of the second part of this was started in 2021, also, I had my first son. So, now I had kind of my second chance at having another servicing advisor. So, I learned. First one, that one I made a lot of mistakes. So, now I had my second chance, and I was really lucky because I had a seasoned advisor who just moved down to San Diego from the Bay Area right when I had my son who had just broken up with some of his business partners. And loved the guy. He's still on my team. He's so great at talking to clients about investments. Not so great about all of the warm and fuzzy stuff.

Michael: Okay. I'm familiar with the challenge. Yep.

Nina: And so I thought that after watching and doing joint meetings where I'm trying to not talk...and it's a really hard thing for me to do, by the way, is to not talk and interrupt him and just ask more questions. I just would wait till the end of the meeting and I'm like, "How do you think you could do it that it could have maybe gone a little bit different?" And he would be like, "It went fine. It was fine. It didn't matter. We talked about their account. We're going to do this. It's done."

And then I said, "Okay. Somebody like this who's an investment person, who's always talked investments, what tool or what process can I create that everybody that's a client of our firm gets the same process and the same initial onboarding experience? It doesn't matter if I'm meeting with them, if Rob's meeting with them, if Charles is meeting with them. It doesn't matter. I want the same client experience." But not all of the advisors have the same skill set to do this.

So, then what if I can create something that puts it on the client side that the client then tells us? Very similarly to a risk tolerance questionnaire, right? Nitrogen or Riskalyze, all the risk tolerance questionnaires. The clients fill out and they tell us what risk tolerance they think they are. What if we could create something like that where they tell us what personality they are in terms of saving or spending or even information about investing? Could we have a behavioral questionaire?

So, then, my advisor that's really comfortable about talking about investments now has a road map that he can talk to the client about other things. And then, he knows how to navigate that client. And then, I can kind of create a process, and I know that every client's going to get that same service.

Michael: Right.

Creating A "My Money Personality" Assessment To Get To The Heart Of Clients' Money Styles [1:05:04]

Michael: So, then what did you build to try to solve for this?

Nina: Oh, well, then I had baby number two, and then I bought a $200 million practice. So, I built it along the way. So, I keep getting derailed. So, this is where I think I'm not really going to buy another practice right now because I want to complete... We're building this out and we're implementing it. And it's been built out.

We've built out a road map in Workbooks and process of when clients come to our firm, they all have to do an initial questionnaire based on their risk and on their behavior. And then based on their behavior, whatever they come up as, they then get a workbook and a description that talks about what type of investor they are. And it's actually just really fun too. People like it. It's like when you're taking personality quizzes it's always fun. Maybe more for women than men.

Michael: I'm a fan. I have fun with them.

Nina: They're so cool.

Michael: I was a psych major, so I nerd out on these things, but I think assessments are cool.

Nina: And then by doing the assessments, with the current clients, they actually started being very accurate. And so, for example, a client who inherits $10 million, who's never worked a day in her life, who was able to spend whatever she wanted. This client is going to be hard to get to budget. She's going to be hard to get to realize really how investing works immediately. It's going to take time to train her. Because she's never done it her whole life. It's just something that needs to be embedded in them from a child, right?

So, she watched her mother spend and she never had a worry in the world about money, just like her mother never did, right? And her father, based on many generations, never talked to the women in the family about money and/or they kept everything so close to the vest that many children didn't even know what their parents had until they died. Or they're incapacitated, and they're cleaning up their...trying to take over now, and it's a mess.

So, somebody like that, when you're building out a budget, automatically I'm going to add more in because I know she has no idea what she spends. And you're going to create an extra cushion for the unexpected things of life, right? You're going to really have to probably hold her hand a lot initially at the beginning. During a down market, she needs a call immediately. She is going to want to sell out. You're going to have to have so much information to provide. So, something like that, we already know, so she's on the radar.

Versus the client that's invested forever can weather the storm that is the one who calls you when the market's down like, "Oh, by the way, I have X amount of cash in my bank account. I'm going to send it over to you." Those are the calls that you have for those people like, "Hey. You have cash. I know you've been sitting on cash. Let's buy in now. What do you want to do?" So, it's different conversations and different kind of service models for each type of person.

So, then based on the personality test, they get their little, "What type of investor am I?" But through the process and through the education and through the review meetings, we're teaching more and more about kind of the things that are important to them, but also asking the questions of why they feel about that. So, then they become more self-aware. So, then they know, "Okay. I'm nervous about this because of this."

And it's really many of our phone calls as advisors, clients aren't calling us because they're really mad about their account on many days. It's usually another underlying factor that's really creating that anger. And we're the ones that they can lash out on just because they look at their money and the accounts are down. So, it's a reason. It's an escape, right? It's a symptom of something else that's really the problem.

So, if we can help people identify their money beliefs, which are embedded in them from childhood and are learned throughout their life. And then I can help advisors create that art of the meeting to work with people based on their money beliefs, I really believe that both go hand in hand, and that's something that AI or some online tool really can't take away from our industry.

Michael: So, then what are the actual assessments that you use? I think you said one is risk and one is behavior, that I'm sort of presuming is different than risk, although sometimes we use risk tolerance to understand investor behavior. So, what are the assessments in practice? What do you do?

Nina: So, my best friend's actually a psychologist. So, she was able to help me with some actual research around the issue and topic. And so the assessment is 10 to 15 questions that really have people answer, "In this situation, you do this." And so they're on our website, where you can take the quiz of your money personality. And based on the quiz and the answers to the quiz, then you get a kind of a label, for example. So, are you a dream chaser, which is also AKA a spender? Are you a safety seeker? This is a saver. Are you the ultimate financier, which is somebody who's very balanced?

Not one is right or wrong, but then let's say that you're a spender. So, then it goes through on the workbook. So, then there's a workbook. And it's like, "Okay, what are three things you want to accomplish this year?" So, then it's almost like we take our clients through the way we take our team kind of through OKRs [Objectives and Key Results] for the quarter. We take our clients through that. What do we want to accomplish this year in terms of your finances? And then okay, so based on the personality and you may overspend, where are areas in your life that you feel like you could cut back on spending to really hit the goal of the things that you really want to do and that are really important to you?

And it's creating that guide map or the kind of workbook, which is really no different than their normal financial plan. But it just, it gets them more involved in the experience. It makes it more meaningful to them because it's really then as we have tracked it, then when the clients see that they're hitting their goals, then they're so excited, and then they go and tell all their friends about it.

It's like we had one client. She really wants to buy a house in Spain. And so we've been saving for her house in Spain and saving. And then she finally just hit her goal. And it was like, "Wow. Now I can do this. I want to celebrate." It was a really great hurdle where before it's I think we talk about goals with clients. We're like, "Okay. Yeah. You want to do this. Fine. Let's put it into your plan." But actually having the process that then tracks it based on having to work with them kind of on how they may or may not feel about money, it's been helpful.

Michael: So, what are the other types? Things like dream chasers or spenders, safety seekers or savers, ultimate financiers or balance. Is that the full spectrum? You're a spender or saver or balance in between?

Nina: Oh, no. We have six different personalities.

Michael: So, what else is in there?

Nina: We have the ultimate financer is balanced. The general altruist is a giver, and safety seeker is the saver. The wealth architect is the ultimate investor. More they want to be your private equity, hit it big type-want-returns. And then the dream chaser is the spender. And then, we just kind of also have one that's kind of I haven't figured it out yet, but one that we're creating, which is the sixth is kind of the person who's in between a couple. Right? For example, somebody who's the novice investor. Someone who's uneducated right now but maybe actually really great with education, or be a great saver and great investor over the long term with education. And that's what I want to kind of teach and implement to the children and the teenagers, the younger generations that aren't educated yet.

Michael: So, then help us understand more. What do you change in the practice based on what their type is? It sounds like the workbooks are a little bit different, but I guess just help us understand…what do you start changing or doing differently as you archetype clients into one of these categories?

Nina: So, let's say that you have the spender, for example. This one's easy. Then their risk tolerance says they're a moderate investor. [20]24 we had great returns in the market. And then they don't own Nvidia, but yet they're asking about returns or, "Do I own this individual stock?" Like, all of the hype. Right? Where most of our clients hear on the news and everybody nowadays because of social media.

So, the way that we kind of change it in the practice is being able to tie, "Okay. You're spending this amount out of your portfolio. If you had this much risk in your portfolio, then by overspending by this much..." And we try to not make it negative, but sometimes this one can be a little bit more negative. "If you're the spender and you're spending down when markets go down in times like now, that can hurt you over the long term." So, changing it in the practice really isn't that different, I would say, for what we've always done. It's just kind of using it as a tool to bring clients back to.

Michael: "So, you're a spender. Be careful chasing market volatility because then you won't be able to spend the way you want." "Oh, you're the altruist. Be careful if you chase the market. You won't be able to give the way that you want."

Nina: Exactly. Exactly. And then...

Michael: "You're the financier, otherwise the wealth architect? The market's down. Let's buy."

Nina: Right. Or, "I want to invest in this private investment. This private investment had a 10x return. Why didn't I do that?" That person, it's like, "Well, your money is illiquid. You can't get it out. And they don't always have those types of returns."

And then the other side of this is, though, really using this then to help my advisors build a relationship with their clients more than just their investments. So, by them going through the process with clients, they're also then able to realize, "Okay, this is how this person is." Because so many times it's like, well, somebody says they're conservative. The advisor puts them into a moderate portfolio. And then the market goes down, and then that client's calling them angry. But now it's, okay, if somebody is a safety seeker, no, they really can't handle the risk. They're really, really safe. Or that advisor now knows, "Okay. I want to have some materials to talk about long-term cash investing and how it hasn't always boded well and why you want to still maybe have some equities for long-term growth in your portfolio for the long term."

Michael: Whereas if I'm one of the other archetypes and markets are down, again I'm anticipating a different conversation. I'm going to train my advisor in a different follow-on conversation because the giver will be different. The wealth architect will be different. The safety seeker is different than the dream chaser.

Nina: Exactly. And so it's really in a way the behavioral taglines, or the giver, the saver, the investor, or the spender, are really our way of identifying the behavioral standpoint of similar to the risk tolerance, how you have a conservative, moderate, aggressive, gross. There's different risk tolerances. And then you manage portfolios based on somebody's risk tolerance. We manage our service model and our conversations and maybe the educational materials and goal planning around more of the behavioral part of it.

Combining Money Personality And Risk Tolerance Assessments To Get A Well-Rounded Picture Of Her Clients' Approach To Money [1:17:48]

Michael: Okay. Because I was going to ask, when you say you're also doing risk tolerance assessments, which normally we do to figure out what kinds of portfolios clients are going to be comfortable with and where they're potentially going to get antsy and upset. I guess, I'm trying to process what the difference is between the risk tolerance assessment and this behavioral assessment, where each part kicks in.

Nina: The risk tolerance really goes into which investment portfolio they're going to be in, versus the behavioral part is more our service model. So, the risk tolerance is, "Okay. Am I growth? Am I aggressive growth? Am I conservative? Am I cash? Am I capital preservation?" Whatever that may be.

And also, what's been interesting is we just implemented actually Nitrogen in our practice. I haven't used it or ever really had anything formal for risk tolerance. But because I've bought all these practices and I have so many different clients that I inherited versus having the initial conversations with, we started to email out a link to, before the client review meeting for both of these, the quiz and Nitrogen. And it's been really interesting of so many clients were in aggressive portfolios that were conservative investors. And thank God we did this all within the last six months because we were able to do risk portfolios last year.

Michael: Okay. And that was fortunate timing.

Nina: Fortunate timing that we decided to do this. Then clients have actually given us really good feedback kind of on how they like both. And then this is before their review, and then we meet with their review. And we just kind of have explained it to, "Look, these are things that we're implementing in our practice. We want to make sure you are aware of the risk in your underlying portfolio. You've had great returns. Now would be the time to derisk. But, additionally, we want to dive deeper and get to know you at a deeper level based on the way you feel about money and your money beliefs."

And then that's kind of how we've positioned the quiz with existing clients now because it's like, "Okay. We've worked with you for these years. You never did this ten years ago." And clients that we inherited, it's like, "This is something we want to get to know." So, many people have been like, "Wow. This is great. We really love this." It's also just been a value add. It's something different. It's something additional that they're getting that they haven't just, I think, gotten from the financial planners maybe before.

Michael: And, ultimately, so Nitrogen…you now bought risk tolerance software off the shelf as it were, an established provider. The assessment end though, just you built your own with your friend who's a psychologist to help as opposed to shopping for a tool to do this.

Nina: Right. So, my best friend's a psychologist, and then my niece actually was working for me part time. So, I kind of told them about my idea, and I was like, "I want to build something around this." There's a huge gap in our industry about the behavioral part. Investor return does not equal investment return. The conversations we have now with people just even about their political beliefs are altering the way that they want to make financial decisions for the long term. And it's like, how can we create something in a process or coaching even?

You don't feel the same way. Like, my husband and I have total different views on money. And how can we work with families to help them realize each other's viewpoints of money? And then that's when my best friend and I kind of put this to paper, and I was like, "I want to implement this in the practice." And I have a really great partner and really great team that have grasped it and kind of let me try it, but it's had great feedback so well. So, we're going to keep it going, and see where it goes.

What Surprised Nina The Most On Her Advisor Journey [1:22:09]

Michael: So, now as you reflect on this journey overall, what surprised you the most about building the advisory business?

Nina: I think I never thought I would probably be where I am today. I think that my goal was always $100 million. And to sit here and say, "Okay, I have a $500 million practice," is kind of eye opening. But all the struggles and the hard times…my mentor once said, "You can't do this job if you don't have thick skin."

And I look back and it's all of the hurdles along the way, like the mean clients, the no's, the people who just wasted your time, the people who wanted to just string you along like a carrot that kind of were exhausting and draining. I look back on that and it's really tiring along the way, and it can be very deflating. But then when I look at it now and I think of the client whose dad was blind and whose mom built their wealth from nothing, I've really built a lot of great relationships along the way.

So, I think in building the advisory practice, yes, we do it for business. Yes, we're managing money and we're managing people's wealth. But I think I really just love the relationships that we've acquired and have made, is kind of what I would say that comes to mind first.

The Low Point On Nina's Journey [1:23:38]

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

Nina: So, one of the parts I haven't shared is I actually had a third partner. So, one of the other Stratos advisors, I had another partner at one point. And the low point I think was we broke up a couple years ago, and they were a friend. So, I lost a friend. But then I look back and I think why I'm so excited about the behavioral part and the money personality part is having an additional partner, I feel like I lost my way. I lost my initial vision that I had in 2011 when I joined Stratos.

I lost the firm that I wanted to build and the literacy I want to put out and all of the things I want to do. I'm only 40 years old. I still have a long time to be able to do so much in this business. And I think that the low point was kind of having that breakup and going through obviously the team separating, the hard conversations, the arguments. But I guess maybe the silver lining is it's what's really gave me the strength to really launch my vision again.

Nina's Advice For Her Younger Self And Newer Advisors [1:24:57]

Michael: So, what else do you know now that you wish you could go back and tell you 15 ago as you're just queuing up to launch your own firm.

Nina: Trust your gut, right? Trust your gut and remember to believe in yourself. And stay true to the ultimate vision that you had in your gut and ask for help along the way. Partners are great. Teams are great. The right people are great. But, definitely, I think take time to vet out people. Do due diligence on people, not just clients, but also people we work with. And, yeah, trusting your gut. Every time your gut tells you not to do something, you need to listen to it. It's always right.

Michael: So, what advice would you give younger, newer women looking to become a financial planner or come into the industry today?

Nina: I think women have such an advantage in our business. We can connect with people at a different level. There aren't very many of us, first of all, so there's a need. But men feel more comfortable opening up to women about what matters to them. Women feel more comfortable about opening up with women. I think that we sometimes can take a little bit of the we're more of can do the touchy feely stuff a little bit easier than men can. No offense to men. Not all men, but just some. I don't want to categorize because not everybody.

But I think being a woman in this business, you have such an opportunity to grow and to really excel and be a leader. It's not always been a woman-friendly industry, but kind of like what my boss said to me: if you can have thick skin, I think you could... I think women ultimately are going to be the ones who crush it in this business and continue to excel. So, I would say get into the business because there's not enough people doing it.

What Success Means To Nina [1:27:08]

Michael: So, as we wrap up, this is a podcast about success, and just one of the themes that comes up is literally that word success means different things to different people. And so you're on this wonderful path in building the firm as you're now crossing half a billion dollars. So, by any objective measure, the business is very successful. How do you define success for yourself at this point?

Nina: Now I'm at a point I want to take more time and lead my team and invest in being a better leader to them and ultimately guiding them, leading them, building out our offices amongst the different locations. For me, that's my number one goal. So, I think as I can take more time to do that, that's going to be my next success.

Also having just more of the balance of spending with family is success. But honestly, I have great clients. I love what I do every day. I really am in a happy place with my job, and I really want to continue to work on and build out and implement the money personality and behavioral stuff. My goal there is to have materials that people can read, financial literacy that's provided out from our firm from My Money Personality.

So, yeah, I think that the answer to success is having more time to do what I want to do and that's going to be by me investing in my team to free me up to do that. So, that's kind of where I am now. More of being a mentor is where my goals are aligned. I feel like I've hit the success of the practice. I don't want to say that and jinx it. Five hundred million is a great practice. More than enough money. A lot of money to live on. We're lucky. But I think now it's okay. How do we take it to the next level?

Michael: I love it. I love it. Thank you so much, Nina, for joining us on the "Financial Advisor Success" Podcast.

Nina: Thank you for having me. I appreciate it.

Michael: Thank you.