Generally speaking, there are two types of unhappy financial advisors. One is the advisor who is having trouble just making it in the business in the first place, who is struggling to find enough clients to make ends meet. The other type is the advisor who might have all the outward markers of success (clients, revenue, profits) but has reached a point in their career where they are supremely unhappy… and often end out feeling trapped, too.
Because, as is often the case for advisors practicing under the recurring revenue AUM model, clients tend to stick around. And while that is undoubtedly a great thing, it can also end out being a double-edged sword, and lead to “practice creep”… where, after a certain number of years of building a book of business, an independent advisor with an otherwise solid lifestyle practice may grow past their personal capacity and find that they have accumulated more clients than they can service by themselves. Which then forces the advisor to hire some staff to help. And (again) while that’s not a bad thing, the advisor can ultimately reach a point where they’re the CEO of a small advisory firm and are spending most of their time managing employees rather than doing what they set out to do in the first place, which was to serve their clients! Which ultimately leads to the question: How can advisors avoid this “accidental business owner” trap, and instead build a business that is optimized to maximize your own happiness?
In our ninth episode of “Kitces & Carl”, Michael Kitces and financial advisor communication guru Carl Richards sit down to discuss why some advisors wind up being unhappy in an otherwise “successful” practice, how some advisors have maximized their happiness by being intentional about building their business the way they want – or even “right-sizing” the advisory practice if necessary – and a few actionable ideas for advisors to do the same.
One strategy that has worked well for advisors is to figure out what outcome you’re trying to reach in the first place (whether that be a certain level of income, or amount of time you have to spend with the people you care most about) and make that the primary thing that you measure in the business. After all, our natural tendency is to direct our efforts to improve whatever we see measured and look at on a daily basis… so it a good idea to make sure that we’re measuring the things that really mean the most to us. Whether that’s the number of clients or amount of revenue in the business… or the number of hours we work, the number of hours we don’t work, or the vacation days we take.
And for those advisors who have already reached the point where they’re feeling unhappy with their current business structure and need to figure out how to get off the proverbial rollercoaster, it’s essential to understand that, although we have a duty to our clients, we also have a duty to ourselves as well. Because if we are absolutely miserable with whatever situation that we are in, we will eventually (and inevitably) experience a negative impact not only for ourselves, but for our clients as well. Which means it’s our responsibility and even our obligation to try to fix it.
So, if you’ve gotten to the point where you’re feeling squeezed by practice creep – unhappy with the business despite it being outwardly financially successful – or if you simply want to avoid that in the first place, then remember that it’s perfectly okay to give yourself permission to build your business in a way that actually makes you happy. And measure and optimize for whatever really matters most to you!
***Editor’s Note: Can’t get enough of Kitces & Carl? Neither can we, which is why we’ve released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
- John Bowen, CEG Worldwide
- Magic Johnson steps down as Lakers’ president of basketball operations
- The Supernova Advisor
- #FASuccess Ep 07: Matthew Jarvis On Building a Highly Profitable Lifestyle Practice
- #FASuccess Ep 094: Crafting Your Optimal Solo Practice By Simply Charging What You’re Worth With James Osborne
- #FASuccess Ep 093: Building A High-Income Lifestyle Practice Efficiently By Running It Like A Real Business
Kitces & Carl Video Transcript
Michael: Welcome, Carl.
Carl: Greetings, Michael.
Michael: Good to have you back for Episode Nine of “Kitces and Carl.”
Carl: Yeah, crazy. Almost at double digits.
Michael: I know. We may have to do a small celebration for the 10th episode anniversary.
Carl: Totally. Yeah, we’ll have T-shirts made.
Michael: So we did this episode last week, two weeks ago, where we were talking about how advisors spend their time and how…the ways that sometimes, we unwittingly fill our time, then it adds up to more time than we wanted. And that may or may not be good or make us happy. And so, I wanted to follow this theme a little bit further this week, of…I don’t know, I think…to me, it’s sort of, how are you building your business? Are you building it intentionally to serve whatever goals you want? As we said last week, if we could get more productive in our business, some of us would do that to double our income, and some of us would do that to have the time that we spend in the business. So to each, their own goals.
Why Some Advisors Are Unhappy In An Otherwise “Successful” Business [01:10]
But I’ve noticed this phenomenon, that when I look out there at the other end of the spectrum, like, who are the unhappiest advisors? I find there’s basically…well, there’s two types. The first is, like, “I just can’t any clients. I’m not growing, I’m not going to make it.” So that’s very unhappy. But aside from the, “It’s just not working and I can’t get any clients,” which is a subject for another day, the next unhappy group I see are the ones who are actually succeeding and crushing it. And the phenomenon that happens…so back in the old days when we were all compensated on commission, every January first, you wake up, your income is zero, you go out and get some clients and make some money.
And if you are commission-based and you liked the hunt, that was a fun thing to do. And if you were good at it, you made some really good money. And when I started out in the insurance world, there were multiple advisors there in the insurance agency who had literally been doing it for more than 40 years. They’re talking to me about the rise of the internet, and they started their careers literally selling insurance door-to-door knocking. Because it’s a fun thing to do, and if you like that thrill of the hunt, you just keep doing it as long as you’re able. Then, we shifted to the AUM model. And to me, the interesting thing about the AUM model, it’s the recurring revenue. It’s the fact that at some point, you’ve been doing this for a while, you’ve, God bless, gotten, like, $100 million under management.
You wake up January 1st at a 1% AUM fee, and you have $1 million of revenue already booked on January 1st. All you have to do is not screw it up and make the clients leave, which then gets really straightforward, how do you do that? You hire a whole bunch of people to service the bejeezus out of your clients so that they don’t leave. And you actually build a…you can build a great business. That’s why advisory firms, and RAs in particular, as they scale, you get real profit margins. You can generate revenue, pay staff to do the work, have profits left over at the end, and you can start building and scaling the business.
But here’s the problem that I find that crops up now, now that we’re 20 years into really seeing the RA model grow and gain scale and momentum, is most advisors, well, either they never get to $100 million, or it takes them the better part of a lifetime to get there. But if you keep accruing clients and you get a couple every year, and you can survive long enough to stay in it and you just keep going, at some point, it may be 7 years or 10 years or 15 years or 20 years, you get way more clients than you can serve on an ongoing basis. And you’ve got to start hiring some other advisors to handle them. And as long as you hire decent people, your clients stay. You’re just going to get more of them, which means eventually, you have to hire more people.
And suddenly…I’ve seen this pattern playing out more and more over the past couple of years, you’re now an advisor that runs a $150 million to $300 million firm, you have maybe a partner, 2 or 3 associates, 3 or 4 staff. It’s like you run a business of about five to seven people, and they’re miserable.
Carl: Right. I call that the “pecked to death by ducks” model.
Michael: They’re enslaved to the business. All the stuff they like to do is see clients, they don’t get to do that anymore. All they do with their time is manage the seven people in their firm that they’ve accumulated to. And so, I call them the “accidental business owners.” They didn’t set out to build a business and scale it up and hire all these staff and get to a point where they’re no longer an advisor, they’re now CEO of a seven-person firm.
And to me, what it comes from is what happens when we don’t figure out in advance what we’re trying to build towards. It’s what happens when we don’t build with intention, which… Particularly in the AUM model with recurring revenue, where clients come in and they hardly ever leave because we tend to service them pretty well, you will over-accrue your clients if you don’t have a plan about what to do with it, or you just really actually want to run and build a big business. Which, kudos to you if some people do, but a lot don’t.
And so, aside from just the advisors who aren’t happy because they can’t get any clients or just can’t get their career going, I find that the unhappiest advisors are the ones that are successful long enough that eventually, the business morphs completely away to what they actually would have wanted to build for themselves in the first place. And then, they can’t figure out how to get off the rollercoaster ride. So does this…? I don’t know, this is my perspective to the world. Does this resonate with you at all, or am I out on cloud nine here?
Carl: No, no, for sure. I think the…like I said, I’ve always thought of that as the “pecked to death by ducks” model, right? Like…
Michael: And what’s the “pecked to death by ducks” model?
Carl: You have so many little things, right, all these little things. A duck doesn’t bite you like a tiger and tear your arm off, right? It’s just these little things, that they’re like, “Too many clients,” “Too many management,” “Too much this,” “Too much that.” And I’ve run into this. I can’t…well, you know. But everybody else listening, probably, it would be hard to over-exaggerate how many emails I get from advisors who are like that, like, “From every outward appearance, I should be happy, but I’m miserable. And the reason I’m miserable is because I just…this thing has grown, it’s not what I wanted.” And to be fair, most advisors, most humans, didn’t know what they wanted when they started. So it’s just whether you can start…
How To Be Intentional About Building Your Business [07:17]
So what I’d be curious to do now is for us to talk about, how do you be intentional? Be fun maybe to think of a couple of examples of advisors, like we call them, the intentional advisor, or the happy advisor. What are the happy examples? John Bowen, who I really consider a mentor of mine, used to say, like, “This business, obviously, after you make sure you’re taking care of the clients and doing everything obviously,” but, “this business should be…why don’t we build a business that’s optimized for the happiness of the owner,” right?
Michael: I like that, “optimized for the happiness of the owner.”
Carl: Given how constant the happiness of the clients, of course. But after that…
Michael: Okay. So we are assuming like, clients are well-served, comma, now, what do you want to do with this thing?
Carl: And optimized for the happiness of the owner. And so, I think it’d be fun to talk about what does that look like, because I think hearing these stories…I tell these stories a lot, and I’m sure you have similar ones. When people hear them, it’s almost like…I guess what I’d love to do, Michael, is to give advisors permission to explore this. And sometimes, people…we need…as humans, we need permission. So Michael and I are hereby declaring ourselves self-appointed co-kings of permission granting today. And we’ve got a little thing where we can grant permission. And we…
Michael: And for those who are just listening, Carl is waving his pen, which is now the magic wand of permission granting.
Carl: Yeah. I’ve got a magic wand of permission granting, and we’re going to grant you permission to do this intentionally. Now, whether you do this at the beginning, or you wake up one day… So let me just tell one quick story to kick the intentional happy advisor part off, because I totally agree with you on the unhappy advisor. It’s like, the people who appear to be crushing it, but really, actually, behind the scenes, are crushed. These are the ones that are unhappy. And we’re talking about deep unhappiness that is tragic.
Michael: Well, because I find with a lot of them, it’s not even just, “Geez, this business takes a lot of time, and there’s all these things to deal with.” The ones that I find really get unhappy with this, it’s that the fundamental thing that they wake up for every morning has changed. They started the business because they woke up every morning excited to serve their clients. And they don’t see their clients anymore, because all they’re doing is managing the 5, 7, 10 staff members that they’ve grown to. Because as the business grows to a certain size, you’ve got to do that. Someone’s got to do that. If you’re not going to hire a COO to do that, that’s your problem. And it’s when you can’t even do the stuff in the business that made you want to do it in the first place that you grow really unhappy.
Carl: Yeah. And I want to make this, too. But did you see the news conference with Magic Johnson when he decided to not be the general manager? Oh, it wasn’t general…whatever it was. Did you see that?
Michael: No, I didn’t see it.
Carl: Oh, it’s so…because he did it impromptu. I’m sure he had been thinking about it, but it didn’t… It was after one of the games, and he said, “I’m hereby…” And people were following him around, and he was like, “I just wasn’t to go back to being Magic.” Like, “I don’t want to…” Like, “I can’t do all the stuff that makes me who I am.” And you could see…if you go watch these videos, you could see him go from that advisor who, like, “I got into this for all of these reasons. And I’m no longer doing any of these things.” And if you are just listening, I’m slumping down now with a big, heavy weight on my shoulders. And then, you remove the weight and you’re happy again.
And so, I think that idea of, like, okay, let’s talk a little bit about being intentional. One of my favorite stories… And if you can find this book…I’m not sure if it’s still available or not, it’s called “The Supernova Advisor,” written at a time when I was at a big brokerage firm with a bull’s head symbol. And this story, at that point, was almost apocryphal. It was, like… And if I remember, the advisor’s first name was George. And George had, like, 500 clients. This is in the book, but I was around when this all went down. I talked to George about this, if that’s his name, if I’m remembering it. Had, like, 500 clients, and he just…one day, he got so sick of it. He was like…and that’s the other part of this that makes this so hard, is, by every outward appearance, you should be happy. You’re killing it, you’ve got all this money, your colleagues are all celebrating you.
Michael: Clients, assets, awards for growth.
Carl: And awards. Awards, yeah, all that…awards. Of course, yes, awards. It’s plastic, awards that I could put on the wall. So George is getting all that stuff, he’s got 500 clients or something. And he does this quick…he decides to do this quick analysis of…just curious about… I don’t know if he started out thinking the 80/20 rule, but he was just curious, like, “Where’s the revenue coming from?” And the numbers were astonishing, just 17% of the clients, or 17 clients or something. Now, here’s what he did. He made a list of…a spreadsheet of who he would like to deal with. And it had these different factors and he weighted them, like likability, “We enjoy each other,” “I’m contributing to their lives,” “They’ve got challenges…their financial challenges are ones that I’m interested in solving.”
And then, one of those factors was revenue. After he went through with this whole screen, it was something like…and I don’t think I’m being overdramatic. It was something like 17 of the 500. So he did…
Michael: That he wanted to work with, or that he was making his money from, or both?
Carl: No, that… The last thing you’d want…if you’re going to be intentional about this, the last thing that any of us would want is a bunch of clients that you make a lot of money from, but you hate dealing with. And so, the money was just one last screen, but incredibly important. We’re talking about business here, not charity non-profit work. Incredibly important, but it was a last piece. But anyway, he gets down to, like, 17 of these 500 clients or whatever. I’m sure I’m missing some numbers, but please don’t debate me because of the numbers. Don’t miss the point.
Got down to it and was like, “All right,” ended up… The model was, “I’m going to buy a…” This was the little story that went around this brokerage firm with the bull’s head symbol, was, “Buy a plane,” like, a 747, “tear out all the seats and put in 100 first-class…” And 100 was just the number. And you’ve hung on that number, a lot of us hang on that number, and I think there’s probably some reasons behind the fact that we pick that number. But, “Put in 100 first-class seats, and then, start thinking…” And this changed everything about how I thought about the business. You think, like, “Wait, I only have 100 seats. I hope I’m going to run this business for a long time. I only…” Now, it becomes…it’s a mutual…
Michael: Yeah, who do you want in your limited seat capacity?
Carl: Yeah, who do you want to give a seat to? And then, it becomes a mutual… Obviously, we’re not in control of that whole discussion, we’d only just get to grant people… But it should be at least partially our decision, like, it’s a mutual process. So you go back through and you start filling those seats in. And I love…the story goes on, but I love that way of viewing. And then, maybe you think you want to put 200 seats in your plane, I’ve got friends that have 25 seats in their plane. There’s no right or wrong answer to that. And we should do a whole other episode on…basically, there’s almost a formula you can follow, based on income and time off, that you can figure out what kind of business you want to do.
Michael: Oh, I can make that formula. It’s a math problem. I’ve got it.
Carl: Yeah, you’ve got that. Yeah, don’t leave that to me. I don’t think it could be done with a Sharpie. But the point here is, think about what kind of business you want, and then build it. And George built it. It only took…he literally just went in and gave away… That’s a whole other discussion, too, that process, those are people. Michael and I care deeply…don’t send an email about, “You’re just going to shut her…?” No, that’s not what we’re saying, care deeply about those people. But for George, he built an amazing business. And I’m sure you’ve got stories. What are some of your favorite happy advisor stories? Give us a case study.
Examples Of Intentional Advisors [15:53]
Michael: So there are two that come to mind to me. One was actually one of the early guests we had on the podcast, on the “Financial Advisor Success” podcast, a guy named Matthew Jarvis. He’s a 30-something advisor from out in the northwest, about 150 affluent clients, managing close to $100 million. And he’s taking 80 days of vacation a year, 80 workdays of vacation. And what struck me is not just, “Holy cow, he’s figuring out how to service 150 clients in only a fraction of the year so that he can take 80 vacation days.” But what fascinated me about Matthew’s story…and it’s Episode Seven of the podcast, if you want to go look up the whole thing.
What fascinated me about the story is, he made this deliberate decision that he didn’t just want to grow more. He wanted to have more time with his family, with his kids, to do things, to take more time off. And so, he literally made it the key thing he measured in his firm. Most of us measure assets, revenue, profits. And guess what? When all you do is stare at assets, revenue and profits, those are the things your brain tends to work on how to grow. So he made the number that he’s measuring, “How many days of vacation did I take last year?” And sure enough, when he made that the thing he wanted to measure and optimize, every year, he tried to put in new processes, more procedures, hire more staff, do more things that would make that number go up.
And over the span of doing it for about 4 or 5 years, he got from the tradition person that hopefully manages to take two or three weeks of vacation, up to 80 days of vacation a year. And I mean, he’s still crushing…he’s running a 50% profit margin on a $100-million firm. He’s got more staff than some people who just have 150 clients, but he runs it hyper-efficiently. He’s still making fantastic income, and he’s taking 80 days of vacation off per year, because for the past couple of years, that’s the metric that he focused on. And I think there’s this interesting effect that comes…I’m not the first person to suggest the things you measure in the business are the things you start paying attention to. Some really famous management dude said that, I think it was Peter Drucker.
But just that idea of, the things that you measure become what you focus on. So if you really want to figure out how to take more vacation or better manage your time in the business, start by just measuring it. And tracking it.
Carl: And Michael, right there, you get to say, “Permission granted.”
Michael: Permission granted. You may measure it.
Carl: If that’s what…
Michael: And optimize it.
Carl: Yeah, yeah. If you want to optimize for time off, permission granted.
Michael: And to me, the most extreme version of this is…actually, another person we had out on the podcast last year is…the advisor’s name is Sunit Bhalla. He’s out in Colorado, a former engineer, left engineering because he wanted more work/life balance, more time with his family. He’s got three young kids who are only a little bit older than ours. He wanted to make a lifestyle practice for himself, but he actually is very business-minded in how he goes about doing it. I think we sometimes put out lifestyle practices like it’s all real casual stuff. It is a business built around his lifestyle, but he runs it like a business.
He does an annual strategic planning process for his business, of himself, and puts systems and processes and procedure in place in all of it. But the fascinating thing for his model, because he’s so focused on having tons of time with his kids, to volunteer to be the engaged dad, his whole firm is 17 clients, 17 affluent clients, $300,000 of revenue, 85% profit margin. He’s just hyper-focused. And when I asked him, “Where are you going from here? Do you want to grow?” His response was, “Well, I’m thinking about maybe taking on one more client this year. I haven’t decided. Maybe I’ll go from 17 to 18 clients, but I’m not sure what impact that’s going to have on my lifestyle.”
Carl: Permission granted. Permission, permission, permission granted.
Michael: And he just…to me, both of them, Matthew and Sunit, just…they have these clear visions of what they’re building towards. And sometimes, they change. Sunit, I think, built it this way from the start. Matthew’s actually gone through a few iterations because he’s been in the business for, I think, 10 or 12 years, of kind of morphing to this. But what you measure matters in the business. And you can make some amazing businesses when you just go in with a really clear intention of what you’re trying to build towards.
Carl: Yeah, two things. I want to share a quick story. I’m going to take you to Colorado again. But while I’m doing…
Michael: I like Colorado, it’s nice.
Carl: Yeah, yeah. While I’m doing it, will you think of…? I’d love for you to share maybe…I know there are some amazingly cool stories coming out of XYPN around this on… I don’t want, by any stretch, to give anybody the impression that this is a “people who build businesses with $5-million clients” discussion. There are models where you can be just as intentional at any spot in this spectrum. So maybe you can think of one of those while I take you to Colorado. And before we go to Colorado to talk about James’ business, I just want to mention something about “lifestyle,” that phrase and the little thing that happens. When you say “lifestyle business” and people look at you and go, “Oh, that’s cute,” that little thing, that’s the one thing I want to punch people in the nose about.
I was at an event… And I mean it, I want to punch somebody about this. I was at an event, and there was this big guy who worked at a big brokerage firm that we’d all recognize. I wouldn’t even quite call it a brokerage firm. I’d maybe call it an investment bank that used to be a partnership and then went public, but we won’t name the name. And he worked there. And we were at a ski resort, and we were actually…we were having dinner after skiing, and somebody said, “Hey, you two are in the same business.” And he looked down at me, even though he was shorter than me, and said, “Oh…” And I think the question was…I can’t remember if it was the first question, but quickly, we got to a question of, “How much money do you manage?” Like, “What’s your AUM?”
And I remember saying whatever the number was. And it was clearly unimpressive, because he was like, “Oh…” sort of like, “Oh, that’s cute. That’s…”
Michael: “Oh, I have a client like that.”
Carl: Yeah. Oh, yeah, “I have a client like that. Oh, that’s cute,” something like that. And I so badly either wanted to punch him in the nose or say, “Hey, man. I ski two or three times a week, and this is your…my life is your vacation.” But I couldn’t say any of that. I just had to take it and say, “Yeah, yeah. Cute little lifestyle business.”
Michael: I think, “My life is your vacation,” would have been a pretty good comeback.
Carl: And I’m sure somebody else said that. But all I’m saying is, what matters after the happiness…obviously, the happiness matters, but don’t lose sight of the fact that net income matters far more than AUM or assets, or happiness of clients. All of that aside, I think if we can please just give each other…everybody who listens to this permission to understand that my clients are always making the assumption that you’re being honest and you’re serving your clients and they’re happy. And so…like, always. But I always feel nervous about that because of the “broader” industry that we sometimes are associated with. So anyway, feel free. Permission granted to build a business that’s focused on optimizing your lifestyle.
And let me tell you one more while Michael thinks of our last one. And I have permission to share this. In fact, I looked it up before we got on this call. So James Osborne in Colorado…in, actually, Lakewood, James runs a company called Bason Asset Management. James, to me, is my favorite example of this, because here’s the deal. These numbers…this has changed a little bit. He’s made a few little changes, but not far off. He had 80 clients. And he gave me permission to share these, 80 clients. This was January when I had this conversation with him. He had 80 clients, his fee was $4,800 a year. Flat retainer, $4,800 a year. It doesn’t…won’t take you long to do the math. Does all the work himself.
Now, I just want you to hear this, because this is the whole thing that blows my mind. Eighty clients, $4,800, does most of the work himself, the net number is something really high. And he had a waitlist of 18 months. When I asked him about it, I’m like, “No, no, no. Come on.” He said, “Yeah. Now, to get on the waitlist, you have to be referred by a current client.” He’s almost like a country club, you have to have a sponsor. “And then, I still say, “Would you like to be on the waitlist?” And I tell you, “It’s currently running more than a year. And based on the current waitlist, it will take me 18 months to get to those people, based on a client leaving, or normal attrition, or death, or whatever.”
And of course, I, like all the cool kids, “Jim, why don’t you hire a new assistant,” or, “Why don’t you grow,” or, “Why don’t you,” da, da, da, da, da? And he was like, “Man, I ride my bike, I see my kids, I service clients I love. I deliver way, way, way more value at $4,800.” The type of client he was focused on was almost universally paying way more than that before he ever got to James. James is delivering way more for less, has a great lifestyle, and has a wait list of, at the time, 18 months. Now, James has since brought on another planner, or an assistant, I can’t remember exactly what he said. But permission granted to build that. Now, that’s not easy. James worked hard to build that, I watched him. But I was around for the whole thing.
I saw when he started his firm. It didn’t take him that long, but it was really, really hard work, and mainly hard from an emotional…like, the courage to just get out and be out in public and do really good work. But that’s an amazing business. That’s a happy advisor, that’s an intentional advisor. So there’s my story for you.
What To Do If You Are Unhappy In Your Practice [27:47]
Michael: So here is how I would wrap up this discussion. We’ve talked about intentional practices, you know, what are you optimizing for? Are you optimizing for your happiness? What are you going to measure to make that happen? The blocking point, I think, for most firms is, they’ve already grown past that point. That’s what gets us to this point about happiness, “I’m not getting to do the things I like to do anymore,” “I’m drowning in my practice,” “I’m spending too much time,” “I’m doing the tasks I don’t like to do,” “I can’t see the clients as much,” “I’ve got all these staff.” All these different things that basically, “We grew past the point of happiness, and now, we’re stuck in this rollercoaster ride and we can’t figure out how to get off.”
And I think a problem…you’ve alluded to it more than once, Carl. It’s, “Well, I can’t change it now, because I don’t want to do anything that hurts my clients.” Like, “I can only fix this by firing my clients,” you can come up with a better euphemism for it if you want, and, “I don’t want to do anything that sets my clients back or harms my clients. So I guess I’m stuck on this ride.” And so, what this reminds me of…well, a lot of people don’t actually know about my background. When I was in college, I wanted to be a doctor with a focus on emergency medicine. In part, it’s actually a lot of the same stuff as being a financial planner. It’s problem-solving, it’s dealing with situations, it’s helping people as they come in, a service-oriented profession.
This is also the heyday of “ER” on TV, so I was probably slightly infatuated with ER emergency medicine for that reason as well. And when I was in college, I was actually an EMT. And I still remember when I was going through EMT training, we had this absolutely fantastic instructor named Paul Markelini. And I still remember the day, sitting in the classroom where Paul made to me this really powerful point, that people in helping professions…happens to doctors, it’s actually notorious with happening in the EMTs, will often stretch so far to try to help people that they’re serving that they can hurt themselves. They can put themselves in danger.
It’s a particular problem when you’re an EMT, because you go into a lot of situations where you don’t know the facts on the ground and what you’re walking into. And so, Paul would drill into us these habits, like, “When you’re parking your ambulance, I don’t care how much of the world is falling down around you. You will back into the parking space so that if things go sideways, you could run to your rig and pull straight out forward and get out. You don’t have to be three-point back-turning out. I don’t care what’s going on, you will back your rig into the parking space so that you can make a speedy exit if you ever have to.” And he would hammer this point in that essentially came down to…and he would say this all the time, “You are more important than anybody else.”
Well, for a lot of people, if you say that, you’re just going to build up their egos in some really unhealthy ways. But when you get people who are in helping professions: EMTs, doctors…and I think this is equally true for financial planners, we so get focused on helping our clients that we lose perspective that you are more important than anybody else. You have to be more important than anybody else, if only because if you don’t take care of yourself, you won’t be able to help anyone after you do whatever bad thing you’re going to do, because you burned yourself out, or in an EMT situation, you really get yourself into serious trouble.
And if we’re in this world of permission granting, I think one of the biggest parts of this discussion of permission granting…because most of us grow past the point where we’re already helping too many people. And that’s what create the problem and the unhappiness, is, you have to give yourself permission to say, “My mental state and my happiness ultimately has to be more important than the clients’, or I can’t serve them all, anyways. And that means if the only way I get to where I’m going is, I have to right-size my practice and figure out how to move a potentially large chunk of clients on, you have to get to that point. So my version of “permission granted” on this is, it’s really okay to let go of some of these clients.
And I know you think you serve them really well, and I think you serve them really well. But if you’re this unhappy in your business, the truth is, you’re not going to serve them that well that much longer, anyways, because you’re unhappy and this is going to start showing through. So do the clients a favor and get them to an advisor that actually is excited to serve them, and get your practice to the point where you’re excited to get up in the morning and serve whoever you serve, because you are more important than anybody else.
Carl: Amen. So good. It’s my job…it was supposed to be my job in this whole conversation to make people cry, and you just about made me cry. I can relate so much to that idea of…and how selfish you feel about that. And again, I can’t believe…I love John Bowen, but I can’t believe that in two podcasts, it brought up… He said to me…when I was getting ready to sell my business, I was going through this exact discussion. And he said to me…he said, “Carl, you know what your greatest disappointment’s going to be in the world?” I was like, “What?” “When you go to sell your business and no one cries but you.” Because I was like, “There’s no way. These people love me. Nobody could ever…”
And they were…you know what? It turns out, especially if you treat it the way… I’m pointing at you, our viewer. We know who you are. You care about these people, so you will treat this… if that’s the answer, which for most… And again, I realize there’s a whole bunch of people listening that are just like, “Oh, please give me that problem.” We’ll talk to you in another episode, but just know you’re going to get yours someday, if you stick it out. But for those of you who this is resonating with, I think what you do is, you treat this like you are interviewing, trying to find a solution for your best friends and your family. That’s how you’ll treat this.
And if that ends up, you hiring a junior advisor and then doing… And then, we’ve got to wrap up, because I think the other thing too, is, the Magic Johnson’s analogy’s really good. Because Magic made this announcement without telling Jeannie Buss, the owner of the Lakers. She didn’t know. And somebody said, “Why didn’t you tell…? Don’t you think Jeannie should have been given at least a heads up?” And he said, “No, I know what would have happened. I wouldn’t have done it. She’s…”
Michael: “She would have talked me out of it.”
Carl: “She’s such a good friend, I care so much about her. She would have talked me out, and I didn’t…” So sometimes, permission granted to just say, “I’m going to pull this plug systematically and carefully, but I’m going to do it. And I’m going to do it because I want to be intentional about the business that I’m running.” And I love how you said, “Do the clients a favor. Those clients will be served better by someone else at this point.” And that’s really valuable. So that’s a wrap on the intentional advisor, don’t you think?
Michael: I think that’s a good wrap. Figure out what you want to optimize for, and it’s okay to recognize that not all those clients can be part of your future. Be a good person, find a good place for them to land, and right-size your practice to optimize for your happiness.
Carl: And in fact, I’m going to extend an invitation. Down in the comments, you can email us. It’s not hard to find us on Twitter or email. I’d actually like to know, would it be useful for us to spend an entire episode talking about this concept of…we’re just going to call it firing your clients. I don’t think that’s what it is, but would it be useful…?
Michael: It’s called right-sizing your practice.
Carl: Yeah. Just purely that one piece of it, “How do I hand these clients off in a successful way?” What stories can we tell you, what experiences have we seen? Because I think there are a set of best practices. Would that be useful? We get a lot of email about this show, and it drives what shows up in future episodes. So if you’d like…
Michael: We’re listening.
Carl: …to hear that, shoot us an email. We’re listening. Cool, Michael.
Michael: Absolutely. Awesome. Well, thank you, Carl.
Carl: My pleasure. Look forward to the next chat.
Michael: Awesome. Sounds good, thank you.