Crafting Deeper Client Relationships To Drive Loyalty, Referrals, And Gain Career Flexibility: #FASuccess Ep 515 With Sarah Baker

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Resources Featured In This Episode:

• Sarah Baker: LinkedIn
• Mason Companies

Full Transcript:

Michael: Welcome, Sarah Baker, to the "Financial Advisor Success" podcast.

Sarah: Thank you so much. I'm happy to be here.

Michael: I'm really excited to have you on today and to get to talk about what I'll just call the good old-fashioned strategy of just building great relationships with clients and what it takes and what that enables for us as advisors. I feel like in recent years, there has been this huge push in the industry on how we expand capacity of advisors with tech in general, more recently with AI…the tech will do more automated touch points and give clients a great tech experience while freeing up the advisors' time to handle more clients. But ultimately, tech startups in Silicon Valley has basically been trying to disrupt financial advisors with tech for decades without success because in the end, clients don't just buy us for the tech experience, they hire us to have a relationship with the advisor or human being. These days, I feel like we're talking a lot more about what makes a great tech experience for clients than what makes a great relationship with clients.

I know, Sarah, you have spent a lot of your career focusing around how do we really build deep and meaningful client relationships to both your success in working with clients and even navigating as career and firm changes have come over the years. So I'm excited to talk about what I'll call the analog focus of developing good old-fashioned client relationships. We put in the time, we show up in person and we really build relationships and what it's taken for you to be able to do that well over the years.

Sarah: Yeah, I'm looking forward to it.

What Sarah's Practice Looks Like Today [03:59]

Michael: So I think to kick us off, tell us a little bit about your advisory firm as it exists today just so we've got some context here as we dive in.

Sarah: Sure. So I work for Mason Investment Advisory Services. We're based in Reston, Virginia, manage as a firm about $17 billion and we're split...the uniqueness of Mason, about half is private wealth, families, and that's the side that I serve as an advisor in, and the other half is institutional, community foundations, endowments, larger institutional clients.

Michael: Okay. And then what does this look like in terms of your practice, your client based under the umbrella?

Sarah: Yeah. So my practice, I started there in 2021. I've been there a little bit over five years, and my revenue is just over $1.6 million. I serve 60 families and it's about $260 million assets under management.

Michael: Okay. And what is team structure look like, I guess for Mason overall and in the context of you and the clients that you serve?

Sarah: So for Mason overall, we have I think around 80 staff and there's some shared responsibility for admins, administrative support, client service associates, and then also we have a team of financial planning associates. Specifically for me, I have one full-time financial planning associate, and then I share a client service associate with another advisor. So I'd say a team of about 2.5.

Michael: Okay. So full-time associate helps you with your clients, client service admin is shared, I guess just because ultimately there is only so many transfer and cash-in and cash-out requests and such with 60 clients. So they have capacity to help another advisor as well.

Sarah: Yes.

Michael: Am I thinking about that right?

Sarah: I think so. Yeah.

Michael: Okay. So it's just, to me, phenomenal metrics from a business end…you plus one and a half...sort of I think of like a triangle where you share an admin point with another triangle, 60 high-dollar clients, $1.6 million of revenue.

Sarah: Yes.

Michael: Okay. So help us understand like, what are typical clients for you? What's the typical profile of someone in the 60? And then I want to understand more like, what do you do for these people that pay you an average of roughly $25,000 a head? But first, who are these clients? What is 60? What's a typical relationship within the 60?

Sarah: The largest bucket of clients would be women that have experienced transition: widows, divorcees, single. And so they're on their own and that leads to more of this higher-touch relationship as a trusted advisor. And then strategically, Mason...one thing interesting about Mason is the business grew through corporate relationships with companies doing financial planning for C-suite. And so a lot of the Mason clients aren't local. And so, when I joined Mason, part of my contribution and goal and focus was to build the local brand and have more geographically DMV, D.C., Maryland, and Virginia clients. So I have a lot of women clients, folks in transition, nearing or entering retirement, and then a distinction for Mason is more geographically local clients. Although I do find myself on the airplane a good bit as well.

Michael: Okay. And so is the business model AUM based? Are you a firm that charges assets under management and then does the combined planning and investments offering?

Sarah: Yes. We have an assets under management fee. We do have some clients that are paying a financial planning fee and there are several of those corporate executive-type clients that are paying...they might only be paying a financial planning fee. We also have a tax offering, and so we offer tax preparation for our clients, and that was really a demand type of addition for corporate executives. They want you to do everything, so you can do their financial planning, help them with the investments, and then prepare their tax return.

Michael: Okay. Is that something that gets charged separately for?

Sarah: Separate. So separate taxes, some separate financial planning, and then investment management, wealth management fee based on AUM.

Michael: What do you charge separately for, I guess, planning and taxes when they are separate? Is there a typical fee or structure? I'm just trying to envision what this looks like relative to sizable AUM fees that you've got given the wealth levels that you're working with.

Sarah: Yeah. And the tax revenue, so when I'm sharing my revenue, I'm not including tax revenue, that's a separate arm. So that's not part of the $1.6 million, but I would say a simple return is $1,000, maybe $1,200, $1,500, so that's a separate fee and I think it's fairly industry average for this area, tax preparation. Financial planning, and I don't have any specific corporate relationships, but I would guess $8,000 to $10,000 would be an annual financial planning fee if you're engaged in that type of relationship.

Michael: Okay. Because you're not living the corporate executive relationship channel, you're building local market, women going through divorce, widowing and such. You've got, I guess, a little bit of a different client profile than where the firm was historically.

Sarah: Yes. And then some of my colleagues have quite a different client profile. I have a few retired executives that are kind of in that retiree bucket now.

Meeting Clients Where They Are Rather Than In The Office [10:15]

Michael: Okay. Okay. So, so now help us understand just what do you do for clients at the end of the day for...? Again, I'm roughly mathing here. It's about $25,000-plus of revenue per client. So what does the service model look like? What do you do for clients through the year?

Sarah: So I guess I would say I care deeply for them. I want to be readily available to them and I want to make a meaningful connection in terms of our time. So I strive to know my clients. So I feel like if you're managing their investments and you're kind of protecting parts of their future, you want to understand them and their goals. And so the unique part of I think what I do is I don't do a lot of meetings sitting across a table in a boardroom. Particularly for women, I found that it's a little bit intimidating to come into a corporate office, sit at those long boardroom tables.

Michael: Long conference room table. Yeah. It's got the glass top on so we don't mess up the wood with the drinks. Yeah.

Sarah: And you're like, hey, over there, and it's like ten seats over. And it didn't feel conducive to deepening trust and understanding the relationship. So I made a focus of meeting clients where they are, going into their homes, finding shared interests. I went sailing with a client a few months ago, brought a few of my kids on the boat for the day. I went to see a client earlier this year just outside of Chicago and she loves horses. And I said, "Hey, would it be okay for me to meet your horses and go to the barn?" And she was like, "Oh, that'd be wonderful. And could I bring my two daughters that are home from college? Because they want to share the horses." And I didn't have the appropriate shoes, so I had to borrow boots. I didn't think about that ahead of time, but I'm in the horse barn wandering around checking out the horses, brushing their...and I'm her financial advisor, but that's what's important to her is horses. So I wanted to understand that and enter into that.

I had a client recently that was buying a car, and she's a widow and she's on her own. And I get scared when clients like that walk into a car dealership. So I'm like, "Hey, call me. I'll talk to the sales guy." And I did and worked through it, and then I'm communicating with her back and forth virtually. And I would show up in person, and I have, to make sure that she feels comfortable and has a good experience. And she saved $6,000 or $7,000 through the negotiations. Attending a concert with a client. I was in Key West this spring and the clients love the symphony and they were like, "We got tickets to the symphony." I'm like, "Sure. Yeah, I'll go with you." And stayed in their guest home. Early in my career, I remember a client wanted to go for a bike ride and she was in her 80s. And I'm like, "Can I run alongside you?" And I just have this memory of I'm going for a jog while she's on her bike. And I think that meant a lot to her. I don't know, just lots of stories of playing tennis, or pickleball, or going to a concert, or whitewater rafting. It's not just the typical go play golf and chat. I've tried to find their interests and passions and family dynamics and enter in to be a trusted advisor and a resource. And I start there. I don't start with, "Let me tell you about your tax picture," or, "Here's your investment return year to date." I start with a focus on that.

Michael: So I guess I'm just trying to visualize a little bit more of how this plays out as you get going with the client. Nominally, most clients come to us because there's some financial planning-related issue that's going on in their lives that prompt them to say, "Today's the day I'm going to go get me a financial advisor." So maybe if you can walk us through a little bit more like, what is the process for you with a new client? If someone has reached out and said, "Sarah, I would love to work with you. I've heard a little bit about you. It sounds great. I think you'd be a great advisor for me. I'd love to get started." What happens? What's the process of meetings and such that you take clients through?

Sarah: Yeah. I have found that I tend to have a shorter sales cycle because a lot of the prospects that I have are coming in as referrals. And so it's an initial meeting, and the initial meeting is everything I can know about you, asking questions about your family. And I'll lead with the prospect meeting of like, "I can't wait to hear more of your story." And that's like a closing on an email. Like when I'm scheduling something, I want to hear their story. I want to know their life story and how that connects. And then I'll share as much or little as they want. And I try and ask questions like, "Do you want a lighter version of our investment philosophy? Do you want to know the full details?" And the client base that I've catered to has leaned more on the light side. I've had clients that have gone all the way through and they're not even sure what asset allocation looks like or the portfolio. I'm sure a bunch of advisors are just like, how is this possible? But they trust the relationship and the process and we've identified and kind of matched them along with their goals and put them into the profile. So it's getting to know them, sharing about Mason. I'm not doing a lot of the personal life things in the prospecting part of the process, if that's the question.

Michael: Just keep taking me through then. What do you cover in each meeting as you go through the series of meetings with clients?

Sarah: Okay. So, for example, so I had a prospect meeting last week in Maryland and I got a phone call and she said, "You don't know me, but I know you. I'm in this medical profession and I've had multiple patients talk about how you care for them beyond their financial picture." And this was related to a client where I'd helped just in her last days because she was what we call solo senior. She was on her own, no spouse, no kids. And I just felt like, I'm going to do everything I can to help her in her last days. And so somehow this medical professional got word of that and said, "I think you might be able to help my husband and I." And then I just went and I'm like, "How about I meet you in your home?" And I met them in their home and uncovered there were some medical things and some interesting family dynamics to where they felt like they needed a local advisor that could invest in them and help them with a possible transition from their home, if that was necessary, and managing long-term care. And so that's how they connected.

So we spent two hours talking about that, and then I have some pages talking about Mason and our offering, the strategy. And then the next step is, okay, so if you can send me a recent copy of all of your investment statements, then I can schedule the next meeting...and this was just last week, the next meeting to share with you, "Here's your current situation and this is what it would look like at Mason." And then, "Here's what I can do." They said estate planning, they want to update that. Would you meet with us and an estate attorney, which I think most advisors would. And, "Sure, be happy to partner with you on that and sit in a meeting or connect with your estate attorney." Same with tax advisor, all of that.

Michael: And so you would outright be going with them to an estate planning attorney meeting and sitting alongside them. That would be typical for you in these sorts of relationships.

Sarah: Yes.

Michael: Okay. So second meeting is you're getting investment statements so you can do some version of a proposal that we have to go through right here. "Here's where you are, here's what it will look like with us."

Sarah: Exactly.

Michael: Maybe there's some discussion of the tax transition along the way, if applicable. Is there more financial planning stuff coming up at this point? Are you a firm that does a preliminary financial plan that gets presented at this stage as well?

Sarah: Yes. We do, but in this scenario, they're retired. So I found that a lot of clients that are over, let's say 70, it shifts from retirement planning and financial planning being a focus to legacy planning. And this is a scenario where given the amount of assets that I feel like the way I could best help them strategically is, yes, manage their investments and then work with them on legacy planning. And that's what happens when you pass away. Where does it go? What does it look like? There's some special situations related to their children and trusts and things like that, that to me, I think of for every prospect, what is their greatest felt need? How can I help them? How do I bring those two things together?

And for this one, I met with them, waiting to get the statements. I'll do that current versus proposed. I'll look at the fees that they pay now, the fees they would pay at Mason. I'll look at the allocation strategy, how they're invested, certainly for any of the taxable accounts, the gain considerations, and we'll move it over in kind. And we're not a shop where all of the taxable assets have to be liquidated regardless of if there's huge gains. We will build a portfolio strategy around some positions that have high unrealized gains. But we'll do like a full comparison. And then for them, I would say, "Here's how I think I can help you. Beyond the numbers, it's legacy planning." So I'm looking for a beyond the numbers, highest-felt need. And remember too, the client's highest felt need is not always what we diagnose as an advisor. And so I'm trying to focus on them and figure out what is their greatest felt need? How do I meet that? How can I connect? And then how do I transfer that to, in this case, it's legacy planning?

Identifying And Working On A Client's "Greatest Felt Need" [20:14]

Michael: Can you give examples of what are greatest felt needs in this context? What surfaces in that way?

Sarah: Yeah. A greatest felt need would be, can I retire and not run out of money? Am I financially independent? What would happen if I pass away in terms of who's going to take care of these assets for this family situation? Sometimes for clients, it's a tax thing. It's, "I am leaving this company and I have this stock picture here and if I don't find or port or move this over, this thing happens." I had one client where that was the trigger. I think that it could be some type of insurance thing. Or, "I've just lost my spouse and I don't understand any of this. I need to pick up the pieces." Or, "I'm going through divorce and my future looks really different than what I thought it was going to be. I need help navigating this new financial picture."

Michael: And so, how directly are you asking this? Are you trying to ask them, "What's the biggest issue you're facing in your financial life," and trying to go that route?

Sarah: No.

Michael: Or are you trying to elicit this because they don't necessarily say it and you're trying to figure out what it is anyways?

Sarah: Yeah, it's more the latter. But I will say at the beginning, "I've got an agenda here and I have some talking points or things for us to discuss. But is there anything on your mind that you want to be sure we talk about today?" And sometimes it will come up then. Or when they're initially reaching out, it's like, "Hey, I've got this problem here." Or, "I just received this inheritance. I have no idea how to work through this."

Michael: So, initial meeting, if I heard right, can be up to two hours as you're really trying to get to know them and their picture and situation.

Sarah: Yes.

Michael: Second meeting, you're coming back with some versions of investment and/or financial planning proposals to try to show and explain what are you going to do if you work together?

Sarah: Yes. The second meeting is how I can help. So the first meeting is understanding their situation and trying to identify, in a summary post-meeting, what is their greatest felt need? And then the second meeting, once I've gotten the data, and if it is financial planning, yes, we have a whole process of putting together a financial planning proposal. There's a peer review for that. We're asking for tax documents, all of the things. But if it's just the wealth management, investment management offering, the second meeting is, "How can I help?" And that's more of a current verse proposed on the investment side.

Michael: So are you cranking out financial planning software and entering numbers and doing some analysis at this point?

Sarah: Sometimes. We have an internal software that's…we'll look through Black Diamond and they're adding in their current portfolio and then looking at mapping that over to a Mason investment strategy. Occasionally we'll put together...if I feel like part of the need is organization, if we have all our statements, we might put together a balance sheet and just prepare that and show that to them so they can see clearly their current situation.

Michael: Okay. But it sounds like you're not necessarily trying to load in full financial planning software and doing projections kinds of things.

Sarah: No, especially not before we have an engagement with them.

Michael: Okay. And so what do you end up walking into the meeting with in terms of proposals or deliverables? What do you actually put in front of them at this point?

Sarah: We have a Mason client proposition that just gives...it's a PowerPoint slide deck and I'll just pull through some of those slides to talk about Mason and who we are. And then a report related to their investments and their asset allocation. And then I will just have a summary of notes of, "Here, they have a large allocation to large cap growth. We have this more value tilt." And so just a summary from our investment department of themes or ideas or considerations. So it's more like some pages from our Mason deck, the investment data, and then just a summary of talking points.

Michael: Okay. And who generates the, I guess, investment analysis, investment commentary? Because it sounds like it's a sizable firm, there's a lot of centralized resources as well as team resources. So what gets created where?

Sarah: So the investment part of it gets created from...the proposal on the investment side would be from the investment team. So we have investment research and then we have more of like what I would call an investment operations and they're doing the trading. So as an advisor, I'm reviewing and approving trades, but all of that's generated from this consolidated team. And so they're helping with some of that in terms of the prospect side.

Michael: So you would give them a portfolio and say, "Here's the information."

Sarah: Yeah. "Can you review, give me your feedback on this? Can you put this into our current versus proposed…Here's the Mason strategy," that I think would be a good fit for them. And that's a fairly newer process for Mason, I would say in the last year.

Michael: Okay. And historically each advisor was on their own to do this?

Sarah: Yeah, we've had Morningstar tools or different things where you can kind of enter it in there, but this more formal process is new.

Michael: Okay. And so, it sounds like the end of the first meeting is still the primary driver for them to say yes or no is an investment portfolio decision and allocations at this point, at least to say, "I'm willing to make a change from what I was doing to work with Mason to help me implement this."

Sarah: Yes, I think so.

Michael: And so, then what comes next? Like, "I like the proposal, Sarah, looks great. Let's let's move forward."

Sarah: Yeah. So then we move the assets over, consolidate, then we schedule a meeting with them. "Okay, everything's here. We want to show you Black Diamond, get you set up, show you all the investments." And then the investments becomes the lead discussion item. And then once it's set up and it's running and they're comfortable and they understand it, then I start moving into, "Okay, what can we talk about beyond the numbers," or, "How else can we add value to this relationship?"

Michael: Okay. So, for your end, you're not necessarily going through a full eMoney, MoneyGuide capital financial plan before they get through an initial investment setup process.

Sarah: I'm not.

Michael: You get into it next to deepen the relationship afterwards.

Sarah: Yes. And I would say that's not true for all Mason advisors. So there are some of my peers and colleagues that they want to do a full financial plan before they create the investment strategy and invest it. For me, I try and find an appropriate Mason fit that's better than where they were and get that moving over and transitioned as soon as possible, and then work into the other parts of how we can make their life better and contribute to peace of mind.

Michael: So I'm just curious then, are there times you want to get to planning earlier? Do you worry about, how much planning do I need to do to make sure they pick an appropriate investment policy statement that fits the plan or tax considerations that crop up?

Sarah: Right. I would say the answer to that is sometimes. So I often...what I'll do in some circumstances is what I call retirement readiness. And so if they're nearing retirement or their cash flow is going to change significantly, which could impact their investment strategy, I want to work through that retirement readiness before we invest. But my theory on this, and I'm interested in your thoughts, if they're invested 70/30 before, and I can port that over to a Mason similar 70/30 model with a lower cost in terms of the expense ratio, a lower advisory fee, consolidated package together without tax impact, why not do that and get that done and then navigate the financial planning? So I don't want to make major changes to their portfolio. I don't want to create significant tax impact and I don't want to change their legacy goals or do big beneficiary shifts or titling changes. But I feel like in a lot of cases, if it's not warranting a major allocation shift, we can port them over into a similar model and then work through it.

Michael: Okay. And I suppose the reality as well for...it sounds like you've got a client base that tends to be higher dollar, right? Mathematically, it's a couple million dollars per client. They tend to be older. I'm thinking very practically. I'm envisioning you don't have a lot of clients where, "Oh, we really got to do the financial plan and run the numbers because I'm not sure if you're going to be able to retire and I need to make sure you've got enough equities in there to get you through retirement." It sounds like you've got more clients...this isn't really, is the retirement plan going to survive scenario, which means we're not financially constrained. Much of the allocation is probably dictated by risk tolerance or other goals, which they have probably already determined to get to whatever portfolio they have because they're 60 or 70 years old. This isn't their first portfolio.

Sarah: Right. Exactly.

Michael: There's a thing, there's a status quo they're already with.

Sarah: I want to build trust. I want them to have peace of mind. I want them to sleep at night. And so most of these clients, you're right, I'll tell them, "There's this large section of your portfolio that you will likely never touch during your lifetime." And so when we're navigating the long term...but it's true, I work with a higher average client assets under management than I think typical. I tell people, I'm teaching my kids how to save and I'm teaching my clients how to spend. I find that I'm, as an advisor, working with my clients and working through the behavioral finance part of getting them to learn to spend some of the money that they've worked so hard and for so long accumulated and saved.

Why Sarah Moved Away From A Standardized Client Service Calendar [31:02]

Michael: So what comes next as you're going through this? So it sounds like you've got a, we're just trying to get dollars moved and placed, get some incremental savings in costs and fees and positioning, get them to an initial peace of mind that's on the transition, and then we'll continue to dig deeper on planning. So, what comes next? How does that flow? How are you setting up the conversation to say, so now let's go deeper?

Sarah: Yeah. So then I offer a quarterly meeting with every client going forward and, particularly in the first year of onboarding, I want to check in once a quarter. And so we have an agenda, and there's an investment review part of it, and then there's wealth management items. And so the wealth management items might be, okay, you're approaching Medicare age, let's talk through that this year, or Social Security, or you've mentioned this family dynamic, let's have this conversation, or you have a concern about long-term care, we want to make sure we're reviewing your situation, or do this analysis, or financial independence. I'll talk about tax planning or strategy usually once a year, particularly as it relates to the portfolio, if there's taxable assets, RMDs, QCDs. All of those planning things we're building into this wealth management section of an agenda and just hitting points.

But I remember the early days of sitting through a full financial plan and I would sit and I would see the eyes just glaze over of clients. And it would be two hours, three hours, four hours. And I was just observing and I observed a lot of information communicated and I don't know that a lot of it was received. And so I don't want to overwhelm. I don't want to sit down with a 100-page financial plan and present that to a client. At one point I had a cycle, tax and cash flow, estate and insurance, net worth, balance sheeting goals. And I would do these quarterly things. And now I've gotten even looser in that of like, okay, what's important to this client for this year? And when they're not paying a consistent financial planning fee, I think I feel more freedom to like, do they need this, do they not need this? Should we talk about this, should we talk about that? What's most important?

And in a lot of these meetings, less is more. And getting them to understand one or two things or create a deeper level of understanding or trust and also just saying, "Hey, you don't need to understand all this. This is what I'm here for. I'm going to help you with this. We can go as deep or little." I tell all the clients, "I need you to know something about this, but not everything." So I don't have this systematic, this quarter's tax and cash flow, next quarter's insurance and estate. I've moved from that.

Michael: So you used to have a more structured client service calendar and you moved away from it.

Sarah: Yes. And that was at a prior firm. So since I've been at Mason, I think I've had more autonomy to build a practice exactly how I would like to do it. I care deeply about financial planning, and being strategic with taxes, and having a buttoned-up estate plan, and reviewing their insurance and property, casualty, and getting their Medicare resource, and all of these things. But I just find that my clients lean more into this, keep it simple. Don't share words I can't understand. Because that's what's cultivating peace of mind. So it's wealth management. It might have one, two, three items, and then a portfolio review. And that's cycled through once a quarter, particularly in the first year of onboarding.

Michael: There's a part of that you said that very awkwardly hits home to me of, I guess I'm paraphrasing, my client is not going to have peace of mind if I keep throwing words at them that they don't understand. Because I think there's an awkward truth in that for a lot of what we do with clients. At best, the industry has a lot of jargon, at worst, some feel a pressure to say, I've got to show I'm knowledgeable and add value and can point out things that they didn't realize that should be disturbing them so I can help them solve them, which might technically sort of be good for adding value. But if my goal is peace of mind and calm for my clients, I'm basically continuously trying to identify problems for them so I can solve them and add value and they never get peace of mind because every meeting I show them a new problem with jargon they may not understand.

Sarah: Right. I sat through, I think it was a NAPFA session years ago and it stuck with me that anytime you say a word that they don't understand, the trapped brain goes up and they start thinking, what is this word, what is this word? And everything you say after that word, it's tuned out. And so the only way that you can effectively communicate is make sure that...We have all of these acronyms, right? And some clients don't even know what RMD is. So you say you're RMD and you'll meet with a widow and she's going to spend the next 30 minutes, what is RMD? And that's a very basic thing for us, but being very careful about how we communicate I think is really important to peace of mind, trust, and serving clients well.

Michael: So then take us further in that direction. What pulled you away from having the regular cycle of things that you were covering in a meeting like the service calendar approach to what are you covering each quarter or semi-annually, what goes on the agenda?

Sarah: To be totally honest and authentic, some of those clients that were on that rotation were paying a financial planning fee. So if a client's paying you a financial planning fee, I feel like I have to hit every single area of financial planning every year. And so in my current role, I don't have a lot of clients paying a financial planning fee, so I feel more freedom to do what makes sense. And I also felt like it was a little stale. I almost could take the insurance and estate review from last year and copy and paste into this year's agenda in this estate and insurance quarter and not much changed. And I also observed some other advisors, when I was kind of joining and entering into transition relationships, they were doing retirement analysis for 80-year-olds that had significant wealth of like, "Here's where your assets are going to be at age 100." And I was like really scratching my head. Once you're in your 80s, likely you're not going to run out of funds if you have $20 million under management. I find that there were these prescribed ways of serving clients in these areas and a lot of times it didn't fit the stage of life and it got stale or they transitioned out of it. So I'm like, let me just start from scratch and simplify it and have a wealth management section and find a few things that are important to each client.

Michael: So the idea being if your client base gets too diverse in their own needs and circumstances, it gets really hard to have a standard calendar because you just start serving up things that doesn't make sense for them. You have to weed it out and now you've created structure to have a standard structure and then an additional structure to have exceptions to the standard structure.

Sarah: Exactly. I don't think when your average client is $4 million or $5 million, you should have a standard structure for all of them. Like you said in the beginning, and I actually don't think too much about the revenue or the fees the client pay, but that's a lot of money to just have the same data pulled every quarter. I think that especially with AI and all of these resources and tech stacks and tools, we have to be personal and unique in the way we're serving these clients, particularly at this asset level.

Michael: And so that's what takes you instead towards, I'm just going to have really clear meeting agendas and make sure I've got something or things to talk about each agenda without being too prescribed about what they're going to be.

Sarah: Yeah. And also, I hold the agenda loosely. If I'm on with a client and the client wants to tell me about this situation happening in her life, this happened recently, and we spend over an hour on it and I don't get the agenda, it's fine. I don't stress about that. I know she's taken care of, I know her funds are allocated appropriately. I don't want to force an agenda on a client as well because it's their time.

Michael: And again, I think just an interesting paradox relative to more firms out there I'm seeing that are adding planning fees, to you the part of the freedom to say, let's just focus in and cover the few things the client wants to cover and then move on without adding more than we needed to is because they don't pay a separate planning fee. Everything I'm doing is value add on top of a baseline AUM fee. So I don't need to add this up to be more than it needs to be. I can just cover what I need to cover that's most valuable for them and that's enough and successful.

Sarah: Yeah. And look, it's not 100% client directed. In our meetings this past meeting cycle, we did a beneficiary designation review for every client, and so created a report from eMoney, "Here's all your retirement accounts." And we made multiple changes. It's interesting that they're like, "Hey, I don't know if I want that," or, "Do you want to add per stirpes on this now that your son has a child," or different things? And we also did a balance sheet, like a network statement for every client. And so we just built that into our agendas, two additional pages. And I sometimes pulled those out or felt like it was too much. Occasionally we didn't get to it. But that's very much a financial planning thing that we added to every client's agenda.

Creating Meeting Agendas But Being Willing To Break From Them [41:14]

Michael: So is there a standard structure at least to the meaning agenda? I realize particular items will shift by client and season. Is there at least a standard structure of things you like to cover that you put on an agenda?

Sarah: Yes. So we start with a personal update, and the next heading is wealth management items, which can vary and be different depending on the client, depending on the season. And then we have the investment review section or review market update, portfolio, returns, allocation, and then questions and clarification. And then I end every agenda with, "Tell me something good." And I ask the clients...and it's been really fun and cool to hear and in some ways challenge them a little bit to think about something good in their life. And then nine times out of ten, I would say the clients are like, "You tell us something good about you," or to my associate, "Sarah," my associate's also named Sarah, "what's good for you?" And so that's kind of a fun meeting ending.

Michael: And so those become, I think it was five anchor sections: personal update, wealth management items, investment review, other questions, clarifications, tell me something good.

Sarah: Yeah. With a preface at the start like, "Hey, here's our agenda, but what's most important to you to cover today?" And also, I don't work with a lot of executives that say, "You've got 20 minutes," start the stopwatch. That's not been an ideal fit for me as an advisor. So my agenda is not built around efficiency and my practice is not either.

Michael: So there's no (five minutes), (15 minutes) after each line item on the agenda.

Sarah: No. No, it's not like, okay, all right, next one. I have had a few situations like that and I find that very stressful because I want to do what they...I want to serve them well. And I'm like, ah, I got to push through this, or go to the next one, or stay on track and on task. And so, yeah.

Michael: And do you send agendas in advance?

Sarah: Only if we feel like the client has requested or is going to want to see it. Most of the time, no.

Michael: Okay. So you're not necessarily asking them to add things to the agenda, shape the agenda in advance. You just start there in the meeting, "Okay, we've got this agenda, but is there anything you wanted to talk about," and that's their opportunity to send it in a different direction?

Sarah: Yeah. Or, "What's not on here that you want to be sure we talk about today?" Try and make it open-ended.

Where Sarah Thinks She's Adding The Most Value For Her HNW Clients [43:56]

Michael: Okay. So, I'm trying to, I think, process through, when I look at how a lot of the industry has evolved around its service models in recent years, it's various versions of clients pay us these fees, they're fairly sizable, bigger clients, it gets to be a pretty big number, $10,000, $20,000, $30,000. I would like to retain these clients because that's a good amount of money as long as I'm doing my service work. And I feel like for most firms that has taken us in this direction of more touch points, more regular touch points, tech to support touch points, client service calendars to facilitate touch points and make them more efficient. All these various things that we've done.

And so, I'm just trying to reconcile...and you're basically going the opposite direction on a lot of this as you've got 60 amazing clients and $1.6 million of revenues. Clearly it's working. And so, I think I'm just trying to figure out if there's some gap to bridge here. Do you not feel the pressure to show value, to justify the fee, to explain the, "Sarah, you're lovely, but remind me again what exactly all the things are that you do that I'm paying you $25,000 a year to manage my portfolio?" Do you just not feel that pressure? Does it show up differently for you? How does this thing I think we all have of feeling like we need to show we are adding enough value to be worth the fees that we charge, how does that get expressed for you?

Sarah: I think that it's like that MasterCard commercial. Peace of mind is where I feel like we translate the value. We have strong portfolio returns, particularly a year like this year and the market's just going up and up and up. It's so easy to show a portfolio report and then when the market's going up, I tend to show or write in my summary the performance in dollars, if it's going down in percentage. And so, it's like, "Oh, you're up this many dollars this year," and that's such an easy thing to hang your hat on. That translates to a lot of value. "Your portfolio is up $350,000 in eight months," and then you say the fee they're paying is whatever, $30,000 or something. And so, gosh, there's a lot of value there.

But I want to go beyond that because...and I remind clients like, "Hey, the market's down about one out of every five years, and so here's why, and I want to do some basic education on that." But I feel like when my client's husband passes away and she calls me and is like, "He didn't make it out of the hospital. He had a blood clot." And I'm like, "I'm there." That's the value. You can't go to a robo advisor and type in, "My husband just died. What do I do?" Or ask ChatGPT. So the relationship is where I find I'm contributing the greatest value to the clients. I think we have great investment offering. Our tax department's amazing. The financial planning's fantastic. We're a coordinated financial quarterback with attorneys connected to insurance agents, outside CPAs. We're doing all of the things, but that trust of relationship like, "Hey, can you talk with my child?" Or, "They're going off to college. How do I navigate this?" All of these sidebar conversations and engagement, I think, for me, that's the value. That's the greatest value.

Michael: So it's some version of the fact that I've got a manageable client load and I'm not doing a lot of the other things is what lets me be there in the hospital with my clients in a phone call response when they say, "My husband just passed away. I don't know what to do."

Sarah: Yeah. I want a very timely response and have a lot of accessibility to those that I serve.

Michael: It does sound like you are still what the industry would characterize as fairly high touch if...I think you said your baseline goal is quarterly meetings, quarterly check-ins with clients?

Sarah: Yeah, that's virtually. Yeah, quarterly virtually check-in. I think in person, my goal is once a year. So I'm not going out and meeting with clients multiple times a year. It's usually once a year, but if I can review it virtually and I can do a few check-ins where I'm going over investments or hitting taxes or other things, that's great because that frees up more meaningful connection when I see them in person.

Michael: So I know you've seen a lot of advisors and firms over the years. I guess I'm still just trying to better understand. We all say we try to do great relationships with clients. No one says, my client relationships are kind of superficial and shallow. We're all going for good, high-quality client relationships. What's different about yours and what we're doing that's making this work better and deeper for you?

Sarah: It's hard to answer. I think I try and be strategic in doing events for clients. I do some unique client gifts.

Michael: Tell us more about those, like what kinds of events and gifts?

Sarah: For Women of Wealth, we've done flower arranging classes around Mother's Day. I've done multiple flower arranging classes, which is really fun. I've had a color consultant speak to a group at 60 Vines right there in Reston Town Center. A therapist come and talk. We've done a wine tasting. We've done some events at Bull Run Winery where we just talk about...I created this course, essentially. It's like Investment 101. So it's like, okay, all of these words, what do they mean? When your advisor sits down with you and talks about asset allocation, what is that? Why do you have a different amount of stocks versus bonds? Just sort of a basic investments course. We've done some events around that. I think some of those things, and that's one where it's like, hey, bring a friend, or if you have someone that you'd like to connect or you think would learn more, of course those events are open to that too. But that's been, I think, impactful to meet them and have some social group outings. I've done some smaller client meetups where one client's referred several others. I'm like, "Hey, can I take you all out to dinner in D.C. and connect?" Things like that. Yeah, unique gifts, trying to remember and connect. I don't know that I'm doing anything that different from everybody else.

Michael: It's a lot of events you're starting to add up there. How many do you do in a year? How often are these happening?

Sarah: One to two in person a year. But this is new for Mason to be doing events. So one to two a year, and then we'll do a few webinars. I've done some of those. Our most recent webinar was on Medicare just for all the private wealth clients.

Michael: And then where does all the growth come from for adding these clients?

Sarah: I know. I've been trying to think about that because I've had a goal. I'm fairly purposeful and I want to grow at X amount. When I started at Mason, I said I want to have a million and a half of revenue. When I was hired, the reason I was hired was four advisors were retiring, and it was a huge percent of the total revenue of the firm. They were looking to hire senior advisors. I had a large amount of clients that I was transitioned internally. So that was part of it. I was at my previous firm for only three-and-a-half years, but I had developed some deep, close relationships. So several of those clients...the firm had sold to a larger national firm, and so several of those clients had reached out to me. That was a huge surprise because I wasn't there that long. But I got a lot of new business from prior clients that I worked with.

And then the third bucket is really internal referrals through the Women of Wealth. Like one situation, there was a divorce and the wife had decided she was going to work with another firm, but she was still connected on tax. They're like, "Well, maybe Sarah Baker can help." So I just joined a call and helped her with her quarterly tax estimate. And, "Hey, I'm specializing in connecting with women and helping them. I know it looks a little different." And then the rest is history. She got lots of funds from the divorce and then kept what she had at Mason and significantly increased the asset size.

So there's a few of those through major transitions, and then client referrals. I do try and go beyond for clients, particularly when they're on their own. One, there was, this was last year, a major health event. And so I got connected to the healthcare power of attorney. And I was trying to share and make sure the finances were connected. After the client passed away, the power attorney came to me and said, "So I'm done working with you, but I'd like to keep working with you. I want to become a client myself. I saw how you treated this person and I need that." So he moved all of his money over. There's been a few of those where I just journeyed alongside and then got exposed or connected with folks and they were like, "Hey, can I work with you?"

Michael: Is there a goal for how many clients you add in a year?

Sarah: No. I kind of have a max because I'm not looking to grow super fast because it doesn't translate well to how I service, I guess you could say. So one a quarter with five to six max in a year is where I am right now. And so this year I've added two or...yeah, I've added two this year and I have a few things pending.

Michael: Okay. But on a client base of 60, that's almost 10% a year. That's actually, on a percentage basis, a lot of client growth from referrals to compound at that rate. Most of what I see are more like 4%.

Sarah: Yeah. I think, well, also, I've just had some other networks. I play tennis, so I've had some folks from tennis become clients. A friend I knew from church was like, "Hey, I have this pension, can you manage it?" Because I just had done a lot of volunteer work and they knew I was in this space. There was a few situations like that, but I think in just over five years, about a million of revenue I've added organically or through connections.

Michael: Oh, wow. So when they seeded initial clients and some came over, that was like...

Sarah: It was like $500,000 of revenue.

Michael: Okay. And so it's been adding $200,000 of revenue per year, I guess between...

Sarah: I guess so.

Michael: ...clients you add and it is an AUM model, so market growth helps to lift some of that over time as well.

Sarah: Right. Yeah, so I haven't been on this one client a quarter trajectory the first several years. So I felt like the first five years I'm building the base. This was the third time I'm starting from scratch to build a book. And so I felt like zero to five years is the building. And now I'm in client experience, client servicing, segmentation. Now I've redirected where one client a quarter new, I can manage and integrate, but I've kind of shifted the focus from growth to retention, serving well, the experience, all of those things.

Why Sarah Chose To Move Firms After Her Previous Firms Were Acquired [56:19]

Michael: So now help us understand more of the career path and journey. I think you just said this is the third time you've had to restart from scratch. So I guess what brought you to financial planning world originally? How did you find your way to financial planning? And then what has been the path through the industry?

Sarah: Yeah. So I always loved people and money. I wanted to be a cashier when I was a child. My favorite Christmas gift was one of those cash register...a toy cash register.

Michael: Because you can do the money and talk to them while you get the money.

Sarah: Yeah. People and money. Yeah. It was people and money. So it was like that from the beginning. And so out of college, I got my start at Vanguard and had a wonderful experience there. Because I'd had an internship, they started me in what was called the retirement resource center, which wasn't like the basic call center core or participant services, but it was like talking to people about retirement. And I loved it. I just love talking to people. And then they would say, "Can I get your extension?" And I'm like, "Yeah, sure, call me back this extension." And then my boss one day was like, "Sarah, you can't keep doing this. You're getting all these inbound calls and we're supposed to be outbound. You're supposed to be taking calls, and you can't do this." And so I'm like, "Okay."

And so then I realized, maybe I want to go work with clients on an ongoing basis, not just one-time phone calls. I'm enjoying that they want to call me back. I want to talk to them again too. But it wasn't working at Vanguard. And so I got hired in Flagship, which is like the million-plus and then was there, but I interviewed...this is in North Carolina. So I found another firm and I landed there. This is like 2006 and I was there for 11 years and I loved it. I had great clients, like dear friends, sort of formative years for me, and going through having my son and some maternity leave, and back at it.

Michael: So is this advisory firm or another asset manager like Vanguard?

Sarah: Yes, RIA. So this is a wealth manager, RIA where I was going to be able to step in and build my own clients. And in 2017, this firm sold and it was a very quick transition and the sale was including...there wasn't anything...basically they were going to start doing insurance and having a mortgage resource and things where I just...it didn't feel aligned to my values. And so...

Michael: They got bought by a bigger thing with more products associated. This was, I guess, 2010s, this was the era that banks and insurance companies and others started buying some of these firms to say, "Oh, they have clients, we have products, we can cross sell this."

Sarah: Yep. It was 2017, but yeah. So I thought, oh my goodness, what do I do? I'm in North Carolina. I wanted to find...I was very focused. Well, one, I didn't want to let money lead my decision-making. I've been alongside and connected with several folks in the industry where they take a job for a higher salary or a bigger bump or this sweetener. And I knew that that wasn't going to be the priority, but I wanted to find a job where I had a salary. I didn't want this eat what you kill type of thing because I'm the provider for my family and I felt this like conviction of like, I need a salary and I need to go where I can do what's best for the clients. Those were the priorities. And there wasn't much in the Charlotte area. So a recruiter said like, "Where else would you go?" I'm like, "All my family's in the D.C. area." And they were like, "Well, that's a great place to go for wealth management." So then, I ended up with multiple offers in the D.C. area and then sort of landed with a firm in Tysons.

Michael: Okay. So when you're...I guess I'm trying to visualize the transition from the prior firms. So, you left, were you leaving when the deal was announced? Were you there for a while afterwards and then decided you didn't like how it was going?

Did you have a path to take clients with you or was that going to have to be a hard break? What did it look like as you're trying to get to this realization? I've been there for, I think you said, 11 years and maybe this isn't my long-term future firm after all.

Sarah: Yeah. It was heartbreaking, actually. Very sad for me. I explored, I found the other offer, I didn't sign the agreement for the new firm. And so then I resigned that day, and then it was sort of one of those things where I got a text message like, "Hey, don't come back and we'll just clean up...we'll box up your office for you." I was like, wow, I'm not welcome.

Michael: So that was the moment, like the acquirer put forth new employment agreements and...

Sarah: And I didn't sign it.

Michael: And you didn't want to sign it.

Sarah: Yeah.

Michael: And so they said, no sign, don't bother coming back.

Sarah: Yep. And then I think they did a farewell lunch for me later and I got my box, but twice it's happened to me and both times...and I understand the business risk and ownership, but you sort of feel like a trusted family member that's loved and appreciated and accepted, and then you sort of turn into like a terrorist for the organization and, man, it's a painful thing. I know a lot of listeners probably have been through this exact thing.

Michael: So were there particular things in the new employment agreement you didn't want to sign or you just didn't like the whole gist of the buyer and where they seemed it was going and decided to make this decision, and instantly end your career with the firm after 11 years feels like a fairly high-stakes moment. So I'm just trying to understand what gets to the point of, I'm going to say no. And I'm assuming you had some sense of the likely consequences of saying no.

Sarah: Right. I had an offer on the table, so I already had a home and a place to go. So that gave me some security. I had navigated the change before.

Michael: When did you start looking?

Sarah: As soon as I found out they were selling. It was quick.

Michael: But I guess it was some number of weeks and months from when you found out they were selling until you...

Sarah: Weeks.

Michael: Until you got to the moment of, okay, it's employment agreement time, yes or no. So you had, in that window, I guess, called a recruiter, had them intro you to firms, had some conversations, gotten to a job offer.

Sarah: Yes. Yeah. Fairly quickly with a few.

Michael: Can I ask what recruiters you worked with that found you a job so quickly?

Sarah: I think it was Diamond...I feel like I'm getting spammed on LinkedIn all the time...

Michael: There's a lot of them now.

Sarah: ...with job offers. Even then there were some. I think it was Diamond Consulting out of New York maybe.

Michael: Okay. Yeah, yeah, yeah. Mindy Diamond and her son now. Okay. To be clear, this was not a, I'm leaving and moving my client's book of business?

Sarah: No. I had a two-year non-solicit. And that's the really painful thing. You have 50 or 60 clients who are, for me, dear friends, and then the next day it's like zero. Because to me the non-solicit is like, I can't work with them, but I also can't be friends with them and I can't contact them. So that just felt...that was really, really tough. Because I think the clients are waiting for you to reach out and you never do. So yeah, the other thing that was tricky about that one is I had consulted an employment attorney and they had said in order for this deal to happen, they either provide consideration, like a compensation, or just create a new job for you, like create a new offer letter. And they did the latter. And so I felt like I had added new business and contributed to the value of the firm and then was getting compensated zero for it. And that's a little bit tough to go through. But yeah, so that was 2017.

Michael: Because the good news, the silver lining in this is there was an active job market for experienced advisor, even though you weren't bringing clients.

Sarah: Yes, yes. And that was a scary part because I'm like, I need a salary that's reasonable, especially in the D.C. area. And I'm not going to guarantee one client. I will say zero clients will follow. That was my answer. Every firm I talked to, "I have no idea. I've never done this before. I have a two-year non-solicit, zero. I'm starting over." And that's how I positioned it.

Michael: And that was not a deal killer.

Sarah: No, no.

Michael: And did any actually follow?

Sarah: A few followed. Yeah. Just a very small number. Because it was also a move to a different state. And the brand where I was, it was a very strong firm brand, less of like me as an advisor brand. And I think that's changed. So I ended up at a firm, a great firm in northern Virginia. And I was there about three-and-a-half years and I had been offered partnership along the way and I declined. It wasn't a no, it was a not now situation, just given my life circumstances. And I found myself in the same situation three-and-a-half years later, "Hey, we're selling." And it was to a large national firm.

Michael: Again. So you left the firm because they were selling, got to a new firm and then three-and-a-half years later and they're selling again. But it sounds like this time you had an opportunity to become partner and participate in some of the biz dev value being created, but chose not to. So why not?

Sarah: I didn't know that they were going to sell and the value was going to double or triple the next year.

Michael: You make different decisions if you know you get to flip the shares as it were.

Sarah: Right. If I would have been privy to all of that, I might've made a different decision, but I also am very thankful for where I am today, so maybe not. But yeah, the partner offer was in 2020 and it was just right at the beginning of COVID. And I was a new single mom, full time with a child and just felt like it wasn't prudent. It was one of those scenarios where it's like, if a client came to me and said, "Should I take on this X amount of debt and put this money down to lock in in this situation, this firm, is now the time?" And I feel like I would have counseled someone else "No". And that stuck with me. And I did check with a few mentors and peers and it was how I tried to politely respond is like, it's a not now for me, I'd love to defer that decision.

Michael: Okay. And how did the firm take that?

Sarah: I think fine, but in hindsight, they knew everything that was going to be changing shortly after.

Michael: Okay. So from there on, they knew not now was actually going to be no, because it was going to be sold before the next time this conversation came up.

Sarah: That would be my guess. I don't know for sure, but...

Michael: Nothing negative, just that's...

Sarah: Exactly. Yeah.

Michael: There's limits on what they can say when things are unknown and uncertain on outcomes.

Sarah: Yeah. They've all signed NDAs [Non-Disclosure Agreements] and all of that. So I understand that.

The Challenge Of Maintaining Long-Term Client Relationships In A World Of Restrictive Employment Agreements [1:08:07]

Michael: So you find out the firm is being sold. So the prior time it sounds like the issue was essentially you didn't like the buyer and the buyer's strategy of now we can do insurance and mortgages and other things. So what was the context with this buyer? Were you happier with this buyer or same problem or different problems?

Sarah: Different problems. In general, I feel like I'm a better fit for a local independent firm that gives me freedom to serve the clients uniquely. And so there was a private equity component, it seemed like in this new ownership, and that scares me because I have a core belief and philosophy of people over things and people over profits. And so I got nervous about that. And then I had a phone call right before it was announced to the firm and I'll never forget, the owner was like, "This is going to be great. We're going to get you to 150, 200 clients in no time." And I just hung up thinking, I have 75 clients. I know their pets' names. I know their children, their grandchildren. There's no way I could take this model and double it and be a mom and have work-life balance. I just felt like the way I serve clients would get squeezed into this more super-efficient machine type of model. And that just conflicts with how I feel like I can best serve clients. And then I read the...I think it was a restrictive covenant and there was a non-acceptance clause and I think it was maybe six years.

Michael: Wow. That's very long.

Sarah: That's fairly long. And...

Michael: It wasn't just non-solicit. It was non-acceptance.

Sarah: It was non-acceptance.

Michael: So even if they want to try to follow you, you're not supposed to take them.

Sarah: Yeah. And this is something that I find to be very scary in our industry now that these non-acceptance clauses are popping up and maybe it's because of all the M&A and protecting the revenue and the advisors are having these relationships and clients are getting more tied to the advisor than the firm. And there is some mobility when M&A things are taking place. But I want to question it because we're fiduciaries. And so I feel like the basis of a fiduciary is what's best for the client. And so I think it's a very interesting conversation like we want to do what's best for the client, except if the advisor leaves, they can't do what's best for them. Like if this is a 90-year-old widow that I've worked with for 15 years and she's like, "I trust you, you know my family, you know everything, I can't start over with another advisor. I need to..." And I'm like, "I'm sorry, no." I didn't want to have to say no. And I just felt like in my core beliefs and my values, I always want to do what's best for the client. And so I couldn't sign it. So I had days in this scenario and I just hadn't finalized where I was going to go. I just knew, I can't sign this.

Michael: So the non-acceptance was the deal breaker.

Sarah: Definitely. That was the deal breaker.

Michael: I guess the idea you're going to have to have a high volume of clients was a negative.

Sarah: Yes.

Michael: The non-acceptance was a deal breaker.

Sarah: Yes.

Michael: Which I guess is paradoxical. So it's like, you weren't looking to leave...

Sarah: No.

Michael: ...until they put a non-acceptance. Then you said, if this is a life...

Sarah: Until they sold.

Michael: But if this is a life sentence, then I'd rather leave.

Sarah: Yeah. And I thought I could try it out and see how it goes and maybe I can manage the work-life balance and navigate the comp changes. But when you sign that severe of an agreement in terms of your career and future...I think there was a non-compete in there too, but they also took it out. It was like two or three years originally and a 50-mile radius or something.

Michael: Which gets tough for national firms.

Sarah: A national firm.

Michael: Because it usually gets interpreted as within 50 miles of any place they have a place of business. So it's basically no major metropolitan area.

Sarah: I think so.

Michael: For the really big national firms, you basically run out of metropolitan areas in the country because they have offices everywhere. And if they don't, they're acquiring firms in new cities, which means even if you leave in two years, if now they have added a branch where you wanted to move, you end up with a non-compete in a city you didn't even know it was going to be a non-compete.

Sarah: Right. You can work at Starbucks maybe. Yeah. So that was another really tough transition. And I just feel like as advisors, for clients, I think they should be able to do what's best for them.

Michael: Yeah. I will admit, from the industry's perspective, I do really struggle with non-accepts. I get non-solicits.

Sarah: I do too.

Michael: Yes, depending on the circumstances. I think sometimes firms get a little aggressive on what's fair to non-solicits depending on what clients where. But I get the principle, the firm's being acquired, there are stipulations regarding revenue. If people leave and draw all the revenue, it creates problems for enterprise value.

Sarah: Right. Exactly.

Michael: But the idea of telling a client, "Oh, the advisor's left and you're not allowed to go work with them," just doesn't sit well to me. Clients should ultimately be able to decide who they want to work with.

Sarah: I agree.

Michael: Don't be inappropriate about how you pull them away from your prior firm if you've made commitments, but if clients really want to follow, they should have the right to decide who the want to work with.

Sarah: Right. And firms a lot of times are paying out large new business bonuses and so they've got to protect...they're making an investment in the advisor for that revenue. And there's other onboarding expenses. And so I think something like a non-solicit or some type of agreement that creates fairness between the firm and the advisor financially makes sense.

Michael: Clients are so bound to advisor relationships that firms are getting aggressive on how they restrict them. And again, I get some of that. It feels like some firms are getting a little bit aggressive with it though.

Sarah: Yeah. And I think that if you're going to do that, I almost think it should be disclosed to the client. It should be in the client agreement that, "Here's your assigned advisor and if this advisor leaves, here's our policy." Because clients kind of feel like, "Hey, you just never called me," or, "You never reached out," or, "I didn't hear from you."

Michael: Clients feel hurt because all they feel is you just vanished and abandoned on me. That's not a good relationship thing to do. And like, "I didn't have a choice. If I called you, they were going to sue me out of oblivion."

Sarah: Exactly. And some firms are more prone to lawsuits than others. And so you have to be really careful. I had a client that I worked with at the first firm years ago and she was a dear friend. I went on several mission trips with her and different things. And I'm going to be in her area and I hadn't seen her in like six years. And I just texted her and she was like, "This made my day." And then the second text, she was like...I'm going to meet up with her for lunch and she was like, "Thank you for remembering me." And I'm like, wow, it stung a little bit because I know for years she felt like I didn't.

Michael: She felt like you forgot her.

Sarah: Yeah. She felt forgotten. And I'm like, wow, so many clients felt that. And so it's difficult just managing these transitions, not just the legal and the client interaction, but the whole part of it. You can send an email and say, "Hey, I'm resigning. Thank you so much for this." And you can get no reply. And that happens. It's a sad thing.

What Surprised Sarah The Most On Her Career Path [1:16:01]

Michael: So what surprised you most on this path of, I guess, navigating your career through three different firms, building client base, building relationships? What surprised you the most on this journey?

Sarah: I think I've been ...one of the things that really surprised me the most and has created a deep conviction in me has been the imbalance of understanding the gap in interest and also knowledge between what I would call the financial spouse and the non-financial spouse. So in serving couples, that variance and that gap has over and over been a surprise. And then one story, I worked with...the financial spouse was an executive at Bank of America, did his own taxes via TurboTax, calls me one day. He's like, "Sarah..." And most of the meetings were just he and I on the phone. This was pre-Zoom. And he's like, "Sarah, I just got diagnosed with stage four cancer." And I'm like, "Oh, man." Meanwhile, my firm had been serving this family for 25 years and I had been in the relationship for two. And I'm like, "Okay, let's look at your beneficiaries. Can I talk with, let's say, Susie? I want to connect." And he's like, "No, no, no, we're going to go to this alternative treatment in Arizona and we're going to work it out. We're into this vitamin C infusion thing and start these things."

And I got a call two weeks later from the spouse who I had never talked to, and the firm again, and she said, "Do I have any money in my checking account?" And meanwhile, the next office over, they're going through all the forms to get her to transfer the money into her name. And I'm like, "Listen, I'm getting on a flight. I'm flying to Texas and I'm going to..." And I spent two days with her. She hadn't used a debit card. This was like, they'd been married 50 years, he took care of everything. We couldn't get in the TurboTax, couldn't find the passwords. She had these life insurance checks just sitting on the counter. She didn't know how to deposit a check. She was probably in her 80s and this was like 2005. And so at that point I said, it was like, never again will someone not know anything about their situation because you experience grief, you have foggy brain, you cannot learn something new. So that surprised me. It challenged me. It changed how I totally navigated my career and clients, but I've seen that over and over. And it's an interesting thing to manage, but I still feel surprised by it.

The Low Point On Sarah's Journey [1:18:33]

Michael: So what was the low point for you in the career journey?

Sarah: Oh, I think the two changes. I think feeling like I have to make a very fast decision with limited information and then leaving clients behind, feeling like I'm leaving my friends. When you have those kind of deep connected relationships, it was very, very painful and difficult to manage.

Michael: Were you able to have a new job and offer lined up when the second firm got bought and you decided not to sign the way that it had with the first or did that playbook not work as well the second time?

Sarah: I can't remember the exact timing, but I ended up with two offers and one of them was Mason. And I know that when I resigned, basically I was paid four days. I turned in my two weeks notice, but it was four days before the conversion. And so I think at the time that I resigned, I was fairly far along with both of these opportunities, but I hadn't made a decision or received a full offer from either.

Michael: And same context, you didn't necessarily expect to bring clients or was it different in this situation where you might've been able to?

Sarah: No, I thought...I was only here three years and five months. So I was at the last firm 11 years and not that many clients moved. I was only here a fourth of that time. And when I was hired by Mason, they were clear, we're paying you this salary and this is for your talent and we don't expect you to bring any clients. And so I think that's, in the end, why I selected them. And I really appreciated that. But I was like, but if clients reach out to me, I'd like to have a conversation. And they were like, "Ooh, I don't know, let's work with our legal team." And I'm like, "No, I want to do what's best for the client." And so then they agreed to that and worked through and...

Michael: Because they had retiring advisors, so they had clients to be certain...they didn't need you to bring your clients, they needed you to serve their clients.

Sarah: Exactly. They were hiring me for talent, to be a senior advisor, to step in and work through some of the retiring advisors' transitions. And so today all of those advisors have successfully transitioned into retirement.

Michael: So was this a recruiter again to find or were you just local job listings or LinkedIn or something?

Sarah: The Mason one was a recruiter. So I was working with a recruiter, but the other opportunity was just like a local networking thing.

Michael: Okay. And so I guess, I'm struck, or the takeaway to all of it, the experienced advisor not able to bring clients, the jobs are out there if you're looking.

Sarah: It was unique. I don't know that there was a lot of those where the firm had the depth and the experience and the higher level of clients that Mason had where I could step in at the compensation level that I did and right out of the gate add value, work into transitions. I don't know that there's a lot of those out there. I feel very fortunate to have landed where I did given the time I had to manage the transition.

Sarah's Advice For Her Younger Self And For Newer Advisors [1:22:01]

Michael: Okay. So any other, just think of it as like pearls of wisdom from your experience, things you know now in navigating all these career changes that you wish you could go back and tell you ten years ago when you were earlier on this journey?

Sarah: I think I wish ten years ago I took more responsibility for my own path. As an older millennial, I was like, "Give me good feedback and show me a career path." And now I think...and I had to learn through the transitions, negotiating compensation, very awkward but very valuable, important to do. Promotions, your career, compensation, all of these things, I think I wish I would have taken more ownership of like, here's where I want to go. Here's how I want to direct this. I don't think business owners are like, how can we pay her more or elevate here? It's like, you have to take initiative, give yourself your own accountability and move forward on that path. But also, I never would let money lead the decision. And I would tell everyone that. I remember I was working at Vanguard and TIAA-CREF was the huge competitor in the area and they paid higher salary. But then it was a different job. I don't remember anyone going for this carrot of a salary and loving where they were. So I feel like avoiding that as a leading driver, which I think a lot of young people are jumping for increases or pay increases. I would be very careful with that.

Michael: And as you talk about take more initiative, give yourself more accountability, just can you give further just context? In what regard? Are there stages or moments in this where you look back and say, if I could have given me advice, I would have done this or I would have handled this differently? Where was it cropping up?

Sarah: Yeah. I got a phone call from the head of HR years ago. Like, "Hey, we have to increase your salary because we looked across the board and you're under this level. And I was like, huh, I've been getting highest-rated reviews. I just thought people just take care of you and just trust the process. I was very disconnected from compensation. And it wasn't until I switched firms where I could negotiate and think through and then switch firms again. And now I'm like, I'm going to...I'm not an owner at Mason. So I'm like, once a year, I want to talk about compensation, talk about my client base, review this. I'm going to proactively, in an awkward, often, conversation, address this. And it's made a significant difference for me. And so there was many years where I just kind of sat back and was like, "Oh, I'll get the promotion when it comes," or this, and you don't want to be that rude person that's asking for money. And so, yeah, I've made a significant shift in terms of how I view that.

Michael: So any other advice you would give younger, newer advisors navigating their career path here?

Sarah: Yeah. I would say earn the right to be heard at your firm and with your clients, especially if you're changing firms. When you change firms, you've got to learn the culture, understand their current practices, really dive in very quietly to everything they're doing to then understand how you might add value or what you might recommend or something to change. And so I think that was a tough lesson I learned along the way. And for young folks, I think finding that first spot and learning as much as you possibly can about the way they do things, and then kind of making your mark is really important to a successful start and/or if you're switching jobs, a successful transition.

Michael: How long does it take to, I guess, learn your things enough to then be able to start chiming in?

Sarah: I would say six months. it could be 90 days to six months, in some cases a year. But I felt like when I did that the first time...what's very interesting in our industry is I find some firms define tenure based on how long you've been at that firm. So I always would say like, okay, when I went to Mason, I have 16 years of experience in the industry. And I started at Mason and it's like, well, you have zero years experience at Mason, right? And so how you can affect change and the advice that you share, it's translated differently when you're at a firm where a lot of them have been there a long time. And so that was something that I learned. I do think it's a good six months of listening, asking good questions, and learning before you try and say, "Hey, do it this way," or, "Have you thought about this?"

What Success Means To Sarah [1:29:22]

Michael: So as we come to the end here, this is a podcast about success. And just one of the themes that comes up is that that word success means very different things to different people, right? It can change for us through our careers. And so you're on this wonderful path of success, rebuilding the client base for the third time. And it's a million-and-a-half-dollar client base, which is phenomenal. So the practice seems to be in a wonderful place now. How do you define success for yourself personally at this point?

Sarah: Yeah, I think that success for me is visible signs of peace of mind and positive impact in my clients' lives, my colleagues, while managing my family. So I feel like I'm in this...it is unique and very special. And I'm super thankful that I can be available to my family, I can be present, I can, you take the kids to practices, run in and out from my home, but also pour everything I have into my clients in terms of my career and see the difference. So when I see them feeling comfortable like, "Hey, I can go buy that convertible," when we've been teaching them about, you got to spend money, you've got all this money, that's success to me. So seeing they have peace of mind, they're sleeping at night, they feel comfortable where they are, they're not fearful about the future in terms of finances, all of those things. To me, that's a huge, huge part of success.

Michael: I love it. I love it. Thank you, Sarah, for joining us on the "Financial Advisory Success" podcast.

Sarah: Thank you so much.

Michael: Thank you.