Welcome everyone! Welcome to the 46th episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Susan Bradley. Susan is the founder of the Sudden Money Institute, which trains financial advisors in how to improve their empathy and communication skills when working with clients who experience so-called “Sudden Money” transitions – whether from a business liquidity event, a personal injury settlement, an inheritance, or the settlement proceeds of a divorce. Because as Susan puts it: “When life changes, money changes. And when the money changes, life changes.” Which means as advisors, we need the training in how to help clients through those change transitions – which Sudden Money Institute teaches through a designation program called the CeFT (short for Certified Financial Transitionist).
In this episode, we talk in depth about what it really means to help clients through these kinds of financial transitions, why it requires a unique skillset to help people through what is not only a big financial change but typically the major life transition that inevitably accompanies it, the “Purpose, Method, and Outcome” framework that Sudden Money Institute uses to have productive conversations with clients, why it’s ineffective to help people in transition to plan for their goals (because they usually don’t even know what’s possible after a major life transition!), and why it’s important to give clients a “decision-free zone” after a major transition before they actually implement any new financial planning strategies.
We also talk about why it is that helping clients through financial transitions really requires more specialized training, the reason that Susan decided to create a formal advisor designation specifically to train advisors in a better and more consistent process, why the CeFT is positioned as a “post-CFP” designation – as you need 5 years of client-facing experience, and an advanced technical designation like the CFP or CPA/PFS, to even qualify for the CeFT training – and what it really takes to complete the year-long training program.
And be certain to listen to the end, where Susan shares her vision of the future value proposition for financial planners, which is all about developing in two directions at once by pursuing post-CFP training, including the technical competency skills that are necessary to actually give the best financial advice, and the empathy and communication skills necessary to really listen to clients and get comfortable being their thinking partner and their guide (and NOT just “the expert” that tells them what to do to achieve their stated goals).
So whether you’ve been looking for better ways to assist clients through financial transitions, thinking about pursuing post-CFP training in communication and empathy skills, or are interested in the evolution of more behavior-change-oriented financial advisor value propositions in the future, I hope you enjoy this episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- Which life events trigger sudden money transitions. [9:54]
- Why helping clients deal with sudden money transitions requires a unique skill set. [11:58]
- The challenge that gets a lot of financial advisors stuck dealing with emotional client issues. [31:49]
- What it takes to complete the Certified Financial Transitionist (CeFT) program. [36:13]
- Why the CeFT is deliberately positioned as a post-CFP designation. [41:14]
- Why it’s important to give clients a decision-free zone after a major life transition. [59:10]
- How to use a CeFT to grow your business and build deeper relationships with clients. [1:23:37]
- Where practicing financial advisors can still improve in helping clients with transitions. [1:32:04]
- Susan’s advice for young advisors just getting started in the industry. [1:38:03]
- How Susan defines success. [1:39:50]
Resources Featured In This Episode:
- Susan Bradley – Sudden Money Institute
- Sudden Money: Managing A Financial Windfall by Susan Bradley and Mary Martin
- Evelyn Zohlen Interview: Episode 21
- Hugh Massie – Financial DNA
- Becoming a CeFT
- Courtney Pullen – The Pullen Consulting Group
- Kathleen Rehl’s Research on Widows
- Best Financial Advisor Conferences Of 2018
- What Comes After CFP Certification? Post-CFP Designations…
- Nazrudin Project
Full Transcript: Training Financial Advisor Empathy And Communication Skills Through The CeFT Designation with Susan Bradley
Michael: Welcome, everyone. Welcome to the 46th episode of the Financial Advisor Success podcast. My guest on today’s podcast is Susan Bradley. Susan is the Founder of the Sudden Money Institute, which trains financial advisors on how to improve their empathy and communication skills when working with clients who experience so-called sudden money transitions, whether from a business liquidity event, a personal injury settlement, an inheritance or the settlement from proceeds of a divorce. Because as Susan puts it, “When life changes, money changes, and when the money changes, life changes.” Which mean as advisors, we need to understand how to help clients through those transitions, which is why Sudden Money Institute trains through a designation program called the CeFT, which is short for Certified Financial Transitionist.
In this episode, we talk in depth about what it really means to help clients through these kinds of financial transitions. Why it requires a unique skill set to help them through what is not only a big financial change but typically a major life transition that accompanies it. The purpose, method, and outcome framework that Sudden Money Institute uses to facilitate these productive conversations with clients, why it’s ineffective to help people in transition plan for their goals because they usually don’t even know what’s possible after a major life transition, and why it’s important to give clients a decision-free zone after a major transition before they actually implement any new financial planning strategies.
We also talk about why it is that helping clients through financial transitions really requires more specialized training. The reason that Susan decided to establish formal advisor designation specifically to teach advisors on a better and more consistent process, why the CeFT is deliberately positioned as a post-CFP designation because you actually need five years of client-facing experience and an advanced technical designation like the CFP or CPA/PFS to even qualify for CeFT training, and what it really takes to complete the year-long training program.
And be certain to listen to the end, where Susan shares her vision of the future value proposition for financial planners, which is all about developing in two directions at once, the technical competency skills that are necessary to actually give the best and most accurate financial advice, and the empathy and communication skills necessary to really listen to clients and get comfortable being their thinking partner and their guide, but not just the expert that tells them what to do to achieve their stated goals. And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with Susan Bradley.
Welcome, Susan Bradley to the Financial Advisor Success podcast.
Susan: I’m delighted to be here. Thanks for inviting me.
Michael: I’m really excited to have you on this episode because you have, I think, a unique story in how your career has evolved as an advisor and one that my gut is something we’re going to see more of in the future. Because I know you were a practitioner for many years with clients, saw a problem that came up in your practice, decided to craft some expertise around that. It turned into a niche that now you train other advisors on how to do to the point that that’s actually your primary business and not focusing on practicing with clients at this point. And I just think that’s a fascinating transition from building a successful practice to then shifting to teaching advisors about these expertizes that you’ve learned and created. So just I’m excited to share the story with everyone today of how you’ve gone through that journey. So as a starting point, you know, your world today is Sudden Money Institute, so why don’t you just tell everybody, like, what is Sudden Money Institute? What do you do, who do you do it for?
Susan: Well, Sudden Money Institute started in June of 2000, so we’ve been around for 17 years now. And we started developing a process and tools for people that were going through what you’d classically think of as sudden money windfalls, and inheritance, and that kind of thing. And as we progressed, we realized we were really in the change management business. Some people would say in the transformation business because change…it’s a transition that really changes who people are. There is a transformation that happens.
So we started early, and we would say that we are available to both clients, to the individuals, and to advisors. And so in the early days we did have the public calling in, and really what they wanted was to find an advisor, and we were training advisors back then. And as you said, Michael, I was a practitioner and I was a CFP from the early ’80s, back when maybe the exam was a little easier. I don’t know. But I feel like I grew up in the profession, and I love the profession. And it has evolved as well. And that’s really what we’re all doing. We’re trying to learn more about serving the well-being of clients. But at Sudden Money Institute, we were looking at those life-changing events. So one of our statements is that, “When life changes, money changes, and when money changes, life changes.” The idea is to learn how to manage change and then manage the money. So we were kind of moving the equation around from what traditional planning was looking at back then.
Michael: I really like that saying, that statement, “When life changes, money changes,” right? Because, you know, I get married, I get divorced, I start a business, I retire. Like, those are all major life changes that have all sorts of money changes around them. And then when money changes, life changes, right? So I get an inheritance, I win a lottery, my business has a liquidity event, and, you know, I go from being a low-income entrepreneur with no cash flow out of my business to an entrepreneur with no business and a whole lot of cash. Life changes. Okay, so when life changes, money changes, when money changes, life changes.
Susan: Yeah. And it’s the second part that’s a little bit more challenging for people. And some of the changes are interesting. It’s not always an uptick. It’s not always a big windfall or a big liquidity event, it could be the opposite direction, or it could be neutral. You know, when people retire, their net worth hasn’t necessarily changed, it’s just shifted. When someone is a widow, they don’t necessarily have a different net worth, they just have different responsibilities. So we had to work our way through, you know, really what are we looking at? What are the events? Who are the people? What transcends all the diversity?
Because when you think about the events we just talked about, and we track basically 12 events, when you think about all of that and then you think about the diversity of the client, the diversity of the business model of the advisor, this could look like a big mess, but if you really kind of get to the balcony on this and step way back, you know, you’ll notice that the struggles that come up and the opportunities that come up with these events transcend age and gender, and sophistication, and education, and even preparation for the event.
So when we started looking at that, when we would hear about these high-net-worth families, because of working with maybe a family office, that were exactly the same as very moderate income people that were going through another event, there were similarities, we started to notice the universality of the human experience here, of managing these events. And then by looking at that universality, it just…I guess that’s what pretty much piqued my attention and my commitment. And that was really early on, within the first year of forming the Sudden Money Institute, that there was something here that was pervasive and important and big, and I didn’t really understand it, but I wanted to know it.
Michael: So just this idea that…I mean, that makes sense to me. That if I have no money, a $100,000 windfall can be as life-changing as a client who’s already a millionaire and then inherits $10 million, right? Like, just anything that’s a material change in money relative to our life circumstances ends out being life-changing money.
Susan: Yeah. Or just think of a widow, whether high-net-worth, moderate or whatever, there’s a tremendous loss. And that grief has an impact, and widows all do it their own way, but you don’t have to be in any one net worth to step back and say, “Wait a second, this person has changed, so my advice and my guidance has to shift as well.”
Which Life Events Trigger Financial Transitions [9:54]
Michael: So you mentioned kind of 12 events that trigger these kinds of changes, can you help us maybe visualize a little bit more what some of these are? I mean, I think we mentioned a few like divorce, widowhood, lotteries, inheritances, business liquidity events, maybe what else is in there in kind of this grouping of events that trigger sudden money changes and trigger life changes?
Susan: Gee, I hope I remember all 12. When I said that I thought, “Oh gee, it’s 12?” Because we do it differently for, you know, different presentations.
Susan: But what you just mentioned were six of them. But think about a serious health change. When someone gets a health diagnosis in a family, it changes the family. A contract, you know, like a sports contract. The work I did with the…or do with the NFLPA has taught me a lot about that. Or it could be a celebrity kind of contract. It could be the change in your parent’s situation. Many baby boomers are caring for aging parents, and they might not have a specific health event, but they have a need, and it changes the dynamics of a family. Gee, I think I’m up to 10 and I’m not quite sure of the other two. But, you know, it could be marriage. You know, we don’t think of marriage as a transition, but it’s a heck of a transition. Any new mother will tell you that having a child is a transition. And these events, if you’re looking at clients, you know that these events drive change. There’s a shift. Repartnering of widows is a very big area that we look at. The idea of being fiscally unequal in repartnering is a very complex problem for advisors and their clients. So, you know, it’s like if you hang around long enough, you’ll find more and more of these that you can give a name to, and you can apply process to.
Why Helping Clients With Transitions Requires A Unique Skill Set [11:58]
Michael: So help me understand a little bit what process looks like, right? Because I feel like for a lot of us as advisors, I mean as you’ve said, like, a lot of these situations are very complex, right? I’m thinking of things like repartnering of widows when they’re fiscally unequal from their new partner or new spouse. Like, this feels like a very messy, complex, specific to individual circumstances kind of thing. Like, how disparate are they? How much do they want to join their finances? Who’s got kids from prior marriage, right? Just this long list of stuff that I think possibly most of us think of as, you can’t apply process to this because everyone’s different, particularly around messy high stakes issues like sudden money transitions. So how do you apply process to something that is as individually unique as how people respond to these kinds of money change, life change events in the first place?
Susan: Well, before I answer that, and I’m happy to, just think about what it’s like to see a messy situation like that. You might see a potential train wreck. And if you have no process, you’re not going to step in there. Advisors don’t want to step into situations where they don’t have training skills, process, whatever. So the default is to step back and let it happen. And then you have one of those regrettable stories to share with your peers. Like, “Oh, I told this client to do this and this and they didn’t and therefore this happened.” I hear those crash-and-burn kind of things a lot.
So then we had to think about, so how do you step into that? And that is one of the more difficult situations. The first thing is to recognize that your client has that possibility, so you establish the importance of talking about the repartnering if in fact it ever did happen. You want to talk about this maybe in a third party situation. Share some other information with them. You want a heads up. You want to invite that conversation without it being threatening. You know, like, “Well, if you meet someone, bring them in and I’ll beat them up and I’ll find out everything.” You know, nobody wants to really do that. They think, “Ha-ha, isn’t that funny?” So you want to establish that there’s process. And if in fact, it comes up, this is how we could do it. This would be great.
So assuming that that hasn’t happened and you have this situation, in the best of worlds, and even some of the difficult ones, you step in with a structure for the conversation. So you’re entering this very…and if it’s a good relationship or they’re happy about it, they’re not really prone to taking advice. They tend to be more invincible or euphoric. So you want to have a structure for the conversation. And our structure is a purpose, method, outcome kind of conversation. And we train advisors to think in those three elements so that they’re leading the conversation in a way that first establishes why this conversation about how things are going to work financially or within family commitments when this partnering occurs. Why is it important to think about that beforehand? What difference would it make if we figured out the best way to do that? How would your life be improved? Or if we didn’t and things didn’t go well, what’s the downside? Who would be helped? Who would be harmed? It’s a conversation, and it’s about the advisor listening and the client thinking and being willing to peel it back a little bit. So it’s not just a one-question thing.
And then when you have established why that is important to them, then you go to the M part, which is method or how. So how are we going to do that? Is it a legal document? Is it just some agreements? Is there some clarity on separation of assets? If you’ve got fiscally unequal…a woman with substantially more than the man, which is still at least in the baby boom generation a difficult cultural setup, how are you going to deal with? You know, is there an allowance, is there an amount of money, is there joint something, separation something? So you get into the how.
And then the O of it is the outcome. And the outcome would be some path to follow, some guidelines to pay attention to. So first, you want to have that conversation. And if it’s really sensitive, you probably have it in pieces. You probably have the purpose part first, a little bit of the method, and then you come back to the method again, but you have the purpose established, so you have a reason to be talking about whether it’s guidelines, agreements, legal or not. The other thing we want to do is invite the other person in and help the couple get their money conversation skills down. We call it communication preference. How do they like to receive information, recommendations? How do they make decisions? What makes them comfortable and productive in meetings? We all have different styles for that. And so we can help a couple understand each other’s communication style, particularly around more sensitive subjects.
Michael: And do you have some kind of assessment tool that you use for this?
Susan: Yeah. You know, we shy away from the psychometric kind of things that tell you that you’re at this and he’s at that and that sort of thing. We have a tool that actually was something that was developed based on Hugh Massie’s work. It was a nice gift that he gave us early on to peel off a piece of one of the things that he does. And we ask clients to tell us how they want to be communicated with in meetings to how they want to be set up for the meetings, what makes them feel comfortable and productive. You know, when people are given a process, and we have preferences to select from, so we have a structure for them to look at and then for them to take some time and think about it and then tell us what things on this sheet are important to them, and then we want to know why. We want to know how it works. We want to know, “What does it look like if I get this right?”
If I give you an agenda for a meeting, how should I do that? Should I email it to you the day before, the week before? Do you want input on it? What makes you feel productive and in control and part and present in the meeting? And some people just default to the advisor’s way of doing it. Other people are very specific, but no one’s ever asked them before. So they’ve never had this experience. So there’s a good chance that you’re going to have, the advisors trained in this are going to have far more productive meetings with that client than they’ve ever had before, which is key to long-term relationships. But in the repartnering of fiscally unequal, this is really important for partners to understand how to have conversations with each other.
Some people don’t want to get into a conversation with that information. They want all the information up front. If we’re going to talk budget or something like that, they want to know everything, they want to read it, they want to be prepared. Other people don’t want to do homework, they just want to show up. And if you’ve got, you know, one is dominant and they always do it one way, the other one is at a disadvantage, which doesn’t bring out the best in them.
The third thing we would do in that case is also to help them explore and experience their expectations. What will it be like? What do you think is going to happen? What’s important? You frame it according to the people. But we again, give them structure. And the structure could just be a table that says a list of what and then next to that when and why, and maybe how much. Have them do it separately and then have them come together with it. You have to do this in a way that they feel the buy-in for this. That’s why you do the PMO, the why part first. Why are we going to do this? So if they establish that having a comfortable financial life when they get married, that there’s no problems there is really important to them, the next question is going to be how. And so doing these things that we just mentioned, like communication preference and expectations, they have a reason to do them.
Michael: I mean, it strikes me this, you know, PMO framework; purpose, method, outcome. I mean, it kind of maps onto what we do in the financial planning process as well, right? We start with goals then we analyze and craft recommendations, and then we get to an implementation phase. And that, you know, goals, analyze, recommend, implement kind of feels like it maps well onto purpose, method, outcome. But I guess part of the distinction here is you’re really trying to train structure around the actual conversations themselves. Like, not the sort of analytical process about, how are we going to collect data and analyze a plan and then help clients implement it, but the actual conversation around how are you going to frame and talk to the clients about it so they actually view what you’re recommending to do. Particular in a high-stakes, very emotional, you know, money changing, life-changing sort of situation.
Susan: Well, yes, that’s true, but here’s a big distinction. And I think our body of work really was instigated on what’s been missing…what was missing for me in the beginning and then us a community of practice, what’s missing in the traditional side. And just to be really clear, I’m only on the traditional side. It’s just this other part is equally important and equally complex. So you just mention goals and then you get into the goals and how you’re going to do an implementation, but there’s much more to life than goals. And most people are pretty unclear about why their goals are their goals and what they really mean by them. We’re used to doing this shorthand, you know, sustainable income. So I can do whatever I want. It sounds good. But there’s so much more usually going on. And we don’t really explore possibilities with people, the things that can’t be seen yet or things that are just kind of hazy. We don’t give them a lot of room for that. And even if we did, the real driver seems to be the emotional connection of the why. Why is that important?
One of our advisors was working with a business owner who, you know, grew everything from the ground up, real hard working guy, son takes over the business, son is doing great with the business, everything is good. And the client doesn’t like paying taxes, doesn’t like the idea of estate taxes. He has an estate that would be definitely a taxable estate. And so they’re talking about a life insurance policy based on his age and the amount. It’s pretty expensive stuff. The business is going to pay for the life insurance policy. Exactly why, I’m not sure.
So as they get into analyzing, the advisors bring…the CFP brings in insurance professional that does the high-end and showing all the different possibilities. And people are getting confused, it’s too much information, it’s a lot of money, and it’s stalling out all over the place. So the advisor did PMO with the guy and said, “So why is this important? This seems to be really stressful for everybody, let’s see if we can figure this out.” She said, “Why do you want this?” And he said, “Because I hate paying taxes.” “Why do you hate paying taxes?” “Well, because I hate the government, and blah, blah, blah.” And she said, “Okay, well, you know, the taxes are going to get paid either way whether you have a life insurance policy or not. So that end thing is going to happen. So we can’t help you there. So why is this really important?”
And it took a while, and he ended up tearing up a little bit and he said, “Because I want to make sure that all the money that I can possibly have is there when I go for generation after generation. I want my people,” I think is what he said, “To be hard-working like I am and to know that somebody did the hard work in the beginning and I cared about them. I want them to know the value of hard work.” And that was the big giant driver for him. And that cut through everything. It wasn’t a matter of, you know, $2,000 more for this or $50 less for this.” He just went for it because he knew why. So it’s not just goals. Goals would be, have money to pay the taxes, but the why behind it was most important for him. And a lot of people will do something like that. They’ll sign up for something like that and then life changes and the premiums seem too high and then they back out of it. And you want to know that someone’s all-in.
Michael: I mean, it strikes me that whole statement you made, that most people are actually really unclear about their goals. I feel like that’s one of the…I don’t know. Like, I want to say it’s a taboo thing in our world right now that, you know, we’re increasingly talking about focusing on financial planning goals and doing planning to help people get their goals, and we’re seeing the entire rise of goals-based investing, and then I still know that when I sit down with most clients, if I actually just sat down with a new client and said, “You know, so tell me about your financial goals.” They just sit there with a blank look. Like, it doesn’t even work as a question. Or if you manage to tee something out of it they’ll say something like, “Well, you know, I want to get to $1 million so I can retire.” And it’s like, “Well, why $1 million? Why not $800,000 or $1.2 million?” And there’s no answer, right? Like, the number was really just plucked out of thin air. They have no actual idea what the goal is or what they’re really working towards, nor even, as you know, what’s possible.
Like, I’m constantly amazed at the number of clients that come in. You know, we see a bunch of folks in there, like, early ’50s who are hoping to retire in 10 or 15 years and, you know, maybe they’ve got a couple of hundred thousand dollars saved and they need, you know, the proverbial $1 million, and they’re saying, “Oh my gosh, I’m so far off, I don’t know if I’m ever going to get there.” And we point out, “Well, actually just with regular market growth, your portfolio is already going to grow to what you wanted it to be in 15 years. You just didn’t understand the compounding of math in your head. So now that we show you actually are on track, would you like to revisit how you feel about your goals?” And the conversation changes, right? Because now they’re not depressed about feeling off-track for retirement, they’re feeling aspirational, like, “Oh, actually you’re on track for retirement, and if you could buckle down a little more, you could actually get there three years sooner.” So you went from feeling like you’re not going to be able to retire because you can’t do compounding math in your head, who can? To no, no, actually you’re on track and here’s the things we could change to make it even better or different if you want. And they weren’t even prepared to have that conversation because they didn’t know what was possible and they didn’t really have a context for their goals in the first place.
And then it only gets worse if it’s a couple and we ask them, “You know, what are your goals?” And they’re different, right? Which I feel like is another one of those things we never really talk about. Almost no one we see as a couple is actually well-aligned on their goals before they come in. Usually, because just no one’s ever asked them these questions until we start asking them and then we freak them out and then they try to figure out how to resolve it. So it’s striking to me that that part of what you’re…to me, like, what you’re talking about in this framework is getting back to the, “No, no, one of the key things that we do as financial advisors is actually help people figure out what their possible goals actually are.”
Susan: Yeah, yeah. And it’s a different conversation. And it’s we train CeFT, Certified Financial Transitionist, to be a different kind of expert. When you say, “Tell me your goals and I’ll tell you how to get there. Tell me your goals, tell me everything that you have. You know, your assets and your income and all that and I’ll make you a plan,” you’re the expert. So people tell you what’s important and then you go do all this work and then you tell them what to do. And that part works. But there’s another part that also works. That’s the other piece of the puzzle, of the pie. And that is that on the personal side, you’re not the guide…the expert, the client is the expert. You’re the thinking partner, you’re the guide, and you’re giving them process to figure things out as life turns and twists and whatever is going on. And you’re able to understand, you’re able to see what their struggles are, see the stress, identify it using and all that from the mindset work, you have tools, but you give it to the client, and you have the client think about it. Like expectations.
Take your client that you just talked about and bring them up to within two years or one year of retirement, then they’re in great anticipation stage before the event of retirement. And there you can help them really explore the different expectations that they have, but you probably can’t do that in your office. You might ask them some questions, but you want to have process. Again, purpose, you get buy-in why it’s important. You have them each do their own expectations and then come back and talk about it. And you can see clearly where they have competing goals, where they have complementary goals and all of that. It takes a little more time, but it’s so valuable when you take that extra time.
Michael: I’m struck, though. You know, you made a comment there that I think is really profound and is hard for us to internalize. You know, to say as advisors were not the experts, were the thinking partners and the guide, the client is the expert in their own lives, which I know is a very kind of coaching philosophy and what coaching espouses, but that’s such a change for us to actually…like, I spent the past three years studying for all the exams and getting my experience done to get my CFP mark so that I can be an expert and now Susan says I’m not the expert.
Susan: But you are on the traditional side. On the technical side, you are the expert. People come to you through the money door because you have that expertise, but they come to you also with this life and this personal side. And the personal side is going to drive the decisions they make with you. But they’re probably not really clear on that. And if you’re not really clear on that then you have this less than perfect arrangement on the technical side with you being the expert and the client being the client asking the expert to tell them about their life.
The Challenge That Gets Advisors Stuck When Dealing With Emotional Issues [31:49]
Michael: And, you know, you said it earlier as well that I think a lot of us get stuck in this…I was going to say trap, that’s not the right word but just did this challenge that when it gets messy on the personal side, knowing that we don’t necessarily have a lot of training in this stuff, we tend to take a step back. I mean, I’ll fully admit, I was guilty of this, particularly in my early years, being, like, the first 10 years probably as an advisor. I’m only now frankly getting better at it. That’s some good technical stuff. I love talking tax law. Show me a client who’s crying and I was terrified. I’ve no idea what to do. I have no idea how to handle this situation, right? Like, give them a box of tissues and pray it stops soon. I feel like it was basically what it felt like for me. And whatever you do don’t ask, you know, touchy-feely emotional questions that might result in the client crying. Right?
Like, we get comfortable, I think a lot of us, in our expertise, right? Like, that was the exchange. Like, you come to me, you pay me some dollars, I lay some knowledge on you, that’s the advice transaction, and I didn’t sign up for all this emotional stuff. Even though the end result that we get into is, you know, the client said what they wanted to do and I gave them the analysis and the recommendations of what to do, and then they didn’t do any of it, and then they came in a year later and I met with them again and then they didn’t do any of it, and then after two or three years I fired them because they’re a bad client. And that that’s the outcome that we get from this, right?
And we even say it. Like, people who don’t follow our advice are bad clients, not people who don’t follow our advice might be struggling because we haven’t done a good job enough of getting them to buy into it and understand why it’s relevant for them and all the things that you have to do to help people change their behavior, right? People who don’t take our advice is not a sign of a bad advisor in our industry, it’s a sign of a bad client. And that’s kind of…right? Because otherwise we have to admit we’re doing something wrong, which doesn’t feel good for anyone, but, I mean, I think that’s kind of what you’re very, very kindly and politely highlighting. That we just aren’t really well-trained in this side of things.
Susan: You know, hello, that’s why we started all this. I had a really good life, and I was a very happy practitioner. And I didn’t say, “Hey, I want to start this whole new thing in this institute.” It’s because something was missing, but I didn’t really know what it was. And you can’t find the answers to things like this within the traditional side of the profession because the traditional side will say, “You did everything right. You checked off all the boxes. You did comprehensive planning. You did all the right analysis and the discovery, and they didn’t take your advice, therefore, they’re bad.” That is how that story goes. So to change it, you can’t stay within it to change it, you have to go outside it, and you have to find out more with other disciplines.
So we went out to…first I went to sociology because of the whole windfall kind of thing, social anomie. I was then studying that. Then I went to psychology, neurology, sociology, physiology, it just kind of keeps going. And there’s new science that keeps coming up, that informs us. So in order for us to build this other side, this other body of work, we focused on transitions because that’s really more dynamic, where all the personal stuff really gets exaggerated, easier to see, easier to name, and more important at the moment, to solve. So we focus there. But what we’re looking at is how can we take these outside bodies of work and integrate it into real financial planning? So everything we do is in the concept and in the whole construct of financial planning, it just begins on the personal side and integrates with the technical.
What It Takes To Complete CeFT Training [36:13]
Michael: And so for you, this is what culminates in this, I think you mentioned CeFT training. So what is that? Can you talk a little bit about what CeFT is?
Susan: Yeah. The initials stand for a Certified Financial Transitionist. The e is a small e just to make it visually distinct from CFP. And it is a…it’s a deep training. You know, we would say we have knowledge, process, and tools for people in this training on the personal side of money. So you start to get those tools, in addition, you’re getting a deep understanding of the human experience of change in transition. And we’re training experienced advisors. You have to have five years client-facing work at a minimum. You have to have the technical side down. We’re not teaching people anything on the technical side, so you have to be a CFP, a CIMA, CFA or a PFS. So we have that established.
And then when they come in, one of the interesting things that’s such a paradigm shift for them is the expert thing that you and I were just talking about. We’re teaching people how to be comfortable not being the expert. How to be comfortable and still productive with a client not knowing the answer. Being able to say, “We’ll figure it out together. It’s going to take some time to normalize all the chaos and the overwhelm and all of that.” And be able to stay present when this stuff is happening. So the training is structured, it’s 12 months. It’s broken into modules, two-month modules. There’s an on-demand side, there’s experienced calls where you hear other advisors talking about it. There’s a textbook. It’s experiential learning. It’s different from CFP.
So in order to complete the certification, you have to have used our tools with your clients and written up that experience. So it’s real-time learning. We have coaching with that and we have other support with our…we have great faculty and other events that people can go to. It’s done virtually because nobody has time to really go to take these courses, but it’s also because I notice it takes time over the year, virtual year, to have the experience with the clients and learn from those experience. It’s kind of more of a being a training than a doing training, some people will say. And everybody wants…if you heard what this does and you’re in practice, you would say, “Yes, I want that. Can I have a prescription and take that pill?” You know, if it was a pill we’d all do it. It does take longer than most advisors are aware of, but once they start in the beginning they start to get it. Right from the very first module, they get that communication preference in that PMO right off the bat. And they can use that with every single client and it can be a game changer.
Michael: And then what does it…like, what does it cost to go through the program if someone wants to do this?
Susan: Well, for an individual advisors it’s $5,100, or $425 a month is how most people do it, but for firms, we work on a firm discount. If it’s a few people in the firm we work on a 30% discount, but if it’s a large, say an RIA firm, then we structure a different pricing for them because we add for them workshops that we come to them and do a 1-day workshop 3 times in the process.
Michael: If I’m a large RIA and I’m thinking like, “I want to make a whole, you know, niche section of our firm that specializes in financial transitions so we’re going to put 3 or 5 or 10 or more, for some really large firms, people through it once so that they can engage you for deeper workshops and kind of group training structures.
Susan: Yeah. And you know what works well with that is that because this is experiential learning, so if you have a group within a firm then they talk to each other and they’re enhancing each other’s experience. They’re brainstorming together. And if they can put one or two of their support staff, if they’re paraplanners into the program, then the paraplanners or the support people are working with the clients in the same way that the advisor is working with the client. So really, it’s a beautiful experience. And clients tend to notice it very, very quickly, and they’ll say things like, “Wow, something is different here. This feels really good. What are you guys doing?” So it’s not like a sparkly thing that’s on the wall that says, “Ta-da,” it’s the heartfelt experience of the client.
Why The CeFT Is Positioned As A Post-CFP Designation [41:14]
Michael: I love that you start with, “You have to already know the technical stuff and have some experience before you show up.” You know, that you require things like CFP or CPA/PFS or some comparable designation advance because…I mean, I think it’s an important point that this…it’s not about trying to do this in lieu of being a technical expert. It’s that of course, you have to be a technical expert and know that stuff cold because otherwise, you’d start coaching clients through transitions and then coach them towards something that’s an absolute disaster, which is just a technically wrong strategy.
Susan: Yeah, that would be terrible. No.
Michael: Right. So you still have to know your technical stuff so you at least have the context of what are we trying to get them towards? And I guess particularly in your PMO, purpose, method, outcome framework, like, you have to actually know the methods part. You can’t have conversations with the clients about the potential methods if you don’t know the methods. So you still need the technical expertise. This just becomes…I mean, to me I call the whole…there’s a whole category of these that I label post-CFP designations, right? Kind of, like, after you get your undergraduate degree you go to grad school or you do postgraduate work. That we have these series of post-CFP deeper specializations or niches or trainings that you can move down the road for. And this to me is a great example, right? We start with our technical stuff, then you build these kinds of conversation and sort of empathy, skill sets on top, and that’s how you move your career forward as an advisor.
Susan: Yeah, yeah. And, you know, what I find too, and I imagine it’s same with the other post-CFP programs, is when you enter this space and you get the 12 months training…we actually have 9 tools there and they have to write a case. We actually even teach our test when we do our testing at the end of the 12 months. We test listening as well as multiple choice and structured response in written case. We actually test listening because that’s a key component to all of this. But once you accomplish that, the vast majority of people will say, “Okay, I got it. This is good, but what’s next?” So we structured 2 years of advanced training with more tools and more experience, and then some people, usually about 50% of the group, wants to go into what we call a mastery training program, not a masters but mastery, a continuous learning program. Courtney Pullen helps me with that one. He’s a psychologist and a wealth counsel person that he’s just brilliant. And he’s been with us for about 18 years. Not 18 years, right? Because I’ve only been here 17, 16 years, 16 years.
So many people…we have a pretty high renewal rate. It’s around 90%, and I guess that would change as we grow to some degree, but I hope not. And what happens is once you start to really connect on the human side with your clients, you’ll see more and more just advances that you want to take or you’ll see a struggle, or like this, what we talked about earlier, the fiscally unequal repartnering. We just started talking about that in the last year probably. And we read a white paper on fiscally unequal, we applied it to what we were looking at, then we looked at the repartnering research that came out with Kathleen Rehl’s famous, hopefully, famous study on widows. She actually got to survey 3,300-something widows. It’s biggest ever. And repartnering is a very, very big deal.
And then when we looked at our advisory group and we said, “So we’re looking at this repartnering thing, what’s your experience?” And some of the best advisors in the group came forward and said, “That’s the number one area where we lose clients, is when they repartner.” And they didn’t even have a term for it. So you keep finding these things as you keep going.
Michael: Well, and that to me is always the fascinating thing when people start focusing on the niches and specializations, you know, there’s this effect that, like, the deeper you go, the more that you discover you don’t know, and the journey never ends. You’re just getting deeper as you discover things that no one else even knew or realized were problems, right? I mean, even I think the industry is just starting to talk about, “Hey, you have to be better with the typically female spouses of your clients, otherwise if they ever get divorced or widowed, you’re going to lose them.” And there’s all this industry discussion right now of serving couples better so that you don’t lose them if a client is widowed. And I feel like we aren’t even at the point of, “Oh, well, yeah, and even if you figure out how to keep them when they widow, you’ll lose them when they repartner.”
Susan: Yeah, right, right.
Michael: Like, we’re not even there yet.
Susan: Yeah, yeah. No, that…
Michael: You are with what you’re doing, the rest of us are still a couple of years behind on this.
Susan: Well, remember, I personally have had full attention on this for probably 20 years, when you think about the time it took to write the book and do the research, and so I’m all in and I got it captured a long time ago.
Michael: So can you take us back a little bit to that time and before? You know, you mentioned that you’ve been doing Sudden Money Institute for 17 years and that you were a practitioner for many years before that. So how did you get started in the financial advisory business in the first place?
Susan: Well, I’m trying to remember that. Oh, I remember. I had an uncle who was the head of marketing for what used to be Paine Webber. Remember “Thank You, Paine Webber?” You know, that was his phrase. And he was trying to get me into the business, and I visited Paine Webber’s home office in Manhattan. It’s quite beautiful and all that, and it just was not for me. But something about it interests me, and then I found the CFP. So I studied my CFP and I apprenticed myself with someone who had won a CFP award back in the early ’80s. And that’s how I got going. And I liked it, and I was a woman in the business in the ’80s and ’90s, which was a great minority, much less than now. So, you know, I ended up…it was a good business for me. It fit and I liked it, and I liked my clients.
Michel: And what were you…like, what were you doing? Who were you serving? Like, how was your business structured at the time?
Susan: I started as an independent with an independent BD. And that was early days. It was called the mutual service back then. And it was a great kind of family feeling, and I, you know, went to everything I could go to and learn. And I was very lucky that somewhere in maybe my CFP classes, I met people who understood that there was a national organization. So I started ICFP kind of things back in that real early days, and that’s really what helped me grow my business. It’s one thing to see people, clients and figure it out and learn and progress that way, and that’s important, but to have gotten out of my local area, I was in Florida, the local area to get into the bigger conversations probably shaped me more than anything else.
Michael: Yeah. It’s one of the things I still try so hard to pound the table on for well, younger newer advisors in particular, but really anyone, that you have to join membership associations like FPA and NAPFA, and you have to get out to at least one conference a year. That’s why we publish the best conferences list on the blog every year. That you have to get out of the firm from time to time because otherwise, you know, you just…you get stuck in what’s happening in the world of your business and kind of literally what’s happening within the four walls of your office, and it’s very hard to really step back and get some perspective on what else is going on out there and what are new ideas and opportunities until you literally remove yourself from the office so that you can go and do that and get that perspective.
Susan: And I still believe in that. And even if there’s a good conference like NorCal, they don’t have to have me speaking. I want to go because I know big conversations happen there. So I still do that. I will seek out the great conversations and just be part of it. I don’t need to lead it. There’s so much that needs to be discovered out there. And we’re moving so quickly as a world and as a profession that it’s not a time to drop back. I was just at the Nazrudin Project, that I was one of the founding members of, and we’ve been doing that for 23 years. And you never know who’s going to show up there and what you’re going to learn. So yeah, I’m into that.
But what happened to me, Michael was that I had a lunch meeting with the senior partner of a large personal injury firm, and they were representing women with medical complications because of breast implants against Dow, and at lunch, he was telling me about how all the women were going to benefit from his work, this is a normal thing that they talk about in that world, and that women were able to get divorced because they could afford to support themselves, or they were buying homes that they’d pay off when the money came in and all that stuff. And any financial planner or even just with two seconds like that has a red flag. That’s future spending. These women are in trouble.
Michael: When they’re already making their decision about what to spend the money on before they’ve gotten it. This probably isn’t going to go well.
Susan: Yeah, yeah. And the amounts that I heard were really modest, not to everybody, but for a planner. It’s like $150,000 to $1.2 million or something, depending upon medical. So these are not amounts, particularly if you have medical complications that would allow you to do all this changing. So anyway, so I said, “Wow, that really alarms me. How many women will have money a year after you get it for them?” He said, “Slim to none.” And I choked a bit and said, “Well, what? That’s terrible.” And he said, “Well, it’s not my job?” And I said, “Whose job is it?” And he basically said, “I don’t care. It’s not my job.” So that was a life-changing moment. Yeah, it was rough. But then I said, “I’m going to write a white paper. You need to hire me. I’ll write a white paper just for those women. Women to women, what do you do in situations like this? Debt versus whatever, and mutual funds, and, you know, basic stuff.”
And so we were in that conversation. I was hired. I thought that someone else had done the research on how to really help in a situation like this. There was no research, so I was glad I had charged a reasonable amount because I had to figure it out. But before I even got to that, Dow went into bankruptcy and so did most of the women. That’s what changed my life. That’s when I realized something really…there’s a dark cloud here and I don’t know what it is. And then as I was thinking more and more about them and heard some stories, I never met any of them, that was never the point, I started to see some similarities in my own clients. I started to see widows were doing something different but similar. I started to see retirees doing that because I had started the study of the windfall experience, and all of a sudden, you know, once you have those glasses on, you see it everywhere.
Michael: Yes, right. Once you buy a new different car, all you can see everywhere is the version of the car…
Michael: …that you never noticed until you bought it and now it seems like everyone has one. Yes.
Susan: Exactly. And every time I went out to conferences or read things or called people on the academic side, I remember talking to Tahira Hira and other people on the academic side, like, what do I do? What is this? Blah, blah, blah. Their response was, “Wow that’s an interesting question. I don’t know, we should know that.” But nobody was going to do that. Probably I was on my…you know, my quest so I had the energy to do it. And that’s why the “Sudden Money” book was written. And it was not as easy as I had hoped. You know, duh, that’s pretty obvious, but because we…
Michael: It always turns out way after the fact, right?
Susan: Yeah. But you know what? We didn’t have a planning model for specifically that. We said we did divorce planning. We said that we worked with widows and retirees. Obviously, everybody is in the business has to work with those because that’s what the business is really about. It’s about change, preparing for it, dealing with it, adapting to it. So I had the technical stuff. And the more I would dig, the more technical it would get. It was never personal. You know, it said, “A widow should wait for a year before they make decisions like to sell a house.” And that is just not true. It could be true, but it’s not true across the board. So things like that would come up, but they weren’t helpful. They didn’t really get to it. They didn’t say what to do when a client is crying in your office and says, “Just make decisions, I’m tired of dealing with this.”
Michael: Yeah, can we move on to the planned implementation phase now? Are we done with the crying?
Susan: Yeah, yeah, yeah. Right. You know, “Okay, I’m going to send you a check for this month, you know, this every month, and if you have any problems call my assistant. Thank you very much.” So this area was really squishy. And so I wrote the book, and I had a great developmental editor. And I don’t think I could have done it without her because to really put this into a structure was the challenge, and to explain each structure. So it came out. As soon as it comes out, you know, you wish you had said it this way or you forgot about this, or you just forgot about that. But it was there and I could say, “Yes, here it is. I’m done.” And I was going back to my life because it takes a lot of time to write a book. It is not something to do lightly. And it will take you away from the rest of your life for some period of time. For me, it was much longer than I thought.
So anyway, I was at a Nazrudin Project meeting up in Estes Park and the one and only Dick Wagner had been following this. We had been talking about the project at the Nazrudin meeting. And Dick said, “You know, so now what are you going to do?” And I said, “I’m going to go back to my life.” And he said, “No you can’t do that.” And I said, “Yeah, just watch me.” I was not going to do that. And he actually badgered me, and I think that would be the right word, for a fairly long time. So finally I thought I would call his bluff, and I said, “So who’s going to pay me to do what you’re talking about? I’ve given up a lot of new clients because I couldn’t afford the time, and I need to get back to that.” And he said, “We will.” And I said, “Who is we, paleface?” And he said, “You form an institute and we’ll all pay, you know, a fee.” So I challenged him again on amounts. I was just pushing back. And he said, “Yes.” And I said…
Michael: Oh-oh, now I’ve got to do it.
Susan: I have to do it. Now I’m in trouble. And we didn’t know really what it was. Everybody that came had a different idea of what they wanted. Some people wanted to use it as a marketing platform, and that was clearly not what I was after. I was not going to create an ambulance-chasing sudden money kind of thing. And it sounds like ambulance-chasing. And so then some people would say, “Well, yeah, yeah, you’re right.” But that’s really what they wanted. Other people really wanted to learn. And we attracted some of the great minds like the late John Levy [SP]. At 80 he would fly to do all of our conferences with us and just help us think through things like this. So we had quite a think-tank in the beginning.
And then eventually, we had to get more and more structure. The book has some tools that we still use today. The decision-free zone, which helps people organize their doing and their commitments based on urgency and very simple timelines, like now, soon and later. It sounds…when most people see it they think like, “Why didn’t I think of that? It’s so simple.” But once you learn how to use it, it is simple, remains simple, but it’s profound. So I got some things right, but I didn’t know anything about the upside of stress, the positive side of stress. I didn’t know anything about transitions. I was three years before I learned about transitions from Bill Bridges’ work.
Why A “Decision-Free Zone” Is Important After Transitions [59:10]
Michael: And what did you even call it early on? I mean, just Sudden Money? You did a book around this called “Sudden Money” and just you talked about it as sudden money and the transition’s concept or framework came later?
Susan: Well, we had stages. We had three stages in the book. And we said, “This is…” Like, in the early stage it was we talked about the chute of emotions. We talked about the emotions and how they get in the way. Where I blew it there is I was saying, like, you want to avoid emotion-based decisions. Well, it turns out that there is no such thing. So you have to learn about emotions and stress so that you can shift for the person to have more prefrontal cortex activity than amygdala activity, more space and more rest so you can make good decisions based on emotions. I didn’t know any of that stuff. When 9/11 happened, I went up to New York and I did a training. TD Ameritrade gave us the space, and I don’t know, there were 300, some advisors from the tri-state area. And I did what I knew to do, which isn’t what I would do today. And I brought my brother with me who is a trauma therapist from Boston, and we helped as much as we can. And I think we helped to some degree.
But what I learned after that, I really got timeframes and I got the connection…the stress connection or the trauma connection with money. Because I didn’t take those clients obviously, but I was present for the advisors as they were working with people, particularly in pro bono, and so many of the people wanted that money to just go away. Here. Here’s a check, just put it somewhere. So that was…
Michael: Because they didn’t know how to handle the money or kind of the…it’s tainted money…
Susan: Because they couldn’t breathe.
Michael: …it’s blood money. You know, it came from a terrible tragedy. I don’t know how to try to create a positive life event out of a terrible tragedy?
Susan: They weren’t even in that conversation. They were so traumatized they could barely breathe, let alone think. And it happened over and over again. So it’s a repetition that you start to pay attention to. It’s not these one-off stories. So we got that. And we got that. It took years sometimes before someone wanted to sit down and to think about it. We got the idea that some people would start to be…it’s called self-soothing, where they start buying and they start buying and buying and buying, where they start gifting and gifting and gifting. And again, we saw a repetition. So we were able to sit as a group and say, “What is the response to that? How do you handle that? What is that called? What do we know from the different sciences that can help us?” And I’m not saying that that was a great event for us at all. I was as traumatized as anyone, but we had to learn it.
And then, you know, the next big learning phase for us was ’08 when we went through that crisis and advisors were in that deep compassion fatigue. So they were called upon to be something they hadn’t been for clients over and over again, and the clients had this process. So we wrote “Money Shock” and we created something we call Financial Triage to handle shock and trauma. Courtney Pullen helped us with that, and my brother, the trauma therapist, to understand the verbiage. Like, just normalizing an experience for someone who’s feeling trauma. To say, “I can understand how you feel that way given what’s happened.” Just that starts to change their neural physiology. So learning that. And then our advisors were all at a heightened state of need, so we gathered together more frequently on the phone to talk about what was happening, and we saw into it even further about how people respond in situations like this. So sometimes events are the greatest teachers.
Michael: Well, I’m struck even by your label that advisors experienced compassion fatigue. I mean, it’s the way to put it. I remember just it was stressful for everyone who was an advisor going through 2008-2009 just…you know, you can only spend so much time day after day walking one client after another off of the ledges before it just takes its emotional toll on us as advisors for what we’re doing with clients.
Susan: And they kept going back to the ledge, right?
Michael: Right, right.
Susan: So you would say, “This is why you’re okay. This is why this news does not apply to you.” And they would be fine, but then you’d get another call and they’d be freaked out again. And we learned…you know one of the things we learned there? We learned the power of visual. So we studied, now it’s called the science of data visualization. Then we were learning it from a teacher who had tried to teach her classroom knowing that there were many different learners in her classroom-style learners, so she said it was three-headed learning, visual, kinesthetic, and auditory. So we started there. And what we did is we took the main message of a meeting or the main overview for a client and we put it on a piece of paper, and we learned to do it to follow some of the principles. Very little copy, shapes, squares, circles, ovals, whatever, in relationship to amounts, flow, arrows, connectivity. Very little copy inside the shapes, but labeled appropriately. Kind of like a book label sort of thing.
So someone with very little cognitive capacity, someone who is in mental fatigue could look at this. They don’t have to read much, there’s no ledgers [SP], and they can see the main point. They can see why their cash flow is okay. They can see this decision that they made and how it affects these people. And it’s really a tough art form. It takes, I don’t know, it still takes me half an hour, 45 minutes to do one of these, and then we share them as a group so other people can use each other’s. So we created these templates. And in ’08 and ’09, people couldn’t think, but they could see. So if their brain could get the message just visually, then they had a greater probability of getting some relief, some stabilization.
Michael: And I guess at a high-level, like, this is why we see such interest and popularity now around one-page financial plans and graphics and visuals and kind of working in that direction. Because once the trust is there, for at least a large subset of clients, it’s really not about all the technical information and the projection anymore, it’s about trying to get the information out there visually so that it connects in different ways and that it doesn’t take as much of a…it’s like a cognitive load to process, because if I’m in a highly emotional stress state I just can’t process that information very well.
Susan: Yeah. So they can own it. They get it. And when they get it they increase their confidence in themselves as well as in their advisors. And wait you hear this one. I’m still overwhelmed when I see this number, but the science of data visualization says that if you follow these primary rules, which you can do just using PowerPoint, if you follow those rules, you will increase a client’s recall by 640%, and that sum increases. And think about what difference that makes. That’s the difference between understanding it and owning it.
Michael: The difference between understanding it and owning it. Okay.
Susan: The client. You’ve told the client how to do this. You’ve shown them the typical graphs. We’re not talking about the typical graphs and stuff like that, and they understand it. So you have communicated in a way that they understand it, but if you show it to them in this other format, they understand it deeply. And that’s what I mean by owning it. They really get it. They don’t get it because you told them and they see a few things that link up with the words that you’re saying, they actually know it. And so when they go home and they forget something, they look at the paper and they go, “Oh yeah, I get that.” They don’t have to bring the paper back.
And they call it…this is a funny thing. For years now, when an advisor gets this right, the clients will call it “the paper,” and they’ll say, “Remember the paper you made for me? Can we make a paper for this?” Or they’ll carry it around. I know some people in Palm Beach, there’s an advisor there that does this, and there are some billionaires carrying around a paper. They want to remember how their estate plan or how their oil and gas and their real estate and this. And all that complicated stuff, we’ve learned how to make it super simple. Of course, all the other documentation and flowcharts and all that stuff is around, but this is the thing that sits on the top of all the more complicated papers. And they literally carried around in their pocket.
Michael: Talk to me a little about how this became a business for you, right? I mean, it’s one thing that, you know, you did a white paper for the personal injury firm, it turned into a book, Dick Wagner poked you until you agreed to kind of formulate an institute around this where you start teaching some other advisors, but it’s one thing to kind of say that, it’s another to actually formulate a business around it that delivers a thing in a repeatable manner with staff that helps to support. Can you talk to us a little bit about how this Sudden Money Institute turned into a business of doing this kind of teaching and training?
Susan: Yeah. And it might be…it’s probably different for me than many others, but I started in 2000 as I said, and, you know, 2001 is when the 9/11 thing happens and so we’re intensely looking at it then because of need. So it started to morph into more than just an annual gathering where we talked about it and we did a few things during the year, and it became more and more. And I had to make the choice about either being in my practice or being here. I’m not wired to have done the right job for both. And my clients quite honestly were getting the short end of the stick. And I had a partner, a guy that I had hired to be my succession, but that was years down the road, so they were getting taken care of, but my head wasn’t in that game. And I knew it, and they didn’t know it, and it wasn’t good. So I made the decision and the partner took over and the clients were fine. He lost one client out of all of them that I had built over 20 years. So that’s a yay.
But I didn’t really understand the business aspect of this yet because we were really developmental. I didn’t have something that was a repeatable process. I was still figuring it out. I was still learning. I was still testing. Some of the revenue was from speaking fees or from training programs that I’d be hired to do. I didn’t want to take clients because I didn’t want to be in competition with the people that I was training, so I made a clean break from that. Occasionally I’d work with the family or an individual that had a big event, who’d read the book. They’d come, I would spend two or three days with them and then help them find the right advisor and go off and do that. And I don’t take any, you know, referrals or anything like that.
Michael: Sorry, I’m curious really fast, though, this transition, I mean, like, you were very quick there to sort of say like, “So yeah, so I sold the practice I’ve been making for 20 years and then went off to do this other thing.” How did you come to the decision to sell a practice you’ve been building for 20 years to go do this thing?
Susan: Hopefully with more clarity than I did. My attention was on selling it properly, and I did do that. And remember, this is back in the earlier days when not everybody was selling their practices, right?
Michael: Yeah. I mean, there was not a lot of structure or standardization around how you do that, how you value it.
Susan: Right. It was all based on somebody died then you had to figure it out. And here I am alive saying…so that part I got right. I wasn’t really keyed into transitions. That was the beginning of the understanding the stages of transition and this whole new world.
Michael: And then you pushed yourself.
Susan: So I didn’t realize I was in it. Yeah. I had to take a lot of my own medicine. And I was just as rough on myself as most people are thinking, “Oh, you should have it together by now. How come you don’t have this?” So there’s confusion and shame that clients go through when they do that. So I got to live that in living color, nice, but I didn’t know it. And obviously, I needed to make a living. I had a life to support. And so I was doing it in a developmental way. Outside speaking helped. We had people who were willing to keep being…we called them members, so we had a membership, but we didn’t have a strong structure for the membership until 2009. And in 2009, after what happened with 2008, the community, the Sudden Money community of advisors was super clear that we needed to get this really formalized for nothing else, just for who is here now. And that’s what we did. So we started a formal training in 2010, and then we went through developmental stages with that. And we weren’t really…I was kind of focused on having enough not building a great big business. I wanted to get it right before I really went out big-time with it.
Michael: So 2010, in formulating a…what do you call here a formal training? Like, is that when…
Susan: A structure.
Michael: …the actual CeFT designation got launched and…
Susan: No, no. We were kind of stuck with a title that sort of…well, not sort of but does mischaracterize us. So to have a designation and call yourself a sudden money advisor just didn’t sound right. And as of 2010, we were formalizing our training and gathering and all that kind of stuff, so people were putting in a lot of time to get good at this. And the question was, “What what do we call ourselves? How do we tell anybody what we do?” And one, I wasn’t interested in more designations. I was of the camp that, you know, that’s a confusing thing. And we didn’t have a name.
And then about three years later, one of our community called me up, Morris Henderson, and he said, “I know who we are.” He said, “We’re transitionists.” And I’d never heard that word before, and it sounded really weird. And he said, “It’s like doctors have a hospitalist, a doctor that just works in the hospital, a specialized area of practice.” And if you google it, I guess it’s the same today, it says a transitionist is one who is skilled and trained in managing change. So it was now we had a name, a financial Transitionist, skilled and trained to manage financial change. So now that we had a name, we had been putting more and more time into the structure, into the experiences and the levels of training and all of that, then people wanted to think about a certification. I kind of grow with my community, so every year when we have our conferences I ask, “What next? You know, what’s working? What do we need to keep, what do we need to get rid of, and what’s next?” Those are the three questions. And so the certification came up. So we kind of voted on that and called the attorney and said, “Can we get this trademark? Can we do this?” And we got yeses.
And then we found out how hard it is to really do the correct work in the certification world. But we were all in and we are all in with that. So we didn’t do it for business purposes really, we did it for the people who were in so that they had a way of explaining to the public, separating themselves from their peers in this area of transitions because that’s why people are hired, that’s why advisors are hired. So we’re all kind of the forest in…the trees in the forest. So how do you separate yourself, and can you follow that through? Do you have brand promise? If you say, “I have this training and I can do this,” well, you better be able to do it.
Michael: And so what’s actually happened since then as you as you kind of launched the designation and formalized the training and the structure around it?
Susan: Well, now we’re getting recognized. FINRA recognizes us. And we’re jumping through the hoops. The groups that are really important for recognition or acceptance, sometimes they say acceptance versus recognition, typically take time. Like, we’re still in the hopper for Nebraska. And apparently, Nebraska is one of the toughest states. So theory is if you get it past Nebraska then you’re good to go with others. I think we’re a month or two away. And we’ve been in their process since I guess April or May. So you just have to kind of keep doing it. We’re not a non-profit, and we do the training and the certifying, which in the world of certifications is viewed as a conflict of interest. And maybe when we grow further, we will see that. Right now, that just doesn’t work for us.
Michael: Because the challenge is at some point there’s a risk that you compromise the quality or the depth of the integrity of the training part just to get more people on the certification side when you do both sides, the training and the certification.
Susan: So we’re a little bit different in that, but we have started a new division, and the new division is the Financial Transition Institute. It’s a division of Sudden Money that does the training, the coaching, and the certifying. So we’re prepared to eventually make a separation. And it also doesn’t appeal to me to go from a profit to a non-profit just to grow my business. It feels disingenuous to me.
Michael: Yeah. Well, and, I mean, I think it’s worth recognizing as well, this is ultimately how a lot of designation programs end out formulating and growing over time. And even if we look at something like the CFP marks, where, you know, the CFP Board doesn’t teach the program, it’s solely the certifying organization that sets the standards because, however many it is, 200-plus educational providers actually do the education part, that’s not how it always was. Originally the marks were conferred by the College for Financial Planning in Denver, that did both the certifying and the training, and that was how it started in 1973 with the first class. And it wasn’t until 1985, after they were doing it for 12 years and had already minted, I don’t even know what the number was by then, I think several thousand CFP certificates that they actually made the split because at that point, as they were growing, it became a little more evident that the combination of the two was creating some conflicts. But it takes a while for growth before you get to the point that’s actually an issue.
Susan: The most important thing for me is to get our work right, and then is to get the numbers and get the system. So we’re building a new learning management system because we’re now in India and Australia, and Canada, and all over the U.S. You get time zones and all.
Michael: Right. Well, because, right, financial…the language of human brain and behavior training kind of transcends borders, right?
Michael: Like the particular legal agreements and tax strategies will vary by jurisdiction, but how you help clients going through that change kind of similar.
Susan: Yeah. And they all want more personal, authentic connection with their clients. So you can use our tools outside of clients with transition easily. That happens all the time. And we encourage that. But we needed a new really state-of-the-art learning management system that comes out in December, a new website so that our advisors can get our tools co-branded with a click instead of a phone call. We have over 1,000 pages of original client material that’s broken down into tools by name and terms of process and whatever, but, you know, and then looking at the software that’s connected to it. And any of these, if that becomes your end-all-be-all, you can lose the integrity of the work. And that’s kind of my job at this point is sort of the keeper of the keys and making sure the integrity of the work happens as we develop as a business, as well as a body of work. I think we’ve done a good job on the body of work. I’m confident and proud there. But when we deliver it, you know, to have…we’ll have a lot of challenges because not everybody or every group is going to want to do what it takes to really be the kind of person that we hold out to the public.
We’re making a promise to the public. We’re saying, “If you hire someone who’s gone through our training, they are…” And we have some descriptors there. And, you know, just like CFP, you know, I don’t know, one of the big BDs told me that they thought only 10% of their CFPs did financial planning. I hope that changes, but there’s some number like that out there that’s a disappointing percentage that actually do planning. And that’s what I’m trying to avoid. I’m trying to get people into the practitioner mode. We have CE requirements. The CFP board has been very good to work with. They’re even, with their new requirements, you know, they tell us what we have to do, we do it and they approve us for CEs usually.
Michael: And so how many CeFTs are there now that are using the marks and have gone through the program?
Susan: We’re still under 200, so we’re not considered a big player yet. A year from now hopefully we are considered a big player with the conversations that we have. We’re now ready for large groups. I’ve trained trainers, so it isn’t just me. And so now we can have, you know, three or four contracts that require all the coaching and the workshops and all of that. And it’s more than doable.
How Advisors Can Use The CeFT Training To Grow Their Business [1:23:37]
Michael: So when advisors go through the training and get their CeFT, do you have a sense of, like, how do they ultimately use it in growing their businesses? Like, do they actually say like, “Hey I’m a CeFT now come work with me,” and kind of they literally market around financial transitionist? You know, I know least one or two. Like we had Evelyn Zohlen on the podcast in the past, episode 21, so kitces.com/21 if anyone wants to go back and listen to it, who I know went through your program and then she…
Susan: No, she didn’t. No, she didn’t.
Michael: Oh, she didn’t go through your program?
Susan: Oh, no.
Michael: She’s just trained around it. Because I know she spends time now focusing on transitions particularly for widows. Like, that’s from divorce and widows as a specific domain. So do people tend to go through your program and then, like, form a particular niche? Do they go through the program and say, “Now I’m a transitionist?” Do they simply go through the program then apply it in their current practice of what they’re doing but they don’t actually formulate any kind of niche or structure around it? You just say, “Here’s another post-CFP designation that I have?”
Susan: All of the above, but even those who are not going to hold themselves out. And, you know, if you look at people’s websites, and I know you do because I’ve heard some really great talks that you give on that, but I know that the majority, I would guess, of advisors say, “I work with people in transition.” In one way or another, they make that statement. Some are more pronounced about it than others. And the truth is they do, but they don’t have this specialized training in it. So what we want CeFTs to be able to do is to explain the value of their training. And they do that in their communities. I was just finishing a program for estate planning attorneys that one of our guys in Walnut Creek will be giving, that explains why this training has been important and gives the audience a taste or an experience of some of the process that he uses. We encourage them to talk to their existing clients about the training and get that talk going. You know, everybody over 55s know somebody who’s going through transition. It’s leaving one job with a 401(k) rollover to divorce, widowhood, parents etc. The average age of a widow is 59, so people know people in transition.
And did you know, this is an amazing study I heard recently, that there is roughly 20 million privately owned businesses in the country and 79% of the owners surveyed said that they plan to retire within the next 10 years? And 15% of those said that they have talked to an advisor about it.
Susan: So get ready for that. That’s a big thing that’s about to happen. The widow thing is happening because baby boomers are right in that spot of the 59 and a half and older. And divorce, graying divorce is the fastest segment of divorce over 50. And retirement, we know that data and so on. There’s a lot of this happening. So we want our CeFTs to make sure their clients know that they’re in this program and they’re being trained and they are trained because then when they hear of a friend who needs a financial advisor in the midst of one of these, they’re not going to refer them because they got a good investment return or because they’re nice people but because they’re specialists. They’re the only one of two in the area or whatever it is in the beginning. They have a huge advantage right now because there aren’t that many of us.
Michael: Well, and that to me is the power of this whole direction towards niches and specializations, right? Like no one…I don’t think anyone’s really excited to say, like, “You know, wow, it seems like you’re having a really hard divorce. Well, I know a financial advisor who can help you invest the money once the settlement is done.”
Michael: Like, that doesn’t go over very well. But, “You know, it looks like you’re having a really hard divorce, you should talk to this advisor. I know he works with people going through rough divorces and making all the transitions that go with it. Just give him a call, it’ll help. And he’s trained in how to do it well.”
Susan: That’s the thing.
Michael: Like, that’s a much more powerful referral. Like, that person calls.
Susan: Right. And then you want the centers of influence, the attorneys and therapists and whoever to know that you can work with people before the money comes in. In that anticipation stage, there are four stages of transition. It’s easy conversation, anticipation, the ending when the event happens, the years of passage of adaptation and then a new normal. So we have that as a graphic. They take it with them, there’s a laminated piece, whatever. It’s a good talking point. But to tell the attorney that you don’t have to wait until everything settles down. I know how to deal with it when it’s not settled down. So when an attorney says, “Oh, I have this case and I want to refer these people to you, but, you know, the money isn’t in yet or, you know, the family is this and that.” And if you wait for that, that’s not going to happen. But if you can say, “Here’s why you should talk to me now, this is what I can do,” it’s a game changer.
Michael: So as we look at this, I don’t know, to me transition of financial planning itself, again, that whole framework of, we’re not here to be the expert we’re, here to be the thinking partner and the guide, I guess parenthesis who also has to actually be a technical expert or you can’t guide people very well if you don’t know how the terrain works and you can’t read a map, right? Like, you need the technical stuff behind the scenes. But this shift around maybe, like, where our value is and the role we play and what the advice or client relationship should look like. So as someone who did this as an advisor for many years and has now transitioned in this direction of training advisors, I’m wondering how would you explain the value of financial planning to a prospect today and, like, and why they should pay for it?
Susan: I firmly believe that…I’m going to say CeFT because they are also financial planners, but also, just even without your post-CFP training, these professionals do things for clients, are able to guide clients in ways that no other profession on the planet can. They can be your go-to when life gets tough. They know the technical side, but if they’re properly trained, they know the human side. And they know that the way you experience life and money and well-being is the most important thing, and your money is going to be managed for that. But in order for me to really do that and do a good job at that, I need to get to know you in a way that’s very comfortable for you.
I know a lot of advisors say things like that, but then to say, “I’ve been trained in the human dynamics of change and transition, and I get it that it can be tough. That there can be days that are tougher than others, and I get it. That decisions are sometimes rough to make. And I get it. That other people want you to be okay when you’re not okay. And I can be with you through all those ups and downs.” I’ve studied the psychology and the neurology and the sociology. Not that you’re experts in that, but my training includes that, is a better way to say it. We say we’re science-based. Always trying to make sure that we don’t overstep what we claim here. But that training and working with clients, and being able to be connected to some of the best experts in the world on what it’s like for us humans to go through change is part of what I can offer. That’s different from everyone else.
What Financial Advisors Can Improve When Helping Clients With Transitions [1:32:04]
Michael: So from the flip side, as an experienced trainer on helping clients, helping people go through transitions, I’ve got to ask, like, what’s the worst advice you still hear that people are giving out in this area that’s just wrong? Are there still things that you see it, like, “Oh my gosh, that’s so wrong. These people have no idea what they’re talking about?” Like, what are the areas that we’re still doing it wrong or that people are still giving the wrong advice about how to do it and help clients?
Susan: I heard someone say…they were telling me that there was a widow that was really having a tough time. I don’t know if she was crying but just really having a tough time, and he said, “Don’t worry about it, all widows go through things like that.” And that is so demeaning, that’s just not connected at all. “Oh, you’re one of those and you do that? Don’t worry, I’ve seen it before.” You know, I think that’s a horrible thing to say to people.
Michael: All right, so I have to admit, that feels like something I might say. I’m the expert, I’ve seen it. Right, like, I guess I’m trying to…you know, people feel sometimes you’re awkward, so I’m trying to normalize it for them. Like, “Right, you’re not weird, you’re not doing something bad. Like, I’ve seen this a lot. What you’re going through is very normal and typical.” So what should I be saying in that situation so that I apparently put my foot in my mouth less than I’m doing?
Susan: Well, you can say something like…rather than throwing that person into a category, and that happens with women too is you get thrown into categories. So I would say, “You know, given everything that’s going on for you, I can really understand why you feel that way. I can understand why this is hard, and I think I can help you with that. And let’s just start to step back, let’s get on the balcony, or let’s take a breather and just do one small thing that will help move you forward. It’s going to take time, but you can do this.” It’s a completely different setup than, “Oh yeah, all you widows are like that, I can deal with it. Don’t worry, go ahead and cry.”
Michael: Okay, okay, that helps.
Susan: Does it feel different?
Michael: Yeah, yeah. It does. Although again, it’s…and I know this is why you require the years of experience to do the training. You know, there’s…I mean, I do think there’s an effect that we go through as advisors where you have to learn your technical stuff because otherwise when you’re in a meeting, it’s hard to even try to pick up on these conversational cues with clients because you’re still stuck in your head of like, “Did I actually just explain how Roth conversions work correctly?” Right? Like, you’re trying to focus on the technical stuff or prove your own expertise, and you have to get through that before you can even get to kind of a competency point where you can sit in a client meeting and be confident enough and knowledgeable enough about your technical issues, that you can actually be self-aware of the conversation you’re having and how you’re having it, and whether that needs to be done in different and better manner.
Susan: So the other part of that, though, is that you can get so into your technical stuff and see a solution that feels elegant and perfect to you that you just don’t hear it. You don’t hear the client. And I’ll tell you a situation that came up. I’ll do it quickly. There’s a family business that’s going to be sold and the owner just wasn’t paying attention and the tax bite is huge, and it’s really a problem because they don’t have necessarily the liquidity to pay the tax bill and do what they thought they were going to do with the proceeds. Meanwhile, the wife received an inheritance from her family. And it was, you know, heartfelt kind of experience, the parents go, the money comes in. And the CPA, the attorney, and the financial planner decide, “This is the answer. This is, you know, almost, you know, exactly what we need. There’s the liquidity and you can go on and do the things that you want.”
And they sit down with the couple and they explain this great realization and how it all works. And she’s furious, and she says, “You mean my parent’s hard work and savings for their life, my inheritance is going to go to pay for taxes? No way.” And she freaks out. And the advisors think, “Well, no, no, no, you don’t understand because liquidity and this…” And they want to explain, “You’re going to get to the same outcome with the houses and that this and that that you want to get to, but this is just taking care of the short-term.” That’s not what was going to work with her. That was not going to work with her. So what I would hope somebody would say to her is just say, “Wait a second, let’s just slow this whole thing down. We missed something important. I am so sorry that I didn’t really pay attention and understand how important this money is to you. I missed this. I’m stuck in my head with this. Let’s just table all this, we’re not in a hurry, we have a month or two to make this decision, let’s just table it and we can talk some more about the inheritance and what you want to do with the inheritance.” That way would work with her because you’ve apologized, you’ve heard her, you’ve seen her, and you say, “I want to know more.” Versus saying, “Wait, wait, wait, you don’t understand, if you paid this here and then we get this and we’re all okay in the end,” you miss the boat with her. And even if you get her to do it, if her husband dies first, you’re not going to be the advisor that she’s going to work with.
Susan’s Advice For Young Advisors [1:38:03]
Michael: So what advice would you give to young advisors looking to come in and be a financial planner today? And given as you’ve looked at the…how the profession has been changing and evolving, you know, your transition from practitioner to trainer, and educator of advisors, like, what would you tell a younger and newer advisor coming in today about what they need to be positioning themselves for success in the future?
Susan: You always want to continue with your expert skills, so you stay on that path, but get a parallel path that’s equally important and equally complex. And on that path, be deliberate in your practice. To be present for your clients. Understand that sometimes you’re going to feel uncomfortable because you’re not going to want to know the answers, but that’s your expertise is to hold a safe space when people are getting confused and things are a bit chaotic. Develop the practice of listening to your clients and listening more than speaking. Get comfortable not being an expert and get comfortable using tools that are not part of the traditional side, that you can make your own and they become fluid and profoundly important. But it takes deliberate practice on the personal side and it takes continuous technical learning on the technical side. And be all in on both, and that’s how you’re going to rise above your peers, and you are going to enjoy the greatest wave of money in motion and transition that this planet has ever seen. Young planners are going to be the inheritors of this great time of change and transition, but you have to be prepared on both sides.
How Susan Defines Success [1:39:50]
Michael: I love that. Young players are going to be inheritors of this great time of change and transition. So as we wrap up here, this is a show about success, and one of the things I’ve long observed is that success means really different things to different people, sometimes even different things to us in different stages of our own lives, and so, you know, having basically gone through this arc twice now, you build a practice and sold it and now you’re building Sudden Money Institute and starting to scale it and gear it up, I’m wondering as you look forward from here, how do you define success?
Susan: Well, I made a decision a while ago that I want to build a company that lasts for 3 generations, roughly 100 years, 3 generations after me. And the next round of managers can morph and change according to what’s needed, but I want this work to be woven into the fabric of what we today call financial planning. I don’t know what we’ll call it in the future. So I don’t…this isn’t something that I’m building to sell for a big liquidity event. I’m sure that we’ll find strategic partners to create the sustainability that we need and want and to take care of what I need and what, but our intention is to look at 100 years and say, “Build the strongest foundation we can, find the right people to keep it going, and just keep learning.”
Michael: Well, amen. I love the vision, 100 years and 3 generations sustainability. I love it. And as you say, and who knows what we’ll even be calling it by then, and will it still be financial planning or something else.
Susan: I’m real clear. I’ve got to get out of the way at some point and let all the new things come in and morph and change. But if we have a strong foundation, that’ll be fine.
Michael: Well, thank you so much for joining us and sharing this foundation of what you’ve built and the program and the training. You know, I think I certainly agree that what you’re building is very much in the direction of where our whole profession is going, and so I can’t wait to see this material infused into the core of what we learn to be as financial planners.
Susan: Thank you. I really appreciate your interest. And this conversation has meant a lot to me. Thank you.