Welcome, everyone! Welcome to the 57th episode of the Financial Advisor Success Podcast!
My guest on today’s podcast is Ted Jenkin. Ted is the co-founder of oXYGen Financial, a wealth management advisory firm under Kestra that manages nearly $1 billion of client assets.
What’s unique about Ted, though, is that his firm is focused almost entirely on serving Gen X and Gen Y clients – thus the “XYGen” part of the oXYGen Financial name – and gets paid through a combination of AUM fees, a small portion of insurance implementation commissions, and a $99 per month “technology fee” that they charge their clients for their own personal financial management dashboard… which is provided by aggregating their accounts through eMoney Advisor.
In this episode, Ted shares how oXYGen Financial grew from scratch to over 1,500 hundred clients over the past 10 years since it was founded, how the firm executes its digital marketing strategies by producing a high volume of “e-books” – some as short as 1 or 2 pages – that they offer online prospects in exchange for their email address and phone number, the way oXYGen Financial drives visitors to its website by getting visibility on “not-advisor-traditional” radio shows like sports programs, and the way the firm follows up with those prospects who contact them online.
In addition, we also talk in depth about oXYGen’s actual four-meeting financial planning process with clients, that starts with an Initial Client Meeting which talks clients through a “Key Money Concerns” checklist the firm created, to a Data Gathering meeting that the financial advisor themselves doesn’t even sit in, followed by a Plan Presentation meeting that oXYGen frames as a “Strategy Session” to talk about potential planning strategies to implement, and then wraps up with an actual implementation meeting that includes transferring assets for oXYGen to manage.
And be certain to listen to the end, where Ted talks about the challenges he went through in leaving a 17-year career as a Vice-President-level manager at a major broker-dealer to go out on his own with his business partner Kile Lewis, how he plowed money into marketing in the first year to not just get clients but set the groundwork for building the oXYGen Financial brand, and how he focused on building relationships with other local small business owners in the Atlanta area to grow the firm.
So whether you are interested in learning more about reaching prospective clients online through e-books, curious how you can grow your business through radio shows, or simply want to learn more about how you can profitably serve Gen X and Gen Y clients, I hope you enjoy this episode of the Financial Advisor Success podcast!
What You’ll Learn In This Podcast Episode
- oXYGen Financial as it exists today [3:41]
- How oXYGen Financial structures their four meeting process. [7:17]
- Why advisors tend to fail by overexplaining a plan. [31:45]
- Why Ted refuses to have minimums in his firm. [41:13]
- Creative ways to reach out to prospective clients. [44:20]
- The unique way oXYGen approaches social media. [44:20]
- How oXYGen uses ebooks to gain leads, and why it’s important to have a call to action on your website. [48:48]
- How financial advisors can get on radio shows. [59:39]
- The best place to put marketing dollars to grow your business. [1:17:27]
- What Ted wishes he’d done differently. [1:23:23]
Resources Featured In This Episode:
Full Transcript: Marketing Your Way To $1B Of AUM In 10 Years With E-Books And Radio Shows with Ted Jenkin
Michael: Welcome, everyone. Welcome to the 57th episode of the Financial Advisor Success podcast. My guest on today’s podcast is Ted Jenkin. Ted is the co-founder of oXYGen Financial, a wealth management advisory firm under the broker-dealer Kestra that manages nearly $1 billion of client assets.
What’s unique about Ted, though, is that his firm is focused almost entirely on serving Gen X and Gen Y clients, thus the “XYGen” part of the oXYGen Financial name, and gets paid through a combination of AUM fees, a small portion of insurance implementation commissions, and a $99 per month technology fee that they charge their clients for using and aggregating their accounts through eMoney Advisor.
In this episode, Ted shares how oXYGen Financial grew from scratch to over 1,500 clients over the past 10 years since it was founded, how the firm executes its digital marketing strategies by producing a high volume of e-books, some as short as 1 or 2 pages, that they offer online prospects in exchange for their email address and phone number, the way oXYGen Financial then drives visitors to its website by getting visibility on not advisor traditional radio shows like sports programs, and the way that the firm follows up with those prospects who contact them online.
In addition, we also talk in depth about oXYGen’s actual four-meeting financial planning process with clients that starts with an initial client meeting that talks prospects through their key money concerns, a checklist that the firm actually created, then comes a data gathering meeting where the financial advisor themselves doesn’t even sit in, followed by a planned presentation meeting that oXYGen frames more as a strategy session to talk about potential planning strategies to implement, and only then wraps up with a final implementation meeting that includes transferring assets to oXYGen to manage.
And be certain to listen to the end, where Ted talks about the challenges he went through in leaving a 17-year career as a vice president-level manager at a major broker-dealer to go out on his own with his business partner Kile Lewis, how he plowed money into marketing in the first year not just to get clients but set the groundwork for building oXYGen’s brand, and how he ultimately focused on building relationships with other local small business owners at the Atlanta area to help grow the firm.
And so with that introduction, I hope you enjoy this episode of the Financial Advisor Success podcast with Ted Jenkin.
Welcome, Ted Jenkin, to the Financial Advisor Success podcast.
Ted: Hey, thanks, Michael for having me on today.
Michael: I’m really excited to have you here. You have a really unique and interesting business in the advisory world. You are actually one of the first folks that I know that ever went out there and started working with Gen X and Gen Y and focusing on them as a target clientele and actually charging them ongoing monthly retainer fees. You know, now we’re seeing a whole lot more of that in the industry but you guys were really early to that space. And so I’m excited to have you on talking about what it’s like serving “younger people” as a firm that’s actually done it for quite a while now.
Ted: Yeah, it’s a very interesting space and it’s been an interesting journey but a lot of fun.
oXYGen Financial As It Exists Today [3:41]
Michael: So you guys have a firm called oXYGen Financial, and, you know, the “XYGEN” in there is not coincidental to the name because that’s who you service. So can you start by just talking a little bit about oXYGen Financial, the firm as it exists today? You know, what do you do and who do you do it for?
Ted: Yeah, sure. I mean, oXYGen Financial is a full-service advisory firm. We do comprehensive financial planning. We do wealth management, we do insurance, we have an employee benefits business as well. And we will range to help our customers anywhere from helping them, you know, figure out how to fix their budget at home and deal with their debt structure all the way to dealing with complex estate planning.
Michael: And who’s your typical clients like?
Ted: You know, it’s evolved a little, Michael. It’s interesting because when I started oXYGen, I was pretty certain that I would never take on an old person as a client. But, you know, what’s evolved over the years, which I think is interesting for a lot of businesses, it’s like, you know, if you’re Starbucks, you might say, “Jeez, we’ll only take on these kind of customers.” But if somebody comes in and they really like your business, do you really want to turn down those customers? And it’s a business decision that a lot of businesses have to make. But our target age has scaled up a little bit. It’s in that 45 to early 50s range right now is really where that target, target customer is.
Michael: So that’s basically Gen Xers.
Ted: Yeah. I mean, possibly.
Michael: The Gen X dividing line now is something like age 52 if you sort of do the backwards math to the birth year. So, like, you’re basically in a Gen Xer space, or even kind of an older half of Gen Xer space.
Ted: Yeah, we’ve got obviously a lot of Gen X and Gen Y clients, but like, the real meaty meat to the business right now is that we’ve carved a really good niche in that space. And I would say not only do we get them from a financial planner perspective but from an emotional point of view, a psychological point of view if you will, we really get the customer. And so that ideal business owner, that now C-suite-level executive, the family that’s dual income, that, you know, basically… Believe it or not, a lot of people still think that those clients are broke, which I say let them keep thinking that because they are far from broke and they are in dire need of getting financial planning services.
Michael: So what do you do for them? Can you talk a little bit more about just what the service is, right? A lot of us sort of talk about financial planning and wealth management, like, what does that mean for you guys?
Ted: So I got my certified financial planner degree in 1996, so I’ve been a CFP now for coming up on 22 years. And I have always and still wholeheartedly believe in the financial planning process. So when those clients come on, much like the finance planning process, you know, we help them identify and prioritize what their goals and objectives are. We go through a fact and feeling process of gathering data, and then we go through the process of preparing a comprehensive financial plan for them, and then coming up with, you know, what I would say is a really thoughtful and holistic set of recommendations that’ll be, you know, thorough and complete, and then trying to help them figure out the best way to actionably execute the plan. And so, you know, it’s interesting from the day I took the CFP and the process that I learned, I won’t say that we really veered that much off of that process.
The Important Questions oXYGen Financial Asks During Initial Client Meetings [7:17]
Michael: So can you break that down for us a little bit more? You know, you kind of mentioned a structure of data gathering, preparing plan, providing recommendations, execution implementation. So what does this look like from a meeting process? Like, three meetings structured out or more? How do you actually deliver this?
Ted: Yeah, we’re actually…you know, at the end of it I would say you’d call it a four-meeting process, okay? And the thing is is that we start our first meeting with what we call to be our initial client meeting or an ICM. And that initial client meeting, we see it as a mutual meeting of us getting to get to know each other, right? Because for the client relationship to work obviously we’ve got to like them and they’ve got to like us, right? We’ve got to have a mutual match. And in that first meeting, what we’re spending a lot of time doing upfront is trying to explain who we are. We talk about our process. We get extremely transparent. And Michael, I, you know, tell advisors, “I think if you’re going to work in this space, it’s really important to get explicitly transparent on how you make money.” There is no issue with this Gen X group with you making a living. They just want to know how. And so we spend a lot of time going through that, discussing our process, what we have to offer.
And then, you know, we actually get out what we call to be like a key money concern sheet, Michael, and we let the person that came in or the partners that come in check off their goals and concerns. And we go through a process of trying to help, you know, them identify what really are the key things they want to work on, and helping them prioritize in that meeting. And then at the end trying to figure out whether or not they would be a match and we would be a match for becoming a client of ours.
Michael: So this ICM, this initial client meeting, this is all, like, we’re still in the prospect phase.
Ted: That’s right.
Michael: They haven’t signed yet but you’re going through this data gathering process, right? The whole balance, “We’ve got to talk about what we do to justify our value, hopefully,” and then get the prospects to talk and just understand their issues and their concerns. I’m curious, though, more about this key money concern sheet. That’s not something I’ve heard from other advisors before. Can you talk a little bit more about, like, what that is and where that came from?
Ted: If you try to compartmentalize the key areas of somebody’s financial life, first of all, you know, we know we have to look at their own individual profit and loss statement, right? Every family has a P&L just like a business does. So, one section of this key money concerns is that, are they concerned about their current debt structure? Or do they know where all their paychecks are going? Or, you know, are they concerned about trying to figure out how they should be saving more money? And that’s sort of one area of key money concerns. Then you’ve got an area of risk management, “Did I pick the right kind of health insurance? Am I over-insured or underinsured with life insurance? Do I need long-term care?”
Then you’ve got an area of wealth management. And that may vary from just, “I don’t know what I’m doing with my portfolio,” to, “I’m not sure about how to manage the right accounts for my child’s college education.” Then from there, we’ve got tax planning. And that maybe you’re concerned about federal taxes or state taxes or other taxes associated with your business. And then you’ve got a section of concerns just about what we call to be work optional. We really don’t like the word “retirement,” Michael at all. In this generation, retirement doesn’t really make sense. The better two words are “work optional.” And then there’s an area on estate planning, which is really more about, “Do I have a will? Do I need a will? Do I have a trust? Do I need a trust?”
And then there’s a seventh area for business owners that talk about key business owner concerns. “Do I have the business structured right?” You know, “How do I exit down the road?” And we let them check off boxes within those key money concerns so we can start the dialogue on the interview.
Michael: So this almost sounds to me like from the advisor perspective, it’s like basically a menu of all the things that we do and advise on but framed in the context of, “No, no, no, you told me about your key money concerns and, you know, lo and behold, these are all areas we can help you with. We’re just trying to understand which ones you want help with and which ones are a priority for you.”
Ted: That’s right.
Michael: So do you give this to the prospects in advance? Like, “Hey, when you come in for your initial client meeting, please complete this sheet so we can make our dialogue more productive,” or is this something you give them in the meeting and say, “Hey, let’s talk through these areas, which of these are concerns for you?” Like, how does this actually get used?
Ted: We never give it to them before the meeting, never. Because what I want my advisors at oXYGen to see and what I want to see is, I want to see the emotions. I want to see the dialogue between the two partners at the table. I want to see if she thinks that, you know, biking basically means taking some bikes out and touring the wineries in France and he thinks biking is taking a Harley, you know, down the coast of California.”
Michael: Yeah, “Let’s have that conversation, shall we?”
Ted: Yeah. Because, you know, it’s very interesting, and I think if you’re going to really help clients you need to understand how the families make decision. And we learn a lot because not all financial planning is about dollars and cents and debits and credits. You know, there’s a lot that’s out there around emotionally, attitudinally how clients feel about what they’re trying to accomplish. So we engage a lot of time in that ICM meeting with them trying to understand their concerns. And it helps us get more people to hire us because they realize we’re not just here to talk about their 401(k) or their assets, that we care about their goals.
Michael: So I’m still just trying to understand, like, how this goes in practice. I mean, is there a part in the meeting where you just pause and say, “Here, I want to give you this sheet now, can you fill some of these out and check the boxes?” Do you, like, just talk through the sheet, “Hey, I want to talk through some of these key money concerns, can I ask you about these and let me know if they’re concerns for you?” Kind of like how the doctor has their list of all the questions that they ask me about whenever I go in for my physical? Like, how do you actually facilitate this part of the meeting?
Ted: That’s a good question. No, we’re not as impersonal as when you go see your doctor. That’s just…
Michael: My doctor is really good at asking the questions, that’s why I like going to him. But yeah.
Ted: What we do is that once we finish the initial 10 minutes of really describing the firm and how we make our money and the background of how we got started, we will take a break in the meeting and we pull a sheet out of our ICM packet, the packet that we have that we prepare for a meeting, and basically we say, “Well, Michael the next step in the meeting in here is that in order to be able to help you the best that we can at oXYGen, we need to fully understand your goals and objectives. I’m going to put this sheet in front of you, and this is not an end-all-be-all list, so it doesn’t have everything on here, but it’s a really great list for us to be able to start a dialogue.”
Now, I put two pens down here or two pens down here because if there’s a partner on the meeting or a spouse on the meeting, we kind of want to see, you know, who takes control, who picks up the pen first, who is controlling the conversation. And then I say, “Look, check off as many of these boxes as you like. This isn’t a test. You know, too few or too many, it doesn’t matter. I just want to make sure we make the best use of our time today so we can figure out what it is you’re trying to accomplish.” And ultimately, Michael, that will tell us the best way to marshal your resources down the road.
Michael: Okay. So and the, like, you just pause and chill out for five minutes while they go through that form and start checking boxes and noting items and then what? And then, like, they hand the paper to you and you just start asking some questions on the spot like, “I see you checked off biking. So tell me about what that means, the biking and your work optional phase.” And, you know, he says Harley and she says vineyards, and off the conversation goes.
Ted: It’s a really good question because I’m actually not chilling out during that time. What we’re training our advisors to do is to intently watch how the person or the couple interacts with each other. Because in order to be able to help clients to make decisions you have to know how they make decisions. And so even from that very first meeting, we’re able to see, you know, does she say, “Well, he handles the money but I handle the budget,” or is it vice versa? Or basically, does the husband push the sheet across to the spouse or partner and says, “Well, you fill it all out because I don’t know what to fill out on here?” What’s the interaction? Because it’s an integral part of this client relationship to understand how they operate.
Then after that, we go through a set of questions. And let me describe to you how we ask the key money concern questions. We start off with basically an emotion question, okay? The emotion question is basically a why-type question. So it starts off in there and we say something like, you know, “Well, Michael, I see you checked off retirement,” you know, “Why is retirement a concern for you,” right? We want some open probe question to get the dialogue going. Or, you know, “I noticed you checked off retirement, have you known anybody recently, family, friends or somebody that’s retired, and would they be a role model for you or not, and why?” You know, we want to have that question that opens up.
Once we finish that then we’re getting into what we call to be vision-type questions. Vision questions are, “Well, what do you want to do Michael in retirement? Or if you hit the alarm clock tomorrow and you had as much money as you’d like in the bank, what would you do over the next month? Would you travel, would you spend more charitable time, would you spend time with your kids or grandkids?” You know, “What would you do?” Because I think a lot of people think they want to retire but they don’t know.
Then we get into need-type questions, which is, “Well, how much do you think you need and why?” And then we get into what we call to be urgency and commitment questions. The urgency questions are, “Well, Michael, you say you’ve done a 401(k) and you’ve done an IRA and a Roth IRA, based upon what you’ve done so far, do you think you’re going to be in a position to have $3 million at retirement?” Yes, no, maybe so. And then if not, you know, “Is this something you want help on and how do you want help?” So it’s that kind of funnel. You follow what I’m saying?
Michael: Okay. Yeah. Yep. And this is all happening in your initial client meeting, just trying to get to…talked a little bit about what you do. Obviously, they’ve got to understand you can help, and then most of this is them talking about their concerns and their issues and where they want help because obviously, that’s what cues up, “Hey, we would love to help you with this.”
Michael: “Here’s how we move forward.”
Ted: It’s a 20% talking, 80% listening meeting.
Michael: Okay. And so once you get through this, what’s next? What’s meeting number two?
Ted: So what happens in between Michael is that we are a user of eMoney, okay? So eMoney is our platform that we use. And we ask the…if the person next to basically fill out what’s called to be, like, their electronic dashboard, right? Or as much as they can. And what we’re trying to do is have them fill out as much of that dashboard as possible.
Michael: Which basically means, like, you’re going to create an eMoney login for them and you’re going to ask them to start linking accounts.
Ted: Correct. And then what we have as the second meeting is a data gathering meeting. Now, that’s not typically run by the advisor. It’s typically run by what we call to be in our system our wealth plan designer. And basically, that meeting is what you would be considered meeting to gather all of, like, the factual detail and discuss assumptions.
Michael: Okay. But, like, just factual details? The point here, like, you’re not getting as much into the hopes, dreams, goals, wishes kind of stuff?
Ted: That’s right because we got a bunch of that in the first meeting. Sometimes there’s some loose ends to tie up. You know what I’m saying? But the reality is in that meeting we’re saying, “Well okay, Michael you said in Ted’s first meeting you wanted to retire at 62, was that full retirement? What’s the furthest you would want to go out? What’s the earliest you’d like to be able to make work optional? You know, what does that look like?” We talk about assumptions. You know, “Let’s talk about inflation assumptions and tax assumptions,” just so we can go through and get a gauge about, you know, where the client is at in his goals. “How much do you want to have for a cash reserve? Can you save on a monthly basis?” All those kinds of things so we can get all of the data entered so we can start preparing behind the scenes the actual financial plan.
Michael: And if they’ve already been loaded into eMoney, like, do you actually have eMoney up on the screen with them and, like, you’re entering the data live on the spot or is someone, like, gathering all this on a notepad or are you giving them a questionnaire to fill out? Like, how does this data actually get accumulated?
Ted: So we try to do as much as we can into eMoney. And whatever the client couldn’t fill it out, we want that thing complete. I’m a big believer, I’ll just say at a high level here just so people know that, and we… By the way Michael, I don’t know where we fit on the eMoney users, but we started using eMoney in 2008. So that’ll tell you how long we’ve been using.
Michael: Wow. Yeah, you are along into that system.
Ted: And believe me, you know, from my change of my…the former company I worked for was just a huge change, but I’m a big believer that advisors that work without having clients using an aggregation system are totally missing out. So I’m a big believer in controlling the aggregation for the client.
Ted: And you see those other models out there that use it as a marketing ploy, but we use it because we feel like we can do the best job for our clients when we have complete, you know, transparency over what’s happening with all their finances, whether we’re managing the money or not. And so that we do live, but Michael there is a questionnaire that’s a fairly comprehensive data gathering questionnaire we’ve put together over time that we have them prefill out as much as possible and then go through some of what they can’t fill out.
Michael: So you said this meeting is run by your wealth plan designer and not the advisor.
Michael: So I want to understand a little more. So first I guess can you help me understand just what a wealth plan designer is? I mean, in sort of classic advisors’ speak, like, is this functionally a paraplanner, is this kind of like an associate advisor who’s technically knowledgeable just not great on relationship management and business development yet so they’re in the wealth plan designer phase before they move up? Like, who is this person?
Ted: You know, I suppose you could have various types of personalities to fill the role but it’s really a non-selling highly competent technical advisor, right? Somebody that actually is really good at building the plans and coming up with the initial recommendations internally.
Michael: Okay. And so, like, does a wealth plan designer work with a particular advisor in a team structure with that client in an ongoing basis or is this person really more like just a specialist at doing awesome plans and when they get through it they’re going to go on to the next plan from whatever the client and advisor happens to be and they’re moving on and the client reverts back to the advisor?
Ted: Well, we’re large enough that they usually work in a team, but they never really take over a relationship with a client, right? They may be involved in various points if we redo financial plans or we need to run a retirement projection for a client, but they’re really…you know, technically, whatever kinds of plans we’re running, that’s what they’re involved with.
Michael: And I’ve got to ask, like, why? Why not the advisor in the meeting? I mean, I’m imagining some advisors saying like, “Either A, if I’m not there for the data gathering I’m afraid, like, I’m not going to be able to effectively explain the plan when we present it because, you know, you kind of…you learn the client’s data really well when you’re the one that gathers it and enters it.” And others I would imagine are just wondering like, “But I’m afraid I’m going to miss out on important information about the client if I’m not there for all the stages of the data gathering.” Like, is that not a concern for you guys or how do you overcome that?
Ted: Well, one, it’s not a concern. You know, look, I make… I think as an advisor you have to think about what you want to do in your advisory practice. When I think about the revenue I’m bringing into the firm, I’m most productive with the revenue when I’m basically meeting with people, right? Or I’m marketing, right? That’s where I’m most revenue-productive. And that meeting to be honest with you, for advisors that are younger in the business, they might need to be in some of those meetings until you can really learn how to be a doctor and solve cases. But, you know, I’ve done…I mean, Michael, over 25 years I’ve done so many cases. I could look at a case and, I mean, I know what I’m doing. You know, I’ve done a few.
Michael: Yeah. Like, just as long as the plan was competently constructed in the first place, you read your own assumptions page and you get up to speed pretty fast on most of the details.
Ted: And we’re trying to set…I’m trying to set the tone with our clients that, “I’m not always available all the time,” right? I don’t want to set myself to be in the middle of all these relationships because the truth is, as the firm grows bigger, there’s just going to be multiple people that are involved in their relationship. And so it’s nothing that we don’t tee up in that ICM meeting, that, you know, “They’ll be various people, and here’s who’s on our team.” So it’s not like it’s a surprise to the client.
Ted: But, you know, for me, it saves me one meeting that I don’t have to do.
Michael: Which multiplied across all the clients at the firm, like, that’s a lot of hours you free up.
Ted: You know, that’s the choice you make, you know, I mean, if you’re going to grow revenue in the firm.
Michael: So there’s initial client meeting, there’s a data gathering meeting, so what comes at next? What’s meeting number three?
Ted: Well, after the data gathering meeting, we build out what we call to be our strategy session. And we use our own… That strategy session is basically I guess for lack of a better term Michael I would think about it like your whiteboard meeting.
Ted: We put together a pretty sophisticated head-to-toe strategy session where we share our concepts, our ideas based upon the financial plan we did. So some people like the idea of going through the financial plan with the client, I don’t, Michael. I feel like I get paid to do the financial plan just like your doctor gets paid to, you know, look at the x-ray, and then I’m going to tell you off the financial plan exactly what it is that I think we need to do. And that is what we do in the strategy session. Again, anywhere from their budget to cash management to, you know, what to do with their benefits at work, you know, it’s all in that strategy session meeting.
Michael: Okay. So this is like a one or two-hour meeting of the wealth plan designer and the advisor, like, sitting down and basically saying, “Okay, we’ve got all the data and the planning software, what do you actually want to recommend to them? You know, what are we going to analyze? Where are we going to recommend? What scenarios are we going to test or model? Like, what other analyses do we have to do?” That’s where you’re figuring it out.
Ted: Yeah. And a lot of times, to be honest with you, there’s a lot of low-hanging fruit, like things that just make sense to do. And we’d say, “Hey we ought to really get this going, like, today.” You know, it’s possible that if they’re moving assets, we could be doing some paperwork in that meeting if it becomes, you know, it’s almost imminent that it’s going to happen. But, you know, the key in there Michael is that we’ve created our own GPS system, and that’s what makes our meetings unique. And the GPS system is sort of our system…it’s our own system of how we get people from point A to point B in the quickest fashion possible.
Michael: Okay. So it’s, like, your planning style, your planning approach? Why don’t you give me, like, some…
Ted: Yeah. Right. So the planning approach is that the G, which stands for growth, and P that stands for paycheck, and S that stands for security. And, you know, many advisors work off of a traditional asset allocation, which I’m not telling you on the podcast is wrong, but it’s, you know, as we evolve to working with clients in this particular age range, we like to talk more about sort of the buckets of money and what monies we think we need to have in growth. What money and what we define is what we call to be paycheck and then ones that we define and things that are more secure. And we sort of have our own little proprietary methods that are through it because not everything is baked off of just plugging in an asset allocation and saying, “Okay, let’s get everything into 12% large gap and 9% small cap.” And you just don’t…
Michael: So this is kind of a bucketing approach around asset allocation and investing essentially?
Ted: That’s right. Yeah.
Michael: Okay. I mean, I guess it makes sense, right? There’s the old, the classic, like, Talmud recommendation on asset allocation was, “Divide your money into a third in land, a third in business, and a third keep in reserves,” which is pretty much growth, paycheck, and security, like, right there. Businesses grow, land produce paychecks and cash flow and reserves was for security. So…
Ted: That’s right.
Michael: …what’s old is new again.
Ted: Yeah. Because I think you have to realize, and one of the things I will tell you is that even though, like, Gen Xers as an example is a highly educated generation, I will guarantee you 100% that if you asked them to explain any of their advisor’s asset allocation and what they own, they can’t.
Ted: Right? So, you know, nobody wakes up… Even their own 401(k). And so we’ve learned in talking to this group, like, doing it this way, you know, as much as you think that your clients in this age range are smart, they’re not as smart as they think you are about this stuff. And so you have to be able to educate them in a way where they can get actionable around their financial plan, because a financial plan that’s not implemented is really a pretty bad financial plan. So the question is can you get them to implement the advice, right? Just because you gave them doesn’t help them. They’ve got to do something with it.
Michael: Right. So you build up through this strategy session, you start mapping recommendations, your recommendations map to your GPS, growth, paycheck, security framing. So you’ve done this internal meeting, what’s next now? Or are we getting into…
Ted: So yeah, after that strategy session then we’re moving to the next meeting, which is sort of implementation, right? “What do you need to implement that you’re going to do on your own and what do we need to implement that oXYGen may handle for you?” I.e., if they had, you know, a $500,000 brokerage account that they were moving over to us, do we need to do paperwork to get it over to us?
Michael: Like, are you presenting the plan in this meeting as well because, like, I’m thinking from the client’s perspective, “I gave you a data gathering, you disappeared into the strategy room. I’m now sitting back down with you for the first time since the data gathering meeting. So you’re laying a presentation and recommendations on me and then queuing up implementation all in one meeting?”
Ted: Well, that strategy session, we’re going through the high-level recommendations, right? You know, sometimes we’ll offer three recommendations and say, “None of these are bad ones, just which way do you want to go?” And then sometimes the client will say in the strategy session, “I really like this,” or, “I don’t like this.” That strategy is usually a two-hour meeting. It’s a longer meeting.
Michael: Oh, okay. I misunderstood. I thought strategy session was like an internal thing that you did. This is an actual…like, this is with the client in the room, you the advisor and the wealth plan designer?
Ted: That’s correct.
Michael: All three of you in the room. Okay. So, like, functionally, this is sort of the classic, “We’re starting to present the plan and we’re talking about what we’re seeing and what kind of directions you might want to go based on what we’re seeing on the screen.”
Ted: That’s right. That’s exactly right.
Why Advisors Tend To Fail By Overexplaining A Plan [31:45]
Michael: Okay. And, like, are you actually doing this, do you print a plan and bring it in or you, like, show an eMoney on the screen? Are you big Decision Center users? Like, how do you actually do that with the client in the room?
Ted: I generally move the plan into this strategy session as sort of a high-level executive summary, right? Again, we view our role… I think this is where a lot of advisors fail by the way. They feel their job is to explain the plan. We don’t. Like if I did the plan and I’m telling you that this is the human life value and this is the needs analysis and we didn’t hear the numbers, I’m not breaking down, like, how I figured out the whole needs analysis and human life value. If you ask me Michael in that meeting then I can always go back to eMoney and we can talk about where the numbers came from. But a lot of times for advisors, you’re the only one that cares where the numbers came from, right? You know, and this is where advisors basically get in their way a lot of times from helping clients achieve their goals. Sometimes it’s you. Because if the client paid you, most of the people want to know, “Okay, I paid you, tell me what I’m supposed to do.”
Michael: Now, every now and then we still have to deal with the classic clients that…you know, the proverbial or literal engineer who wants all their details. So is there some follow-up thing you can still give the ones who actually want that kind of depth or you try to talk them out of, “Hey, don’t get stuck in these numbers?”
Ted: No, no. Not at all. Look, you have one quadrant, which is the 25% of the people that are chemists, engineers, accountants, that if you can’t prove to them that A plus B plus C equals D they’re not going to do it.
Ted: Well, those people, we know that Michael, and we probably will get a smidgen to eMoney to say, “Just so you know, here’s how we arrived at the numbers.” But we know who those clients are, right? We know and you’re right.
Michael: Yeah, it’s pretty clear, like, eight minutes into the first meeting usually if that’s the style of the client. Or in the pre-meeting to set it up based on how they interacted with the firm. Right.
Ted: We know who they are, and of course, we’ll give them the full-blown plan. If they want it and they want to put it on their shelf and store it as a trophy, they can do it. But, you know, the reality is I’m just telling most advisors not all meetings have to be that way. And even some of those engineers, if you do a really good data gathering meeting and saying, “Look, we’re using all of your assumptions to get to the outcomes,” and you agree on those assumptions, you save a lot of time with those highly technical people because you have agreed upon set of criteria going into getting to the answer.
Michael: So meeting number four then is this plan implementation meeting. So you’ve already at least gotten some tentative agreement about what direction you’re probably going because that was the point of the strategy session. So now we’re sort of in the follow-through implementation phase. So investment rollovers, insurance policies, just, like, whatever the things are that they need now you’re queuing them up in this implementation meeting?
Ted: That’s right.
Michael: So how do you get paid for all this, right? You talked about that you go through this in some detail with clients. Like, what’s the business model and structure for you guys? Are you charging planning fees for this? Are you mostly focused on getting paid on the implementation side? You know, as we mentioned earlier you’ve got some monthly retainer work that you do. What’s, like, the revenue business model for oXYGen?
Ted: So it’s probably a little complex for the podcast but the reality is that we charge a monthly fee, and we have been since 2009, really for the technology. And it’s complex to get into. It took a long time to get squared away with our broker-dealer. We technically do the financial planning for free and we charge for technology
Michael: Because if you’re not sitting…because you are a broker-dealer affiliate, you’re not sitting on the RIA side, so charging ongoing advice fees has lots of custody and other planning regulatory implement issues. So structurally, you frame this as, clients are paying for essentially the technology portal, which is the ability to use eMoney and get account aggregation and get supported through your dashboard. And then your actual advice technically gets compensated from insurance and investment product implementations so that you don’t run afoul?
Ted: It’s only two things, it’s fee-based asset management, and then yeah, if we end up having to do term life insurance or whatever it may be, we are getting compensated for that. But largely, Michael, the revenue is really in the fee-based asset management and our monthly ongoing technology fees.
Michael: So can you talk about what those look like? Like, what have you landed at as a palatable monthly fee for, you know, having clients gaining access to eMoney and the aggregation and the rest?
Ted: On average I would say $100 a month. And that’s really…I mean, honestly, we probably should have been inflated it over time but that’s really where…it’s been stuck for many years. I don’t know why back in 2009. I can’t even give you a good answer on the podcast about why I started there. All I kept thinking to myself 8, 9 years ago is that, “If people would pay $99 a month to go to Life Time Fitness, they’d probably pay $99 a month to basically get access to my stuff.” And when I say that we probably have millions of dollars of those credit card fees, we do.
Michael: Yeah. Yeah, I mean, $99 a month times lots of clients every month all year long that adds up. And basically everybody is on that fee, or I guess everybody that’s using eMoney. But that’s pretty much all your clients because otherwise, they wouldn’t work with you?
Ted: That’s right. It’s the model so I would say the lion’s share of them, yes. I mean, obviously, there’s a few cases where you don’t have it for various reasons, but that is the model.
Michael: Okay. And then the rest is an AUM fee. And what does that…like, just sort of industry standard AUM fee with breakpoints? You know, what does your fee schedule look like on that end?
Ted: Slightly lower. It’s in that 0.75% to 1% range.
Ted: We obviously believe that, you know, we’ve got more value than a robo, but, you know, we’re not where I would say the wirehouses and banks are today, which seem a lot higher to me. But, you know, we’re fair. I think we try to be a fair fee to provide our own…the way that we’re managing the portfolios for the clients.
Michael: Okay. And then you said you do write some of the insurance policies so you get some compensation for term life insurance, you know, for whatever you get. Term is pretty commoditized and not terribly expensive these days. But you’re holding onto that revenue as well for just whatever they need when they implement it. You’ve got the relationship through your broker-dealer?
Ted: No, we don’t have our insurance through our broker-dealer. We basically use several outside places to place our fixed insurance business.
Michael: Okay. So like an outside broker general agent?
Ted: Yeah, an outside BGA, you know, FMO, IMO. There are a few places, Michael that we go direct just with our relationship with the carriers, and sometimes that helps us because we can help design products. You know, that can be impactful. And we have an employee benefits business, too. So for businesses, you know, we can earn for doing health insurance, although it’s not the business that it used to be. But we can do that when we need to.
Michael: Okay. And, like, structurally for the firm, can you give us some sense? Like, how much is monthly fee revenue, how much is AUM revenue, how much is the, like, insurance and employee benefits?
Ted: Yeah, I’d say 20% is our monthly fee revenue, 70% AUM, and then maybe 10% insurance, various other products.
Michael: Okay. And are you still doing much securities-related…
Michael: Business as well or the investment side is pretty much all fee-based accounts at this point?
Ted: Yeah, I would say it’s as next to nil with the exception of just some legacy accounts that are there. You know, it’s not our business model.
Michael: And are you…like, do you guys manage portfolios internally? Do you have, like, managed accounts that your broker-dealer makes available? Are you fans of, like, third-party TAMP platforms? How do you actually handle your…
Ted: Not a fan of TAMP platforms and we don’t turn anything over to anybody. We hired some CFAs and do everything internally. So everything is in-house. We don’t use anything outside of what we do internally.
Michael: Okay. So what does all this add up to in terms of the size of the firm? Like, how many clients do you guys have? What’s the AUM base? What does the firm size look like overall?
Ted: Well, we’re at about $1 billion right now of money we’re advising on. And, you know, the number of households right now, it’s around I’d say 1,500, 1,600, you know, because that average account size is in that $500,000 to $700,000 range. When we first started, Michael, it was smaller. You know, since and the model was in that $200,000 to $300,000 range but it’s upscaled itself.
Why Ted Refuses To Have Minimums At His Firm [41:13]
Michael: Yeah. Well, it’s one of the effects that I’ve seen for lots of firms over the years. You know, just when you get good at what you do clients tend to find their way to you, including some more affluent folks. And you don’t necessarily want to turn them away. And, you know, if you’re a popular advisor and there aren’t a ton of them, you know, lots of firms end out moving upmarket as they’re successful. You know, still to this day as I look at the landscape I know one of the big complaints in the independent RIA space is that so many of them have high minimums. And when I look at them what I see is like, I don’t see firms that set out to do high minimums, I see firms that attracted so many affluent people that they said, “Why not raise our minimums? We’re getting them already.” Because there just aren’t enough firms in the space.
Ted: Yeah. That’s why I love what we do as a model because I still don’t have minimums in the firm Michael. And I refuse and I will never, I will say it here and I’ll say it 10 years from now, I won’t have minimums in my firm. And the thing is is that my feeling is that if I look at my average age of my client in that mid to late 40s now and I look at the asset size that they have, I have such a huge growing book over the next 10 to 15 years. My book is not going to die off, my book is going to inherit and grow.
Michael: Oh, yeah. I mean, if your typical client is, you know, mid-40s or early 50s, they’re in peak accumulation years themselves. You know, kids are finally getting out of the house, their savings accelerate. Parents are in their late 60s into early 80s or so, so, you know, they’re just queuing up the point where the inheritances may begin as well. Like, it’s pretty powerful when you get clients that are still in net contributor, net saver phase.
Ted: Yeah, we love that. And that’s why, like, I just… And basically, I think one thing advisors forget and I won’t let people do it at oXYGen Financial is that, you know, we did get into the business to help these generations. And basically, a lot of these younger clients, too, I think people aren’t patient enough. They’re only looking at revenue today and they don’t see the forest through the trees about the revenue tomorrow. Because you might have a client that works with a technology firm that’s 33 that you may exit in 4 years, but you have to be patient and nurture the client. And we’re willing to do that. And a lot of firms aren’t because they set their minimums or they just say, “That’s not our client.” And that’s why, you know, we’re really making it happen in that space.
Michael: So can you talk a little bit more Ted about how you’re making that happen? Like, you know, 1,500 households, that’s just a lot of clients by sheer numbers. You know, you guys have been around 10 years. You know, I know you said you brought a few clients over with you from where you were previously, and we can talk about that transition in a few minutes.
Ted: No, I had no clients when I started here. Zero
Michael: Oh, so no one…no one came over when you originally broke away to go out on your own.
Ted: I had literally on September 1, 2008, when I opened oXYGen up, I had 0 clients.
Creative Ways oXYGen Financial Reaches Out To Prospective Clients [44:20]
Michael: Okay. So 1,500 clients in 10 years, I mean, that’s 150 clients a year. Like, that’s 3 clients a week for 10 years. Granted it doesn’t always grow quite linearly like that, it tends to be a little more exponential. Like, that is a lot of clients and business development. So can you talk about where 1,500, you know, 40 and 50-something clients, 30, 40 and 50-something clients come from? How do you get that kind of client volume?
Ted: Yeah, I think… Well, you know, this is what I enjoy most about the business. But, you know, when we opened up the firm in 2008, I really didn’t want to do any of the traditional marketing that I had seen in all my years at Ameriprise and American Express. And that was the old, you know, lunch and learns and client bring a friends and dinners, seminars. And so I had to self-teach myself at that time, at the time I say how all these digital media and social media work. But I thought to myself at that time that, you know, “This whole game of chasing people to do business, there’s got to be a way to get them to be able to chase me.” And so I spent a lot of time over the years now mapping out some sophisticated systems where you have lots of content and quality content that’s out there, that leads people down a funnel to want to come to your website if they want to engage in a meeting. And that’s really where our leads came today.
And the other thing I said Michael is that media makes sense. So way back in 2008, rather than doing the Saturday drive by financial advisor show, which I think are horrible by the way. I don’t mean to offend anybody if they’re on today, just the whole you know, “Hey, it’s the retirement symphony on Saturday.” I don’t get it. I’m sure it works, but what I started to do is what I call to be integrated programming. And Michael, back in 2008, I went on a sports radio show to basically be like their color commentary guy on money. And it turns out that a lot of people like integrated programming versus advertorial-type programming. And I still believe that today, and it’s where I continue to head my marketing.
Michael: So talk to us a little bit more about that. You laid out a whole bunch of interesting stuff right there. So, you know, you’re doing marketing around money issues by being a guest on shows that are talking about sports. Like, unpack this for us a little bit more. Like, what does this look like?
Ted: Let me say to everybody, the biggest flaw that people don’t understand about social media and media, in general, is that actually a lot of the people that get into this stuff don’t really care about reading lots of financial topics, nor will they. So a lot of people that are listening are like, “Well, my broker-dealer won’t let me do this and I can’t talk about securities here.” It’s like nobody wakes up on a Sunday morning and says, “Man, I really wish I could find a high-quality large cap value financial article today. I really wish I could find one to read today.” You know, people don’t say that stuff. People want to talk about people-type stuff.
So when I mention integrated programming, I go on a sports show even still today, and we talk about sports things that are happening that may involve some money. Like, “How is the city financing the new stadium for…you know, it’s a municipal bond for $500 million. And what does that even look like?” Or, you know, the coach signs a… Like a good example, Michael is on the tax law today. Coaches that make over $1 million at all these schools are starting to pay an excise tax on their earned money over $1 million. Or people are not going to be able to deduct all the charitable deductions they used to have for sports tickets for their college. Like, people want to hear about that stuff. So it is a financial topic but it’s integrated into the day-to-day stuff that people actually talk about in their lives, right?
Ted: Versus me going on and going, “Guys, this is a great year to start a Roth IRA,” you know.
Ted: I’m not saying people aren’t interested to hear it, it’s just like, you know, hearing somebody on the radio that’s basically like, “I want to show you how to never lose money in the stock market but always make it.” I mean, those shows are a joke. And they’re not really actionable. And what people want to do business with is people. So if you get on the radio and you’re like a normal person talking about normal stuff, people like it.
How oXYGen Financial Uses E-Books To Generate Leads [48:48]
Michael: How do you translate that to actionable, though, right? Because I’m imagining like, “Yeah, I’ve got a sports show I listen to on,” whatever, “Saturday mornings and, you know, this week they had this guy Ted on talking about how, you know, we’re hoping the stadium is going to come to the city but the city is doing this giant municipal bond offering. I have no idea what the hell that actually means but, like, I learned me something about how cities finance stadiums so that I can see the team.” Like, okay, which point do I call you with my life savings because you told me about stadium municipal bond financing? Like, how does that transition happen?
Ted: Here’s how it’s actionable. Most advisors have no call to action on their website for people to actually do something. And we over the years, and what I’ve written more than 1,000 of these are little e-books. And e-books are just like little giveaway books. So an example right now is you might have an e-book that says, “The five tax moves that you need to make here in 2018.” And probably nobody could write it better than Michael. But, you know, what happens is I finish a segment and the people on air Michael say, “Well, how do people get in touch with you?” I say, “Folks, look, we talked a lot about a lot of good stuff today. If you want to learn more, especially how to save taxes on your bottom line, go to oxygenfinancial.net, click on the e-book that says, “The five tax moves you need to make right now.” We’ll get it to you and somebody will follow up from oXYGen Financial.” You see what I’m saying?
Michael: All right. So they, you know, wrap up like, “Yeah, that sounds neat. I hate me my taxes so I’m going to whip out my smartphone and go to oxygenfinancial.net and grab this little e-book.”
Ted: Yeah. Or a month ago Michael it might have been, “Hey, go to the website and get the ultimate guide to cryptocurrency. Should you own Litecoin or Ethereum or Dogecoin or Namecoin or Bitcoin or which one? Go to the website. We’ll talk to you all about the do’s and don’ts and how not to get, you know, blah, blah, blah.” And, you know, that’s sort of that dialogue. Now, we’ve got to realize, every time you have a show, they also have a website where they’re trying to digitize and monetize their own content. So, on their websites, like, the Sports Radio, you have banners on there and other little articles where people can click through and read more, and then that takes them over to the website as well.
Michael: Okay. And so what are these e-books? Like, what do people get? What are you producing for them?
Ted: So an e-book, so everyone knows an e-book doesn’t have to be more than one… Don’t get confused by the word “book.” An e-book can be one page, right? So an e-book on us might be like you know, “The 10 things you should know when you’re filing FAFSA forms.” Or there may be an e-book on, you know, “Five ways to trim your budget here in 2018.” But basically, what we do on our website Michael is that people can request anywhere but 100 e-books. We don’t show them all at one times. And then once they do, we have a special marketing way that they get instant access to the e-book and then they can read it and have fun and whatever. But we never give them the e-book without getting their email and their phone number and their address.
Michael: I guess the whole point of this is getting their contact information?
Ted: Name of the game, right? And name of the game is you want the free stuff, we need to get the information. But we’re never calling anybody, Michael, who hasn’t really hit us, right? The only way that we’re calling you is if you came to the website or request information from us.
Michael: And so, I mean, like, these e-books, I mean, functionally, like, this could just be a one-page checklist, this could be like a two-page article I guess that some people would call an article but you’re calling an e-book?
Ted: That’s right. Yeah.
Ted: That’s right. That’s exactly right.
Michael: And so how does it work? Like, someone comes to the website and enters their information. Like, where does that go, how do they get their e-book? I’m presuming you don’t have a staffer who just sits around and waits to hit email replies to people.
Ted: We don’t. What I would recommend is what we did is that we basically created, like, a curtain. And if you think about it like this it’s like, if we have 100 e-books were giving away, and we won’t keep all of our e-books up on there so people just don’t try to take every e-book and copy them, is that once you request the e-book, the curtain drops and then all the e-books are right there. You follow what I’m saying? And then you can get whatever e-book you want. I know you only wanted…
Michael: So it’s like a little login area once they turn over their email address the first time?
Ted: Yeah, I don’t care, you can read them all. You know, I got what I wanted here so you can read them all.
Michael: So what, like, tools or technology do you use to actually make that happen?
Ted: Well, you know, we’ve used two tools. I mean, the main CRM system which we have an integration with is Redtail, but I also heavily use Infusionsoft because I like the marketing campaigns that Infusionsoft has.
Ted: And Infusionsoft is definitely a more highly technical software. It is a CRM system but it’s not the same…it doesn’t have workflows in it like Redtail would have.
Ted: Marketing, you can pre-program out I think a much cleaner what I would call to be an autoresponder. For people that don’t really know what that is on here, when you sign up for something and they send you, you know, an email every month for like 10 months, well, they’re not doing it monthly. It’s just they pre-program them, and then they’re sending them. I think it’s a better software.
Michael: So anybody who hits the website and enters their information, like, they get their e-book but you have now signed them up for some autoresponder email campaign where Infusionsoft is going to send them 10 emails over the next 10 months?
Ted: Yeah. In fact, many years ago, I think Michael and I are probably one of the few people that got to hear a guy named Ramit Sethi speak. He has a website called “I Will Teach You To Be Rich,” but still to this day, I love reading his emails because he’s so good at writing copy that I really learned a lot from him over time about how to write copy. You know, if you have ongoing campaigns where the copy is well-written, they won’t seem intrusive.
Michael: And so, I mean, is that what it comes down to? Like, just you’re out there on radio shows, you’re constantly trying to tell people to come back to the website and get the e-books, they sign up for the e-books, you start sending them emails over the next 10 months or however long and a bunch of them actually start replying like, “Hey, these emails are great, I want you to be my advisor,” or do you do other outbound stuff to them? Like, when does the listener actually get to the end of this and become a client that wants to work with you?
Ted: Well, as soon as they hit the website, somebody from here, we have a coordinator inside of Redtail because the lead goes into Redtail, and then they assign that lead out to an advisor, and then the advisor is calling them either that day or the next day. We’re very big on 24-hour, you know, we’re going to call you and say, “Hey, Michael, I saw that you requested a brochure on taxes and 529 plans. I’m just calling to see what you were concerned about or interested in.” And then usually they’ll say something like, “I’ve been listening to Ted on the radio for five years,” or, you know, or, “I’ve got this situation.” And then, you know, hopefully, we can book an appointment.
Michael: Okay. And you call them, you send them an email?
Ted: We always call.
Michael: You always call. So part of the requirements I guess when they enter their stuff is not just an email address but you ask them for, like, an email address and a phone number, and they’ve got to give both if they want their e-book?
Ted: Yeah. You know, look, and yeah, if they usually don’t answer via phone then we’re sending them an email and then we start them down the drip campaign if we can’t get in touch with them within 48 hours.
Michael: Okay. And so what’s the questions there. So when you’re reaching out to them, like, what do you ask them for, invite them to do? Like, “Hey, do you want to come in for a meeting to help with that?” Like, how do these calls flow? Because I’m just imagining from their end they’re like, “Yeah, I heard about your e-book. you know, entered my address into your website, which I may or may not have actually realized what was going to happen next.” And now they’re like, “Wait, who are you and why are you calling me again?”
Ted: Yeah, I mean, it happens. You know, I would call it, like, you know, the rule of thirds. You know, a third of the people, they did it, they’re waiting for the phone call. A third of the people, like, were kind of interested, and then you’ve got a third of the people that’s exactly what you’re saying. They’re like, “What’s up? I didn’t know someone was going to call me.” From time to time Michael, I will call the leads myself, which is really hysterical because sometimes people are like… You’d be surprised for advisors in your market. They’re like, “Ted Jenkin is calling me?” Well, I don’t know about that. I’m not, like, a celebrity or anything. But they’re just like, “I cannot believe that the owner of the company actually called me.”
Michael: Yeah. Well, and it’s powerful when they’ve heard you on the radio for however long and they’ve been listening to you over time and, you know, feel like they get to know you. And of the same thing in most forms of digital marketing. When you get a regular audience of folks that know you, you know, they may connect with you even though you as their stranger at the other direction, right? Like, you’re calling them as a cold call, they’re like, “Oh, man, I’ve been listening to you talk about your family and your kids for five years. How are your kids?” You’re like…
Ted: Yeah. No, it is really crazy. And what I try to do the best that I can in the firm too is that when I know those leads are coming in, I’ll try when I can and it makes sense to just stop in and say, “Hi, thanks for listening to the radio.” We also for many years here did a rock show, which was just like a morning, you know, Howard Stern like talk show that was called the “Regular Guys.” And, you know, people listened to that for years. I mean, Michael, I can’t tell everyone how much that when you decide to do something like radio and you spend a big chunk, $50 grand or $100 grand, you cannot underestimate the power over time of the brand and people still remembering even if you’re off the air how long that they heard you for. And that is part of what’s helped oXYGen’s brand name here in Atlanta. That, you know, we’ve been doing it for…I’ve never gone away from it for almost 10 years. And people remember.
I was in the grocery store the other day and a woman’s like, I have a jacket on that says “oXYGen” and she’s like, “You’re with oXYGen?” I said, “You could say that. Yeah, I’m with them, I kind of own the company.” And she was just like, “Man, I’ve been meaning to call you guys for years. I used to listen to “Southside” Steve and….” You know, and it’s just cool. Just don’t underestimate it. Don’t look at all that hard ROI. Hard ROI is not always everything when you’re doing things like radio.
How Advisors Can Get On Radio Shows [59:39]
Michael: So let’s dive in on that a little bit further, though. Because I was going to ask, like, how do you get onto all of these radio shows in the first place so that you can be color commentary person or be, you know, talking about stuff and have a chance to promote your e-book at the end? It’s like, do you get invited onto these things? Is this like a, find the right centers of influence? Is this just a, “Hey, you can pay to get on radio shows, it’s a marketing expense,” and you write a check? Like, what does this look like?
Ted: Well, I don’t think you have to pay to get on it, okay? Because I’m doing national TV now every weekend and I never paid anything, right? The whole thing is is that you have to be able to start to pitch the producers of these shows, that includes TV and it includes radio, with something that’s interesting, right? So if you’re in a city right now and you’re listening to this broadcast, go to your sports show, and I gave you two ideas in this show. One is the $1 million coaches and 2 is the tickets, where you’re not going to get the charitable deduction anymore. And you send a note into the producer and say, “Hey, look, I’m a local financial advisor, I love sports but I’m also pretty sophisticated with taxes and things like that. I’ve got a few things that would be really cool. I’m not sure if you’re looking for a guest for one of your shows.”
And they’re always looking for somebody if the content is interesting, you know. So you’re not going to go on there and say, “Hey, I want to talk about if the Dow is going to hit 30,000.” To be honest with you, it’s not that interesting, right? But if it’s interesting to…I know it’s interesting to a lot of people on here but, like, we’ve got 8 million pundits on TV that talk about that stuff. Talk about something different that’s interesting. Or, you know, in your city, people are more interested to know the places they can get half off on a bottle of wine or what place has appetizers for free on Friday night. This is the kinds of things that you need to be pitching them on.
Michael: But the way you get them back to, yeah, but you manage money and help them get to their financial planning goals and the rest is because it all just keeps routing back to, “And go to our website and get the e-book on such-and-such,” and now they’re in your marketing funnel and you get to call them and you get to email them. And if you do it with a high enough volume of people, low and behold, some of them start becoming clients.
Ted: Right. Here’s the basic premise, right? Nothing has changed in this business in 25 years in this sense. That the two reasons that most clients do business with you is they like you and they trust you. So anytime you’re getting into a medium, any public forum, you’re really after two things, can people like you and trust you? So you need to start with like, right? And if you’re likeable and you’re reasonably decent on one of these mediums, you can get a lot of people to do business with you. And that helps us fuel… I think that we’ll acquire probably 250 clients this year. That’ll give you perspective.
Michael: Wow. I mean, that’s just like a new client every business day of the year.
Ted: Yeah, yeah.
Michael: That’s a lot of people. And it’s all just the inbound cumulative effect of, they’ve heard you on the radio for years, you’ve got however many people on the mailing list because you’ve been accumulating it for years and you just keep sending them stuff.”
Ted: That’s right. Yep. And it is. That’s right. That’s exactly right. Now, we do a few other small unique things. I’m just not a big fan of, like, seminars so, you know, we’ll do some webinars during the year where we’ll do a tax webinar or things like that where people can come on and hear stuff. We have a unique way we go about what we do with referrals where I think most advisors make huge mistakes. But, you know, it’s just the way that we do it, and that all leads to I think, you know, high client acquisition.
Michael: Can you share a few of those other ones? Like, what else have you found that works from the marketing end? Because I think for a lot of us, that’s still where we struggle. Like, you know, I do this because I’m good at advice not because I’m good at marketing. But I think that’s the challenge point for so many of us.
Ted: I’ll give you the simplest referral thing here that we’ve been doing, you know, ever since I started the company, is that when you get referrals, okay, and I want you to recognize this basically in your own life, for all the referrals you gave last year, ask yourself what you actually got. Like, one is did you actually get a thank you? What might trump that is that you actually got a thank you card, which I’m sure you didn’t. And then something after that would be something small that would recognize that you did something good, right? So what happens is, because we have very strict guidelines obviously with FINRA guidelines or SEC guidelines and what you can do for a gifting purpose, you really can’t do that much.
So what we ended up doing, and this has worked amazingly over the years and you will get more referrals if you implement this is that we basically send fresh delivered food, and I’ll explain this in a minute, to the client who referred. We send it to their workplace after they referred someone. So it’s almost like if Michael referred me a client, I don’t want to send him a Yeti mug at home. I don’t want to send him a hat with the company name on it. Guys, you don’t want to do that. Don’t send him a fidget spinner in the mail.
What we want to do is we want to basically take, and I have a couple of places I do with here, I’ll give you a good example Michael called Da Vinci’s Donuts. They make little mini donuts, about 16 per pack. It’s only about $18 for the entire pack. They agreed to put our oXYGen frosting on the two middle Donuts so it says “oXYGen Financial.” Listen, they agreed that they will handwrite the card that says, “Dear Michael. Thanks so much for referring, you know, Alan Moore to me. I really appreciate it. We’re going to make sure we take good care of him.” And the reason…
Michael: So they handwrite the card on your behalf because…
Ted: Yeah, absolutely. That’s right.
Michael: …you’re not at the donut shop. So okay.
Ted: I go train the owner. I tell them, “We’re going to put the referral gifts here.” We train the staff for owners about how the oXYGen gifts work. So a staff person from here can just call in the name and address or, you know, type over an email saying, “Here’s what goes on the note,” and they send it. And the thing is is that you have to realize, at the workplace, and ask yourself this personally, when was the last time you got anything good at work except for Christmas time or holiday time where you get a couple of bad baskets from people that just I don’t even know what they’re thinking? They’re just like those nondescript baskets like “merry holidays.” When that goes there, you’re not likely to eat 16 donuts on your own. So what you do is you bring those donuts into the kitchen.
And the kitchen at work is like the kitchen at home. It’s the end-all-be-all a congregation place and then people are like, “Hey, Michael, where did you get those donuts from?” You’re like, “My financial girl or guy, you know, sent this to me.” “Pretty cool. Well, who do you work with?” And it begins the dialogue of, “Wow, my person never did that for me ever.” And what you want to do is you want to do it with local vendors that are really esoteric to your area. Find a great cookie place or a donuts place. Don’t send a mug with candies in it. Don’t send somebody a Dean & DeLuca basket. It’s totally not personal. We want local and personal that goes to the workplace.
Michael: Okay. I get the personal side. Like, why the local side? What’s the big thing about local in this context?
Ted: Because every single time I’ve gone local, I pick up another business owner as a client.
Michael: Because you’re giving them business. Sure.
Ted: And then I, say, “Michael, who do you have your accounts with?” They say they have it with blah, blah, blah, a big wirehouse. I go, “I can’t believe this. You know we’re both local business owners. Do you want to keep your money and the resources here and more local jobs here in Atlanta or do you want it going to New York or California,” wherever their headquarters are? And I say, “Come on, man.” And 9 out of 10 times I’ll get the business.
Michael: So it’s literally a networking opportunity and just the, you know, encouraging local business owners to want to buy local, you’re the local story.
Ted: Oh, yeah, Michael. I buy almost everything I can local and I tell the owners. I buy my office supplies from a company here that’s local called Perimeter Office Supplies. Now, I could go to Staples or Office Depot, but it’s not what matters because I’m a local business person in a local community. Even though I’m in a big city, how do I build my brand reputation? As a owner that cares about my community or one that doesn’t?
Michael: So how did you figure all this stuff out? Like, what was your background before oXYGen?
Ted: Yeah. So I started in the business with a company called IDS Financial Services. It migrated to a company called American Express Financial Advisors which in 2005 migrated to Ameriprise Financial. And I started out as a financial advisor for them. I built a really successful book. And then the way that if you wanted to become a vice president with the company, you actually had to give your book back. Oh, my God, I can’t believe I said that out loud. You had to give your book back to the company so you could become a vice president because vice presidents couldn’t have clients at all.
Michael: That was basically like that would be the management role and more income upside? Like that’s why you would seek to become a vice president?
Ted: You know, I’m not sure in retrospect. I’m not sure in retrospect but yes.
Michael: In theory at least. Okay.
Ted: In theory, what it was is you get into management and management could obviously, you could climb the corporate ladder. There obviously was significant upside potential for income. But at that time in my life, I really thought that I wanted to manage, and so I did from 1997 until 2007. I actually didn’t have any clients. And my last job there, I managed 800 financial advisors.
Michael: Okay. So you were teaching advisors and training advisors and dealing with that side of the business but got out of the getting clients part for a while.
Ted: Yeah, you would call me probably part practice management consultant, part marketing consultant, and part recruiter. And I was really, really good on the marketing side and I influenced a lot of stuff that happened at that company. But, you know, eventually, I realized I wanted to be an entrepreneur. And I could not do that in that framework.
Michael: So you broke away from a vice president job at Ameriprise to go be your own startup.
Ted: I tell you what, when you’ve got to go home and tell your wife, when I say you’re making a very high income and you tell your wife, “I’ve got a really good idea. I want to go back and make nothing but I think this thing will work.” You know, the funny thing is about oXYGen is that when I was thinking about XY Gen I was in a Chick-fil-A. This was back in 2007 when I was thinking about making the move and I was doodling on a napkin. And the doodle kind of looked like an O, and I was like, “Hey, O-X-Y GEN. I’ll just name it OXYGen.” And, you know, my wife was like, “You are literally insane. I don’t know what you’re thinking about.” And, you know, I knew at that time that I wanted to have a more significant impact on our industry and what we’re doing. And I thought if I could make it work, that I would be able to leave behind something a lot bigger than just managing some people.
Michael: So can you share a little bit more about what it takes to make that leap though? I mean, I’m just imagining in real time like, you’ve got a nice stable job at Ameriprise, you’re making good money at the vice president-level, you know, you’re actually going to your spouse and saying like, “So how about we walk away from all the money and I think I can get back to that point at some point, I think, I hope,” right? With all the stress that goes with being an entrepreneur. Like, how does that happen? How do you make that leap? Because I think there’s a whole lot of people out there that kind of think about that and just can never get to the point of making that leap.
Ted: So I think to the people that are listening, you know, I would tell you that one of the things, when you get on any salary job, is that, you know, I almost say you get addicted to crack, which means that you get addicted to the paycheck and you’re never really thinking about building equity in something that you own. And I knew that despite the fact that I would go backwards substantially in income, I started to think about both sides of the equation. Not just building a business where I can make cash flow like I was making at Ameriprise but also building something I could own, that I could give to my kids one day or I could sell. But something that might be, you know, bigger. And I think for everyone that’s on here, at some point you have to ask yourself did you really dream when you were a kid about being a manager at some nondescript company or did you dream about, you know…
Michael: It’s like, “Cue the office space video right here.”
Ted: Right, right, you know. And it’s like I was sitting there and I’m like…I mean, I thought I would dream one day about, like, being, you know, a big corporate person but I realized that, for me at least, you know, that wasn’t really my dream, that I had a lot more entrepreneurial blood in me. And, you know, at some point you have to say, “Is that really what my dream is?” And if you chase your dreams, I’ve no doubt for people out there listening to the podcast you can make them happen if you go all in. Don’t go halfway in, you’ve got to go all in.
Michael: So how do you get your spouse on board?
Ted: Arm-wrestle. No. You know, I think I at least had put us in a financial position where we had some runway. And that may not be the case for everybody. But, you know, what I told my wife is, “If I stay in this corporate job, the likelihood is that we’d have to move again, and we would be in another city three years from now making new friends.” And I share with her that both she and I grew up in neighborhoods where we knew the person that owned the pizza shop and the pharmacy. And there’s something about being a local business person when you really commit to it which is more than being a financial advisor. It’s being somebody who can make an impact on the lives of people in your community and your kids and the future. And that to me is more appealing and still is, than any amount of money I could make.
Michael: So it was kind of the promise of the opportunity to set roots?
Ted: That was big for us. You know, we had moved… IDS American Express I lived in Boston, I lived in Washington, D.C., I lived in Baltimore for three years, I lived in Cleveland for five and a half or six years. And believe me when I tell you that I’ve seen every city east of the Mississippi. And you know what? I didn’t want to be George Clooney on a plane, you know, for the rest of my life. There’s no way for me at least. I wasn’t seeing enough of my kids’ stuff, I wasn’t seeing enough of my wife. And no matter how hard I’ve had to work at this job, literally, you know, most nights I can be home.
Michael: Yeah. And what about just the sheer financial transition? Like, did you have to buckle down as a family as you were going from making, you know, VP manager salary to, you know, screeching halt zero? Or not even zero but, like, negative outflow. You have to actually put money into the business that you’re starting in addition to not getting anything out.
Ted: Well, talk about having to do your own financial planning, right? There’s nothing like asking yourself, “How would you live if you had zero money?” You can figure out real quickly, like, what things in your budget. So, you know, yeah, Michael, for the first couple of years we did staycations and we didn’t do vacation. We just didn’t. We didn’t travel like we did before. I cut Starbucks out for a couple of years.
Ted: Yeah, I know. Woe is me, uh? You know, I just…all the niceties that I had in that corporate job I basically…I cut them for two years. It was a rough going to build it, you know, no question about it.
Michael: Now, you weren’t entirely on your own as a solo when you broke out, right? Was your business partner with you at the time or did he transition later?
Ted: No, we both broke off. Myself and Kile Lewis.
Ted: We both broke off the same day. There were a couple of advisors who left but we had some pretty significant non-competes. And to be honest, we weren’t really interested in recruiting a bunch of people from our old firm. We wanted to build something new. So we never even went after trying to recruit people from the old firm. We just didn’t care. You know, we just wanted to build something new.
Michael: Okay. So you guys just made a clean break so I guess initially it was the classic, like, you’re doing everything yourselves and you’re serving the clients and you’re doing the behind the scenes work and then everything until you could hire or did you put some dollars in to try to hire some staff infrastructure around you from the start?
Ted: Well, we hired one what I would call to be, like, a utility infielder to start. You know, somebody who is you know, processing some paperwork. We had pretty quickly hired two people in here. So we did put, I can’t remember whether it was $300,000 or $400,000 but we put a significant…because you’ve got to remember I was spending $100,000 on marketing in my first year in the business. Talk about everyone on here about taking risk.
Ted: I spent $100 grand in my first year in this business on marketing.
The Best Place To Put Marketing Dollars To Grow Your Business [1:17:27]
Michael: So my God, like, it’s just a gargantuan sum for most advisors. Like, what do you spend on, right? For those who have the capital and want to get a quick jump start on the business, like, you know, where do you deploy a big chunk of marketing dollars that actually drives results and gets the business going faster?
Ted: You know, asking me that question here in 2018 is probably different than 2008, but at that time, I put heavy money into building my digital presence and my blog and radio. You know, today I think you can get a lot more surgical in what you do with a blog, a podcast, Facebook advertising, Instagram advertising. I think you get a lot more surgical with it. But at that time I knew I had to get the brand known in Atlanta while I built leads, right? I had to do both at the same time, which you need a public medium to be able to do that.
Michael: So you were, like, spending to get spots on radio shows at that point? You were, like, spending ad dollars to get people to come to the blog that you’re starting? I mean, what…
Ted: All direct commercials to go to the website. It was all 15-second call to action commercials. I learned a lot about writing copy for these commercials.
Michael: On radio, on…like, where were the ads? Where were you running all this?
Ted: Eighty percent radio.
Ted: And then what I was doing is I was doing a weekly segment on a radio station here that was a sports radio station that I joined the morning crew called “Mayhem in the A.M.” What a way to put your brand with them, huh?
Michael: “Mayhem in the A.M.” because that’s where I want to put my life savings.
Ted: Yeah. And I did by the way. But they had a really strong affluent suburbian Gen Xer following. The demographic of that station was ideal for what we were trying to do. And we went to all of their stuff, Michael. Went to all their tailgates, we were at all their outing, you know, and people got to know us really quickly like, “Hey, you’re the money guys on the sports radio.” Like, “Yeah.” And like, “Cool. I like hearing you. It’s different. It’s not all this stale stuff that’s out there.” Because everybody else is basically the Saturday, Sunday, you know, advertorial radio guy. “This is financial symphony to talk to you about how to retire early,” you know. And, you know, that stuff to me, people see right through that today.
Michael: So as you look at it today, knowing what you know now and knowing a little of how the world has changed now since when you guys were going out in 2008, like, I’m just curious how would you build it today if you had to make that clean break again?
Ted: Well, you know, it really depends on the compliance rules that you’re dealing with. This is where the fork in the road comes because if you had your own set of compliance rules, like you’re an RIA or you’ve got, you know, fairly liberal ones or you’re with a broker-dealer, I would be doing as much digital video live. I would be doing everything digitally with a really robust website that’s designed to basically make call to action.
Michael: So it’s all about getting people to your website, offering them something, getting their email address and phone number so that you can either call them or drip-market them. Like, that’s the deal?
Ted: Yeah. And I would work as hard as I could in building as many followers as I could on as many platforms as I could, you know, because… And I think probably, you know, you know this as well as anybody. I mean, when you have lots of followers, lots of good things can happen.
Ted: And we’re very focused on our digital strategy today to increasing the footprint digitally across all of our platforms, and are working on lots of unique things podcasting-wise and other things that will help us build out, you know, more brand, more people being like, “Wow, oXYGen is a cutting edge company.” And people like to know that we’re in the front of what’s going on not in the behind. You know, they like that.
Michael: Right. So where does it go from here for you? Like, what’s next?
Ted: So, you know, I think, you know, for me, which in some sense if you think about the way I view my own personal brand and then the brand of the firm is that I’m going to continue to increase my television presence. I go on CNN Headline News every weekend, and I aim to do more of that. I also am sort of creating our own podcasting channel now, Michael, which is that we have a podcast called “The Shrimp Tank” that we interview entrepreneur. We have a millennial podcast now that’s called “They Didn’t Teach You This.” And then I have a social media podcast that’s called “The Social Commute.” And using these podcasts to provide various streams of content through the various marketings that we do.
And then the last thing that I’m doing now is that I finished a book now that’s called “The 21 Day Budget Cleanse.” And I will tell most people openly on here, at the get-go of this that I Ted Jenkin personally believe that the next 25 years, that cash flow management for families will be just as important as asset management. So consequently, I’m about to launch something where people can hire a budgetologist. I mean, I hate to use this analogy but it’s kind of like when you get your hair cut you see a cosmetologist and when you want to drink at the bar you get a mixologist. And like, eventually these Gen X and Gen Y families struggle so much because of the lack of transparency over their cash flow, that you have people that are making lots of money they just don’t know where it goes. And just the fact that everything is digital and electronics today doesn’t mean that they’re better at it. So we’ve got a process to help folks through that, to become better at managing their day-to-day finances.
Ted: And that’s kind of where I’m headed.
What Ted Wishes He Would Have Done Differently [1:23:23]
Michael: Interesting, interesting. So as you look back, like, anything you wish you’d done substantially different in this journey?
Ted: Yeah. I think there probably was a time where I was interested in and I could have branded us out in more cities a lot quicker. But, like, I’m not even really in the recruiting game today. If there’s people that really wanted to be at oXYGen, they could call me but I’m not actively out there trying to hire 50 more people to work at oXYGen. You know, it’s just not the juncture that I’m at. I like being a boutique firm, but I really wish we had hired even more staff quicker. I think for advisors that are out there, you’ve got to understand if you’re giving people advice about their families and their businesses, give yourself your own advice and don’t be pennywise and pound-foolish. Get the staff in where you need it so you can leverage yourself to go grow your business. And that’s what grows your income. And I wish we had done even more of that quicker than we did it. I think we could have grown faster.
Michael: Okay. Interesting. As we come to the end here, this is a show about success. And one of the things we have always observed is that the word “success” means very different things to different people, sometimes different things even to the same person at changing stages of their lives. So as someone who’s built what most people would objectively call a very successful business on the business end, I’m curious just for you personally, how do you define success from here?
Ted: You know, for me at this juncture, Michael, it’s really peer-driven. And I view the people who I respect a lot in this industry about what your peers and, you know, this media that’s starting to recognize advisors, not, like, the best wealth manager but, like, having made a significant impact on our industry. It’s the reason why I’ve taken a lot of bullets, you know, doing social media because we were one of the first ones to really do it and do a lot of it, but I’m trying to help pave the way so more advisors can better their professions and help more clients. And, like, that to me, you know, being on those kinds of lists and being involved with those kinds of names is very gratifying to me. Now, the money at this juncture, not so much, that other stuff, a lot.
Michael: Well, very cool. Thank you for joining us here on Financial Advisor Success podcast to share some of that story and journey.
Ted: Thanks for having me on.