Between Now and Success

Hey, welcome to my first Friday Podcast. Today, I share five ideas and tools that will help you plan better, market better, and get more profitable results from your seminars and events.  For free access to the tools and links I mention in today's show, visit www.belayadvisor.com/fridaypodcast   

Have you planned as effectively for the transfer of your business as you have for the financial lives of your clients? In part II in our series on succession planning, (see part I here with Tim Kochis), my guest Jay Hummel continues the conversation and we discuss the operational and financial details of making a smooth transition. Jay, along with Tim Kochis and Eric Hehman, is the co-author of a new book on succession planning titled, Success and Succession: Unlocking Value, Power, and Potential in the Professional Services and Advisory Space. As a senior VP in the corporate strategy group at Envestnet, (see podcast with Envestnet founder Jud Bergman), Jay works closely with the firms largest RIA's. Prior to Envestnet, he was president of a large RIA.

Succession planning is a critical yet woefully neglected business necessity that could cost advisors millions of dollars if not properly handled. Today’s guest, Tim Kochis, is the co-author of a new book on succession planning titled, Success and Succession, and we dive into the details of how to effectively do it. Tim is a legendary wealth advisor who co-founded Kochis Fitz, a multi-billion dollar RIA firm, and guided it through a merger to create Aspiriant, one of the country’s leading wealth managers. Along the way, he held numerous leadership positions within the industry and has been recognized with several prestigious awards including the inaugural Schwab Impact Award and FPA’s P. Kemp Fain Award.

Jud Bergman, the founder of Envestnet, has been at the nexus of every major trend happening in the financial services industry for the past 15 years. As a serial acquirer, Jud and his team have built an industry behemoth. With recent acquisitions including Yodlee for big data and analytics (pending), FinanceLogix for financial planning, and Upside for robo advisor–coupled with its many existing businesses–Envestnet has a window into almost every corner of what’s happening in the advisor space. And in today’s show, Jud and I talk about all of it and what the future holds for financial advisors. Seven Things You’ll Discover in This Episode How the value proposition of financial advisors is changing and what the successful advisor of the future looks like. The main way the advisor of the future can improve their productivity and grow their fee-based practice at 2.2 times the rate of the average advisor. The three things we can thank robo advisors for. One is they’ve set a market rate for commoditized investment advice. The second is they’ve demonstrated the value of aggregated data as a backbone to a financial plan. And the third is they’ve proved the value some investors place on 24/7 access to their account data. Specific ways the promise of “big data” and account aggregation will help advisors and clients make more money and reach better outcomes. What the implications for advisors are when Jud says, “We’re seeing lots of evolution, lots of transformation, lots of evolving towards different pricing arrangements for the advisor.” How to conquer the digital divide that separates advisors stuck in an old business model from advisors who are well-equipped to work with the digitally savvy clients of the present and future. Why having an offering for millennials that may not fit your normal account minimum is an essential ingredient for the successful advisor of the future.  

In this fourth and final episode in the millennial advisor series, we discuss an area that was not addressed with our previous guests. The other guests were all running their own independent RIAs and generally targeting other young professionals with non-traditional business and pricing models. But what about millennial advisors who are pursuing a traditional career within a well-established RIA? What’s their story? How are the established RIAs finding, managing, and retaining talented young advisors in their business? To find out, I dialed up my friends at United Capital, one of the country’s largest RIAs, and had a great conversation with Jarrod Upton and Brandon Moss. Jarrod and Brandon are two of the firm’s leaders and they work with their young, up and coming advisors.

Today’s guest, millennial Alan Moore, started out working for a traditional RIA firm, then started his own “location independent” RIA while concurrently developing other entrepreneurial sources of income. Alan and I discuss how millennial advisors think, act and make money differently than traditional financial advisors and what that means for the future of the financial advisory profession. Traditional RIAs can benefit from hiring a millennial advisor and injecting some “millennial thinking” in their business.

MILLENNIAL FINANCIAL ADVISOR JAMES OSBORNE STARTED OUT ON A TRADITIONAL FINANCIAL ADVISOR TRACK then he became disillusioned. He noticed there wasn't much difference in the services he provided to a client with a 3 or 4 million dollar portfolio versus a client with a half million dollar portfolio. As he told me, "It started to feel that the fee structure was not based on what we did for people or the value proposition, but was really based on ability to pay." So what did he do? He left the traditional RIA, started his own firm, and began charging a flat fee of $4,500 per year, which includes financial planning and investment management services. Today, after just three years, James has about $100 million in AUM, roughly 50 clients, and is earning a nice living running a lifestyle practice in the foothills of the Colorado Rockies. If you do the math, you'll notice his fee comes out to about 25 basis points on $100 million in assets. That's equal to what the average robo advisor charges but in James' case--it also includes personal financial planning directly with him.  He's beating the robo advisors at their own game! His pricing structure is just one of the many ways he's reimagining the financial services industry. We discuss them all in the podcast. This is the second in my series on how millennial financial advisors are shaking up the industry. Be sure to checkout the first one with Brittney Castro--including her finance rap video.  

MILLENNIALS GET A LOT OF PRESS AND THERE'S GOOD REASON FOR THAT. They’re over 80 million strong, they’re digitally savvy, and they tend to think and act much differently than earlier generations. In this new series of podcasts, I interview several leading millennial advisors and explore their business models, their thinking, and how their cohort may reshape the financial industry over the next 15 years. Although there’s no definitive start and end date for this generation, it’s fair to say they range in age from about 35 to as young as 15. You may think they’re too young and too few in the business to have an impact on our industry. In the short-term, that’s true. But long-term, they’ll cause a titanic shift in how financial advice is conducted. As I spoke to these millennials, it’s clear—they’re smart, articulate, and definitely not your “traditional” RIA. They have different business models. They price their services differently. They market differently. And they’re not afraid to call out what they see as “problems” with the way financial services is structured today. I thoroughly enjoyed talking to these advisors and I know you’ll enjoy listening to their stories. Keep an open mind because they are the future of our business. First up is Brittney Castro, a talented and innovative RIA from Los Angeles. Brittney is a CERTIFIED FINANCIAL PLANNER™, entrepreneur, personal finance expert for women and Founder & CEO of Financially Wise Women. She specializes in working with busy, established professional and entrepreneurial women who are passionate about life and want to finally understand money—how to manage it, save it, invest it, and protect it—in a fun and simple way.  

A relatively small number of RIA firms have grown faster and more profitably than their peers in recent years, according to research from InvestmentNews and BlackRock. Dubbed "Elite RIAs," these firms have cracked the code and implemented strategies, tactics, and "ways of doing business" that propelled them to the top. On average, these Elite RIAs have > $500 million in AUM, $5.8 million in revenue, 13 full-time employees, 365 active households, and revenue per client of $14,327. In today’s episode, Hollie Fagan, head of BlackRock's RIA business, and I discuss the specifics of what these leading RIAs are doing to scoop up the lion's share of industry assets.

You could be a highly competent financial advisor but if few people know about you, you’ll starve for new business. There are two main ways to become known to your ideal audience. Develop the audience yourself through marketing. Show up in the middle of somebody else’s audience and display your value. I can assure you, the second option is by far the most effective both in terms of time and money if done correctly. In today’s episode, we discuss the mechanics of how to show up in the middle of a media outlet’s audience and share your voice, your opinion, and your insights to a large group of ideal prospects who are hungry for your wisdom. My special guests are Jim Pavia, senior editor-at-large at CNBC Digital and Fred Gabriel, editor at InvestmentNews. Jim and Fred are two of the financial industry’s top journalists and they share an incredible number of tips and insights on how to work with the media to get your message out.  Visit www.belayadvisor.com/media-marketing to read 9 tips from today's episode.