Summary: As we enter the last quarter of 2019, Patrick Brewer does a postmortem analysis on the biggest mistakes and lessons learned from this year. 2019 wasn’t all about mistakes. We have launched a brand new business (Model FA). We’ve supported many advisors on their path to growth. We have added amazing professionals to our team. And yet, when you are moving fast, you are bound to make mistakes. Read on for lessons learned!
Most of the time we only talk about our wins in business. Everything looks amazing on the outside but on the inside … it’s total chaos.
My business is no different. I’ve made a ton of mistakes this year and have learned a valuable lesson from each one of them. And today, I want to share my biggest mistakes with you, hoping that you will glean some wisdom from my failures.
For context – these mistakes span my 3 businesses: Brewer Consulting, Model FA, and SurePath Wealth. I’ve provided a description of each:
Brewer Consulting – a marketing company focused on helping fiduciary financial advisors add more clients to their practices.
Model FA – a community, resource hub, and acceleration (coaching) platform designed to help fiduciary financial advisors build a lifestyle practice faster than ever before.
SurePath Wealth – a multi-specialty wealth management firm with a unique operating structure that allows financial advisors to merge in and maintain equity ownership in their business. We have offices in multiple states and service clients all over the country.
OK, now on to my top 9 mistakes of 2019…
One benefit of being a visionary (seeing the future) is being able to predict the general direction in which your business needs to evolve and change based on shifts in consumer preferences, competitive landscape, etc. But (kind of) being able to predict the future also presents some serious challenges.
Have you ever seen a superhero movie when the main character realizes they can fly?
Initially, they are really excited. They lift a few inches off the ground. Everything seems fine, no cause for alarm.
So, they decide to push it a little further and take their new superpower for a spin around the city. What could go wrong, right?!
The next things you know, they are flying through downtown Chicago at 300 mph and wind up smashing through a window of a high-rise office. The crowd runs out, screaming. Maybe being able to fly isn’t such a great deal, after all.
Pretty much the same thing happens when you have visionary tendencies. Minus the ability to fly, of course.
Being a visionary allows you to see the full orchestra before the sheet music has even been written (which is a superpower). That’s great — until you set about hiring the 3rd chair violinist before you’ve started selling tickets to the show (kryptonite).
That’s what happened to us in early 2019. I hired some fantastic people, but those decisions came too early. In some cases, we caught our mistake pretty quick. In others, it became a game of musical chairs. This wasn’t fair to the people we brought on. It also drained firm resources while we were figuring things out.
Lesson Learned: Control your superpower. It’s your #1 strength and your #1 weakness. Since early 2019, we have implemented the hiring methodology from the book “Top Grading”. We also have two other people on the team who are responsible for resource allocation / interviewing, so that we get multiple opinions and don’t hire too quickly. I still get to use my superpower … but the team tells me where to fly.
This one ended up costing me around $30,000. Not a small mistake.
Very long story short, we hired a CPA to help with tax preparation at SurePath. He had a solid background in tax, all the right credentials, and seemed like a reasonable human. At the time, we only had 23 tax returns that ranged from low-to-moderate complexity. We hired him at a salary of $55,000/year, figuring that we were comfortable with losing money on taxes (temporarily) so we could use it as an up-sell and value-add for wealth management clients.
With the hiring decision and the onboarding behind me, I took my hands off the wheel and focused on other areas of our business. Every 2 weeks, I’d get a status report on our tax clients. So far so good …. right?
What I didn’t know at the time was that the status reports were fake. No actual work was being done.
In March, I started to get emails from our clients, “Hey Patrick, I haven’t heard from TAXGUY. What’s the status?”, “Hey Patrick, TAXGUY never followed up on the email I sent. Can you check on that?”
Turns out our friend, TAXGUY, was traveling around Central Asia, pretending to work on client returns and cashing our checks. Luckily, I have a CPA friend in town. She had capacity for additional returns, so we paid her to fix the issues. It didn’t change the fact that we had spent around $30,000 for someone to pretend to work for 6 months … But at least we got those returns out on time.
Lesson Learned: Trust but verify. Since then, we have partnered with a local CPA and delegated all our client returns. It took a while to find the right fit, but it’s been working very well.
Remember this blog post? There’s a reason we could speak in detail to the dangers of automating the wrong parts of the client experience…
In the beginning of the year, we became obsessed with figuring out the “best” tech stack for scaling a wealth management firm.
Spoiler alert: What we eventually realized is that it’s not about tech at all. Client experience is all about process and methodology.
During our tech binge, we decided to automate the client service emails we sent out each quarter. In theory, it sounded like the right move. It would increase efficiency by allowing clients to schedule their own quarterly meetings. It would reduce the number of “check-ins” needed. We thought clients would be impressed.
But we forgot the reason WHY client’s hired us in the first place … to provide a personalized, high-touch experience. That’s why they had selected a boutique financial advice firm! They didn’t want automated emails, no matter how beautiful and sleek.
After a few rounds, we noticed that the open rates on our automated emails were much lower than expected. The number of quarterly meetings booked was in the 5-7% range, which was also very low.
And so, we ditched front-office automation completely and re-focused on spending more time meeting, talking with, and emailing clients. We even mail them things on occasion 😉
Lesson Learned: Understand actual client preferences — before you make business decisions. Since then, we’ve built a collaborative client experience platform. It allows us to manage the mid/back-office with a high level of efficiency. It also frees us up to personalize the front-end client experience. This approach gives us the best of both worlds: an incredibly efficient business, and a world-class, high-touch client experience. The shift happened when we started to view wealth management as a never-ending commitment to project manage people’s financial lives. It’s not about technology. It’s about building the right accountability and collaboration systems.
When preparing for the launch of the Model FA, we wanted to create a story video to explain the challenges that financial advisors face in our industry. If you haven’t seen the video yet, check it out here (it’s pretty great, I may be biased though) ==>VIDEO
At first, the video seemed like a great idea. It would reinforce our positioning in the market, tell a story that the community needs to hear, and add credibility for our new brand. All good things.
What we didn’t realize is that producing this type of video is complex. You have storyboarding, copy, design, illustrations, video animation, post-production, voice-overs, etc. It’s no joke, and the costs add up quick. I think we spent about $14,000 on it? Had we not done a lot of the work ourselves, it would have been closer to $40,000.
But that wasn’t the worst part.
Based on “watch time” metrics, impromptu videos I’ve recorded in my car on my cell phone have actually outperformed this expensive video by a margin of 4 to 1. It’s crazy.
Lesson Learned: Don’t invest in high production quality videos (at least not until you have a separate line item in the P&L for “brand”, and your budget is over 6 figures). DIY and low to mid-budget videos are sufficient for most companies. Your audience wants authenticity, not expensive production.
At the beginning of the summer, my attention drifted away from our products and towards our competition (i.e. other consultants and coaches in the financial space).
If you know me, you know that I am insanely competitive. It’s a blessing and a curse. My business is my castle. I’m constantly building walls, putting archers in the towers, and loading flaming rocks in the trebuchet … just in case I need to go to war.
I’m always scanning the battlefield for enemy troops, so I noticed a few (little) armies showing up on our lands. Initially, we started to beat the war drum … Let’s destroy the competition! Take their gold! 🙂
But after a few weeks, we decided this wasn’t the most productive course of action. The best way to win wasn’t to compete. It was to make your competition irrelevant by creating the best possible product. We already knew this of course … just needed a few weeks to re-internalize it.
Lesson Learned: Get laser-focused on product. The rest will sort itself out.
This one stung.
You probably haven’t seen a lot of coverage of my companies in the media. I tried to scramble and beat my head against the wall for a while, until I realized it’s because I’ve missed the boat on Twitter.
You heard me right, friend … Twitter.
The news media in the financial advice industry rely heavily on Twitter to see which advisors and consultants are “influential”. I’m not sure why, but it’s definitely their platform of choice. Just check out the latest Investopedia Top 100 advisor list – it’s all Twitter people.
At this point, Twitter is a pretty developed social network. As a newcomer to that platform, it would be difficult for me to create “influence”. The only way I could increase my followers would be to get re-tweets, likes, and shares on my content from other consultants and thought-leaders … and that’s not going to happen (competition).
To compound the issue, I’m not a very interesting person to the media. I’m a 34 year-old bearded white male who’s trying to build companies in financial services … I won’t be making the headlines any time soon 🙂
If I had a do-over, I would have doubled down on Twitter when we first started the company.
Lesson Learned: Evaluate the strategic value of different social media platforms when starting a new endeavor. Since I’ve made the connection between public visibility and Twitter, I decided to stop beating my head against that particular wall. We have something in the works that I can’t disclose yet… But let’s just say you would recognize the name of the advisor potentially joining SurePath as Chief Communication Officer.
Even though our businesses are synergistic, running more than one is incredibly difficult. The early part of 2019 was pretty rocky. Today, I have a team of all A-players sitting in the right seats … but that’s not where we started.
The hardest part for me was balancing my passion for seeing other advisors flourish against making the time to apply proven strategies in my own wealth management firm. I wanted to grow the SurePath Wealth presence across the country … but I also wanted to help advisors grow.
That isn’t an easy act, and I got it wrong several times this year.
On the one hand, I realize I could make A LOT more money if I put all my time and energy into the wealth management business. It’s the logical choice.
But my passion to help other entrepreneurial advisors thrive keeps me tethered to the products and services we’ve built at Brewer Consulting (and now at the Model FA). It’s a conflict, and it will always be a conflict. No way around that.
What I’ve learned is that there’s no perfect answer to where and how an advisor should run their business. Some are better off on their own. Some are better off when they are part of a larger firm. We plan to continue offering both options, because we’ve found both to be profitable and enjoyable.
Lesson learned: When you see opportunities everywhere, focus becomes a superpower. You must learn to choose which opportunities to pursue and which ones to pass on.
While not quite a 2019 mistake, I think it’s still relevant.
When I started Brewer Consulting in 2017, my RIA was growing at about $2MM in AUM per month. For the first few months, I was able to manage both companies. However, it quickly became apparent that I either had to stop consulting, or put a hold on organic growth in the RIA.
I chose to grow and scale the consulting firm.
That decision put me on the defensive in the wealth management firm and slowed our growth rate dramatically. I had to transition client relationships to another advisor in our firm, which took time. I also struggled to continue business development for SurePath Wealth due to the influx of consulting clients.
After about a year, the situation stabilized. During 2019, we’ve grown past $60MM in AUM. We’ve re-committed ourselves to develop people and processes that help SurePath Wealth run like clockwork … but that transition wasn’t easy.
In hindsight, I should have brought on a partner earlier. I could have used someone who could develop the business locally while I focused on getting the consulting firm up and running.
Lesson Learned: Don’t commit to a new business endeavor until your current business can operate without you.
I truly believe that a significant sacrifice is required in order to build a business. I don’t think that “build it from the beach while working 20 hours a week” is a real thing. But hey, different strokes for different folks.
That said, you can also sacrifice too much — and burn the relational capital you’ve built up with your family and friends.
Over the past few years, I’ve definitely leaned pretty heavy into work. My goal was to build the infrastructure needed to remove myself from the day-to-day operations.
The funny thing about that strategy is that it’s a double-edged sword. The more infrastructure you build (products, team, overhead, etc.,) the more time, energy, and money you need to support it on an ongoing basis. As an entrepreneur who is building for enterprise value (not cash flow), this is something I’ll have to constantly balance.
There were several times this year when I’ve lit some relational capital on fire. I plan to be better about this in 2020 and beyond.
Lesson Learned: Don’t sacrifice the people you love in order to build your business. Otherwise, there may be no one in the stands to celebrate your victory. To help enforce balance, I’ve given up control of my schedule to an assistant. We have also created specific “off-limits” times that I can use to re-charge and spend time with people I care about.
The biggest takeaway of the year for me was simple.
Nothing will ever be perfect.
Something will always be broken, personally and/or professionally. But I can strive to work on it, commit to get incrementally better every day for my friends, family, team and clients.
I invite you to do the same.
We have just rolled out a program called the Model FA Accelerator (application review started on October 1st). The 2020 Accelerator cohort will go deep, find out who they are, what they are building, who they are building it for. They will follow a step-by-step process for growing and scaling an advisory firm faster than ever before.
And you can still join this elite group of 80 advisors if you submit your application today.
I’ve been personally building this program for 9 months. It’s the best thing I’ve ever created. I am so excited to share it with you.
If you want to learn more about the Model FA Accelerator, click on the link below and apply. There are only 80 seats available. Spots will fill up fast, so get your application in today.