Financial advising with a

S2 EP08 Career Management  and Recruiting for Financial Advisors with Ryan Shanks

11.04.19 | 0 Market Transform

My guest today is Ryan Shanks. Ryan has over 19 years of experience in financial services. He is the Founder & CEO of FA Match, a digital career management platform for financial advisors. He is also the CEO of Finetooth Consulting, which provides transition consulting, outsourced recruiting and succession planning to financial advisors within the United States. He is a member of the Board of Directors for Riskalyze, a FinTech company that developed a risk tolerance score for investors and he is an active mentor with Everwise.

In this conversation, we discuss how the advisor is always the product of the firm. Advisors bring enterprise value to the firm. As an advisor, if you don’t know your value you may be more passive in your career than you should be. Ryan shares about why asking the question, “What is your purpose and what do you want to be doing in this business?” is an important step in knowing if your current firm is the right place for you.

Don’t miss one of our favorite moments, when Ryan talks about advisors being hired for the wrong role. Ryan mentions that it is a two part issue, the firm needing to fill a seat, but not knowing the advisors strengths beyond their credentials. He encourages the firm to understand the strengths of the advisor to align them in the best fit role at the firm. Firms also need to be open to the new perspective the younger generation can bring the firm.

As you think about this conversation, if you are a firm leader, what are you doing to be sure to recruit advisors that bring more than “just a heartbeat.”  As a young and new advisor, how are you actively practicing to learn how to market yourself to the independent firms?

Looking for more ideas about creating value for your financial advice practice? Join the Model FA advisor community, where you will find expert advice on how to launch, grow, scale, and transform your firm.

Resource Links
FA Match
Finetooth Consulting
Connect with Ryan

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FULL TRANSCRIPT

Ryan Shanks: 00:07 I will tell you though, in fairness, there are some advisors that sit in those seats and that's exactly what they want to do. Like they want to be a supporting role. Yeah. I don't want to be the lead actor and that's totally okay because you need that support infrastructure. So it's just a function of figuring out like what's your purpose, what do you want to be doing in this business and then align with it.

Patrick Brewer: 00:33 Hey everyone, I have Ryan shanks in the podcast studio today. Ryan loved that you made it to Austin, man. How's it going man?

Ryan Shanks: 00:41 Very well. Thank you.

Patrick Brewer: 00:41 Awesome. Super excited to have you here brother. I'm really, really pumped to talk about the topic related to, uh, advisers and what their options are as far as considering wirehouses captive Beatties independent BDS, you know, just going fully independent. I know that you have a wealth of knowledge and, maybe where we start is just getting a sense of like, you know, what's your background? I know that you've been like a sports agent pretty much for financial advisors for a number of years, and you started, a tech company called FAA match. So I think it'd be just useful for the listeners to get a sense of like who you are, where you came from, what's your focus now. And then we can kind of dig into some of the real cool stuff around what advisors are doing.

Ryan Shanks: 01:15 Yeah, no. And listen man, thank you for having me. Austin is one of my favorite places, spent 12 years here. I remember about half of it. Um, but you know, my journey has been, you know, I got into this space doing financial advisor recruiting about 20 years ago and I cut my teeth, you know, co calling financial advisors have today calling financial services companies the other half in seeing if I could match the two together to make money. Love it. And that's kinda how I got into it. Um, and, you know, and, and I realized early on, like advisers were being told who they should talk to and weren't being asked what was missing. And so that really kinda created my calling to be like, gosh, I really want to represent the advisor's side of the ledger. Um, they have the trusted relationships with the clients. And so that's really how I, I, you know, kind of evolved. I worked in two a broker dealers running their national recruiting, uh, their MNA business, so helping, you know, O S JS grow and then I decided to spin out and create my consulting business where I was like, I'm going to be a sports agent.

Patrick Brewer: 02:12 How long were you independent for as a consultant ?

Patrick Brewer: 00:02:22 So, um, why don't you, let's just get started. I don't usually do like the regular interview style podcast just because I like to kind of focus on the meat of what people are working on and just their direct contributions and you know, help them, you know, help the audience apply their knowledge. But I think in this case it would make sense just for the listeners to, to get an idea of like where you came from, how you think about things and just some of the, the stuff that you've worked through and where you're at today. I think it's a cool story. So I'm hoping it's a cool story cause I don't really know it, but um, I'm guessing it is. So why don't we start there man. Like let's not from maybe like birth to now, but just like maybe, maybe talk me through like your start in the financial services industry and then we'll just kind of see where it goes.

Jason Wenk: 00:03:07 Got it. Yeah. Cool. So happy  to share, you know, the story and I think, um, it is funny, you know, to give you like a, a story before the story as having dinner with an advisor. This may be a couple of weeks ago and you know, he's fairly well known, we'll say like in the twitter world and lots of followers and really, really lovely. A guy like great human, just really, become a friend. And I really enjoy, um, you know, kind of kinda chatting and hanging out with them. But, but it was interesting, you know, you've got to send to me. Um, you know, we knew that there's some conferences that I was going to be at.

Ryan Shanks: 02:14 I am still running that. I mean, so I started that business in 2006 and that's where I said, you know what, I'm going to flip kind of traditional recruiting on its head instead of representing the firm, I'm going to represent the advisor. And that's where kind of the sports agent thing came into play. And so it's an exclusive engagement that I do and I work with an advisor, so like we're not stepping on anyone else's toes. Um, and that's, I mean that's how I've really gotten into the space and always had kept my ear down to what's important to the advisor. Hmm. Cause I feel like when you look out into the ecosystem, firms are sort of commodities. They come in, they go. But that advisor in the sticky relationship with the clients is like that's the core.

Patrick Brewer: 02:50 Yeah. I feel like if you're not independent too, then you're just kind of Hawking whatever the, the employer or the broker dealer or whatever it is has to offer. Right. You can't really represent your client in the right way. Love, love the fact that you went independent. I mean, what options do advisors have in today's environment? I mean, you've been at the game for awhile now, 10 plus years. I mean, what are you seeing as far as, the trends in advisor movement? I mean, we've seen more people flow to the independent broker dealer channel. We've seen more people just stick with the wirehouse. More people just go and fully independent. Like what are you seeing in the marketplace and what are you recommending?

Ryan Shanks: 03:21 Yeah, I mean it's, it is all over the map. And so, you know, first of all, there's not enough new advisors coming into the business, so we're going to end up dealing with a very top heavy market, which we're already starting to deal with. So continuity is like, that's the big theme everybody's talking about. I'm going to buy you out like you're older. So it's really trying to figure out how do you bring people into the early side of the business. These wirehouses, banks, insurance companies have got that training infrastructure. So it's almost like a necessary evil, get into the business, learn the business, and then ideally if you want to spin out and kind of put your own spin on it and call it your business and serve your client your way, you have those options. In terms of trending, and what I'm seeing is it's, it's been interesting for a while the capital that's coming into this space from really creative avenues.

Ryan Shanks: 04:05 I mean, I've innovated interface with private equity, family offices. Uh, you know, there's companies that are coming out and they're really propping money in and saying, I don't really need to be controlling. I just want to help you scale. And then in terms of advisor evolution and movement, it's really interesting. We've been tracking stats and we're seeing, at least from our platform that the largest number of adviser users that are registering are with an RIA interest and they're looking at leaving the RIA. So when I start speaking about that, they're like, well I've, you know, I'm servicing 150 million, I'm making cash compensation to service them, but I have no equity. So I keep bringing clients on and growing the company. I just make my cash cop and I really want participation.

Patrick Brewer: 04:47 So these are salaried or profit share advisor revenue, shared advisors that are not equity owners in the firm and they're like, why am I doing all the work and not really reaping any of the, that's a value, the enterprise value.

Ryan Shanks: 04:57 Right there in that really in between space where they just, they, they don't have the confidence and the wherewithal to go and leave and build it themselves. So they're like, I'd like to take the clients that I'm working with and go find another firm, but one that's open, like we will allow equity participation.

Patrick Brewer: 05:12 Yeah, we've actually created a model that facilitates that and I'm sure there's tons in the space. I mean basically allowing advisors to take their business merge in and they own 100% of the relationships and then there's a split on revenue for shared infrastructure, marketing, operations, compliance, tech, all the whole, the whole nine. What are you seeing as like good options in the marketplace for let's say that you know, advisor that you were just talking about that's looking to get some equity in their book and you know, have some support but maybe not go fully independent or is your recommendation in certain cases to go fully independent?

Ryan Shanks: 05:44 It's a risk path. So even the advisor that I'm working with and going down that path, you know, I'm really helping them if they're in a captive environment. Right. And I've got several clients right now that are in wirehouses that are breaking away, but they're completely different. One's like, I want to build it, I want it to be my brand. I want to operate it. Yeah. So then you start talking about, okay, so we've reached that conclusion. Now where do you align? Is it going to be an RIA? Okay, where do you custody? What's that partnership look like? Um, what's the model look like? What do you want to build? Do you want attract other advisors to it? So I, as I work with these advisors, I'm like, look, it's like chess. The first move anybody can make. But it's setting yourself up to have the fifth or the sixth move. That's a win.

Patrick Brewer: 06:23 And I think you're trying to figure out as an advisor, right? And that's like the, what are you building question? Like how big is the castle that you're trying to build? Do you have like, you know, walls around the castle that are wooden and you know, you've got a little team in there that's kind of farming the lands and you've got, you know, a couple hundred million. Are you building like a huge castle with like archers on the walls and you're the King and you've got like this huge army. So like trying to figure out like what are these advisors actually building? What are they trying to do? They trying to take over the world and you know, roll up a bunch of others. Or are they just, you know, trying to build a lifestyle business? Like what are you, what trends are you seeing in that regard? Are you finding that most advisors are building for lifestyle building for income or are they building for enterprise value and trying to,

Ryan Shanks: 06:59 it's a combination. I mean it's a combination, you know, I mean, I mean it's, you know, there are advisors that are in a captive environment that just, they grow frustrated with that environment where the client's not the top priority. So what are the analogy that I'm always using when you look at the independent landscape and the captive landscape is, is the independent landscape, the most important factor is the client in everything that happens from there is tied to that. Yeah. When you're in a cat, that wire house type of environment, it's flipped upside down. Yeah. The revenue and profitability comes from the client, but it's almost like, Oh, that's a commodity. Bring in more of those. Yep. And we're going to make X off of it. And so is the advisor has to reach sort of that tipping point where, you know, like, I'm done, I don't want to be here.

Ryan Shanks: 07:43 I'm not sure I want to go build it, but I might be willing to go plug into it and join it. And, and so when I work with the advisor saying, listen, you could plug into a great RIA for example, where you know, at three o'clock in the afternoon you could leave to go coach your kid's team cause you're not responsible for compliance and technology and payroll and right. Someone else's dealing with it. Yep. And you could theoretically get a nice bump in income, have ownership of that book, have equity participation. So you get all those upsides but you still able to maintain sort of the balance of your life. Yeah. And then if it's someone who's really just kind of an alpha, like, no, I want to build it. I want to grow it, I want to scale it, I want to be able to go out and sell it to other advisors to get them to buy into the value prop.

Ryan Shanks: 08:22 They're on a completely different terror. Got it. And at that point it's really like, okay so it's great that you want to do this today. Let's talk about in three or five years, what do you want this to be? Right. Do you want to be attracting other advisors? Cause these are considerations, right? So if somebody that wants to recruit advisors, I'm like, well do you want to be fee only? Right. So what about the advantage in front of it? It's got a 50/50 buck. Yeah. You're saying, listen, you could come join my company but half of your revenue you have to leave. So you gotta think about that.

Patrick Brewer: 08:49 Yeah, I mean we decided to go fee base because we feel that especially for business owners, insurance is a big component of what need help with like risk management. Even some of the tax mitigation strategies require insurance. I mean insurance companies have done a good job looking at the tax code and figuring out products that can help, you know, shift that liability out in a number of years and reduced tax burdens for, for that particular audience. I think, you know, I would view that as a huge hurdle if you're trying to recruit and your fee only and you know, the universe that you're trying to recruit from is like, you know, 50, 50, or 75, 25. I mean, what do you, what are you seeing out of most of these firms that are looking to recruit? Are they fee only firms that are looking to aggregate folks or are they, you know, a little bit more flexible with their fee schedule?

Patrick Brewer: 09:29 Does it vary? Like what are, what are you seeing right now? So let's flip it on the other side of the ledger. Again, going back to sort of our user base and what we're seeing and it's early launched in February, so trends are what they are. Um, but our largest firm adopter sort of getting on the platform is RIA. Hmm. So, you know, so it's interesting [inaudible] or short of the most aggressive in wanting to recruit advisors with RIA are the most aggressive in wanting to leave. So clearly there's something that's not working out the formula range. So I'm just analyzing it and going, okay, well what is it? Is it incentives? Do you think just like poor from incentives to align the value creation with [inaudible] guys, I think it's principles of these are IAS that are very self serving and they're not thinking about the value chain and these advisors and what real value they bring to retention and maybe you know, capturing more asset flow from the same client.

Patrick Brewer: 10:17 Yeah. And they're just saying, well I'm paying you X in the margin I get. And that's where those advisors are like this is such a cultural thing. It's an ego thing. If you're going to create an ensemble and you're going to really align people to be supportive, like you've gotta be really, we also have to provide support to, I feel like a lot of firms they provide access to. Like that's the big thing that I see with a lot of these aggregation platforms, whether it's a, a BD or an RIA, it's always I provide access to, and then they curate some, you know, list of technology providers and they do access to compliance experts and support and all these things. But really what advisors need from what I've seen in the marketplace having consulted hundreds of them, is they need marketing and media support. So they need to be able to get in front of more people.

Patrick Brewer: 10:58 They need to be more visible, they need more authority so that people, when they come into on the top of the funnel, they're more likely to work with that advisor and that advisor makes more money. So there needs to be some type of a proactive marketing strategy that doesn't involve the advisor always having to go out and eat what they kill. And then the second thing that I've noticed is most firms are reactive in their client service. So they just wait for their clients to come to them and say, Hey, we need this. Instead of being proactive in defining the client experience on the front end. I mean I'm a big believer that wealth management is really just one big project management nightmare that only one person really cares about. And that's the advisor and it's a lifelong project management. You're basically project managing someone's finances for their whole life and the advisor usually isn't well-equipped to deal with that responsibility because the advisor wants to build relationships.

Patrick Brewer: 11:48 Like yes, some of them are very detailed oriented and they're good with follow through. But I find that a lot of these large firms, they spend, you know, millions of dollars on a Salesforce build, but they're missing the point. It's not the technology, it's the actual methodology and the delivery of the experience. And most advisors in most firms aren't defining on the front end what a client experience needs to look like. How many times do you meet with these folks? What are you talking about? You know, what is your process on the back end to turn them into raving fans through events, through, you know, marketing and, and, and touch points. So you know what I've seen in, I think probably the reason a lot of these RAs and advisers that RAs are independent broker dealers are unhappy, is they think that the high payout model or a higher payout model is actually what they want, but in reality they just need more full service support.

Patrick Brewer: 12:34 So I think the wirehouses nailed it in the sense that they provide access to an expert team. They've got sales and marketing training, full business development. They've got, you know, leads coming in through their marketing, things of that nature. But the misalignment is in the fact that they obviously flipped the model on its head and they sell product instead of putting it as a human first model. I think the RAs and these firms that are trying to aggregate advisors are still trying to figure out how to build the business that actually supports the advisor instead of the other way around. Yeah.

Ryan Shanks: 12:59 Well, and, and what you said about the client engagement of being sort of active or passive is where firms are screwing up recruiting, right? They're just kind of, Oh, I want to grow and I want to recruit. And it's like, okay, so what's your model? You know, who are you looking for? Who's, what's the right advisor? Avatar. Yeah. What do you mean? And I'm like, well, what's the right fit for your firm? Well, just somebody with a heartbeat and a book of business really. Like that's really your goal. That's what you're trying to do. Yeah. And, and you know, we're trying where you tried to sit down with them and say, look, you need to be very intentional about this. Right? Who are you trying to find? What's the client you're trying to interface in service and then go out and

Patrick Brewer: 13:33 communicate that. Yeah. So I, I feel like a lot of firms don't do that. I mean, what I've seen is a lot of firms try and turn the advisor into an annuity for the firm. They're basically like, Hey, we're going to wrap these platforms and services and easy things to do together and we're going to sell it to the advisor and we're going to get a cut of their revenue. And then the advisor is going to go out and support the growth of our business. So I think, you know, again, it needs to just be flipped around so that the advisor is supported in their quest for independence and they're creating their own enterprise value while supporting the firm. But the form of the firm is really there to again, create the platform and the visibility for the advisor to grow

Ryan Shanks: 14:10 the flourish. But I will tell you though, in fairness, there are some advisors that sit in those seats and that's exactly what they want to do. Like they want to be a supporting role. I don't want to be the lead actor and that's totally okay because you need that support infrastructure. So it's just a function of figuring out like, what's your purpose? What do you want to be doing in this business and then align with it.

Patrick Brewer: 14:29 So what are your, uh, so I have pretty strong opinions on the fact that I think this is a team based business. I have six personalities that I've kind of defined. Um, as far as for financial advisors, I think, you know, you've got the Rainmaker personality that loves to, you know, be in the community closed deals. They're, they're great. You put them in front of a client in two seconds later, you know, maybe not two seconds, but through the sales process they're able to convert them into a paying client of the firm.

Ryan Shanks: 14:52 And then you've got your foragers, your connectors that are out there building relationships. You've got your, I call them guardians, which are the support advisors who just build trust really quickly. They love people, they love building, you know, lifelong relationships and usually they're experts in financial planning. Then you've got your architects and integrators and stuff like that. But what are your thoughts as far as um, you know, advisors trying to build the business on their own versus teaming up and trying to form collaborative partnerships with others that have maybe complimentary skillsets? I think a lot of that psychology comes from the environment you're in, sort of, you're in a captive environment. It's very much in sort of a silo. This is my business, these are my clients. We're competing. When you get into an independent model, it becomes, it's a holistic approach. The client care and service and delivery is what matters.

Ryan Shanks: 15:36 It's not about you. It's not about me, it's about us. And so I think it's just, it's just a shift there. And so sometimes you find that an advisor sitting in a captive environment has all the right DNA. They're just a S, you know, that's just where they're working in the business. And so sometimes when you talk about that, you know, you talked about teaming, they're like, Oh, well I don't, I don't want other people interfacing with my client. It's like, well, hold on. Like do you want to be doing all these things and wear all these hats because someone else could do a better job at this? And if there's two or three touch points to this client, is that a more meaningful engagement? Absolutely. Is that client going to say, well, you know what, I've got 2 million that's sitting over here, but I now feel like I've got sort of this comprehensive approach.

Ryan Shanks: 16:18 You can take care of all of this. Yeah. Yeah. I love it. What, so what are your thoughts? You mentioned something I think is really important to talk about. This idea that we don't have a lot of new talent entering the business. There's not a lot of people that graduate from college and say, man, I can't wait to be a financial advisor and call my family Merrill Lynch. Like it's just not really because they can go into tech, they can make 75 80 grand a year selling software to people, you know, in the Bay area or they can work anywhere. Now, you know, you, you don't have to be in a big city to make good money. Um, what are your thoughts on how we can flip that around and attract more young talent to the industry? Do you think that's something that we can do? And you've seen anyone that's doing that?

Ryan Shanks: 16:57 Well, I think it's something that we can do. I think it's something that we're not doing a good enough job at. I think there's, you know, there's some outliers, there's organizations like TD Ameritrade and Schwab that are really trying to engage, but a lot of times I, what I see is they're engaging and they're, they're getting this younger generation to come to conferences. But then I'm talking to some of these advisors that are at these conferences and they're like, well, they put on a reception, we all got together in a room, but we're not really in the weeds. And so then I'll do follow up with them like look, and a lot of my conversations with these young generations coming out of colleges. Yeah, you're young with no experience CFP, right? The planning or your, your, you know, educated to do that. Here's how you need to go sell yourself to the independent firm that's looking at you going, gosh, you're going to be an operating expense.

Ryan Shanks: 17:42 You're not bringing any clients how much revenue [inaudible] go, you know what? I'm coming in as the next generation. They can interface through social media to complete different sort of new client demographic for your company. And I can wear lots of other hats to support to justify my existence and it should. There's a hustle, but there's just not, I mean the, you know, the financial planning programs at the colleges for near Virginia tech, Texas tech here in Texas, you know, they're doing a great job to try to facilitate that, but it's not, there's never really, there's not been kind of that aha moment where it like being a financial advisor sexy, like that's what I want to go do when I grow up. Like, you know, kids are like, you know, I want to be a fireman. Yeah. Like my kids aren't running around the house going, dad, I want to be a financial advisor when I get older. Yeah.

Patrick Brewer: 18:22 Well maybe we can change that. I feel like it's changing the perception, the, the challenges, right? The perception in the media of financial advisors after 2008 and after all the financial scandals, like it's not the most well-perceived profession in the industry. So we've got some work to do there. I think also since most of the new advisors and advisors in general are part of the wirehouse channel and they're incentivized to sell product, obviously people are going to have bad experiences and they're going to say, Hey, I got sold this product. I'm not super happy about it. So that also hurts the perception of our industry. So it's a challenge, right? Because we were trying to invest in the expertise side, which is, Hey, get a CFP, learn the actual craft, but you still need to invest in the soft skills. Like you still need to be able to sell. You still need to be able to influence, you still need to be able to build relationships. And I think the challenge is you've got a younger generation that comes out and they're equipped with the knowledge, but as you said, they're not, they're an expense, you know, like they're coming in and immediately you have to write them a check and say, here, this is yours and this is coming directly out of the owner's bank account in order to support you too.

Ryan Shanks: 19:27 [inaudible] exactly. So you're literally betting on the com, is this individual going to step into my business and add value and learn it and is there stability there? Will they be here in five years? Yeah.

Patrick Brewer: 19:37 And I, I think the responsibility doesn't fall on the individual in my, in my, uh, so the way I see it is it's the firm's responsibility to create a sales and marketing environment that empowers young talent to actually be successful. And I haven't seen a lot of advisory firms do that. Even at the billion, 2 billion, $5 billion level. I mean generally what I've seen is they bring on a COO who maybe has some fortune 500 experience and they change around the colors on their website and they test different buttons, you know, to see if people are going to click them a little bit more frequently. And the business development is kind of neglected. It's, you know, the senior partners have done a good job of bringing in business referrals are coming in, but they haven't done a good job of mapping their experience and their knowledge into a process, into a system that allows younger talent to come in and say, Oh okay, I can understand the nuance of what you're doing. Therefore I can take that and go out and find new clients for the firms. So I think it's just this disconnect and that's probably why a lot of these advisors who are successful in the independent channel who don't have equity in their business, they're like, wait, you guys didn't really help me outside of the fact of just giving me this platform and like I went out and with my soft skills and my network and built this like

Ryan Shanks: 20:43 I should actually participate in some of the apps. And I think you're spot on. I think. I think a lot of, you know, hiring in the wrong role. So like again on the firm being like active, like aggressive about it. Like, these are the roles we're looking to hire. Here are the skill sets we're looking for in those. So sometimes they'll come across and we'd be like, okay, well, you know, they've got the CFP, so I'm gonna throw him on the spot. Maybe they don't want to be an advisor. Maybe they want to be support. Yeah. Right. So it's understanding where their strength is. Let's align you there so that you can shine there. But there's also an element of like a younger generation looking from a different perspective. And if the principal of affirm that sort of aging can be humble enough to sit down and engage in that dialogue, they may learn a lot.

Ryan Shanks: 21:27 Right? Like, I mean, you see lots of generations in other industries where like, you know, the grandson got involved in the business, started running the business and then grew it 25 X. yeah. And second, where did that come from? Where they came from a different perspective. It always been this business, this way. So those fresh ideas, you gotta be open to him. It's gotta be open to them. I mean, I'm a byproduct of a failed succession plan myself. I don't know if I've shared this story with you as great. It's pretty amazing. I mean, I left dimensional fund advisors at 27 and got the entrepreneurial bug and I bought a firm up in Sacramento, California, 200 million in assets, great from great people and walked in, had no idea what to expect and it was a really good learning experience. I was there for a year and the first day I was there, I came into the office and I hear this like T chinois noise and I'm like, what is that?

Ryan Shanks: 22:16 Is like, is there like a bug in the rug? Was what's something in the, in the blinds or something. So I like walking around to the office in my right and I see this lady and she's just typing away on a typewriter, just like from the 1960s like, you know, takes the letter, grabs it, um, after it's done being typewritten and then scans it and then emails it to me. So she literally typer it, wrote a letter, scanned it into the computer and then emailed me the type written letter. And that's how they communicated in the office. Well, I mean I sent you a letter in the mail to accept coming on this podcast. Should you look, there's an elementary old school that should come back. Absolutely. So that's a really, maybe we go there next. Cause I love that cause we do that in our marketing programs.

Ryan Shanks: 22:55 It's mixing the digital and the traditional media. Cause if you [inaudible] it's so important right now to have that like personalized human touch, especially in the client experience. So what are your thoughts on like client experience? I know we're going completely deviation here, but a, I like this topic w for most firms. Like what do you seeing? Like what would you define as a good client experience? Um, at the advisor level? Like what, what are you seeing as far as far as it'd be successful? You know, I mean I'm an, I am in hundreds of offices a year and so, you know, I get a sense of like, what are they doing? Is it winning? Is it losing? I mean, I think, again, it's intention. Like it's not like, Oh, all of a sudden I've got these clients doing 2 million in revenue and I'm just sort of doing whatever to service them. It's like being very thoughtful about it. How often do I want to communicate with these clients? What's the experience like? Man, I'm seeing companies that are, you know, they'll do like a happy hour and they'll bring their clients in and they're having drinks in the office on a Friday and it's just sort of this family sort of, it's a different vibe. Yeah. Um, so, you know, in terms of, I mean, client experience, it's, you know, the stickiness. Um, yeah, I can't really comment more than that besides like, you know, it's, um,

Patrick Brewer: 24:04 well, it's pretty diverse. Yeah. What I've seen is a large, so with technology, right, the temptation is to automate your interactions. So I've talked to firms that are, you know, let's call it a billion plus in assets and they're explaining how they have automated emails that get sent out to clients for them to schedule meetings and those types of things. I actually think that's really bad. I, I don't think that clients should receive any form of automated communication at any time. And the reason why is they're paying us for a highly curated personal experience they bought from our firm as a wealth management firm because that's what we're selling as what we should be selling. So I feel like the temptation right now is since all these firms are offering access to technology, it's to go deeper down the rabbit hole and say, well, not only we have access to technology, but we're actually going to create so much efficiency that we're automating away the reason for us to be involved in the client's life in the first place.

Patrick Brewer: 24:59 So we've actually gone completely in the other direction. Like we've automated all of our mid back office functions internally within the company and it's not from investing like millions of dollars in Salesforce. It's like a complete waste of money. You just have API integrations, you can hire developers and Ukraine. I mean you built the tech platform, you know, the drill. Um, if you need to create some efficiencies between software, but it's really understanding that you need to be very, very personal and intentional with your communications with your clients. So like, we'll routinely send them like handwritten notes. We'll rip out a page from like Austin magazine if like, one of our clients is like a blues, you know, fan, and we'll just like put a little note on there and send it to them in the mail. So it's just, that's a lost art. Yeah, man. But that's, I feel like that's what people need right now. No,

Ryan Shanks: 25:39 you know, the experience that you talk about, I mean, it's, I'll kind of share a funny story and I shared this on social media, but like, my, um, my 10 year old son has been wanting to lizard. It's right. And so we're like, look, you know, you've gotta you gotta, you gotta make money. So he made, wanted to go sell, eliminate. And last weekend he went out and he bought two things of lemonade. They were two bucks each. Okay. And you know, dilutes it, half water, half lemonade and over Saturday and Sunday he made 50 bucks from one of the canisters of lemonade. So that was $2 investment. He made 50 bucks and I went over to pick them up Sunday evening and I was like, you know, look, dinner's ready. He's like, dad, I got a little bit eliminated left and I'm just so I kind of pulled over to the side and he, we took him to the kind of the old neighborhood where we live and he was at a corner, kind of a busy road and I'm like, Oh, what's he doing? He goes over and he stands on top of apart bench. He's got his sign and he's flagging cars down there honking cars are driving down the block, turn around and coming back. And I'm just sitting and I'm like, this 10 year old is creating this experience. The people are flipping around, they're coming back, they're getting lemonade from and the lemonade is good. The product is good. Yeah. The

Patrick Brewer: 26:44 price is right, but he's creating this experience. So he made all this money and I'm like, is he looking for a job? My succession is a monolith phase. I know that you're enjoying this episode. I wanted to talk to you about a program that we're releasing. It's called the model FAA accelerator. It is an intensive experience where we're gonna bring you to Austin. We're going to help you solve the biggest problems in your practice. How to pick a niche, how to build a consistent marketing strategy, a sales process that actually converts and how to scale it all up. So if you're curious about that, go to www.modelfa.com forward slash accelerator. Book your call and we'll talk to you soon. I love that man. Cause it you can, and then you can take and look at it from the other side. It's like, well you could take automated lemonade provider with a really, really good product that's just sitting there on the street corner and you can walk up and go get lemonade from it.

Patrick Brewer: 27:35 But how many people are actually going to stop there and put a, you know, a dollar in the machine to get lemonade on the street corner, like zero. So I love that example. Yeah. A yeah. I'm a firm believer that the adviser, regardless of the size of the firm, the advisor is always the product. So you need to make sure that your advisors are featured. You need to raise their visibility, their awareness in the community and promote their value proposition. Because at the end of the day, like when somebody is sitting in a meeting, it's like, yes, the firm needs to be credible. There needs to be that backstop there of credibility and trust so that they believe that their money's not just to evaporate into thin air, but what the consumer is buying is the person or the people. Right? So that's where the expert team and that type of stuff comes in, makes them much more comfortable.

Patrick Brewer: 28:16 And there's some of the advisors that draws them to leave. They're like, you know what I mean? You know, maybe I did come in in a supporting role and I built up confidence being in that role and I'd like to maybe be out there and the principal, the firm's like, no, this is my firm. Right. You can't be about you. It's about me. I've seen that there's some of those pivots that take place and it's like, okay, well I've learned a lot from being on the inside. Maybe I'm willing to take the rest of the blow out of here and do it myself. Yeah, yeah. And sometimes it's a good risk and sometimes it's not. I've seen a lot of it, you know, I've seen advisors go out on their own and you've obviously seen a lot more of this than I have, but I've seen advisors go out on their own and they do it for the wrong reasons.

Patrick Brewer: 28:51 They do it because their incentive structure wasn't appropriate in their in old firm or you know, maybe the, the process was broken and they wanted to do financial planning in a way that they felt comfortable with or sell products and services that they felt should be priced in a different way. But then they get out on their own and now they're a business owner and now they've got to worry about marketing, they got to worry about sales, they got to worry about human capital management, they got to worry about all the stuff that comes along with being a professional business owner. And I feel like today is, I mean I don't have a benchmark to what it was like maybe 20 or 30 years ago, but I feel like the environment today is like hyper competitive. I feel like with how free flowing capital is right now and with all the consolidation, just digital media in general, like things do seem to be accelerating very quickly. I mean what, what do you, what are your thoughts on that? I mean do you feel like we're in a different environment? Maybe we were 10 years ago or things about the same, like what, what's your pulse on

Ryan Shanks: 29:46 it has gotten much more competitive in some of it's just, you know, social media 20 years ago we didn't have that. Yeah, right. I was chatting about that last night, like about, you know, sort of online dating when that became sort of like that. It was sort of conceptually that was the new thing, right? That's how you met somebody new, you know, you go back 20 years ago and it was, you know, seminars and, and you know, independent adviser was very rare and the brands is what was known and now there's become more knowledge at the retail client level about, Oh well wealth management can be independent. And it could be, you know, this wealth management business. So there's become a lot more transparency there. And then there's a lot more transparency around regulation, around different models. So the retail customer is like, okay, you know, I talked to my friends all the time. I'm like, how does your advisor charge you? Like, wow, they're doing this. And I'm like, well, you know that there's an alternative. Like you could do this. And they're like, no, I didn't know that. So sometimes you just want to kind of reverse engineer and say, gosh, the customers should go back and say, Hey, here would be my preference.

Patrick Brewer: 30:41 Yeah. Yeah. So when you're, when you're directing advisers and you're having these conversations about like, what's a good home for them? Like what, what are the, what are the answers that generally come up and do you find that a lot of times you're placing them with independent broker dealers, do you find that you're placing them at large RIA, A's? Do you find that often you're saying, Hey, you know, based on the landscape, you should probably start your own RA. Is it like 100% variable based on the advisory? You're noticing that it's individual? Hmm.

Ryan Shanks: 31:11 I mean, and it's, and it's really like, you know, as a firm when you meet with your client and you assess their risk and you know, their tolerance, right? All those things and what's appropriate for them. It's not like cookie cutter that, well, I don't really care. They're all gonna get this. Yeah. And, and that's something that I learned with one of the first cold calls that I made close to 20 years ago to an advisor when I was like, you know, look what's missing. What do you wish you had guys at Merrill Lynch is a grind. I've never had a recruiter call and asked me when I want or need, we're just calling to tell me who I need to talk to. And I just remember thinking, well that's like a doctor and you come into their room, the waiting room or the exam room, you're not asking the symptoms. Like, I don't really need to know what's going on with you.

Patrick Brewer: 31:49 You just gotta give it a shot. Got the good, and we're gonna got the pad out there ready to say financial device. So it's kind of really shifting that gear. What, so talk me through the FAA match platform. So 10 years providing independent matchmaking consulting for advisors, and you got the idea for this marketplace where advisors can vet out their own options. So talk me through how that idea came to bear and what's going on with the FAA match platform right now. Yeah, no, it's, it goes back to that call.

Ryan Shanks: 32:19 It goes back to, that was early days, me cutting my teeth, literally cold calling advisors saying, Hey, are you happy? Right. What's missing? And then they'd be like, you know what? I'm really not happy. Well, gosh, can we get to know each other? Can you trust me enough to trust that maybe I might know of a firm that might be a better fit? And it just stuck with me that advisors, they're not advocating for themselves enough. Right? They're sort of more passive. I always say that it adviser their career to their clients, but they're typically writing shotgun regarding their career, someone else's driving the car. And like they should be driving. They should be advocating. They should be, you know, they have these clients that are sticky, that generate this revenue in all these firms. They want a piece of that revenue and they're all throwing their value prop out. Yup. And so that's what really drove me to create my consulting business in Oh six and in doing that, I love doing it. I'm working with advisors. Um, but I spend two, three hours onboarding and advisors, a client, all the due diligence calls are like an hour or a pop. Yeah. It's not scalable.

Patrick Brewer: 33:18 It's emotionally draining too, I'm sure. Cause you're, you're like, yeah, but I love it. I mean I love

Ryan Shanks: 33:22 if somebody that's like, you know what? I think I'm done, but they don't know what they don't know. And I'm like, well, I actually happened to know what you don't know. And so this is good. This is great. Right? So we were able to really engage in a great partnership. Um, but I wanted to create automation. I wasn't able to touch enough lives and help enough advisers on a one-to-one basis. So I said, could we create a technology that allows for that advisor to be in control? And the three elements that are most important are privacy, transparency, and control. And so when our technology platform, that's what we've created to instill to that advisor. And then the firm gets the same benefits on the other side.

Patrick Brewer: 33:57 Love it. So as far as privacy is concerned, if you're browsing to see what options were available, your firm isn't going to be able to log in there and say, Oh, we see that Brian's on the platform looking for another firm that he could potentially join. Every single user

Ryan Shanks: 34:11 type is private unless they send a connection request to the other side and it has to be reciprocated. So if you're an advisor and I'm a firm and I send a connection request to you, you need to reciprocate that for us to find out who one another is.

Patrick Brewer: 34:25 Okay. So is there like an NDA component to that as far as like if you're on the platform, like if you signed up for the platform, does it say you are bound by this NDA or something not to disclose any of the matches outside of the privacy policies really tight. I gotcha.

Ryan Shanks: 34:38 And again, that is, it is the single most important factor because an advisor, I'm like, they know when they're not happy before anyone else. Then usually their spouse is like the close second that finds out, right? They're going home and they're like, gosh, you know, and you're like, you know, every day's a bad day at work. Like you should do something about that. Okay. Um, that's, I mean that's, that's part of it.

Patrick Brewer: 34:58 What are the user metrics look like? I know that you, you mentioned that there's obviously different types of advisers. They searched for different reasons or different types of firms. They're looking for different reasons. I mean, how, how has the advisor set up for success when they joined the FAA match platform? Like what is before it was you bridging that gap and saying, Hey, I've got this knowledge. I'm asking these questions. I'm going to make sure that you land in the right or the right home. What, what are you doing inside of the platform to ensure that they get, hopefully a similar experience, but just in a more leveraged,

Ryan Shanks: 35:26 it's, I mean, it is more leveraged. It's got scale. Uh, I'm obviously very still very involved. I mean, we're a very, we're a lean startup, right? So I'm involved, I'm, I'm doing calls with advisors. I talked to a recruiting partner this morning. I'm doing two calls tomorrow with two advisors. So I'll speak to them addressing either concerns, get them registered on the platform, we'll do a screen share, I give them control, we walk through and I, and I hold their hand and navigate it cause we're really shifting the way that the business has always been done. Yup. To say you're the advisor, you have 100 million in client assets that generates a million in revenue. There's value in you. Yup. Take control. Don't be passive anymore. Right? We're giving you the keys to drive, not ride shotgun. And so, um, that's, I mean that's it. It's all about that. And creating that value for them to drive that connectivity with the firms.

Patrick Brewer: 36:13 What are the user metrics look like right now? How many people are on the platform to partner with advisors versus advisors looking to partner with firms?

Ryan Shanks: 36:20 So we have, um, we have a total of 325 users across both sides. Okay. Um, you know, three and a half billion is where we are in assets on the advisor side. And when did you start again? We show we launched February. Oh wow. That's publicly pretty good growth. So yes, works, but you know, I'm trying to build a sustainable business, so I'm trying to plant the right seeds. I'm trying to create the right relationships. Um, I'm viewing it as more than just transaction business. That is a relationship business. That's why our technology just scales everything at the top of the filter and it brings it all down to a one-to-one qualitative discussion. Got it. So we have three and a half billion in motion. Um, the average adviser on our platforms around 65 million in assets and we're just trying to nurture those relationships, service them. That's what you do in your lean start up. What we can control is the experience, the support, and then we're trying to communicate that out into the marketplace to the extent we have the budget to do it.

Patrick Brewer: 37:16 Okay. And you don't have a lot, you probably don't have a lot of data to this point, but um, you know, in your experience as a consultant, like from the time where an advisor becomes, I don't want to say unhappy, but just interested in shopping around to when they actually make a decision. Have you seen any general rules of thumb is like as far as how long that process usually takes?

Ryan Shanks: 37:33 It is, it is historically six to nine months from the point of like, okay, you've been unhappy for a while and then you internalize it and you're like, I didn't like, you know what? Maybe I should do something about it. And it may be prompted from a recruiter calling you that's like, Hey, are you happy? Like I used to do. I was like, no, I'm, you know, I'm not happy they engage in. And frankly that's why recruiters are a very important partner to us. We're like, look, there's most of the advisors you talked to you, you don't have contracts with firms to make an introduction, but we're scaling that side of it and we can be that support infrastructure for you to help you close more opportunities to help more advisors.

Patrick Brewer: 38:06 Oh, I liked that. I liked that model. So you're basically, you've got a free sales force in essence, right? You've got these recruiters that have, they want the same outcome as you. They want the advisor who is currently in the wrong seat to be in the right seat. And then you're creating a list of firms that are vetted on the platform and saying,

Ryan Shanks: 38:23 can standardize. So what we're doing is we're saying, listen, we're scaling the agreements. You don't want to be in the agreement game, right? You want to be in the talking to an advisor, finding out if they're happy or not. You refer them to us. We take over everything else and we continue to scale that for them. So that's exactly, yup. And some of our recruiting partners are there. It's getting to where it's almost exclusive. Every advisor they get in front of their kicking does. Wow. What percentage of your business do you think is going to be driven through from recruiter sending advisors versus advisors reaching out on their own? I mean, it's probably pretty early innings, but it is really early innings. Um, you know, we've got, um, a number of recruiting partners now that we're engaging with. And again, I'm supporting them. I'm like, look, I'll get on a call with you and the advisor.

Ryan Shanks: 39:06 I want you to understand, you know, that I'm going to nurture that relationship, but we're going to drive them to this automated platform. Right. So the, and let them to understand how they benefit from it. So that's some of the user experience. We're just, it's brand new. How did you raise money to start a match or was it self funded or how, how did you have funded the development? Um, we started our first line of code January of 2018. I funded that with a good friend. That's my co founder and the CTO. Nice. Um, but he had come out of a startup. And so I was like, gosh, I can give you equity. And he's like, dude, no way. No, I start off with the crap, so you have to pay me. I'm like, ah, they're getting me. No, I paid them. And then we got ourself to up to a, a, you know, kind of a beta point and we raised money.

Ryan Shanks: 39:46 Um, then we're in the process. We'll raise another round that we plan to close this next month. So we're just, you know, but you, you crawled in, you walk. Yeah. So that's why I love that you bootstrapped it. That's good stuff. And then, you know, prove the model, get the, get the product out to the market, test it, validate it, and now it's, you know, off to the races. So, um, what other tips would you say, or what other tips would do you have for advisors that are in a situation where they're starting to feel like they might not be like, where w what's the first place they should turn? Right. So a matching platform could be like, Hey, I've decided that I'm going to put myself out there and I'm looking for other opportunities. But how does an advisor really know? If so, you know, we talked about, you talked about a while ago, like there is so much information available.

Ryan Shanks: 40:33 You can go out and you can Google and you can look at these research studies and you can, you can learn a ton to the extent you want that. But I think recruiters are an incredible resource because it's what we do all day every day. We deal with advisors, different personality types, different business models, different needs. And so that's a great resource to go to, to just really sort of level set, like are you just not happy today but you're not gonna do anything with it? Or have you been unhappy for the last year and you're ready to do something, but you want to do the right something. Got it. I think recruiters provide a great resource there. And then what we're doing is we're just trying to provide that support infrastructure. What, so I, I'm not even familiar with the advisor recruiting landscape. And when you say recruiters, are you talking about independent recruiters that are not part of this specific firm?

Ryan Shanks: 41:17 Cause obviously if you're, exactly, yeah. Independent recruiter. Uh, how many independent recruiters are there? 175 really? Are they all kind of on their own or is there a large firm that does or some that are one man solo solo preneur. Okay. Like a standalone single. There's some that are really large companies with big teams. Got it. So it just really depends on what your flavor is as far as what you're looking at and you don't, again, I mean like for me, when I started my consulting business doing advisor recruiting, um, when my first kid was two months old in Southern California and I was just like, you know, I've been inside of a company representing a company and I was like, gosh, I wanna represent the advisor. So you just take that risk.

Patrick Brewer: 41:57 How many of your adviser clients are like repeat customers? Like how, like once you placed them in a firm, do they usually stay there for life? Do they end up moving on? Do they grow out of the firm? Like what, what would you say that as far as the consulting side, you have repeat business versus new business, like how does that work for you?

Ryan Shanks: 42:12 Never had repeat business in terms of advisor that I helped transition because my philosophy is is that if you look at an advisor's life cycle, there's three most meaningful moves they'll make in their life. One is sort of choosing where they might build it or kind of plugging into it. It then becomes scaling it and then it becomes monetizing it. And so my consulting was always, I want to work with you three times in your life cycle, but not repeat for the same use. I don't want to help you figure out you should go here with your business and your clients and then in three years churn you out and move you somewhere else to make more money. That just never was my model. Yeah. Because I'm like, if you're in the moving business every five years, you have an unstable client base. From an asset perspective, you could, you could say you have a discounted value, right. Cause the retention off of those clients. So you want a really idea now I've used like, okay, you got to figure out we're going to build the house. Yup. Then you want to add some additions to the house and you want to sell it.

Patrick Brewer: 43:06 Yeah, for sure. So I love that. Yeah. I was hoping you would say that if you were like [inaudible] 80% of my businesses repeat. Usually two or three years later they come back looking to change. So it's good. It's good to know that it's a, it's, you know, a lot of new clients, probably referrals too, right. People that send their friends is like, Hey Ryan, did he get service by me and you should check.

Ryan Shanks: 43:26 So I am 100% referral. Okay. Uh, the advisors that I have worked with for a long time and they come from just friendships in the business. People that I've gotten to know that trust that I'm going to get on a call, I'm gonna engage with them. I'm actually going to deliver on what I say. Um, I'm honest, transparent,

Patrick Brewer: 43:43 can't ask for much more than that man in this business for sure. Well Ryan, I really appreciate you coming on the show and talking about your new platform FAA match. I'm excited that it's had, you know, early success. It sounds like it's a, a model that advisors really need to vet out their options. It's independent, it provides the leverage there, the privacy, the transparency on both sides, which is pretty great. So congratulations on that. Before we sign off, do you have any other, just one takeaway or one tip that you would have for the listeners as far as, um, you know, transition and thinking about landing in the right spot or building their business? Anything that you think would be valuable to the audience? You know, the thing that

Ryan Shanks: 44:19 I would share is any decision that you make regarding the business that you're doing and how you're doing it should tether to the care to the client. So don't get sucked up in the weeds about, well, you know, I can make more money here doing this. Think about the client model and where can you be happiest? So I tell people, I'm like, life is short. You spend most of your hours in the work that you do, not with a family that you love. And so if you're going to not be with your family, love what it is you do and love how it is you do it in love, who you do it with.

Patrick Brewer: 44:51 I think that's great advice, man. Looking forward to grabbing a beer tonight. Thanks for making the trip to Austin. Thank you. Hopefully I have you on the show again soon.