S3 EP09 Special Edition: COVID-19 & Financial Advising

Dan Allison (00:23:03):

... the founder of the firm and what did they do to market their company? How did they get from $0 to 40 billion? There's never an answer. There's not a system. There's not a [inaudible 00:23:13] bull-headed enough to put their heads down, get their nose bloodied, and just go. Surrounded themselves with great people and they happen to grow a company. Now they do marketing, but when they refer to marketing, typically it's branding. It's not marketing. It's not with the intent of driving a measurable ROI. You listen to Pat talk, he knows his metrics. If he's going to market and invest money, he wants to measure the metrics, he wants to know the ROI, he wants to fail. He wants to blow $10,000 so he can learn, don't do that again. So, they think about, how do I market my firm? And they think about branding, and billboards, and their website. And Pat talked about differentiation and your value proposition.

Dan Allison (00:23:52):

The reality is I have literally had hundreds, probably thousands, of firms in 17 years. My first question, every time I do due diligence on a firm is, "Tell me what makes you different from any other firm, within 10 miles of your operation?" I could record it. I could play it for you guys right now, it's the same thing. It's the objective, comprehensive, wealth management, fiduciary, it's all the same stuff. So, how do you differentiate yourself in marketing, on a billboard, or a newspaper ad, or whatever? You just can't. And the reality is, they've got to realize that what makes them different is not words that they can put on a billboard. It's not things they can put on a website. It's all the same. It's them.

Dan Allison (00:24:36):

And what they're really bad at is leveraging their own relationships and skillsets. David brought up referrals. That's been my niche for 17 years. And you look at a firm that has 300 clients and up, I was in Salt Lake on Tuesday, and the firm has 300 clients and a billion dollars under management, or $900 million under management. So if they were to talk to Pat about how do I market, how do I go out and create new prospects? My first question is, if you really leveraged those 300 people effectively today, can you tell me that you've, these clients that already said yes to you, and they didn't say "yes", like I'll buy your product. They're entrusting you with everything they hope happens in their financial life. And they're hoping that you can protect them from all the stuff they hope never happens in their financial life.

Dan Allison (00:25:28):

There are not a lot of bigger decisions in somebody's life than who I trust the livelihood of my family with financially. And these people have 300, 500, 1000 people that already said yes to them. And when they look at, how do I get better at marketing? If you even talk to the people that said yeah, they're on the treadmill running forward and I would say, stop the treadmill. Turn around. There's a whole bunch of people behind you that said yes, if you leverage them and they haven't. So, what I loved about what Pat does and what David does brilliantly, David's been coaching me now for about a year, is if you can master those two pillars, if you can have a system like what Pat and Model FA have built, that can drive prospective clients. And like David said, "You got to stay in front of those people until that moment's right." And the thing happened in their life that made them say, "I need to talk right now." That is the hardest part in the wealth management space. But if you can do that, that's awesome.

Dan Allison (00:26:24):

But then the second piece is, how do I take the people now that said yes, and clone them and turn them in, I always say, like a tree branch, like a branch that's just going to go like this. And I think between what Pat does and David does and what I do, it's kind of the perfect combination, because you've got a system that can drive traffic and attention to the advisor. Now the advisor's got to be good. They're going to say all the same stuff all the other advisors do. No different than I do as a consultant. I tell every wealth management firm the same stuff other consultants do.

Dan Allison (00:26:54):

I'm great at helping you build your business. I got to do it more convincingly. I've got to be better at it. I've got to be all the things that they're not to win the business. But once I got the business, I've got to take that client and clone them. So I think marketing is a weird word in the wealth management space, because there's not a marketing phrase that you can put out there that's going to make your phone ring. I've always said wealth management firms, they have all the risks of every entrepreneur on the planet, but because of regulation and compliance, they can't even say they're good at what they do.

Dan Allison (00:27:31):

Imagine owning a lawn care service where you had to put up a billboard that said, "Ah, I mean, we're fine," you couldn't even say, " we're the best lawn care service, we kill it". You can't do that. It's the [inaudible 00:27:45] thing I've ever seen from marketing. So what Pat does is drive attention. What David's awesome at is once you have the attention, how do you stay in front of the attention until they engage? And then once they engage, you've got to be great at making sure that that person wants to tell everybody they know about how unique and valuable you actually are. I just rambled. I knew that would happen.

Pat Brewer (00:28:07):

You got a lot of ranters on this call. This is good.

Eric Lee (00:28:09):

Yeah. We're good, we're good.

Eric Lee (00:28:19):

I think the question then becomes, obviously we're in a space where maybe traditional methods of asking for those referrals and kind of diving into these things, are out of the picture, right? We're in a digital meeting space. Here we are sitting on this call, talking with each other right now. So how do you leverage that technology? And somebody asks, our question, how do you train people who are not tech savvy to use tech, using tech to train them, how to use it? If that makes sense, it's kind of feels like the circuitous kind of problem that we've got ourselves in. So how do you take this,

Pat Brewer (00:29:00):

So to clarify, as it relates to referrals, or just generally?

Eric Lee (00:29:04):

I guess, a positive and an asset to that process.

Pat Brewer (00:29:08):

I would say high level, I'm not going to address referrals, cause I'm not an expert in that particular matter. This is one of the greatest opportunities, I think, we're going to see in the wealth management space. There are a lot of people that are, if marketing doesn't work in this environment, it never has and never will. We've got people that are terrified of a deadly virus that are locked in their homes. The market's somehow still going up, even though the economics behind it are completely disconnected from the market price, which we've obviously seen in other scenarios as well over the time the markets have been in existence. But you've got this time where everybody's stressed out, they're locked in their homes. They're worried about getting sick. They don't know what's going to happen with their portfolio. They don't know if inflation and increase in taxes, and the increase in debt is going to erode their ability to spend their money when they actually do get into retirement.

Pat Brewer (00:30:07):

So, they should be asking themselves a lot of questions right now. And most advisors are completely sidelined. They rely on seminar marketing, educational marketing, networking events, and other forms of in person interaction to meet prospects and to develop their client relationships. And they're not doing anything. So you've got a situation where people are looking for information. Information is cheaper than, than usual to push out. I shouldn't say information, they're looking for insight. Information is, they can find that anywhere. They're looking for an insightful person to step into their life and give them something that they can use to make better decisions.

Pat Brewer (00:30:47):

And right now most platforms are on sale. So Facebook ads, for example, are cheaper than they would have been six to 12 months ago because a lot of the companies that were advertising on Facebook are out of business, or they've trimmed down their ad budgets, or they can't advertise because maybe they were advertising for educational seminars, or in person events.

Pat Brewer (00:31:06):

So, the supply of advertising is lower and the demand is higher and it's just an auction system. It's just going to be a lower price for you as the adviser, if you're willing to advertise, you got more people, looking for information, looking for insight, less people actually out there giving it. And you've got an open field to test the waters as it relates to virtual client acquisition. So I think it's for those advisors that act now, and they act in a way that's not attending a virtual summit, right? Where, the latest, every single thought leader you see at every single conference tells you, "Hey, how's the tide, man? Now you need to do this new thing." And they just say the same thing every time. Like I've been to, Daniel on mute.

Dan Allison  (00:32:00):

I said, be careful I make a living doing that.

Pat Brewer (00:32:01):

You're really entertaining, though, so I'll give you the benefit of the doubt. So the thing is, you have to act with a lot of intention if you're going to do this the right way. So you have to equip yourself with the right types of strategies and you need to act very intentionally and aggressively in order to capture the market share that's going to be available for the next six to 12 months, and maybe longer depending on the situation and how it evolves over time. But I view this as a huge opportunity for forward thinking advisory firms that we're thinking about virtual client acquisition, we're willing to push in that direction. Most of the firms that won't do that, their growth rates are going to slow down dramatically. And some of the midsize ones or small ones may not survive the process entirely.

Pat Brewer (00:32:55):

So, that's my thought, I view this as a big opportunity for the right firms.

David DeCelle (00:32:59):

I think too, part of the question, if I heard it correctly Eric, was, "Hey, how do I actually learn how to leverage technology?" Like even Zoom, or whatever tech platform we're referencing. I think advisors really have three options. In terms of embracing technology and figuring out how to use it. One is whatever your question is, Google is your friend, just literally type it in and you will most likely get the answer. But it's just, that takes your time, so you got to be willing to solve that problem in that moment and read something, take action right away. But between Google, YouTube tutorials, whatever platform you're looking to use, say Zoom, their website has a bunch of different tutorials on exactly how to use it, so that's an option.

David DeCelle (00:33:46):

The other option is finding a peer in the industry who is actually embracing these things, and see if they're willing to invest some time with you in a collaborative manner. And number three is you find a company that will, that you can just pay to train you on all these things. But I think that the first two options are pretty easy and the last one as resort if you need to have someone kind of hold your hand through that process so that it's a seamless transition. But, Google is your friend for whatever question is on your mind, as it relates to.

Eric Lee (00:34:20):

I think the other thing that people are kind of wondering about is how do we train, not necessarily even ourselves, but how do we train our potential clients or our current clients to embrace and use this technology that, for many of them, is completely new territory. It's odd because we're having to train them using the technology that we're training them how to use.

Eric Lee (00:34:39):

Do you have any thoughts on that?

David DeCelle (00:34:42):

I think you always want to be on the receiving end to test out what that experience is going to be like. So, if you have at home, or a friend nearby, maybe you set up a fake Zoom call, as the example that we'll stick with, and see what it's like when you send the invites. See what it's like when you click the link. See what it's like after you click the link, and figure out where they could potentially get tripped up. And an option can be is when you schedule the meeting with them, walk them through what that process is. Let them know that, if for whatever the reason we're unable to use video, we'll just do a regular phone call. So have a plan B as well. And then another option could be, we use a service called Loom, L.O.O.M, for videos, quick little videos.

David DeCelle (00:35:38):

And you could always do a quick screen share as to here's what it looks like when you get the invite. Here's what it looks like when you click the link and you include that in an email. But I think it all starts with not being assumptive with what you think the process is going to be, because there's been times where I'm like, I just clicked the link and it happened. But then there's a quick little download. So, [inaudible 00:36:00] and then giving them the answers in advance, and then having a backup plan so that you can still use that time appropriately.

Eric Lee (00:36:07):

Yeah.

Dan Allison (00:36:09):

Eric, I want to add to what David said, because I think I bring a different perspective to this, because David and Pat would tell you I'm fully transparent about everything. So, I use a paper calendar and Dave does gives me shit all the time about it. I literally don't use the digital calendar. I've never used Zoom, Loom. Right before this call, I think we started maybe at 11 o'clock, at 10:55 my son asked me to help him lift the top off his Jeep and it was plugged into something, and I couldn't figure it out. And he said, "just go on your call and I'll Google it and I'll figure it out." And he did figure it out. David taught me how to put pillows beside my computer, cause I don't have AirPods right now. I'm the consumer that asked that question on Facebook. I'm him.

Dan Allison (00:36:56):

And the reality is that what COVID did, what this whole like pandemic did, it's going to be fascinating in 10 years to look back as a case study on psychology, the social impact of what's going on. I meet people right now. We're finally kind of back, my staff, we're all back at work at the office. I'm having meetings. I don't even know how to greet anybody right now, I don't know, do we elbow bump? Do we just wave? It's the weirdest thing I've ever seen in my life. But the reality is what it did do, which I think advisors are going to benefit tremendously from, is force us to communicate the way we are right now. These guys, the old school dudes that are like, "nah, I got to drive 40 minutes out to the farm and meet at the kitchen table for an hour and a half, and then drive 40 minutes," so inefficient. So ineffective.

Dan Allison(00:37:43):

And the reality is most of them, especially wealth managers that gather assets, they're not selling anything new. So, they're not making more money by doing that, they're earning their money. And if they can create efficiency, and the reality is I think most consumers would prefer this. They don't want to drive to your office. They don't want you to, this is easy. But also when it comes to perspective clients, this has given people a much more comfortable platform to engage with an advisor without the assumption of, I need your help. If you think about like a referral or a prospective client to get in their car, husband and wife, whoever, drive to your office, sit across the desk from you. It's a very assumptive thing to do. And a lot of people don't do it for that reason.

Dan Allison (00:38:27):

They don't want to lead you on that I need your help, or I'm going to hire you. This is a very nonthreatening way to engage with people that I can hang up and just never call you again. And so I think this platform is whether this is Zoom, or Loom, David taught me how to use Loom, it's incredible. Whatever the future is, I think that's why people are going to want to engage. And if they don't embrace it, they're just going to get consumed by the wave. Like me, I have to consume it. David makes me do it and it drives me freaking crazy, but I need to do it. My team needs to do it, or we're going to get smoked by the people who already were and are doing it. So I think it's created a lot of opportunity

Eric Lee  (00:39:13):

And I think looking ahead to the next 12 months and beyond all these changes that are maybe at their Genesis right now, but are going to continue to grow and morph. Do you guys, like Jeff Grimes for instance, asks on Facebook, "will virtual only practices has become more acceptable?" So, do you guys think that that.

Pat Brewer (00:39:32):

I think it will. A lot of it's going to depend on how well we return to a more normal state. I would say that a lot of older folks still like to meet people, one time in person. Up until this event, I was still a big believer in the local presence, building the relationships in person. Mostly because people have become so disconnected through technology that you can actually put the odds in your favor by just meeting with them one time because they don't realize it. They think they want to meet virtually from a convenience standpoint, and they do. And if you allow them to do that, you may not have quite as strong of a relationship long term. So, if you can just meet them one time in person, you have the ability to build a stronger relationship. So I think even if it moves to virtual, you're probably still going to want to meet your clients one time, and fly around, shake their hand, when we're able to do all those things, and meet them in person.

Pat Brewer (00:40:26):

I think it opens up the opportunity, a lot more so than it currently was, for virtual client acquisition, because it does force those people that were maybe on the fence or maybe would have sought out a local advisor to jump on a Zoom call and say, "wow, that really wasn't that bad."

Pat Brewer (00:40:44):

And I got to meet them face to face through the technology, and I we're good enough to where I'm comfortable moving forward. To give you some real data, we've had 30 calls scheduled, this is the only board I have in front of me, 30 calls scheduled in the past six days. And we've got a 57% show up rate for those 30 calls. So not to say, if we ran that number out to 3000, that that show up rate with hold. But 57% of people have booked a call on the calendar, I sent them a Zoom link, and they click the Zoom link, opened it and attended the call. And they didn't really know us that much, other than watching a 45 minute webinar.

Pat Brewer (00:41:23):

To me, that says people are open to virtual client meetings. It says they're open to advisors that are building a virtual practice. I think the challenge that we're going to face as advisors is we're not ready, frankly. Because before, when we were building clients relationships and building our practice in person, it was easier for us to just go through our lives and be ourselves in a medium that we've always used, which is walking around in a networking event or meeting someone in person or being introduced by a friend or a colleague or giving a seminar and feeling comfortable because the camera isn't on us.

Pat Brewer (00:41:59):

Now, we have to look at a computer or at a camera. And I'm going to tell you the first time you start doing video, and that light, that red light comes on and hits you in the eye, you're going to freak out. You're going to be uncomfortable, and you're going to forget your words. And it's going to be the worst two to three hours, and potentially the worst five to six sessions after that, of your entire life, where you're questioning everything you thought you knew about yourself. But, if you can break down all of the things that you need to do and tackle them one at a time, work through the problems associated with doing video, putting on a podcast, putting yourself out there through a webinar, you're going to be successful. If in the event, the economy changes in the way that people interact, change longterm.

Pat Brewer (00:42:48):

I think this will absolutely impact our industry. I think people will go back to meeting in person. I think that seminars and educational workshops will come back. Those things will happen. But there will be a sector of the population that says, "yeah, maybe I should just work virtually," right? And that's going to damage the practice of someone who's working locally. Who's used to maybe getting 20 people and 25 people out their seminars, and now maybe only eight people show up. So now your client acquisition costs just jumped from $3,500 to eight grand. And now you're in a position where maybe that doesn't cashflow. So, and now you're behind the eight ball, and you don't have the ability to spend the money to create the type of brand that you're going to need in order to be competitive in a new environment. So I would say absolutely bullish on virtual financial advice. However, I do think that we will see a return to a more normal time, but I think it will impact that. That new normal will be more expensive client acquisition, in my mind.

David DeCelle (00:43:47):

And I think when you combine a virtual meeting, like this on a zoom call or whatever, and Dan I'll use you as an example and then Pat I'll share a quick example that you and I experienced too, where Dan you and I first spoke on the phone. Then we transitioned over video. We started building upon our relationship through this medium, and in between, if anything, technology accelerates the relationship building process, because then what happened is every time you went on Facebook, you went on LinkedIn, you went on Instagram, who did you see? You saw me because I was posting all the time, even to the extent where your business partner, Debbie, who usually as you guys had mentioned, takes a little bit of time to warm up to someone. She agreed to work together without having a conversation with me when we were going through those conversations, because she did her due diligence online.

David DeCelle (00:44:45):

Then we meet in person that one time in Austin, Texas, about six months later, we gave each other a hug because we felt as if we knew each other. I could never see you again in person, and I think our relationship only gets better over time because of the frequency in which we see each other online. And Pat for you and I, same idea, when we went out to Seattle and met with Tyler and Allen, we felt as if we knew those guys, because we're both popping up all the time. So it just accelerates everything compared to in person, in my opinion.

Eric Lee (00:45:18):

Yeah, so it's not burn down your office building and go completely digital. It's kind of use the digital setting to supplement and undergird those interpersonal relationships. That makes sense.

Dan Allison (00:45:31):

A big roadblock to it, though, Pat brought up, I've been for 17 years a public speaker, so I've been on stages all over the world, and I'm really comfortable on stage and in front of people and all that. But, the second my kid FaceTimes me, and I see what I look like on FaceTime, I want to throw my phone in the air. I hate it. So, when David like insists on video calls, it kills me. I'll never forget the first time I was ever on real television. I was being interviewed as a content expert in the mental health industry, and my partner after the interview.

Dan Allison (00:46:03):

... expert in the mental health industry, and my partner, after the interview, I came back and I said, "How'd I look?" And he said, "Well, you looked fat." And I said, "Well, the camera adds 10 pounds." And he said, " How many cameras did they have on you?" The reality is, it is so hard and it's still so hard for me to get comfortable with this medium. It's incredibly difficult for me. And I'm sure it is for a lot of people watching this. But what David said, I'm glad he brought it up, because I was kicking and screaming at my partner, Debbie, that he brought up was definitely kicking and screaming. We don't like video. We don't like the angles and what's the background look like and all that.

Dan Allison (00:46:36):

But the day I met these guys and the day I met Pat, I met him one time in person, I feel like I've known him for 10 years. How you can develop that over this kind of medium, I would have told you you're lying. I mean, yeah, but there's something to being in-person and there is, to Pat's point, at some point. But I think that the combination of the two is going to be the future of the industry. As a matter of fact, yesterday, I had a conference call with one of my clients and he's got 18,000 square feet in Philly, outside of Philadelphia, and he said that for two and a half months he's not been in his office, not once.

Dan Allison (00:47:13):

And his team, I think he's got 50 staff and advisors, and he said nobody's been in the office and he said their lease is coming up in January. And they're looking at why do we have 18,000 square feet? Now we have to have awesome conference rooms and media, the TVs and the cameras and all that, but why don't we have two conference rooms, a few offices for when advisors need to come in and meet clients, but why isn't this the way we do business? And I think that's going to be one of the huge things that we see in the future, with commercial real estate, is firms like mine. I think I've got 12,000 square feet for 28, 30 people that have all worked from home for almost three months now and our businesses is up. So it's like, why do I have all that brick and mortar?

Eric (00:47:57):

For sure.

Dan Allison (00:47:58):

Why do I have these people in cubicles that drive 30 minutes to work and are miserable for the drive? They got to get dressed a certain way, sit in a cubicle for eight hours, drive home. Why do I do that, when they could wake up, put their pajamas on and still crush it. And I think that's going to ... David has forced me to embrace this and now I just can't wait to see the evolution of it. And that's what people got to get used to. But it's super uncomfortable. I don't think the first five or six, like Pat said, I'm probably on call number 100 and I still can't look at the square on the upper right, because I don't want to see myself. It's just the way it is.

Eric (00:48:37):

Well you look fat, if you're wondering.

Dan Allison (00:48:39):

Oh thank you [crosstalk 00:48:40].

Eric (00:48:44):

So Dan, I've got a question for you. When somebody asks, obviously you're the expert on referrals, but what do you think that advisors can expect when asking for referrals in these digital meeting settings? This digital world?

Dan Allison (00:48:58):

Yeah. I mean the kind of question I could ramble for an hour on, because to me, in all the research my firm's done, the idea of just asking you for a referral. I've never believed in that when you're in-person, sitting across the desk and saying, "Hey, will you refer me to somebody?" To me referrability is what Pat said earlier, truly being valuable, being unique, delivering an experience that's different. That people want to talk about and then equipping them when they decide to talk about you, with the things that are necessary for them to be effective at how they talk about you and getting that person in front of you. I think what has changed is right now, the consumer is not sitting at the cocktail party talking to their buddy and then saying, "Hey, have you met Pat Brewer? You ought to meet him."

Dan Allison (00:49:43):

They're not doing that right now. So the idea of a client referral right now is very, very different. I'm not having a Zoom calls with my buddy from across the neighborhood, discussing our finances and saying, "Hey, you ought to meet Pat Brewer." Plain and simply, the referral marketing has been crippled right now by what's going on in this form of communication, because it does rely heavily on the social aspect of influencers engaging with people they have influence over.

Dan Allison (00:50:15):

However now is the time, I tell advisors, now's the time you ought to be engaging with your clients in this platform to get feedback on their experience, their peace of mind, how do we deliver more value right now? How do we communicate more effectively? So that as you tune into the Today show it's terrifying every day if you watch the news, how do I be some of the calm in the storm for you? Now's the time to engage your clients in those conversations so that they can feel comfortable. They can teach you how to be more referrable. So when this is all over, the referral marketing is much easier than it is right now.

Eric (00:50:50):

Yeah, no, that makes perfect sense. Kind of piggybacking off our earlier discussions about all these marketing options out in the world right now, Andy Panko brought up an interesting point on LinkedIn, he said, "The typical in-person events, like library seminars or gatherings at restaurants or hotel conference rooms, aren't possible for the foreseeable future. Clearly an effective virtual and social media presence is now a must. Those things were already becoming increasingly necessary anyway, but now they've been catapulted to top priorities." So what are the recommendations and best practices to develop an effective virtual and social media presence?

Pat Brewer (00:51:23):

Much like referrals, I would say that David and I could probably go for a few hours on this one, but David, do you want to take a first crack at it?

David (00:51:31):

Yeah, I think I shared this with all of our clients and I think it would be very helpful, is when you tell someone, hey, go build a brand. They're like, okay. And then they go and do nothing because it's too general for them. So if you Google 64 pieces of content, Gary [Vaynerchuk 00:51:50], there'll be 200 and something page slide deck. And what his team has done is, they've gone through every single platform that's relevant right now and shared with you exactly, from literally how to screenshot something on your phone, it's very, very granular, and it shares exactly how to create content on every single platform.

David (00:52:15):

So the how-to has been done for you through that document there. So again, 64 pieces of content, Gary Vaynerchuk, you'll be able to find it as the Google search populates. Then there's, well, how do I apply this to me? Because there's all these different platforms, all these different things you can do. You want to figure out if you really enjoy writing, well then maybe you lean into that. If you're really comfortable and you enjoy video, you lean into that. So figure out what it is that you're going to lean into that provides, or that involves, the least amount of friction just to get going.

David (00:52:52):

So if you're more comfortable with writing than you are a video, cool, start writing and you'll get more comfortable over time to start including a video, but just start somewhere. And I think the other thing to do is type in things like, influential financial advisor or influential people or influential people on social media, and just start connecting with these other people, like Gary Vaynerchuk, who I mentioned. Like an Andy [Frisella 00:53:20], like whoever out there is out there creating a lot of content.

David (00:53:25):

And just observe and get a feel for what they do, because they share stuff and create stuff that is professional, that's casual, that highlights their personality, that discusses their interests. So I think it's a matter of learning the how-to, just logistically, and then through osmosis and consuming other people's content, and then just taking action. So if you go to the bottom of my Instagram page and you look at what I posted, two years ago, and then you compare it to now, totally different. But you evolve into something new over time through experience, through trial and error, through feedback. So I think it's learning the how-to on the per platform basis, and then learning through osmosis and consumption through connecting with those other people on those platforms.

David (00:54:15):

And then combining that with taking action and just knowing that there's three circles of people that are going to see your stuff. You have your inner circle of friends, who you've been friends with your whole life and they are going to bust your chops, because that's their job is to keep you in check. And if you stop because someone says something that hurts your feelings, I think it's a little too shortsighted. You then have a second circle of people who know who you are, but you don't talk with every day and they're are going to be super supportive. They're going to be like, "Dude, I've been seeing all your stuff, great job."

David (00:54:46):

But they're not going to do business with you. They're not going to refer people to you. And then you're going to have a third circle of people who find out about you on your 50th post, on your 500th post. And you're immediately up here. You're the guy, you're the woman, you're the person who is edified in their eyes and they start doing business with you. And over time, that second circle is like, "Oh, damn, this person's actually being consistent with this." Because part of people busting your chops initially, is to see if you're actually committed to following through, or if you're going to get thrown off.

David (00:55:22):

So that second circle of people, they're going to start talking about you, they're going to say, "Hey, I've been seeing your stuff for some time. I have a question about such and such," and then, boom, they're in your system. And then the first circle of people is like, "Oh yeah, you should talk to my buddy so and so, they've been doing all this," and then they're super supportive. But you have to break through that initial circle and just maintain your momentum and don't give up. So take action, stay consistent, and in due time all three circles will be doing business with you and referring you.

Pat Brewer (00:55:51):

David, I didn't realize you were this smart. This is a good realization for me.

David (00:55:54):

I'm just passionate. I'm not smart, I'm just passionate.

Pat Brewer (00:55:59):

I don't really know how to come back on that one. I was planning on having to close the loop here. I think the only thing I would add is, before you get the wheels turning and start to build that momentum, you want to make sure you're going in the right direction. And I've found that a lot of advisors kind of haphazardly build businesses over time when it comes to marketing and just business development in general. They have a couple of executives, a couple of business owners, a couple of widows, people getting close to retirement or in retirement.

Pat Brewer (00:56:26):

And the reality of that is each of these people consumes information on different platforms, and they're also ... You have to sell them differently. So if I'm selling an entrepreneur, I'm selling them on the strategic value of my solution. Like why should they even consider buying financial planning and wealth management in the first place? If I'm selling somebody who's in retirement, they want to know how it all works and what's the proven process so that they get the result that they want?

Pat Brewer (00:56:50):

Totally different sales process, totally different marketing approach, same service, to a degree. We're still selling them on wealth management, we're still selling them on financial planning, but it's just a completely different process. That influences your brand, it influences you as a person and influences [crosstalk 00:57:06] you're going to be walking these people through to get them interested, get their attention [crosstalk 00:57:10].

Pat Brewer (00:57:12):

So the first step is to take a step back and to say, "Who am I actually wanting to work with? Who gives me energy? How do I buy products and services?" Are you a strategic thinker? Are you a process oriented thinker? Are you analytical? Because if you buy that way, you're going to have much better success selling to people in the same way that you buy. So if you're a DFA advisor, you're really into the academic research, you're super empirical, you go through all the 800,000 word Michael [Kitces 00:57:42] blog posts, and that's your niche? Well, maybe you should target engineers.

Pat Brewer (00:57:46):

Because those people are going to buy in a very similar way that you consume and disseminate information. So I think it starts with, who are you? Who do you want to serve? And then creating the content and using the platforms, as David mentioned, to get your message out so that you can attract those people magnetically. But I think it starts with an acknowledgement of who you are and who you want to serve and how you're different, and that will drive everything.

Pat Brewer (00:58:14):

And just to give you a concrete example, the webinar that we're promoting right now on Facebook, that would work for a retiree, probably wouldn't work as well for an entrepreneur who's trying to save their business and is more interested in PPP funding. So just that distinction of like, well, these people might need wealth management. It's like, yeah they do, but they need it for totally different reasons, and their mindset around why they would buy it is completely different. So if I launched a webinar and I was like, here's why you should think about retirement planning as an entrepreneur. They'd be like, "Dude, I'm just trying to stay afloat right now. I'm just trying to get some extra money so I can pay my people." So just be mindful of where your audience is at in their journey to creating wealth.

David (00:58:54):

I think too, on a per platform basis, we need to recognize what types of content, or personality, can be involved on each platform. So as an example, and speaking loosely with these percentage breakdowns, but you'll get the gist of it. Where it's on LinkedIn, it should be 80% about what you do, within the scope of your profession, and then 20% personality. Where maybe there's a more personal post. Whereas Facebook or Instagram is the opposite, it's 80% all about you and what you're doing and things that you're working on and then 20% business. So just be cognizant of what the platform is intended for. And act accordingly.

Eric (00:59:37):

No, that makes great sense. All right, well, I think the first part of our conversation we've been talking about changes that are happening right now, changes we see in the next 12 months. I'd like to pivot us a little bit in the second part of our conversation here, looking at how the industry is currently evolving or maybe how it should be. And that may be related to the pandemic and it may be just to the current financial environment at large. But I have some really great questions here that folks have submitted, let's kick it off with Steven Dolly's question. He said, "I see the industry bifurcating between true fiduciaries, IRA's, and a salary plus bonus model wirehouses. What are your thoughts about the role of stockbrokers versus advisors going forward?"

Dan Allison (01:00:16):

I'm just going to get mad, so you start.

David (01:00:18):

I'm going to sit this one out, Pat [crosstalk 01:00:22].

Pat Brewer (01:00:26):

I was hoping that Dan would take it, but I'll give my 2 cents. So I feel like, oh man, there's a lot of stuff going on in the industry right now. I mean, we're basically seeing private equity enter the industry, it's a very developed industry. We're in the seventh to eighth inning, I think. There's still a lot of opportunity for certain types of firms, but in general we're in the seventh to eighth innings. You see a lot of PE-backed firms going out, buying up advisors, selling them to large banks like Goldman Sachs, I'm not going to name names here, under the guise that we're creating this huge, independent ecosystem for advisors.

Pat Brewer (01:01:00):

So what I'm seeing is that it feels like it's a little bit of a cash grab right now, as far as how these large firms are interacting with advisors and just with the industry in general. It's who can create the most financial arbitrage is going to be the winner. It's less about the client, it's less about the advisor and their experience, it's less about entrepreneurial-ism and building something good for everyone involved. It's more who can create the most ridiculous structure to trick people to join and then have the biggest exit at the end.

Pat Brewer (01:01:33):

So that's just my general take on what's going on. Maybe even more aggressive than what Dan's is. And then as far as fiduciary versus employed advisors, I mean, I think there's room for both camps. I honestly, I think that some advisors function better as employees of large firms. I mean, honestly, if the incentives are right and you want to focus on being an advisor and just building relationships with clients and doing that work, I mean, why worry about all this other stuff?

Pat Brewer (01:02:06):

Why worry about building a webinar and becoming an influencer and putting out content and handling all of the risks associated with scaling a business in an environment that's uncertain? I mean, just work with your clients. I mean, we've created a structure at [inaudible 01:02:21] that allows people to be partners. They're essentially employees but they own equity in their relationships, but they don't have to do all the crazy stuff associated with scaling the infrastructure. And they still get to have an exit value for their client relationships, they still get paid on net revenue. So I think there's opportunities in that camp for advisors that want to be employed. And I don't think either side is better.

Pat Brewer (01:02:42):

I mean, if you look at the DFA benchmarking survey, and this is probably holds across most of the major custodial benchmarking surveys, most advisors, if you look at the one to 3 million in gross revenue and you normalize their profit and loss statement, they only make about 53%. 50 to 53% net revenue is their payout. But everyone's holding up the independence torch and they're like, you need to be out on your own. You need to be doing your own thing. And I agree with that, I think if you're stuck under poor leadership or incentives, you're in a wirehouse environment, you're selling bad product. All those things, you should leave.

Pat Brewer (01:03:15):

But you shouldn't leave just to make more money, because if you actually build the company the right way the most you're going to make personally is probably around 50 to 53% of the net revenue that the clients pay you anyway. So do you want all those additional headaches that are associated with that? Or would you prefer to just be an employee and maybe get 50 to 55% of your net revenue anyway, without having to deal with all of the infrastructure decisions, the human capital management and all of that comes along with it?

Pat Brewer (01:03:43):

So I think the problem is, there's not a lot of great solutions out there for an advisor because usually the way advisors move throughout their career is; they start in the industry, they get trapped at one of these big companies, and these big companies lock them in to a proprietary model where they're selling proprietary product. They don't own their relationships. They call, they get to a point where they have enough production, enough AUM, they can see how the industry works. And they're like, I see how you tricked me, I'm not happy about it but I see it. And then most will leave after about five to seven years and they'll move to a more independent infrastructure.

Pat Brewer (01:04:18):

At that point. They probably land at a independent broker dealer, which isn't bad, but you just need to understand what that is. Independent broker dealers are going to monetize the advisor based on products that they sell, and their incentive is to cashflow you as the advisor. They're not going to be progressive, they're heavily regulated. So you're going to merge in and you're going to say, "Hey, I want to do these progressive things for marketing." And they're going to be like, "That sounds risky. Why don't you just shake hands with people and make friends? You'll get clients. And then while you're doing that, why don't you sell them products that we created on our platform so we can get that embedded margin out through the sales that you're making?"

Pat Brewer (01:04:51):

So I think these high payout structures are really attractive to the advisers who initially got trapped at these larger wirehouses and captive broker dealers. And they're like, wow, I can increase my payout to 90, 92%, even 80%? But then you get put in that position where they're like, yeah, here's your desk, here's your cubicle, here's a heavy handed compliance department and a tech stack from 1987. And now you need to figure out all your marketing. You need to figure out how to build influence. You need to figure out that.

Pat Brewer (01:05:20):

And not only that, we're going to put a bag on your back that weighs 800 pounds, have fun carrying that up the hill. By the way, if you meet anybody, we'll carve off our percentage of revenue for not helping out. So that's kind of what I'm seeing in our industry is, there tends to be traps along the way to get people stuck in suboptimal situations. And then this idea of being independent, I feel like it's fantasy. People think it's better than it actually is. And I really like the idea of being independent, being a fiduciary, doing those things. But I just think you need to understand the trade offs and who you are as a person.

Pat Brewer (01:05:55):

Do you want to be a visionary entrepreneur and build the team and create the incentives and accountability structures? And build all the infrastructure, create the marketing, build influence, maybe sacrifice time with your friends and your family and your hobbies, to do all that to get your 53% net revenue? And potentially get some extra value that you wouldn't have had if you were an employee advisor? Or if you just owned equity in your client relationships. Maybe. So I don't think it's a yes or a no to either one of those.

Pat Brewer (01:06:21):

Maybe I'm answering the question differently than Eric had posed it, but I think there's room for both parties; the fiduciary, the employee advisor. I think what there's not room for in this industry anymore is all of the embedded conflicts of interest in all of the business models that are designed to monetize advisors throughout their career and give them suboptimal outcomes. I think that's what we need to do away with, and that's ultimately what our platform stands for. But it's going to be a long road. I mean, pandemic or not, I mean these companies are very well entrenched. So I think it's going to be a long road before we see something like that happen.

Eric (01:06:56):

I think that you're onto something, because we've had several questions. Richard [Debona 01:07:00] threw down the gauntlet via an email to us. But his question was, "Why has the industry continued to push the narrative that everything fee-based is good, everything commission based is bad? Since when has merely being fee-based synonymous with being a fiduciary?"

Dan Allison (01:07:14):

So every firm that I've ever worked with says that they're independent, comprehensive wealth management fiduciaries. And they're neither independent, comprehensive or fiduciaries, period. This word is so freaking watered down, it drives me crazy that it's become a buzzword. A fiduciary. I want to give you an example. I told Pat, I think this just happened, Pat and David, when I was in Austin meeting you in person, it had happened two weeks earlier.

Dan Allison (01:07:41):

And I was on a panel at a conference, back when we used to have conferences, remember that? And there's 800 people, 1000 people in the audience, we've got a panel and I'm the expert on business development. And at the end of the panel there's a guy that owns a $10 billion fee-only fiduciary, comprehensive wealth management firm. And I hope he watches this because it'll piss him off. Anyways, so during the Q&A, somebody from the audience asked me, in all my experience, what do I see as the number one blind spot for wealth management firms in the fiduciary space?

Dan Allison (01:08:17):

What do I think they are blind to as they try to carry out their mission to be comprehensive fiduciary firms? And I said, "The number one thing they're blind to is risk management, insurance, disability, longterm care planning. Because those are largely, and I would say almost exclusively, commission driven products that are important parts of planning. But because fee-only firms can't derive revenue off commissions, at least legally, I said they're really blind to that. So this guy at the end said, what Mr. Allison ... And I promise you there's a point in here, he said, "What Mr. Allison's not telling you is he also owns an insurance company." And I asked him, in front of everybody, I said, "I don't understand the point that you're trying to make." And he said, "Well, I think that the insurance industry is riddled with ...

Dan (01:09:03):

He said, "I think the insurance industry is riddled with bias, because it's commission driven and it's riddled with unethical behavior that's driven by compensation." And I said, "Completely. I mean you're right. Yes." But I said, "When you woke up on January 1st, you had $10 billion of assets under management and guaranteed at least 40 or $50 million of revenue, depending on your fee structure and your revenue model promotes complacency and laziness, period. You don't have to have conversations about your client's diabetes to get them life insurance, because your money's fine. So you don't do real planning. You pretend you're a fiduciary." So, number one, this idea that commission ... And I asked him on on stage, he has three business partners. And I said, "I'm assuming, because you're a fiduciary and you don't believe in commissions, that you don't have life insurance funding your buy sell agreement for your $10 billion company."

Dan (01:10:00):

And he said, "Well, of course we do." I was like, well, how could that possibly be that somebody earned a commission selling you life insurance to fund your buy, sell agreement? How is that possible? You got screwed. No, we didn't get screwed. The guy did the right thing. It just happened that that product, the revenue model was based on a commission, but it was the right product to fill the solution. I think the future, number one, we've gone way from this siloed industry, stockbroker life insurance guy, property and casualty. We've gone so siloed, commission, transaction to where now it's glamorous and sexy to be a fiduciary fee only, I don't believe ... And the reality is the middle is the answer. The answer is, Pat and David hear me say it all the time. If I look at wealth management products, whether it's a 401k, an investment product, life insurance, longterm care disability, life medicine. Every medicine is brilliant as long as it's utilized to treat the exact symptoms that required the development of the medicine, right?

Dan (01:11:02):

But if you give chemotherapy to somebody to treat asthma, you're going to kill that person. And that's not right, and our industry is full of people that understand one solution. They diagnose everybody with that problem and then prescribe the wrong treatment nonstop for that person and never actually do. And the people in wealth management asset accumulation are as guilty as life insurance people. They are, whether it's I subscribe to a superior investment philosophy that's academically based on empirical, blah, blah, blah, cool. But there's not one solution for every problem. And that's what they do, instead of their identity being a true comprehensive wealth management firm that solves problems individual by individual, they subscribe to a philosophy of wealth management, and push that individual by individual. And that's completely wrong.

Dan (01:11:54):

So, I think we're going to see, we saw a huge correction, over correction to where yeah, everybody used to screw you by selling you wrong commissioned products and now we're this way. And I think we're going to sway back and be like, okay, somewhere in the middle is the right answer. And the bottom line is every individual ... David's wealth management situation and Pat's wealth management and mine, and Eric, yours, we're all incredibly different. I've got two children and a wife out here. I've got companies and employees, my situation is just very different than somebody else's. So, to prescribe me with a medicine that you prefer to push on me is the wrong thing to do. So I hate the idea that fiduciary is exclusive to fee only. And I give the analogy like a realtor saying, "I don't charge 6% to sell your house because commissions are disgusting and unvariable. I charge 600 basis points as a fee to sell your house." It's the same freaking amount of money, it's a commission.

Dan (01:12:56):

Come on, Joe, I took 75 basis points on your assets or 1%. It's a commission. It's not a fee. It's a commission. It goes up and down when the market goes up and down. So, I think we got to, at some point we got to be more honest and transparent, like a fiduciary should be and just say, "Look, here's how I'm making money. Here's how I'm driving value to warrant the money that I made on this." And if it's ever out of line value with money, then we got to correct that. We got to make the money and the value in line, which it's not. A lot of times in insurance we just did a million dollar premium life insurance policy, and the advisor that sold that made a million dollars. And I'll bet he spent, I don't know, 20 hours, but the client was a multibillionaire and needed that policy.

Dan (01:13:43):

So, it was the right thing to do. The advisor doesn't get to decide that he made a million dollars. The insurance company did. So was he a bad guy? No, but did the value and the revenue align? Probably not. So, the industry has got to address that in the future and it will, the consumers are getting better educated. And I just get mad about this topic.

Eric Lee (01:14:04):

It's good. We like passion. Anything else to add that?

Dan (01:14:07):

Anyways.

Pat Brewer (01:14:09):

I mean, I think Dan pretty much hit it on the head, I would say I think the biggest thing is just figuring out a way to cap compensation across the industry in general, to figure out what people should be paid regardless of source. But the problem is there's going to be so much money spent on lobbying that it's going to be pretty difficult to get that done. I'm sure it will change over time, as Dan said, but yeah, I mean, it's a long road home for any of these types of changes.

Eric Lee (01:14:36):

Sure. Someone else asked does a flat fee or a retainer model disincentivize advisors from proper investment management because they have no skin in their clients' portfolios?

Pat Brewer (01:14:46):

Think about that one.

Dan (01:14:47):

I'm going to say something that's going to piss everybody off.

Pat Brewer (01:14:50):

You want to keep it going?

Dan (01:14:51):

Proper investment management I take your three million bucks and I throw it over to a company and they deal with it, but it was my proper investment. There's not proper investment management and not to be dismissive of the person that asked the question because, but retainer completely makes sense. You should be paid a fee to ... But again, my advisor is a fiduciary and I feel like I'm doing air quotes a lot, which obviously is embedded with cynicism. But I mean, he's a fiduciary. But when I went to him and said, "Hey, look, I'm looking at buying an insurance company and I want to pull three million bucks out of my cash and go acquire the firm you are my comprehensive wealth manager. What advice do you give me?" Immediately there's a conflict of interest. It doesn't matter that he's fee only fiduciary, doesn't matter.

Dan (01:15:44):

He is looking at, if he charges me 75 basis points, $24,000, two grand a month out of his pocket gone, to give me the advice that, "Yeah, take the three million bucks to go buy that company. It's a good investment." He's not qualified to give me the advice. He's not incentivized. He is disincentivized to give you the advice, where somebody on a retainer, my accountant, my CPA, can give me objective advice. He doesn't care where the money comes from and where it goes. He analyzes cost structure and profit and loss and like, "Hey, go buy that thing." That's a fiduciary. Yet my guy goes out and says he's a fiduciary, but, and he tries to behave that way, but the industry doesn't allow them to really be fiduciary. There's conflict of interest in every business model I've ever seen.

Pat Brewer (01:16:30):

Yeah. I think part of the challenge though, in our industry with a CPA or any other type of professional service, a law firm, it's a little cheaper to acquire clients because people need to do those things. So, I think part of the issue is people don't appropriately prioritize their finances and that's what drives up the acquisition costs. And it causes these conflicts of interest to become more prevalent. And, if you think about why embedded compensation was invented, I'm sure it's the company started to just try and sell products and they're like, "For some reason they just don't want to pay for help on their finances." They just seem like they're just not willing to pay. And it's like, "Well, why don't we just bake the fee into the product?" And they're like, "That's genius, Bob. Let's just do that."

Pat Brewer (01:17:13):

And then they had six jets, right? And then they ... The executives of that company probably left and started a similar competitor. And now we have the insurance industry. So I think it's, if people appropriately prioritized their finances, we would see a reduction in client acquisition costs, which would make it a little bit more sustainable to create a business around a retainer model. The reason I love the retainer model for reducing conflicts of interest, I hate the retainer model for producing a business, it actually has the potential to scale beyond the founder. So, I think if you launch a business and you're, "I'm going to be fee for service, I'm only going to charge a retainer." Well, guess what, you're competing against people that have those conflicts of interest, that are willing to accept them based on the current regulatory environment, they can do that.

Pat Brewer (01:17:57):

And they're willing to pay five to six to 10 X, what you're willing to pay for a client. And not only that, not only are they willing to pay it, the companies that back them, these huge insurance companies, are willing to pay them marketing credits to go out there and acquire more, to sell more of the product. So, I think it's just understanding all the way through like, okay, they've got these embedded conflicts of interest for a reason, either on playing by the rules or if I'm not, and if I'm not playing by the rules and I'm going to remove myself from the system and I'm going to charge a retainer, I need to understand what the outcome is for me as a person. Right? And for if I'm trying to build a business, I would say that right now, given the regulatory environment, given the size of these banks and insurance companies and just how advisors have set themselves up, yes, people would prefer a flat fee or a fee for service type of model, but I'm not willing to run a nonprofit either.

Pat Brewer (01:18:47):

So, the challenge is it needs to be top down. It can't be bottom up. It can't be like, "I'm going to build a business for me and my family and this thing's going to be sustainable. I feel good about it. I'm doing retainer." It's like, cool, man, you're going to be broke. You know, that's just how it's going to work, because people aren't going to adequately prioritize their finances. That's just not going to happen. And two, your competitors are going to be able to spend more money to acquire the same client that you want. So, I think that that's a big issue right now that a lot of these progressive networks and things that are promoting this retainer based model, this fee for service model. It's like, yeah, you will stumble across people in your life that are looking for this service, but you can't go out and create a company that has multiple employees ... Prove me wrong. I'm happy, whoever wants to prove me wrong, prove me wrong.

Pat Brewer (01:19:29):

If you're regulated, if you do a financial coaching company, you can absolutely do it. Because then you can have testimonials. You can have reviews, you can build the infrastructure that's necessary in order to scale that fee for service model. But if you're regulated and you're playing by the same rules that everyone else is subject to, you are operating at a disadvantage from day one and you will never scale a company beyond a certain point.

Dan (01:19:52):

And something from a consumer perspective, Eric, that I think, if I got $10 million invested with you at 75 basis points and I'm paying 75 grand a year, but it's invisible. And it only shows up on my statements. Or I pay four grand a month, so whatever $48,000 a year, when times are tough and I got to look at expenses that that four grand a month is going to be one of the things that I'm like, "Ah I don't, I can throw this. I don't need to pay that four grand a month." Meanwhile, I'm paying 6,500 a month in the other model, but I don't see it. One is an active decision to pay and hire value. The other is a passive decision, no differently than a gym membership that gets taken out of my credit card every month.

Dan (01:20:36):

I don't have to write the check. So even if I didn't work out last month, I'm probably not going to cancel that membership. Whereas if I have to stroke that check every month, or I got to actively make a choice to reengage and rehire, I think that model not only does the advisor suffer, but clients quit using it. Because it's one of the weirdest industries on the planet, because it's one of the most important decisions a human could ever make. But because of how it was built 50 years ago, they're not used to paying for it. They don't know how they pay for it. I got a million dollar life insurance policy and the guy made a million dollars, but I didn't pay a million dollars. So, it's free. And that's the whole industry is like that. So, how do we get from there to any kind of retainer model that makes sense, it's-

Pat Brewer (01:21:20):

It's got to be top down.

Dan (01:21:20):

From a business perspective or the consumer perspective.

Pat Brewer (01:21:24):

It's got to be top down regulated.

Eric Lee (01:21:26):

It almost becomes a semantics game of how do we make this, we package this the right way to make it more palatable for the consumer? So, yeah. Awesome. Well, last question here is kind of a technical question. From Scott Prichard, how can advisors efficiently serve 401k plans without distracting from their core wealth management business?

Pat Brewer (01:21:46):

401k. So, when we rolled out our RIA, we started with the private wealth side first, and then like most firms, we saw an opportunity and potentially diversifying out of just providing investment management and financial planning to consumers and business owners to extend our services into things like tax planning, 401k, things like that. The challenge of the 401k space is you really need somebody who's specialized to handle that area of the business. There's a lot of really good providers that you can outsource to. So what I wouldn't recommend is if you're one advisors or maybe a team of two to three and you want to be a two ... I think I heard this term from, from Brent, Dan, your friend, Brent, a two-plan Tony, I think is what he called.

Pat Brewer (01:22:34):

So, if you're going to be a two-plan Tony, stealing this from Brent, then it's probably not going to work out really well for you. And I'll give you a situation for me personally, we brought on a plan, it was pretty sizable up in Boston and had a great connection with the CFO. He's an awesome guy, him and I hit it off immediately. We beat Fisher Investments for the plan. They actually flew out Ken Fisher's son. That was partially the reason why I wanted to win. I just needed to know I could beat Ken Fisher's son in a one on one meeting, took him down. Great, great plan. But once we started to implement the service, I packaged the TPA together with the record keeper, we set it up appropriately, all the stuff was done.

Pat Brewer (01:23:14):

And then it was like, okay. And then we're like blind. We didn't get any information from the record keeper as far as what was going on and what the service model was. The TPA was haphazardly communicating with the record keeper. So, it felt like it was a very disjointed process. And then, I didn't know what expectations to even set or manage to with our client, because I didn't know the internal processes that were going on behind the scenes between these two other parties. So, six months goes by, I think everything's fine. We're scheduling our six months meeting, we do two meetings a year for them. And he's like, "Dude, this sucks. Here's what's going on, I'm getting this paperwork. This person sent me this. They didn't respond to that."

Pat Brewer (01:23:56):

And I'm like, "What? I thought we were all good. I thought we were all good on this stuff." And it turned out that we weren't all good. And I think that's the problem with the 401k industry is you've got multiple people with different service models and the right record keeper for one plan might not be the right record keeper for another plan. So you're going to be managing a relationship with Voya. You're going to be managing relationship with Empower and all these different vendors. And you might be using outside TPAs to construct the plan if you're doing cash balance or a new preparability profit sharing, those types of things. So what I would recommend for most firms, if you're, don't be a two-plan Tony, like me. Find a vendor that specializes in the 401k space that can wrap all this stuff together and oversee it.

Pat Brewer (01:24:42):

And then you just manage the relationship, but you need to make sure that you're doing your due diligence and you know they have a process. So make sure you get their process laid out entirely, so that you know what it's going to look like a to Z, how you're supposed to interact with it, how the client interacts with it, what types of contacts they have at the firm to make sure they get a good experience. So, that was my experience with it is 401k's great. It's a good way to diversify your revenue stream, but you probably don't want to go at it alone or with a small team. You're better off outsourcing, and then if you want, you can in source it later on, but still the margins are so tight it probably doesn't make sense.

Eric Lee (01:25:20):

Yeah, that makes sense. All right. Well, gentlemen, thanks for joining us today. Before we sign off, does anybody else have any final thoughts to kind of, for the advisor community and this particular juncture of the world that they'd like to share?

David (01:25:34):

Just a general statement, action always beats inaction. Even if it's the wrong action, you either win or you learn. So, whatever nugget, whatever that one nugget was that you got from this episode, whatever nugget you've gotten from an audio book or another podcast, just take that nugget and please actually do something with it. You don't want to be the smartest person in the room that has no money and no clients, you want to have the best of both worlds. So, just make sure that you're taking action and prioritizing the follow through on that. Analyzing if it's effective and recalibrating as needed, make sure you're not just a sponge. Let's clean some dishes too.

Dan (01:26:21):

Yeah. I think to dovetail on what David said, the number one criticism I get at least to my face or in writing, that people give feedback. When I [inaudible 01:26:31] do a workshop about how to get more referrals, they say, "Well, the information was incredibly basic and simple. You know, it wasn't academic and empirical enough, it was simple." And I always say the same thing, eating grilled chicken and vegetables and working out five days a week is also quite simple. But if there's no action behind the common sense, you don't get the Greek god body that David [Ducelle 01:26:54] has. You just don't get it.

Dan (01:26:55):

You got to put the work in. And when I give interviews, one of the questions people always ask is when I look at all the firms that are successful, what's the common theme? You know, what do they do differently than other firms? And they do what David just said, it's so simple. They put their head down and they work and they hit a brick wall. And they'd say, "Well, that sucked." And they go around the brick wall and they just keep going. But they take common sense, things that work, they're confident in their ability. They understand they're valuable, which I think is the number one thing in the wealth management industry is that most advisors truly deep down, when they go to bed at night, when they wake up, they don't believe they're truly delivering value to people. They don't.

Dan (01:27:38):

And so that impairs their confidence, it impairs when they communicate with people. The social media, like when you put, when you follow David on his social media, he's incredibly confident. Now he's humble about it, but he's confident. And people are attracted to that. Most advisors aren't truly confident that they deliver a lot of value, because if you are you're pretty convincing when you meet with people that you need to be working with me. If you have any kind of complication with wealth, you ought to be working with me. So, I would say, number one is confidence. Number two, like David said, get out there, be present. Be somebody that people recognize. I keep seeing this guy everywhere. Even when it's little things like David said, I think today you posted something on Instagram and it was one sentence. And it was something like inaction is worse than action. Or something like that.

Dan (01:28:27):

I immediately saw that first thing I woke up, thought about David. He's in front of me non-stop, be good at that. But number three is just puts your head down and work. Everybody's looking for a silver bullet and there's not one, there is no triple your business in 90 days scheme in the wealth management world and anybody who pretends they're selling you one, you're the product, you're the product they're buying, you're being sold something. [inaudible 01:28:56] Simple.

Pat Brewer (01:28:55):

Yeah, I would say my two cents would be now is a really good time to take stock on two things. The first is what are you building for yourself and your family? What is that? Are you building an enterprise level practice? Are you building a small firm? Are you building towards having really great relationships with your clients and just being an advisor? What are you building? What is your intention for what you're trying to do? I find that having coached hundreds of advisors over the years, been a consultant for a decade, all too often when I ask people that question, they don't know how to answer it very specifically. They just say, "Well, you know, I'm looking to bring on a couple more clients." Why are you trying to do that? What is it that you actually want to build for you, for your family or for whatever reason?

Pat Brewer (01:29:38):

So, I would say this is a good time to reevaluate that or evaluate if you haven't before. And then the second thing is, are you in the right spot to build it based on where you're at? Maybe you're at a captive broker dealer or a wirehouse, or you're running your own firm and you're burning the candle on both ends. And it's not ultimately what you want. What lit you up about the business was changing people's lives and impacting them in one on one relationships. Start with what are you building, see where it leads you from an introspection standpoint to see if you're at the right place. Because I also find that a lot of advisors they tolerate good enough for too long. It's good enough where I'm at, I get paid 87% or 90%, or there just hasn't been enough of a push to kind of get over the hump and find an optimal situation.

Pat Brewer (01:30:26):

Start looking for an optimal situation. Because right now, a lot of these firms that were pre-pandemic firms that a lot of advisors are at are not going to adapt nearly fast enough to provide the infrastructure for the client experience, the marketing, all the stuff that's going to be necessary to get to the next level in this new kind of paradigm. So, just start looking if you feel like you're not at the right spot.

Eric Lee (01:30:48):

Awesome. Well, thanks to everyone for listening and thanks for submitting your questions. Hopefully this was a useful and kind of equipping and encouraging discussion we've had today. This has been Patrick Brewer, Dan Alison and David DeCelle, and Eric Lee here, be sure to check out modelfa.com and follow us on all of the social medias for more information in the coming weeks ahead. Thanks so much.