Financial advising with a

S4 EP03 | The Future of Client Experience: a Wake-Up Call for Financial Advisors

12.10.20 | 0 Market Scale

Our team sat down last month to talk all about Client Experience with Reese Harper, CEO of Dentist Advisors. On this show, Reese Harper joined our host Patrick Brewer to answer questions from our listeners and readers.

What does “client experience” actually mean? What should your clients see, feel, interact with? 
What are the components of an effective, strategically designed client experience?
What are the first steps an advisor can take to evolve the CX into the future?

Tune in to the conversation and get ready to take notes! If you have ever struggled to build relationships that naturally grow deeper as the client’s needs change, then this conversation will help you. In a discussion facilitated by our Executive Podcast Producer Eric Lee, you will hear Patrick Brewer and our guest Reese Harper share strategies for establishing the relational depth that is required to engage in a true financial planning partnership.

Did you like this conversation? Then leave us a rating and a review in whatever podcast player you use. We would love your feedback, and your ratings help us reach more advisors with ideas for growing their practices, attracting great clients, and achieving a better quality of life. While you are there, feel free to share your ideas about future podcast guests or topics you’d love to see covered.

Our Team:
Model FA Creative Director and Executive Podcast Producer, Eric Lee
Model FA Founder and Podcast host, Patrick Brewer

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Resource Links
Connect with Reese Harper
Dentist Advisors
Get Elements

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FULL TRANSCRIPT

Reese Harper (00:05):

Advisors who can deliver a consistent process understand their cost. They can start measuring their cost. So what'll happen is advisors that don't know what they cost and they don't know what they deliver, they're going to get the clients who also are clueless and don't know what they should be paying.

Eric Lee (00:25):

Hello, and welcome to The Model FA podcast. I'm your host for today, Eric Lee, and we're sitting down today with Reese Harper and Patrick Brewer, and we're talking about next generation. For those of you who are Star Trek fans, I've got bad news. We are not talking about Star Trek. We are talking about the next generation of financial advice, both from the advisor standpoint and looking at the difference and the morphing of our clients as well. So let's kick off today's discussion, guys, with talking about the client experience. How do you define client experience? I think that's a nebulous term that a lot of people throw around in this industry, but a lot of people don't actually really unpack what that means. So let's start with doing that.

Reese Harper (01:06):

Well, I just want to say hi to Eric. This is the first time we've met, man. I'm liking that beard and that road mic. I'm loving this whole set-up here.

Eric Lee (01:14):

Thank you, sir.

Patrick Brewer (01:15):

[crosstalk 00:01:15] looking good.

Reese Harper (01:16):

Me and you are both showcasing our mics right now. This is good.

Eric Lee (01:17):

That's right.

Reese Harper (01:18):

Most of you don't know me. I'll introduce myself just briefly. My name's Reese Harper. My focus for the last 10 to 12 years has just been building an RIA, dentistadvisors.com, that Patrick has been instrumental in helping us strategically in a lot of ways try to really dominate that market. We've been able to build a nationwide footprint that this month is our highest number of inbound appointments that we've ever had in our history. It's cool to see how good marketing strategy can drive an RIA firm. That's not what we're going to talk about today as much, but I did want people to know my background was in building an RIA firm.

Reese Harper (01:59):

About a year and a half ago, I started taking our financial planning process trademarked elements, and you can go to getelements.com and check it out there. But what we did was to try to learn what a client experience should be like for a next-gen client. What is the 18-year-old customer today actually going to be thinking when he's 30? What is the 30-year-old customer today think that's different than the 50-year-old customer? What's the difference in generational planning that's going to be happening? I don't have all the answers here. I've learned quite a few things in advisor interviews.

Reese Harper (02:35):

We launched our product about 30 days ago. We have our first few paying customers, which is awesome. I'm finally not worried now about being it that no one's going to want it, so that's good. I did have some dark nights of really restless nights wondering if people would think I was crazy and that this wasn't going to work. When you don't have a paying customer and you've spent a few million dollars on product development, it's a scary moment when you go to market, just to make sure that all your research paid off. I did learn a lot in the initial probably 65 advisor appointments I've had now in the last month, just 30-minute to hour consults doing fact-finding on these people that I haven't been able to engage with as much. I've been doing dental, consumer-focused conversations with clients but never with advisors as much as, Patrick or Eric, you probably have.

Reese Harper (03:26):

There's some themes that continue to come up that I think are really important and luckily part of the genesis of the product that we started building a few years ago. One of the main themes, I would say, is I really do think that a business that isn't interacting in a mobile-first environment, like if your main interaction with your customer is not via mobile, I do think that's going to be a challenge in about 10 years. It's not a challenge today. In fact, most financial advisors I meet with are wondering why our system is on mobile and not on the desktop. They're like, "I'm sitting at my computer. How am I going to do financial planning if it's not in my computer?" That's a very common initial reaction.

Reese Harper (04:09):

But I think in order to have an experience that helps the next generation feel like they are being conveniently serviced and it feels light, it's not heavy, there needs to be a way where you can collaborate with your client via their device of choice, which is going to be mobile. It's all going to go that direction, and gathering information, collaborating with clients on data points you need, collecting data, I really do think that 10 years from now it's going to be very different than it is today, where right now you have a very eMoney, RightCapital, MoneyGuidePro-centric web experience where it's comfortable and it's working and those are great companies.

Eric Lee (04:51):

Do you think that that's accelerated because of the pandemic and everything else that's going on in the world? Have you seen that at all?

Reese Harper (04:58):

I don't know. It probably will be, Eric. For me, this was a theme from three or four years ago. If you just look at the data, even people in their 60s, which device they're spending time on, the world's all going mobile. I think people have a hard time collaborating with their financial advisor remotely now. Before, see, you could kind of, we'll call it, subsidize your mediocre value proposition with an annual meeting and just show up and do a dog and pony show and everyone would feel good for an hour and then they would say, "I guess that's financial planning." But now you can't do that, right? Financial advisors' jobs are part functional, I would say 20 to 30% functional. And Jobs-to-be-Done Theory, for those of you who are not familiar with that, it's a book that Anthony Ulwick wrote. He's a Silicon Valley consultant. There's functional jobs, which are task-oriented jobs that service providers perform for people, and then some industries have emotional jobs, and some have social jobs.

Reese Harper (05:59):

Social jobs are looking good and getting social recognition, and some businesses are in the business of making people feel good in a social construct. Financial planning, I think, has got some social jobs that it's doing for people, that you're a good steward of your money, you get to feel like you're responsible. That is a job that advisors provide, but the emotional jobs are probably the 70% of the jobs financial advisors provide to clients, and those are hard to provide in a COVID world because emotional jobs are things that you can provide more fully when you're face-to-face with people doing meetings. Then when you take that away, I think your ability to have the emotional impact with your client is a little bit more difficult. I do think what we're doing today with the Zoom call, as long as there's video, you can sense emotional a little better there than you can audio-only. So we do a lot of Zoom meetings. But I think it makes the functional jobs very difficult to do if your user interface or your customer service experience is not mobile because it is a pain to schedule a time and sit down.

Reese Harper (07:12):

There's a difference between asynchronous and synchronous communication, and a Zoom meeting is a synchronous kind of time-scheduled thing. Most consumers that I am researching, they want to be able to interact with their advisor asynchronously. So I ask you a question, you get back to me when I have time. I ask you a question when I have time, you get back to me at a different time. It's more like a WhatsApp or a message, right? I ask you something, you get back to me when you can. That needs to be a part of the financial planning process, too. Financial planning can't just be this event-based work. It has to be a continuous kind of asynchronous world, and I think that's where at least my personal worldview's at now. It's going to be a mobile-first, asynchronous kind of future, and I think advisors that have ... I'm trying to be one of many people that are building a financial health platform that does mobile-first, asynchronous kind of work and allows advisors to build these emotional connections with their client without having the baggage of physical meetings that have to happen at certain times.

Patrick Brewer (08:19):

I've got a quick question, Eric. My question would be, just given the fact that we serve diverse types of clients as financial advisors ... We've got people that are getting close to retirement. They're used to a certain type of interaction, and they have some expectations on what it means to interact with our industry. You've got people who are in more of a professional context, dentists, doctors, attorneys. You've got entrepreneurs who historically have been underserved, I would say, by the financial services industry, at least from my experience.

Reese Harper (08:51):

For sure, they are. Yeah.

Patrick Brewer (08:53):

I think all these people think differently and they may want a different product, service, or client experience. How do you see that playing out for advisors? Obviously, you have built a firm that's primarily focused on dentists. Do you feel that this asynchronous, mobile-first, tech-forward experience applies to all of these different demographics and psychographic type of profiles?

Reese Harper (09:18):

Not all of them, right. Here's what I'd say about that, and I appreciate you calling me out on that a little bit. I think that when you ask me what's the younger generation looking for, I do think that over time that's going to become more common. If you're asking me what does a 60-year-old that is in retirement looking for, yeah, it's a very different experience. I'm targeting, we'll call it, the next generation of customers for the most part, next generation of advisors. I think within 10 to 12 years, if you're not tech-forward, mobile-first, you're in trouble, even because the 40-year-olds right now that are getting closer to retirement, I don't think it's going to be a world where ...

Reese Harper (09:58):

For example, I'll just give you a concrete example. So I want to invite someone to engage with me as a financial advisor. I have a few options. I can ask you to schedule an appointment with my secretary at my office and bring in your paperwork and we're going to sit down and have a chat, right? Or, as I did this morning with a 26 million dollar net worth client who I'm not engaged with yet, I just ... He heard about me, and I said, "I'm going to text you a link to an app, a native, mobile iOS app." It opens perfectly on his phone. I just said, "Can you fill it out for me real quick before we meet? Because I want to make sure and not waste your time with a generic conversation during our first meeting, I want to really be able to understand your situation."

Reese Harper (10:45):

He spent about six minutes typing in on his phone really quickly all of his assets and all of his debts. He has 42 assets and 18 debts and a 26 million dollar net worth, a complex case. The app prompted him to add his assets and add his debts, and he did it perfectly. It prompted him to clarify his entity structure and the tax structure on the business entities that he entered. His real estate holdings are all in there properly. He told me it took him between seven and nine minutes to do it. That experience now, when we get on the phone next week and we talk, I will have had a very low cost way of getting a really accurate picture. All of his financial health scores are in there, his liquidity score's in, his savings rate's in there. I know what he spends, I know what he makes, I know what his real estate equity is compared to his business equity compared to his qualified assets, and I've only spent five minutes looking at it.

Reese Harper (11:42):

So he spent seven to nine minutes, I've spent five minutes. That process that just happened takes most advisors months to get to right now. Now, I'm going to get right to what on the next thing? Am I going to get to functional jobs? No way. I'm going to jump into emotional connection jobs at the first meeting. Talk to me about these guitars. Talk to me about this real estate. Talk to me about this business that you've got over here. I want to hear more about you. At that first meeting, my fact-finder is deep, right? My fact-finder is a mind map, and at the end of that call, he's got to sign a contract with me to move forward or not. But I've got all of his data, I have all of the emotional buy-in from that first meeting, and I'm a premium financial advisor that isn't going to work for free. He's got to make a choice. Do I want to work with this tech-forward, mobile, easy to work with advisor?

Reese Harper (12:40):

It's all been remote. He literally lives five miles from me, and we have not met, right? And he doesn't want to meet in person, and he's 47. He would if I was like, "We got to meet, man, we got to meet," and I'm sure we will meet in the next few months. But if my condition working with him was a physical meeting at my office, here's my assistant's number and my schedule, I may not get that guy to actually engage. But if it's easy and it's low friction and we're moving together easily, he's only spent five minutes watching a football game on a Saturday giving me some data, and now we're texting back and forth like we've been friends for 10 years. What we just described right there is a critical part in any financial planning process, whether you're doing it manual at your office with paper or whether you're doing it in a more tech-forward mobile way.

Reese Harper (13:33):

He shared himself in a very vulnerable way with me, right? He shared some of his financial data that he hasn't told to maybe anyone in his life. What does it take for someone with a 26 million dollar net worth to engage an advisor? This person's been very private. They've been very DIY probably his whole life, for the most part. Now, I've got to validate that moment and make him feel like I value what he just did and take him seriously on the data he just shared and make him understand that I'm dialed into his life. That moment can happen in any number of ways, no matter how your practice is run, but that's the first step in a good experience, is you share me your stuff and you're going to get to see how I react.

Patrick Brewer (14:21):

Yeah. I think what you're driving at, and a lot of things here, we could spend hours just talking about what you opened up with that story there, but the way I've described experience is every interaction they have with you as a person, your brand, your team, any digital assets, any of the email, the communication style, the responsiveness, level of reliability of your staff, all of these things ultimately roll into the experience.

Reese Harper (14:46):

Totally, man. Yeah.

Patrick Brewer (14:47):

I think that's what a lot of advisors miss, is if you're on the phone with them and they all have the same exact website with the same logo, they spent $25 for 99 designs, and they're communicating the same exact way about their set of services, they've got the same badges on their page about why you should trust them because they're part of these networks, but they really don't have any differentiating qualities. Then they're going to struggle to be able to attract the right type of attention and get people to actually say yes, even though the client ... What I've noticed is if your client experience isn't compelling, the prospect isn't going to tell you that. They're not going to be like, "Hey, I didn't move forward with you because of these nine reasons," like your website sucked or you weren't compelling in the sales meeting or you didn't have a digital storefront to be able to collect information and make me feel comfortable emotionally. They're just going to ghost you or say no.

Patrick Brewer (15:39):

So I think what you had mentioned in building out this platform to be able to, in a low friction way, collect this information, that's just giving them the first step and being like, "Oh, wow. This is, a., different than what I've experienced to this point, and, b., it feels credible and secure enough for me to open up that dialogue and start to have that discussion." So it allows you to then move the ball to that next phase, right? My question to you would be it doesn't sound like it eliminates fully the friction around making sure that all of the financial planning, the i's are dotted, the t's are crossed as far as analyzing all these entities and the structures. Eventually, you're going to need to collect all these operating agreements and all of this stuff to make sure that he's set up for-

Reese Harper (16:23):

Cap tables, right, promissory notes, operative agreements.

Patrick Brewer (16:26):

How do you then introduce the next stage, which is, "Okay, we've engaged this person emotionally, we've reduced the friction in order to get them in the pipeline, they're interacting with a tool that is lower friction," but this person is going to require a lot more hand-to-hand combat as far as making sure they get answers to their questions because their questions are complex. So how do you shift it from this asynchronous, high-touch experience to, "Hey, dude, we're going to need six hours of your time to make sure that all this stuff gets lined out appropriately?" What does that shift look like?

Reese Harper (16:58):

Well, let's not forget that prior to this moment, for me to have this opportunity, it wasn't because of the technology I have, and that'll never change. The reason I have this opportunity is I have a very clear value proposition at Dentist Advisors that this client has probably been trolling me for a year before he felt comfortable enough to reach out. That is the primary advisor value proposition. It always will be. You are a custom, well-built, boutique, high-end operation or you're going to get replaced by any number of platforms that are commoditizing your job. So you're either going to have to go to the direction of if you ... Go build the platform. I'm not saying don't build a platform that commoditizes the industry. Do that. But either go do that, go get stock in one of those companies, go start one of those companies, or go build a very narrowly-focused experience for a particular group of people. I just want to make sure we're not ignoring that.

Reese Harper (18:00):

Today, we're going to assume that you all have that because Patrick has done a killer job of making sure you position yourself the right way. But the first step beyond invitation is that sales call that I'm about to have with this prospect who's given me his data. I'm going to make sure in that sales call that I don't give away the farm. I'm not going to give him strategy. I'm not going to tell him everything that I'm going to do. But what I am going to do is tell him what I am going to do for him. I am going to explain my process. I'm going to walk through the details of my process, and I'm going to give him a little bit of insight strategically on where I think his gaps might be. But I am not going to give him a plan, I am not going to give him advice, I am not going to move forward. Why? Because he has to pay me, he has to engage me. My time is valuable.

Reese Harper (18:49):

That's your opportunity to really show that prospect that you have a process. Assuming that you do that and then you're ready to move forward, it is ... This focus today is where do we see the future going more than anything. I think that if you have a six to nine-hour grind of onboarding with a customer, that is not going to be sustainable. I don't think that is the future. I think the future is smaller. In our platform, right now, we have what's called a prompt engine. There's about 470 prompts that we've programmed into the system right now that are professional prompts for the advisor and some are prompts for the customer, and they're ranked by priority based on the data that the customer enters into their net worth statement.

Reese Harper (19:37):

So, for example, one of the major priorities of a prompt engine would be what does this person earn, right? What do they earn? Well, I don't have to know based on their tax return and dividends and interest income and rental income and W-2 breakouts what they earn. I can start by just having a really simple, gentle, friendly prompt hit the customer and say, "Hey, Reese really wants to get going on your planning, but he needs to know what you think you're going to make this year." That's it. Type it in, it'll take you 16 seconds. The client fills a reward, they feel awesome about it because they just communicated something with you that was valuable to them and now you have a piece of data. We're going to hit them once or two times or three times maximum a day, so they can only have three prompts a day that come up and ask them for things. If the client wants to do more, they can always say, "Yeah, I want to do more. I want to onboard faster. I want to keep going."

Reese Harper (20:30):

But you're going to ask for things like a document. You're going to ask for things like their CPA's contact information, or if you are their CPA, then you just tell the system you just want it to ask for their insurance agent's information and their estate planning attorney's information. All of these prioritization of prompts are going to be the way that advisors can stop doing 90% of their job gathering paperwork and functional garbage that computers really should do. Humans should not be collecting basic facts about another person in an imperfect white pad notebook that they end up losing and then have to re-ask for facts. Right now, one of the biggest frustrations I hear from users or clients is, "I already gave my advisor this information. Why doesn't he have it? I gave him this. I gave him that. I already told you this. I already told you that." It's because we're not sharing a centralized system to store the information. We fact-find on one system, we collect data for our investments in another system, and then our CRM tries to contain it all, but it's not built for this use case anyway.

Reese Harper (21:34):

So my thought for onboarding is it's gentle, gradual prompting that lasts for a lifetime. But up front it's probably a little heavier on some granular things, and as time passes it lightens up and focuses on other things. The technology will actually never replace the human. It just won't for 100 years, man. The technology can only do organize-level and analyze-level tasks, and you have to program it what to think, and it takes a human to program it. When it comes to making decisions and taking action, the real emotional jobs of financial planning, giving people confidence to make a choice or what choice we should make in our life based on data that we already have, computers are not going to win that battle. The platforms like mine, there's going to be many more that are better than ours. I mean, I hope we're the best, but we probably won't be. Someone's going to have more fundraising and more backing than me.

Reese Harper (22:32):

But platforms like this are going to focus on the functional, organize-level jobs to be done, and the advisors who are really smart are going to focus on niche marketing, they're going to focus on knowing their customer, knowing the emotional jobs of advising a customer. I was working with Daniel Hannoush, who's coming onto our platform, has a small, not a small, a medium-sized RIA that services the Chick-fil-A founders nationwide, probably has hundreds of Chick-fil-A franchisees.

Patrick Brewer (23:02):

Nice.

Reese Harper (23:03):

He has very different emotional jobs that he's going to be performing because of his knowledge of that unique part of the marketplace. But the data he's collecting is the same as the data I'm collecting for dentists, and the automation is very similar, and the prioritization of whether you want personal spending estimates before you need kids' 529 plans, it's easy to see which one you need first. You don't need it all to get started. I can get started with a client off of that five-minute upload of their data. I don't have to expend eight hours collecting it all. Anyway, thoughts?

Speaker 4 (23:37):

Hey, Model FAs. I know you're enjoying this conversation, but I wanted to take a quick break to talk to you about the Model FA Accelerator. This is a unique collaboration between us and you where we help you build a financial advising practice that you can be proud of. We focus on the foundational concepts around how to pick a niche or a specialization, how to price your services, how to construct an offer that people are going to buy, and then how to market it and sell it in a way that'll get people to sign on the dotted line and become clients of your firm, all while giving you the information to scale and set up workflows and operational processes that'll allow you to reclaim your time and build a practice that doesn't run you. So if you'd like to hear more about that, go to www.modelfa.com/accelerator or www.modelfa.com, hover over Work with Us, and click on Accelerator. Hope to see you in the program.

Patrick Brewer (24:27):

What percentage of advisors would you say have the ability to operate in that environment? So they collect information from a 26 million dollar account and they can sit down with that person and have intelligent conversation without being able to collect all of the data in advance, formulate their thoughts, run the plan by the team, and get input. Because what you're talking about, it's a fairly high operating-

Reese Harper (24:52):

That was probably a bad example of a customer. But you're right. That requires-

Patrick Brewer (24:57):

Or even a lower-end customer, right? Let's say somebody who's ... They're in their late 30s, they've got two to three million dollar net worth, a couple different things going, maybe some private business interests, some real estate, they've got a primary residence. One [inaudible 00:25:13] a business owner. The other is just a W-2. They collect some basic data. Do you think that most advisors have the ability to facilitate a value-added discussion without all of the pieces and the system would provide something like that, this prioritization system would allow for that to happen?

Reese Harper (25:29):

Our system is designed to prompt the advisor what they need to do based on data that's being collected. It's not because the system could do it without the advisor. It can't. These are discussions that have to happen. For example, what we do, Elements has a planning process that targets topics based on data input from the client, so every customer, if they're in accumulation years, needs to build some kind of a savings strategy, a savings plan, and they need to renew that plan, and that should happen. It doesn't need to happen at a random interval, so our financial planning system is designed to give every advisor the chance to follow very prescribed steps to deliver the value to the client. As advisors get more capable, maybe, we'll say, they've got more experience like I do, they'll rely less on the structure and be able to customize it to their own competency level and not maybe need the prompting to guide them. But if it's three months after you started onboarding and you still don't have a savings strategy or an initial plan in front of your client-

Patrick Brewer (26:36):

You're in trouble.

Reese Harper (26:37):

... the prompt engine is still going to be like, "Dude, you don't have a strategy that you have delivered to your client. Hey, you still haven't collected any PDFs on any of their insurance policies. You have no idea around anything regarding the risk management. You've got to follow up with this customer because he still hasn't uploaded this document." That's kind of where we see the future going, but I've got a lot to learn, and as advisors use it, they'll tell me what we are doing wrong. But that's kind of what we think they need.

Reese Harper (27:06):

Most of these people are coming to me, they're like, "Dude, I have no idea. I just want to buy, not build." So we've created a really robust prompt engine that has types of prompts that are professional for the advisor and some that are user prompts to help guide the process. So the advisors can jut go get a boatload of clients and not worry about all of the process building that they have to do to scale. Because that's the truth, if you have to do all the service delivery and you don't have a consistent, repeatable process, you're going to be stuck in bottlenecks your whole career.

Patrick Brewer (27:40):

Yeah, that makes sense. I've always subscribed to the idea that financial planning is, at the functional level, really nothing more than a commitment to project manage people's finances for the rest of their lives.

Reese Harper (27:50):

Yeah, yeah, exactly.

Patrick Brewer (27:51):

Only one party really cares most of the time. The other party very selectively cares, but when they care, they care a lot.

Reese Harper (27:58):

A lot, yeah.

Patrick Brewer (27:59):

So I think giving the opportunity when they actually care and want to get it sorted out to go in and fill out all the prompts and do all the things but also hit them up along the way with smart prompts, I think that makes a lot of sense. I think it also allows the advisor to ... I've been in sales for my whole career, right, and I feel like I'm fairly proficient at sales at this point.

Reese Harper (28:22):

Best in the biz, yeah.

Patrick Brewer (28:23):

I'll be humble about it. But I feel like this is one of the hardest products to sell because it's so intangible. The nature of financial advice is very intangible. When consumers are sitting in front of you, when they make that decision to say yes, you usually don't have anything to give them or show them. So I think this process of them interacting with a tool, filling out some basic information, having a conversation, seeing the prompts come up, it sounds like that's allowing the conversation to shift from the intangible maybe to the tangible. Do you see this becoming more of a tangible dashboard that both the advisor, and maybe it already is, advisor and client function off of to make decisions so that they're selling more of a product than an intangible service and result? I understand that the advisor's value proposition, everyone says this, is behavior management, right? We all want-

Reese Harper (29:14):

I think that's BS. I don't like that label.

Patrick Brewer (29:17):

I do, too. I was getting there. I was getting there.

Reese Harper (29:17):

I don't like that label. I think it's bull crap.

Patrick Brewer (29:19):

I was getting there. But everybody says that.

Reese Harper (29:21):

I'll just kind of pick apart the industry slightly here, which is the reason it's hard to sell is because people don't want what you got to offer because it sucks and you're not delivering any value. That's why it's hard to sell. So you just have to change what you're selling. Sell something tangible, which is you don't have to sell software. Our platform is silent. It's a process, but the client knows who's doing the work. They know the advisor's doing a boatload of stuff. All I'm doing is creating an infrastructure to make sure the client is aware of all of the work that the advisor is doing and sees that all of these things really matter. You're just exposing to the client a real financial planning process, what it would look like to do real planning.

Reese Harper (30:14):

On top of that, we're pivoting from ... If you look at medicine, when one drop of blood can give you dozens of health insights into someone's life, one drop of blood can tell me about your overall wellness in a really incredible way. What we've tried to create is a financial health platform. Elements is a financial health platform that identifies the weakest areas of financial health to an individual. So we're scoring people on critical metrics. It's their savings rate, their liquid term, their total term, their real estate. In consumer language, it would be like scoring their spending habits, scoring their savings habits, scoring their debt habits, scoring their tax rate, scoring their liquidity, scoring their qualified plan choices, scoring their estate completeness, scoring their insurance preparedness. We have to establish baseline metrics. We can't just be like, "Save up for a rainy day." We have to say what define a rainy day and define preparedness for that event and whether someone's in good shape or not. If someone's got a liquid term score that's below a .5, that's not liquid enough, period.

Reese Harper (31:28):

So you turn from a world where you're just trying to create value out of thin air and charge a point on assets and say that you can outperform your competitors' returns, which is ... I know that's not what the majority of your audience is saying, but that's the old, old school way. Now, we say it's behavioral coaching. Tell me what behaviors you're going to coach. Well, I'm going to coach the ... If you try to get out of the market, I'm going to tell you you can't. Well, so I have to pay a million dollars for that over my lifetime? I'll just remember not to do that, and then I don't need you. It's like, okay, never mind. I got a different value proposition.

Reese Harper (32:07):

Your value proposition should be, hey, financial planning is a lot of stuff. It's estate completeness, it's insurance planning, it's tax planning, it's keeping track of your documents, it's making sure your entity structure's actually appropriate, it's making sure your cashflow is actually moving your net worth in a positive direction on a monthly basis. These are the things that financial planning is. Most advisors don't do that. I do. I just spend more hours with you, I do more work, and I use technology that helps me accomplish a lot better job than other people do, and I won't waste your time collecting paperwork the way other advisors do. It costs a lot of money, though you can see all the jobs I've got to do. I charge $10,000 a year for this. Oh, okay, and now the client's going ... You can say the asset management's free, but it's $20,000 to work with me. You can set your price point wherever you want because it's your niche that determines your price point and the volume of comprehensive planning you're doing. It's not about the asset management.

Reese Harper (33:09):

If you want to do an asset-based fee like I do, shoot, we charge six grand a year plus one and a half percent on the first million. It's just the cost of the service we're delivering. It's just more tangible and it's more concrete. It's not removing the advisor, though. The advisor and their ... I won't call it behavioral coaching, but the emotional jobs they're providing are much more than behavioral coaching. Clients need confirmation of decisions they're about to make. Clients need confirmation of choices they shouldn't make. Clients need reinforcement that they're doing okay in life. Clients need reinforcement that they're not doing okay.

Reese Harper (33:46):

The only way that you can give them that feedback is through metrics that really are objective and then benchmarking to your customers that you have in that same market and kind of going, "Okay, well, Dr. Jones that makes 200,000 a year, he saves 18% of income. Why does Dr. Johnson save 37% of income?" What's going on here between these two customers? Do I just tell one that he's okay and one that they say they're both okay? One's net worth is growing at 4% a year, and one's growing their net work at 27% a year. What's the difference between ... And they both have the same income. That kind of technical planning, to answer your original question, I think that's where the industry goes. Advisors start just getting better at their freaking jobs because they stop wasting time scanning paper.

Patrick Brewer (34:35):

What happens to the advisors ... This is where I was going, and you're taking me in this direction already. The advisor who doesn't move in that direction who wants to work with the usual couple who both W-2, their income increases with inflation each year, they at age 65 amassed a million dollars into their retirement accounts, is there a place for that advisor in the shift in our industry?

Reese Harper (35:03):

There'll still be a place for lots of kinds of advisors, but I would say if that customer asked three advisors what they should do, some would say, "You're a perfect candidate for Betterment," or another advisor might say, "No, I'll do all this for you and talk to you once a year, but it's going to cost $1300 a year or $1800 a year." I just don't see AUM-based pricing being ... Advisors who don't know their pricing model and don't understand, like if you can't tell me ... I can tell you today for sure that if a client says, "I'll pay you 54,000 a year," I don't care how much money I manage, I'll do that job. I know there's a price point at which I go fixed fee. I know there's a price point at which I go AUM. I know there's a price point that I can quote you if you want to go fixed, as long as I've worked with you for a year and determined your complexity.

Reese Harper (35:52):

I know my cost, right, and advisors who can deliver a consistent process understand their cost. They can start measuring their cost. So what'll happen is advisors that don't know what they cost and they don't know what they deliver, they're going to get the clients who also are clueless and don't know what they should be paying, and there'll always be clients who don't know what they should be paying and don't know ... They'll work with you because you're their next-door neighbor, but if you want to be competitive and grow a business, you got to have a price point and a service deliverable that you trust the pricing on. I think that generic advisor you described is going to have a tough time competing because I'm willing to work for less and do more because of the technology that is going to exist in the future. You're just going to have to deliver more or you're going to get replaced, and that's kind of my view.

Patrick Brewer (36:42):

Yeah, I think I would agree. I think what we're going to see is the rise of larger firms that will be supported by influencers, right? Some of those influencers are going to be personal in nature. Some of them could be more corporate level with building influence at the corporate level. But they're going to have a specific client that they service, and that client and that specialization is going to drive their marketing, it's going to drive their client experience and technology, their pricing. So I think what it always gets back to for me, if you're an advisor right now .... And I don't want to shift our conversation because you and I had a really good conversation about this on your podcast, on the Elements podcast.

Reese Harper (37:18):

Oh, yeah.

Patrick Brewer (37:18):

If you're listening in, make sure you check out Reese's show, Elements. It's just Elements, right? Is there any other-

Reese Harper (37:24):

Yeah, if you go to getelements.com, you can just get the podcast and subscribe there, yeah.

Patrick Brewer (37:29):

Okay, cool. Great show, mostly because I'm on it, but also a great show [inaudible 00:37:32].

Reese Harper (37:32):

Yeah, you're one of the ... We had to kickstart it off to you, just jump our audience numbers, get them high enough.

Patrick Brewer (37:39):

Yeah, I know. You got to use me for that. It's good. But I think the number one driver of the process is making sure that you do have a specialization that has the money to be able to pay you for your service and they have a defined problem that you can solve. If you can't solve it, you need to be willing to learn the skills in order to solve it.

Reese Harper (37:54):

Yeah, man. Yeah.

Patrick Brewer (37:55):

And you need a platform to be able to reach them. All these things need to be in place before you ever get to the point of deciding what you actually want your client experience to be and what you want your pricing structure to look like and what type of technology you're going to use. So I think if you're listening to this episode right now and you're like, "Man, Reese's technology and what he's describing sounds awesome," definitely schedule a call with Reese to learn more. But I think you also want to make sure that if you are on your own, you have your own business right now, you have the appropriate specialization that you feel super excited about serving. I think that's the number one thing that needs to be on every advisor's list at this point because if it's not and you want to build a business or maybe you have a business already, it's going to be tough to compete long-term. That's what I'm hearing from you, Reese.

Reese Harper (38:39):

Yeah, man. And just to validate what you're saying, I was sketching this out with my CTO yesterday because we were trying to say, "Who makes a good client for financial advisors, which type of people?" We're just curious because half the industry is going to just ... Betterment or Wealthfront or self-directed or maybe a different type of robo-platform, a little bit more robust, like a Vanguard, might be good for certain users. Who's this customer that values the emotional and functional jobs that an advisor can provide? I created this two-by-two matrix. The X-axis and the Y-axis were ... In our office, we call it complexity score, or if you think about it in terms of the prompt engine in our software, it's like the more wealth people have and the more net worth they have and the more entities they have, it's going to trigger more prompts. It's just obvious. We have it under a pretty close science of how many prompts get triggered based on number of assets and debts, entity level and income, and net worth, and it just triggers certain complexity.

Reese Harper (39:38):

So complexity's one measure, and the Y-axis has to do with financial IQ and financial interest, financial knowledge or interest. I don't want to say that those are the same, but they're kind of correlated. Interest is different than IQ, but this idea of what do I want to do with my life, that's more interest. Some people are wealthy enough where they just don't want to deal with this stuff. But, generally, financial capability or competency or knowledge is also the higher that that gets, the lower people actually value an advisor. So the more they know, the less they value you. If you just look at types of customers that are going to value advisors, they're people with increasing levels of complexity.

Reese Harper (40:27):

Like, who's going to trigger more prompts in the prompt engine? Well, if you only have a 401(k) and a house, it's only going to trigger 20 prompts, and that's probably not enough value for you to build your whole future around and say, "I'm going to compete with technology." It's like, no, you probably need more prompts. If the prompt engine ... Like, this guy with the 26 million dollar net worth I said, there was 110 prompts. He doesn't get to see them. I see them. But it's all over the board. He doesn't even have his operating agreement in the system, and he has a cap ... He says he doesn't own all the business. We need a cap table. We need to analyze his estate plan because he says he doesn't even have a trust. It just starts triggering all this stuff.

Reese Harper (41:06):

Then the interest level and financial IQ, the lower someone's interest and the lower their IQ on finances, the more they're likely to want to work with you. So I think there's a lot of opportunity in the underserved business owner world. There's a lot of opportunity. We haven't even touched it. So we're really creating a new market right now. We're just going to serve the new people that've never had a good experience and find a niche like that and just go learn about it.

Patrick Brewer (41:37):

Agreed.

Reese Harper (41:37):

You're going to dominate. There's so much opportunity right now in that part of the world. I know we've got a limited time today, but I appreciate you letting me-

Patrick Brewer (41:45):

Yeah, no, I couldn't agree more, man. I think that-

Eric Lee (41:46):

Yeah, obviously, we've gotten super granular, which is good, but I would love to just pull back a little bit as we're wrapping up here and think about if you had one piece of advice to the advisor who's listening to this, seeing the need to change their client experience, seeing the morphing environment in that space, but is a little overwhelmed with all these very nitty-gritty things we've been talking about during this episode, but what's your one thing that you can kind of say, "Here's the first step to take?"

Reese Harper (42:11):

Patrick, I'll let you share that first, and I'll wrap up with my thoughts.

Patrick Brewer (42:15):

Okay.

Reese Harper (42:15):

What would you say?

Patrick Brewer (42:16):

Oh, I guess it really depends on where they're at in the spectrum of their business because there are just so many different types of advisors that listen to the show, whether they're just starting off and they're part of a BD or wirehouse, they have their own practice, they're part of a larger firm. A lot of it just comes down to taking stock with where you're at in your career as an advisor. I would say that my advice still holds. If you don't have a specialization, it's first figuring that out. I think Reese mentioned that business owners and entrepreneurs, it's really a blue ocean. Most advisors, to this point, have only been serving people that already have assets because we've obviously grown as an industry around the idea of managing assets under management and charging a percentage for that. So I think there's a lot of competition there.

Patrick Brewer (42:56):

COVID has really highlighted the flaw in that model because most advisors grow through seminar marketing, they grow through in-person networking, they grow by meeting their neighbor next door, and they really can't do that right now. So Reese saying that he has had his biggest month is evidence of building influence in a very specific market, being specialized, having a brand and a client experience that resonates, and all those things get wrapped together into creating a successful business. So I think it's looking at your business and analyzing it and saying, "Do I have a specialty? If I do, am I priced appropriately? Do I know how to distribute and create a marketing strategy on the right platforms and channels to get attention? Am I taking that attention and converting it into clients by explaining my offer as a product and not as a service that's intangible in nature?" All of these things need to be considered, so the place that you start really just depends on where you're at in your career, but there's a lot of resources on modelfa.com and then also on Reese's website, Get Elements, that can help you get started.

Reese Harper (43:52):

Good insights, man. I don't really need to add a lot to that. I'll just second the fact that if you don't know your specialization, it's going to be really difficult to build a process. But once you kind of know who that is, I would say the second thing is you better be able to draw really clearly on a piece of paper to me with little bubbles every touch that you're going to have from the start to the finish to the ongoing client experience, and it needs to be concrete. I can tell you right now, on my chart, there are 17 very, very specific interactions that are happening each year. Some of those are technology-driven, some of those are a text, some of those are a meeting, some of those are a piece of advice I'm delivering. But every client is getting the exact same process delivery. And if you can build that, you'll have a repeatable, scalable model.

Reese Harper (44:43):

If you're finding that some clients are getting this experience and some are getting this experience, depending on how much time I have, I'll create a little bit better experience with people that have more money than the people that don't have money. It's just not going to scale well. So you need to be able to go to a piece of paper, draw in bubbles what your client experience is to me. You better be able to do it in no more than 30 minutes, or you don't have a process. If you can't document it, you either haven't done it enough times or you don't actually have a process. So either buy a process or build a process. I'm selling one, so I'd love to sell it to you.

Reese Harper (45:18):

Buy or build it, but if you don't have it, you have nothing referable to ... You don't have anything you can scale with, your infrastructure and anything you can be referred to out because there's nothing tangible you deliver except for whatever experience you may have over-delivered on for one person or under-delivered on for another. You have to have more consistency to scale, and I think that's the key to any business, is, really, even if you just want to scale to five, six, seven people, you're never going to get there without a consistent process. It's so important because that'll be the thing that allows you to go and double down on the things that Patrick is talking about, driving people into the system.

Reese Harper (45:59):

So you can have a month ... Like now, in COVID, Dentist Advisors is being managed by a managing director, it's had it's best month ever. I'm not even operating in that business anymore, and it's growing at 40-plus percent per year, and it won't stop. It's built to scale, partially because of process but mostly because we know our customer and we do a good job and our advisors are very focused and they only work with that one customer. So it's a combination of marketing and process. I just think where advisors' unique difference is is in their marketing and positioning and knowledge of their customer. Process can be assisted by computers really well. Those are my parting thoughts, and I just want to thank you, Patrick, for letting me rant. I don't get to rant very much.

Patrick Brewer (46:44):

Usually, you're not a ranter. It's good.

Reese Harper (46:46):

I feel like we always put together good content. I always learn a lot from you and really appreciate your effort, man. Be patient with all of us advisors out there, and keep giving us knowledge. We appreciate it.

Patrick Brewer (46:55):

I like how you call yourself an advisor. I don't view that. I don't see that being the case, but I think [crosstalk 00:47:00]-

Reese Harper (47:01):

I still have 50 clients that I work with, but the process kind of makes it happen, so it works great anyway.

Patrick Brewer (47:07):

Nice. Love it.

Reese Harper (47:08):

Thanks a lot, man.

Patrick Brewer (47:09):

All right, well, thanks for coming on the show.

Eric Lee (47:10):

Yeah, Reese and Patrick, thanks again for being here today.

Reese Harper (47:12):

Thanks, Eric.

Eric Lee (47:12):

Thanks for the discussion on client experience. Obviously, if you've got more questions, feel free to reach out to either us here at Model FA or Reese at Dentist Advisors, and we'll see what we can do to help equip you to better scale and transform your own client experience in your own practices. Thanks again for tuning in. We look forward to hearing from you next time.