Developing COI Referrals With Attorneys As A Former Attorney

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

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Full Transcript:

Michael: Welcome, Neel Shah, to The Financial Advisor Success Podcast.

Neel: Michael, thank you so much for having me. I’m so excited to be here.

Michael: I really appreciate you joining us today. And I’m really looking forward to the discussion. You know, there’s this theme I’ve been watching in the industry for the past few years. It’s actually come up even a little bit more often on the podcast over the past couple of months, of, this idea of advisory firms having multiple services under one roof. Like, firms that are doing advisory work and tax work, like, literally are CPAs or have CPAs under the roof. Or advisory firms that are doing the advisory work and legal work under one roof, or just technically, like, shared roofs because there’s some bar association rules about law firms and advisory firms. But this sort of one stop shop kind of effect, which I think a lot of us have said, because, oh, well, you come to us for everything. And then we’re the financial quarterback. I feel like it’s going to another level, maybe exemplified by some folks that have done it at a very large scale, like Peter Mallouk. And creative planning, where legal services and/or accounting and tax services are, like, as part of the advisory firm offering, often coming from people who are attorneys who are also RIAs or CPAs who are also RIAs, who can wear both hats.

And I know you’ve lived a journey like that. You’ve got your version of law firm and advisory firm under one roof, or I guess, shared roofs…However you do that legally. So just I’m excited to talk a little bit more about what that looks like, what that path’s like when you’re effectively a career changer from the law or accounting side into the advisory side. And then even thinking about, how will other advisors who maybe didn’t go to law school before they became advisors, like, how do other advisors do this as well. But I think I really just want to start with hearing from you what this looks like to have this, I’ve got a law practice and an advisory firm all coming together as one for clients.

Why Neel Chose To Launch An RIA Alongside His Law Firm [05:16]

Neel: Yeah. You know, it’s been an interesting journey, for sure. And I’m sure if I could do it all over again, I may do things a little bit different, but then maybe not because I kind of love where I am, too. So, you mentioned doing it under one roof. I describe what we have more like a duplex, almost like, you know, separate entities…

Michael: There’s a partition wall. It’s okay, they’re separate-ish.

Neel: Exactly. Just in case somebody from the bar, or from FINRA, or anywhere else is really listening. There are separate entrances, separate exits, separate branding on the doors too.

Michael: One roof, two doors, extra walls.

Neel: Absolutely. Yeah. Exactly. And, you know, it’s interesting, because I get that question a lot about career changer. And I think I’ve sort of adopted more of a career adder, or just more of a transformation, because I don’t think that I’ve ever really left anything. I’ve always taken the skill sets that I’ve had over time. And I guess we’ll get into some of this later. But I hear this a lot, the concept of the financial quarterback. Back before I started my RIA, I did have a handful of advisors. I was actually in my estate planning law practice prior to starting my RIA, getting about 80% to 85% of my referrals from financial advisors, and many of them would use this concept of the financial quarterback.

And I think it’s fantastic. I think it’s important. I think it’s necessary. But not to go too deep on the sports analogy, but when you’re a quarterback, you’re calling plays, you’re running plays, but there’s 10 other players on the field. And you need to make sure your wide receiver’s running the right route, and people are blocking. It’s a lot of stuff to coordinate. And if somebody messes up, your play doesn’t go as designed. And I just feel like sometimes, being that golfer or that tennis player who can basically control everything, might be a little more streamlined, and maybe just have a more effective solution for my clients. So, it’s actually worked out for me pretty well.

Michael: So out of curiosity, not really the theme of our discussion, but as I’m hearing it, so I’m so curious. As an estate planning attorney, what’s it like working with advisors who say they’re the financial quarterback? As you said, if you’re the quarterback, you’re trying to make sure everybody else is following the play. So how do you feel as an estate planning attorney following the advisors’ quarterback calls?

Neel: It was interesting, for sure. And again, I know it’s not the whole theme, but I’m a Chicago Bears fan. So, I could tell you that play calls are important because we didn’t really have that for the last couple of years. But it’s interesting because you have this trust with the clients, no pun intended, and they’re sharing their entire financial life with you. And what I mean is, when you’re strictly in this financial advisory role, clients may not be as forthcoming with all of their held away assets, their business assets. But if there’s a thought that they might pass away, and they want to make sure all these things make their way to the next generation, you better be sure that they’re going to share just about everything they have with you. They’re going to share their goals, they’re going to share the daughter-in-law and the son-in-law they can’t stand. They’re going to share everything with you. They bear their financial souls. So, you get visibility to all this information.

And this is not every advisor, but then you see the play call, if you will, or the strategy that the advisors put together. And it just doesn’t seem consistent, or it definitely doesn’t seem optimal, in many cases. So, you’re kind of in the sticky situation. And I’m not naming names here, but if you could think of the large wirehouses, or the large insurance companies that have their own stadiums and stuff like that. You get these sorts of strategies, and you’re looking at it, like, well, that doesn’t seem completely right to me. But it’s a tricky place for the attorney to be because you got this referral from that advisor. And if it weren’t for that advisor, you might not have that relationship. So, it kind of sticks you in a weird position. You can, if you have a good relationship, have that conversation with the advisor and try to educate them. But a lot of times, they can’t fulfill on what you want, because they have marching orders from their bosses. So, it was definitely an interesting observation, opportunity for me to see what these advisors were doing with their clients before I entered the space.

Michael: Interesting. So, you’ve got kind of two pieces there, of, I guess, at least where this gets hard. On the one hand, there’s folks maybe that come from companies at the end of the day are manufacturing, distributing products, and so they’ve got a certain motive to sell the plan, fulfill a certain product, because that’s literally what their company does. So, got to deal with that on the ground. And then there’s a dynamic that sometimes, we think we know everything about what’s going on with the clients, but we may not really always know everything that’s going on with the client, because it’s not until the client is literally talking about death and distribution of everything, that everything comes out on the table.

Neel: Yeah, you hear a lot of it. And death and dealing with one’s own mortality definitely brings out a lot of that stuff. But you also deal with business owners, for example, who have a child who’s involved with the business and another child, or another set of children who are not. Or you have somebody who’s involved in litigation, or they’re dealing with a major life transition like a divorce. They will share that stuff with the attorney. They’re not going to always be as forthcoming with the pure advisor. That’s been my experience, at least.

Michael: Which then, I guess, from the attorney, and puts you in the awkward position of, well, I actually know there’s a problem with the strategy that the advisor is putting in front of the client, because I now know more about their clients than they do because of the thing that they told me about the family dynamics as they were preparing their will, and why a certain person is being disinherited. And now you actually have to read the advisor, and even though the advisor was “the quarterback.”

Neel: That definitely happened. And then there’s also just more of the whole… Like, philosophically, I may not have agreed with the advisor’s strategy, product vehicle. It might be, I don’t use any variable life insurance policies, or variable annuities, or something like that right now. Or it might be something with a large expense ratio that I may not necessarily agree with. Or it might be more esoteric than that. It might be, hey, you put something that spins off a lot of taxable income in a non-grantor trust, which is getting taxed at the highest rate of $14,000 of income. Can we do something about that? Or can we just have a discussion about this before you actually do something? Because it would be helpful to know the tax impact of something before you actually made the decision.

Michael: So, for the advisors who are good financial quarterbacks in working with you, what does it look like from the advisor that’s doing it well, right? If we can speak to all the people who are listening, like, this is what will actually make the estate planning attorney much happier to work with you as a good financial quarterback.

Neel: Yeah, and I’m glad you brought that up, Michael, because there are advisors who do it fantastically. And I do think that… I mean, again, my observations have been that they did come in with more of a, let me start listening first mentality, not necessarily having that agenda going in. So, there are advisors who do put together the right team and assemble them. My observation has been that when the advisor brings the right professional in, and lets that professional, whether it’s the attorney, whether it’s a CPA, whether it’s a trust officer, whatever realm you bring them in, lets them operate in their zone of awesomeness, that’s when good things happen. Having a good open dialogue, but not being attached to a specific strategy, or even a specific outcome. And I believe that the client has a fantastic experience with this, because not only will we have open dialogues in the client meetings, but we’ll have separate side dialogues where we’re brainstorming certain ideas, not confusing the client, but definitely exploring and looking under different rocks for strategies that might work for them, evaluating and even eliminating a lot of opportunities that may not be the right ones for them at the time. So, I think that’s where I’ve seen the most productive and most successful relationships.

How Neel Gained Center Of Influence Referrals With Financial Advisors As An Attorney [12:43]

Michael: So, I am struck, though, the other comment that you had made earlier on, was sort of this dynamic of financial quarterbacking is hard because there’s so much to coordinate as opposed to the tennis player’s kind of the sole person on the court and can control all of what’s going on. And so, I’m presuming then, your journey from attorney that was working so heavily with advisors. I think you said 85% of clients were coming as referrals from advisors. To building the multiple practice under one roof, or the legal RIA duplex. We’re going to go with that, the duplex, you built the duplex. Talk to us more about why from the attorney side, you decided to build the duplex instead of simply continuing to do all the joint work with advisors that you were doing.

Neel: Yeah. So, again, it’s been an interesting journey, I guess. I actually have never really had a job. I graduated law school in 2000. I had a one-year clerkship, which wasn’t like a permanent job at all. And then I decided to start my own law practice right out of the gates. And as I started this law practice out of the gates, I had connections in the real estate space. And if you remember, this was 2001, 2002, 2003. It was when rates had just really dropped for home mortgages, and I was just doing a lot of refinance closings. And when I was doing these refinance closings, I happened to just develop relationships with a lot of these clients that I was doing refinance closings for.

And it became sort of a base for clients for me, and they happened to be a lot of entrepreneurs and business owners. And when they needed additional legal needs, I started getting to that place. Now, I enjoyed the relationship building part of it. I’ve enjoyed the advisory aspect of it. And what ultimately happened right after that, is I wound up doing a lot of corporate business real estate transactional work. I think I did the math once upon a time, and it was somewhere between 3000 and 3500 corporate business and real estate transactions in a period of four or five years. It was a lot, it was intense.

Michael: Wow, that’s a lot of volume. That’s all, I mean, just real estate purchases from people who were serial buyers of real estate, or is this other corporate-y, business, legal transaction work as well?

Neel: I mean, it was all of the above. I mean, I tell you, Michael, it was like factoring agreements for businesses, it was international agreements, it was people who were exiting businesses, people who were entering businesses, some employment incentive deals. It was trial by fire because again, this was my own practice and I just had to learn a lot and find the right people to help me with things. And I think that’s where my journey of just being sort of a learner and an implementer really started, because it’s not like I had a managing partner or somebody holding my hand through this. I had to go find somebody who was going to help me with this, and attend the right education events, and find the right resources.

Michael: I was going to say, did you have any partner or other lawyers under the roof with you? Or were you entirely solo at this point?

Neel: After a year, I did join up with a partner. It ultimately wound up ending in a partnership divorce, which is probably a whole another podcast altogether. But we could probably hit on that too. But it did end in divorce or partnership breakup in 2010, when I started the current law firm. But by that point, I had already sort of come to the conclusion that I love working with people in transition. I even did a stint for one year as a divorce lawyer, when one of the attorneys we had hired had to go on a sabbatical, and I wound up doing divorces for about a year. So, it was this whole period of, look, I enjoy working with these folks, but I don’t love the transactional part of it. It’s very, like, hey, I need you, I need you, I need you, I need you. And then I’m not going to call you again until I need you again. Versus the relationship side of it, and the advisory side is, hey, let me put my arm around you or let’s go grab a bite.

And let me tell you how we can retain your employees and sell for a higher multiple by making sure we have incentives for your employees to stay. And let’s figure out how we’re going to structure these sorts of things. So, I enjoy the advisory part of it, which is why I shifted from that transactional law space into more of a advisory law space, which was my estate planning practice. And because my base of clients were still entrepreneurs who happened to be high net worth folks, my niche grew into being a high net worth or ultra-high net worth estate planning space.

Michael: Interesting. Because I was actually going to say, as you were framing that… You shifted to the more advisory side of law, which was the estate side of the business. And I guess, relative to literally doing one real estate transaction at a time or buy-sell at a time, estate is more relationship-y. But the discussion I’ve heard from a lot of estate planning attorneys I know is, they struggle with estate planning because it’s so transactional, like, one will and trust after another, one will and trust after another. But I guess that looks a little bit different if you’re doing estate planning work in the more affluent, high net worth space, because they need more stuff, they have to react more as laws change. So, there’s more things to do on an ongoing basis. If there’s a lot of wealth, and they’re still building wealth, there tend to be new businesses and entities and things that enter the picture that have to be estate planned for. Am I reading into that right? That the high-net-worth space tends to be more relationship-y than the mere average American estate planning work?

Neel: I think that’s accurate. And I think there’s a relativity aspect of that too, right? Because if you think of me coming from the transactional law space to the estate planning law space, that seems very relationship-y. But you’re right. I mean, and that’s, I think, a big reason why I’m in the wealth management space today, is, even the estate plan feels transaction-y. Like, it’s still very, like, let me get to know you really intensely for a period of 6 weeks to 12 weeks, and know everything about your deepest, darkest fears of what’s going to happen when you pass away. We’ll sign your documents, we’ll help you find your trust, and then, yeah, call me when somebody dies. And that’s not necessarily where I wanted to be with that. So, as I sought ways to serve and also be internally fulfilled, it brought me to the wealth management space. But I realized, you can’t plan for somebody’s life without considering their legacy as well. So, it’s actually kind of…it’s dovetailed very well with one another. I don’t see how I could do it any other way.

Michael: So out of curiosity, how did that impact the way you are working with advisors? So, I think at this point, you’re still primarily in the law practice, you’re not necessarily running your own advisory firm yet. So, was this more of your work with advisors when you were focused on high-net-worth estate planning side as opposed to when you were doing the broader business and real estate transactional work? Or did that start to shift where your estate planning clients were coming from?

Neel: Well, it wasn’t something that I could just walk into. Moving into the wealth management space and having a diverse set of clients wasn’t going to interrupt me. So, I had to be very intentional about how I did it. I used to teach these advisor boot camps for financial advisors, CFPs CPAs, and insurance agents. And I would, over all day Friday and half day Saturday, just market to these advisors. And I call that wholesale marketing, because I was marketing to the Centers of Influence who were going to refer me. I had to shift that if I was going to go in the wealth management space. So, I had to shift from a wholesale marketing, more to a retail marketing, like, a direct to consumer, direct to end user type marketing approach. And I started doing that.

Michael: Wait, I’m just curious, I’m just processing that in retrospect. So, I mean, as I’m sure you live now on the advice side of the business. As advisors, we talk about working with attorneys as COI marketing. I feel like I just heard you say from the attorney end, like, you were doing boot camps for advisors, because we’re your COIs as we think of you as our COIs.

Neel: Isn’t that crazy? Yeah, it’s so funny. And the epilogue to that entire thing is, I was relying on financial advisors to refer me and got to the point where I didn’t need them necessarily to refer me because I wanted to be able to have wealth management conversations with clients. And where we are today, and I know we’re not up to that point now, is, now I have financial advisors, insurance agents, and CPAs even, and attorneys reaching out to me to refer me because they want part of the wealth management practice, and they want in, and they want to find a way to work together. So, it’s kind of funny how it’s gone full circle there.

Michael: But I’m just envisioning this, like, an attorney and an advisor come together and look at each other and say, “You’re going to refer me clients as the COI, right?” And then the other one says, “No, you’re going to refer me clients as the COI, right?” And then there’s a weird stalemate.

Neel: It definitely is. Yeah.

Michael: I guess I’m just wondering, from your end, when you were on the attorney side, how does this work? I mean, I’m just hearing this and thinking, as advisors, are we approaching this wrong by trying to look to attorneys as referral sources, because attorneys are looking to us as referral sources? And obviously, someone’s got to originate the retail client before it gets referred to the other one?

Neel: Yeah. So, in word, yeah, I think all advisors have it wrong. I mean, that’s extremely succinct, and probably a little too… It probably doesn’t tell the whole picture. But I think you have to look back at this. And I have this unique perspective, because I have done it on both sides. Attorneys are, and I can speak as somebody who’s been this, they’re notorious for sitting in their ivory towers, and sort of waiting for people to have problems, and then reach out to them. Because things are either broken, or they think things might get broken in the future, so let me just get this done. Attorneys haven’t had to do as much marketing as wealth managers or financial advisors have had to do. So, as you think about it, financial advisors just tend to be so much better at pounding the pavement, at marketing, at branding, because attorneys haven’t had to do that. For me, specifically, when I was doing these boot camps, my goal was to always provide value.

So, I did these boot camps, and it was continuing education courses for them. But since I’ve been in the wealth management space, and I’ve been in several study groups with advisors, and I do get that question often. It’s like, “How do you get attorneys to refer you?” And I basically tell them, you don’t. What you have to do, what worked for me as an advisor, because I did get a significant amount of referrals from financial advisors, but they enjoyed working with me because it did help their bottom line, is, you’ve got to help the attorney with the process. And by that, I mean, get permission, but don’t bully your way into design meetings when they’re doing the estate plan. Offer to help with the funding of the trust. But again, don’t bully your way into it. Because attorneys just…especially the ones who charge hourly, we don’t charge hourly, but the ones who charge hourly, they want to do this efficiently and move on to the next client.

In most cases, they don’t necessarily want to have the same conversations over and over again. But to the extent that you can help them to fund the trust, that’s great. Offer to have a family legacy meeting. This was part of our estate planning process. And in that family legacy meeting, get permission to have the advisor in there, so that the advisor can develop a relationship with the next of kin, the trustees, the executors, the adult children, the elderly parents, and possibly use that from a business development standpoint. But to just straight up say, “Hey, refer me.” That’s just not going to happen. The attorneys are worried about liability, and plus they’re not having those conversations with clients.

Michael: Well, and I guess, to the point, like, they just literally may not be originating a lot of clients, right? I mean, as you said, if 85% of your legal work was coming as referrals from advisors, the majority of your clients are…like, five out of six clients are already spoken for, because it came from an advisor, so you’re probably not going to refer them out. At best, only one in six of your clients even was already not directly attached to an advisor that was referred in from. And even of those, they just may already separately have an advisor, or you may not be in a position to refer. And so just the actual pool of people you even possibly could refer as an attorney was a really small segment of your clients. And then you have to decide which of the 3, 5, 10 advisors that are referring them to you, you’re going to give the one referral to.

Neel: That’s exactly right. And you’re alienating whoever you don’t refer to. And I happen to practice in Central Jersey, and I’m of Indian descent. So, a lot of my clients were also of Indian descent, and it’s a small tight knit community. Or if you’re dealing with a group of clients in particular business, like franchise restaurants, like a Dunkin Donuts, or some other franchise restaurant, for example, they all know each other. So, if you referred one financial advisor, and the word gets out that you referred that person, you’re probably biting the hand that feeds you with respect to other financial advisors who would have referred you because now you’re kind of tainted.

Michael: So, the smaller the community, the more word gets out of, for better or worse, who you are referring to and who you’re not, which I guess is even more dangerous when you’re on the attorney inbound end. Because if 85% of your clients are coming from referrals and you alienate an advisor, you’re putting your inbound flow at risk to send an outbound that may not really necessarily be worth the risk at that point. There’s not necessarily a lot in it for you and the attorney at that point to actually try to make the outbound referral when the web is that tangled.

Neel: That’s right. That’s right. And I think it’s, again, ironic, because I’m at this point now where I do have attorneys referring me. And I think that they like the duplex concept, they like the Shah Total Planning concept as well, too. But they’re not referring me because I’m asking for the referrals. I’d like to think that I’ve earned those referrals. I think maybe having that law degree plus the RIA probably gives me a little bit of credibility too. But I think I’ve also just learned how to develop relationships with other attorneys, which is, not make their lives difficult. Like, let’s actually work on making their lives easy, not pressure them, because they don’t deal with the pressure, explain to them that there’s not going to be a liability for referring me. And of course, we’re still in the process of working out some sort of arrangements that’ll formalize that, too.

Michael: Can you explain it further? Short of literally saying you won’t have liability for referring me, how do you explain to them that they won’t have liability for referring you? Because I feel like that is not a conversation that most advisors have. I mean, we may talk about our services, and how we’re different, and why we’re better than other advisors, and how we’ll take great care of your clients, and how we’ll try to work really constructively with you. But I can’t remember the last time an advisor said, like, “Oh, and I explained to the attorney about how they wouldn’t have liability for referring to me.” How does that part work?

Neel: Yeah. And I guess I don’t think I’ve actually really stopped to articulate it in this way. But if you think of the attorney’s mindset, just the way that I transitioned from other practice areas, we as a profession, meaning attorneys, do tend to put a value or emphasize the value of education and knowledge. And if I can show them that, yes, when you’ve got a business owner client who’s about to go through an exit, what I’ve done for clients in the past is set up a family limited partnership, or a family LLC, move your business interest into the LLC, set up a Nevada trust, so that you’re not going to pay state income taxes on it. And then make sure we manage that in a way that’s effective. All of that is adding to my credibility. So, you can’t come right out and say, “You’re not going to suffer liability.” Attorneys are smarter than that. They’ll get to that conclusion themselves. I think it’s just displaying that competence without saying you’re competent, actually just showing them that competency. And word travels.

Michael: Okay. So, it’s not a discussion of, let me tell you how I’m going to de-risk your liability, it’s effectively showing them I actually have the knowledge and education. I know what I’m talking about. Which, in essence, kind of sets up the, I’m not going to embarrass you if we’re end up working on the client jointly together.

Neel: Yeah, I think that’s exactly right. I think it’s basically just displaying that confidence. And a track record also helps. I think that’s a big part of it too. Making sure it’s not going to reflect poorly on them.

Michael: So, I get that for how it works for you because you have a law degree and have actually done this to be able to do that, then to work with other attorneys. So, for advisors that didn’t go the legal route in the first place. So, like, I can only show so much about my creative legal estate planning strategies to clients, because I’m not an estate planning attorney. How would you recommend advisors try to either demonstrate that credibility or even just build the knowledge they need to be able to demonstrate that credibility?

Neel: I think asking the right questions without having the answers is probably a great way to establish that credibility. I think just being naturally curious. Because look, I mean, I’m not a CPA. I’ll propose tax strategies. I consider myself a tax strategist and even mark myself as a tax lawyer. But I don’t necessarily consider myself a CPA. I don’t file tax returns. I don’t have an expertise in property and casualty insurance. But I know which questions to ask. And I know who I’m going to bring on when the time comes to bring that too. So, I do think that being naturally curious, I think case studies are great, too. Because I realize that a lot of advisors listening to the podcast are not attorneys. In fact, the majority are not. And if they are, they might not even be practicing attorneys. So, I do believe that you can do this with the right affiliations, it just requires a little more coordination to do that.

Michael: And does this also mean that we should, I guess, be more discerning in what attorneys we’re trying to generate referrals from? I mean, I am struck by this phenomenon of 85% of your clients were already coming inbound from advisors, so there just isn’t going to be much fruit on that vine for advisors looking outbound. But I don’t know if that was unique to your firm and how you built your practice? Or if that’s pretty typical of advisors that are trying to work with estate planning attorneys. So, how do we, as advisors, figure out, I guess, in our context, who is a good attorney COI who might actually be able to work with us in sending referrals, cross referrals, versus not? Like, this tree is not likely to bear much fruit for you.

Neel: Yeah, I’m not going to lie. It’s not easy. Just actually, literally, yesterday, I was having a conversation with an insurance advisor or insurance agent, who used to refer a lot of matters to me. And she was referring three, I think, clients to me over the past three months. And I just picked up the phone, I said, “Hey,” let’s call her Jane. “Hey, Jane, I really appreciate the referrals. Just to be complete disclosure here, you know that we’re not really taking on law firm clients, unless they’re also working with us in the wealth management space.” And I explained our whole shift. I kind of used this example of this plane, which I’ll explain in a second. But she just wasn’t getting it. She’s like, “Listen, if I don’t refer you, I don’t know who to refer. Because nobody really else helps create an asset map for their clients to help fund their trust. Nobody else is having this conversation.” I said, “Yeah, I get it. There’s not a whole lot of folks who do it right.” And I tried to give her a couple of names. But I’ll be honest, even those people that I want to refer out to other estate planning attorneys, I’m having a hard time with. Because they’re people that I can’t…

Michael: So apparently there’s still opportunities to be an estate planning attorney, if you want to go that route.

Neel: Yes, yes. For anybody who’s considering law school and estate planning attorney, give me a call, I’ll put you… And in fact, I’ll probably even send you some referrals as well. But it’s a challenge right now, because there’s just this shortage of people who do it right. There’s a lot of folks who have documents out there. There’s a lot of folks who kind of understand the concept of intentionally defective grantor trust, or estate taxes and gift taxes. But not a lot of folks who can communicate it well, and not a lot of folks who necessarily have that business savvy to develop a Center of Influence type relationship and kind of pay it forward and realize that business development’s important for both sides of the advisor table.

Michael: So, are there particular things we should be watching for? Just who’s an attorney that’s more likely to be a cross refer? How do we try to vet this from our end?

Neel: Yeah. So, I’ll be honest. Well, I don’t know if it’ll necessarily land as well. But when I decided to enter the wealth management space and open my RIA, I took my top five referral sources out to lunch, and I let them know I was going in the space. And to a person, all of them were like, “That is fantastic, Neel. I can’t believe it took you this long. You should have done this a lot sooner. You’re going to do fantastic.” And will you still refer me?” “Absolutely, I’ll refer you. I trust you, Neel. You would never poach.” And then it was crickets. That dried up so fast.

Michael: “Of course, I’d still refer you!” [buzzer sound]

Neel: Yeah, pretty much. That was, like, I think I got deleted from their cell phone. No. I mean, some of them are still friends. But I get it from their business perspective. But before that happened, I did have good conversations with them about them wanting referrals. And I explained to them, look, I speak with 10 people, 9 of whom came in from a financial advisor. If you want to work with me to nurture a client base, if you want to work on speaking engagements, if you want to work on getting to know the rest of the family, let’s work on nurturing that. But if you just think we’re going to trade referrals, I mean, we’re not a BNI, or a LeTip, or anything like that. It just doesn’t work that way.

Michael: It’s an interesting framing of, like, look, if you want to work on nurturing jointly and talk about joint educational seminars, joint family meetings to go deeper with a particular client we already share, and let’s see if we can open up new opportunities. That may be a more fruitful path than, I’m just hoping if I refer, and I get some referrals out.

Neel: Exactly.

Why Neel Transitioned From Estate Planning Attorney To Financial Advisor [33:36]

Michael: So, help us keep going down this journey. What comes next for you as you’re now getting deeper into the estate planning side? You’re enjoying it because it’s more relationship, it’s moving you upmarket into higher net-worth clients, where you get to do more relationship-y estate planning work. At some point, advisory shows up in the picture. So, when did that shift come? Or what led to the shift of saying, I don’t just want to do the relationship work for high-net-worth clients as their attorney, I also want to actually be their advisor and offer wealth management.

Neel: Yeah. So, like you said, it was a realization that the estate planning work is still more transactional than I like, but still, I enjoy the advisory aspect of it. And I was a member of a few study groups and coaching groups at the time. And there was a group of attorneys who were actually investigating opening up their own RIAs. And through just conversations, we kind of got to this concept of like, well, this can work. And I was already helping people to fund their trusts. And I was getting visibility to a lot of their financial statements. And I was looking at it from a legal lens. Like, oh, we can change your beneficiary designation on your IRA to your trust, as long as the trust has certain language, this, that, and the other.

But as I got more exposed to this financial planning aspect, it was almost like an aha moment. I don’t want to say the clouds parted and I heard angels singing or anything like that. But it just felt right. The first time I saw sort of a financial planning software from the advisor’s perspective, and I got to turn the dials on a MoneyGuide Elite to play with the Play Zone, for example. That just felt right. And it got to this point where I wasn’t just helping people to take care of what’s going to happen when they pass away. Now, I have an opportunity to help people to live more powerful lives. So that sounds like a great sort of movie script, and it wasn’t…

Michael: When the clouds part and the angels actually start singing. So, I know how that soundtrack overlay works. I can visualize that in my head. Take me back a moment, though, just I was actually struck, you said you were in a lot of study groups. So, what did that look like? Where did study groups come from? How do study groups work in the legal world?

Neel: Yeah. So, they’re similar to like the coaching programs that you’d hear about, that we know about from the financial advisory space. And I’ve been involved with so many of these, Michael, at this point. Some are uniquely legal in nature, some are more financial in nature, some are just more not even business in nature, just more like your personal development and mindset training type work. So, the one that I’m referring to specifically was a group of estate planning attorneys, who were basically exploring going into this wealth management space. And that meant different things to different people. For some of them, it meant being life insurance licensed. For some of them, it meant joining an RIA. For some of them, it might have meant joining a broker dealer. But I think there was this whole idea of being able to serve at a different level, not just the legacy planning, but also the life planning.

Michael: So, was this a group of attorneys who were all thinking about going this route and said, like, “Hey, if anyone else is thinking about going into wealth management, let’s form a group and hang out together,” and it formed spontaneously? Or is there some organization that is organizing study groups for attorneys looking to shift into wealth management?

Neel: Yeah, not quite that formal. So, it is a formal coaching group for attorneys. And it’s not unique to estate planning attorneys. But this one specifically is called Atticus. And that’s where I was coaching with before I joined the wealth management space. And they had a subset group of estate planning attorneys. It was predominantly estate planning attorneys. And within that group of attorneys, there was another subset of the estate planning attorneys who either had financial experience and then transitioned to being an attorney or were exploring a financial experience. And that’s when I got to really witness some of these models of entering this space. So, it was a collaboration in research, if you will, but everybody was on their own path. And I ultimately decided to go the TAMP route.

Michael: Interesting. So, Atticus is, I guess, a practice management coaching kind of thing for attorneys or broader than…

Neel: Yeah, exactly, exactly. And they do a fantastic job. And I had some coaching exposure prior to that, but they’re definitely the first immersive coaching experience that I had unique for attorneys.

Michael: Okay. So that becomes your, I guess, introduction awareness into wealth management. So, they introduce you, you start talking to other attorneys who are coming to wealth management, you see MoneyGuide Pro’s Play Zone, and the clouds part and the angels sing. So, practically speaking, what comes next? How do you actually begin to take a step in this direction?

Neel: Yeah. So, my family has been serial entrepreneurs. When I say my family, I mean, really my wife’s family. I come from a family where… I did have a bachelor’s degree in finance, so I wasn’t completely new to this whole thing. But being of Indian descent, if you kind of said, “Hey, mom, dad, I want to be a financial advisor.” The conversation would be, “Hey, that’s cute. It’s actually pronounced doctor.” So, it wasn’t really one of those things that you kind of grew up. So, I actually started college pre-med, and then in the first few weeks, decided that’s not going to happen, so I should go to law school.

Michael: Well, if you’re not going to become a doctor, I guess, attorney is a reasonable fallback option.

Neel: It’s a reasonable… I mean, engineer wasn’t going to happen either. So yeah, it was going to be that. And again, I didn’t grow up with a lot of money, so we didn’t have financial advisors growing up. I was a first-generation born here. I was born a year after my parents migrated here. I didn’t speak any English until I was five years old. Just that whole classic immigrant story itself, too. So yeah, and as I’m going down this sort of financial advisory route, I’m kind of being exposed, not just to being a financial advisor, but just financial advisory services as a whole. So, it’s kind of a new experience for me all together. But starting businesses, we had invested, at this point, my wife and I, in a startup title company, which did quite well. We had invested in international real estate investments, which did horrible. We invested in a couple of franchise restaurants, which did decent. So, starting businesses was easy for me. That was not very difficult.

So, formed the LLC for Beacon Wealth. That’s pretty easy. Start looking at different service providers for this RIA services, and I forget who I used. I know I evaluated RIA in a Box. In fact, I might have used them for a startup. And okay, so now I’ve got a business, and now I’ve got sort of compliance related things, how the heck am I going to do this stuff? And this is where my personal development work and my coaching sort of helped. I knew enough to know that I had to focus on what I did best, which was communicating and guiding. But I didn’t necessarily need to be the one who executed trades. I didn’t need to be the one who had the relationships with the custodians. And the TAMP model really sat well with me. And I’m still using it to this day, but with a different TAMP than I started with.

Michael: So, I want to dig further into that. But let me actually take a step back before we even get to TAMP models and choosing a TAMP and such. So, I think you had said, when you were doing this with Atticus, some advisors were going more life insurance, some were going BD routes, some were going RIA routes. It sounds like you chose the RIA route out of the gate. But how did you even make that choice of insurance versus BD versus RIA, particularly as someone that didn’t necessarily have industry background? If you’ve lived in the industry for a while, you’re more familiar with some of the differences in those. I don’t know what that looks like when you’re an attorney, sort of career changing, or as you said, career adding your way into financial advisor.

Neel: Yeah. I mean, you can’t be an estate planning attorney marketing to advisors and not be propositioned, I want to say, once every few months, by those advisors to set up a separate LLC. A lot of the large organizations, maybe not so much the wealth managers, more the life insurance companies, have structure set up where you can have a joint LLC, and be members, and have the percentages proper, and all that sort of stuff. And that never sat well with me because I didn’t want to be beholden, or I didn’t want to be committed to a certain type of strategy. I knew I wanted to be independent.

I wanted to build something. I’ve always been a builder. I’ve always been sort of… And I feel like I’m a good team player as long as I’m the leader of the team. That sounds horrible, I know. But that’s always kind of been my thing. I feel like I need to have some sane direction. I’ve gotten better about that over time. But the RIA really sat well with me because of the independence, but also because, look, I enjoy my marketing, and I enjoy communicating with people. Like, we’ve started this podcast, we use our social media channels, we use our email marketing. I just wasn’t ready for somebody to tell me what I could and couldn’t do outside of the government authorities, of course.

Michael: Interesting. So, I guess in a pretty literal sense, at least to me, it was the independence side in particular, just that whole, like, if I create the RIA structure, I guess, at that point, you have to literally hang your own shingle, you can’t just affiliate to someone else’s. If I hang my own RIA shingle, yes, I have to comply with the government, but I’m in charge of my own compliance. I’m in charge of my own systems. I’m in charge of my own choices. That was very compelling for you.

Neel: Yes, that was hugely compelling for me. I did a little bit of research back then, but the more I think about this, and the more I reflect on it, I’m so thankful that this is the route that I went because I’ve had friends who are with broker dealers now. And we’ve been talking about ways to do things together, and they do not make it easy. So, I’m just very happy…

Michael: Just because of BD compliance, particularly BD compliance and a multi-firm lawyer crossover, which is just a whole other level of compliance and things for BD compliance who don’t come from the law world or don’t come from legal practices.

Neel: Exactly. You know, it’s in their best interest to make it sticky, so it’s not very mobile.

Why Neel Chose To Launch His Law Firm And Advisory Firm As Separate Entities [43:18]

Michael: So, help us understand how this works, just as you were setting up. You said you formed the LLC for Beacon Wealth, which is the advisory side. I think you said you still had the law practice. So, just talk to us about, I mean, literally, why separate entities? Why not one entity? Or why structure the entities this way? How does that come together for you?

Neel: Yeah, well, until recently, we were still taking on many law firm clients who were not working with us on the wealth management space. And there were a few wealth management clients that didn’t work with us in the law firm space, but those were few and far between. Most of our growth was coming from our own internal law firm. So, from a compliance standpoint, there were people who came in, and we had to make sure we had attorney client privilege. And we didn’t want to necessarily have FINRA having visibility to our law firm clients. So, we just wanted to make sure we kept those firewalls up, or the duplex concept that we have there. So, we wanted to make sure, and to this day, we still do it that way. We still have a law firm, and we make sure that the legal work is done under the law firm.

We make sure we have an attorney trust account, and our law firm’s E&O insurance, and all that stuff is sort of set up on the wealth management side. Beacon is still an RIA, obviously, and it works with the TAMP, and it’s got its own insurances as well. But from a branding perspective, we really branded ourselves a Shah Total Planning. And we just make sure we have all the disclosures in all our marketing materials as to who’s doing what work.

Michael: Interesting. So, when you market out to the marketplace now, it’s Shah Total Planning, (that’s a combination of Shah & Associates, a legal firm, and Beacon Wealth, an advisory firm.)

Neel: Yeah, that’s right.

Michael: And is that literally the website now? Is there a Total Planning website that you steer people to or still separate websites and offerings for each business, because the whole duplex two doors thing?

Neel: Well, so we’re steering everybody to shahplan.com. And that basically is the website we’re using to tell our stories. And I guess the analogy that I’ve given, because we have effectively, all but a few of our clients who come in now are working with us on the total package. Meaning, we do their wealth management, their investment advisory, we custody them at Charles Schwab or Fidelity. And we’re making sure that the financial plan is created. But we’re also making sure that the estate plan is consistent with everything else that we’re doing from a life planning perspective. So, we have this one website that tells our story. I use this analogy often, but it’s almost like we bought the 747 and we ripped out all the business class seats, and the first-class seats, and the coach seats. And we put in these plush recliners, and we’ve got this amazing music playing, and we’ve got the best gourmet meals going on there, too. And the downside of it is, hey, we can’t fit as many people in, but what I love about it is, well, now, the people who are in there are going to have this amazing, integrated experience, and they’re going to make sure life and legacy plans are met. So that’s kind of the image and the perception that we want our clients to have.

Michael: And what happens, as someone whose practiced so long and has all these different referral sources, and existing prior clients who may come back. Like, what do you do with all the people now who have reached out and don’t watch or can’t actually afford the plush recliner?

Neel: Yeah, well, from a pricing perspective, our pricing isn’t really all that different than most financial advisors. We still charge assets under management, and our schedule is a pretty normal schedule. So, from a affordability standpoint, I don’t think it’s all that different. I think you talk about this extensively, Michael. And I know we’re talking a lot about how I kind of got into this advisor space. You don’t know this, but you’ve been part of this journey from day one. Your podcast has been…it’s must listen, listening. Your website, I’m a kitces.com member. You’ve been an immense help in this journey, and you didn’t even know it. So, thank you for that before I go too…

Michael: Fantastic! I’m glad to hear someone reads it. You just post on the internet, you never really know if anybody’s reading it.

Neel: Oh, man, are you kidding? And this is not to fanboy on you here. But it’s definitely the kitces.com, it’s definitely the podcast that I’m on right now, which is a huge honor. But it’s Kitces & Carl, and it’s listening to your Office Hours at Buckingham. So yeah, I’m a fan.

Michael: I appreciate that.

Neel: I think what it means is we just have to be more selective and know what it means. We just have to be more selective about who we’re helping. I speak with every single person who’s referred in. They’ll speak with Julie, who is our onboarding coordinator, a specialist. And Julie will get them on my calendar. So, I will speak with anybody who’s referred in. And she’ll set the expectation as to what we’re doing, what we’re not doing. But look, I mean, a very common client of mine is somebody who’s anticipating a letter of intent on a business exit. And they want to know what they could do from a tax perspective. They also realize that they’re going to have a taxable estate. They also know that they want to be in control, and they want to teach their kids how to manage money over the span of their lifetime. And they have these aspirations of having an impact on the world and on future generations.

So that’s where we can make our biggest impact. And when you think of people who are going through these life transitions, almost every life transition, somebody who passes away, you got probate, a business sale, you got somebody who’s become a widow, or somebody who’s retiring. There are illegal tax and financial ramifications to all of that. So, when we can provide that holistic solution, that’s somebody who gets on the train, or somebody gets on the plane. But if it’s somebody who’s just looking to check a box for a will or a trust, then we probably have to get them over to one of my friends.

Michael: And you mentioned for a moment there you have a team member, Julie, who’s helping with, I think you said coordinating onboarding. Just can you talk about that role further? I don’t hear a lot of advisory firms who have a dedicated person who’s taking the calls to do that kind of scheduling and onboarding.

Neel: Yeah. I mean, so our team is a core…I call them the core four now. The core four people who are in there. And we have more than four folks on our team, but these are the four that are probably the most impactful. They’re my leadership team. And Julie, she’s our marketing coordinator, as well as our onboarding specialist. So, anybody who calls in speaks to Julie first. Julie will explain the process. Julie will get some core information. Julie will make sure that they’re the right fit. And then she’ll help them with scheduling with me. And she’ll kind of hold their hand until they actually become clients. And once they become clients, that’s when Valerie takes over. And Valerie has been with me on the wealth management side almost since day one on the wealth management side. Clients love Valerie. She helps with executing the RMD orders. She helps with all compliance aspects of it too. She’s sort of been the operations guru on that too. And then Hetal is our overall operations person. So, she helps with the operations on the law firm side, as well as on the wealth management side. And then there’s me, who’s that lead advisor.

Michael: Interesting. So, anybody who calls in and wants to speak, normally, you’ll speak with pretty much anyone who gets referred in. But Julie still takes every call first, screens them all first, gets some information from them, I think you said give some information about the firm. So, I guess I’m wondering, I don’t know, do you… So, I’m channeling a lot of other advisors that are… Well, if it’s a prospect, I have to take the first call out of the gate. It’s a sales opportunity out of the gate. And I tell the story of my advisory firm better than anybody else tells the story of my advisory firm. So, how do you draw that line of what prospects that Julie fields and how deep she goes with them before it comes to you?

Neel: We do take our cue from the prospect who’s calling in. We don’t want to prod. And we know some people are more comfortable talking to me directly than they are speaking with anybody other than me. But I think Julie has become quite adept at making sure that she’s asking open ended questions, and just in the spirit of how can we help. I think that initial phone call, it’s about those three Ps. It’s about Process, it’s about the Problem that they’re trying to solve, and it’s about Pricing. And if we can just kind of focus on that in that first phone call. And she does a fantastic job with it. She’s a rock star.

Michael: I really like that framework, just prospect calls in and ultimately, you’re trying to answer their questions about the process, their problems, and the pricing, what it’s going to cost.

Neel: Yeah, exactly. You want to set that expectation. I mean, look, it’s not often that you can call an organization, and you’re going to get a real estate/business attorney turn high net worth estate planning attorney… We didn’t even talk about my elder law space, because I happen to be in a town in New Jersey where there’s the highest concentration of 55-plus communities. And my mother was a nursing home nurse for 30 years. And then we also have this RIA and life insurance offering as well, too, if it makes sense for you. So, it’s not often you could do that. If we clogged my calendar, and I got on every prospect call, I’d never do anything else. So, we need to have a system and a process for that too. And quite frankly, the prospect would get frustrated too, because if they’re not going to be the right fit, let’s get them in the right hand sooner than later.

Where Shah Total Planning Stands Today And How Fees Are Structured [52:08]

Michael: So, what does all this add up to right now, just in terms of sizing of the firm? I don’t even know if you track that by revenue, or by AUM, or number of clients, since you’ve got the duplex dynamic. What has this built to for from a client base at this point?

Neel: Yeah, it’s a little tricky because the revenue does come from a few different sources. But sticking with sort of the RIA side, we’re just at around say, 57. I mean, we were just towing [$]60 million under management right before the market did what it did over the last six and a half months or seven months, as at the time of this recording. And we’re about 50 households right now. We’re averaging about a client to a client and a half per month. We don’t have any half clients, that’s just the average.

Michael: Yeah, yeah, understood. A client per month or three every two months.

Neel: Yeah, exactly. That’s probably better put. We’ve been doing the assets under management. And we’ve had some tremendous growth. Because, I mean, really, we’ve been taking this seriously for the last five years, right? So, in the five years, we’ve gotten up to close to about 60 million under management. And for the handful of our clients who are not ready to go with the AUM model, because they either don’t have liquid assets or investable assets, or they have something else going on, like a cousin or a multi-generational financial advisor’s managing that. We started a subscription model for them, where we charge the equivalent of what we would have charged under assets under management, we just break it up into quarterly fees and those are fee only. So, we’re not the investment manager, but we’re more the advisor. Still looking at everything.

Michael: All right, so I’ve got a couple of questions here, just trying to parse through. So, clients pay the law firm for the legal work, they pay the advisory firm for the advisory work, which is primarily AUM based. And then for clients who don’t fit AUM, there’s a subscription model. So, let me just start with, how do clients pay the law firm? Is that hourly work? Is that other work?

Neel: God, no, I hate the hourly model. I’ve always hated the hourly model, partly because I don’t want to have to keep track of my hours. But I also think it disincentivizes efficiency. So, we’re always flat fee on the law firm side. So, they will pay the law firm for legal documents. And from a compliance perspective, we want to keep it that way. Because I think it’s good for the clients to do that. For our business owner clients, some of them do want to pay from the business, because, again, from a tax perspective, that makes sense, too. So, we give them the option to do that as well, to pay the law firm directly on that when it’s legal services. If we can bifurcate it, we will, but for the subscription…

Michael: And in practice for the law firm, just what legal work are you still doing at this point? Is it all trust and estates work? If a client needs a real estate transaction, are you still in on that? If a client’s got an employee…we need to roll out an employee comp structure, are you still in on that? What legal work are you still doing now?

Neel: Definitely not closings. Really anything advisory that falls within our wheelhouse. So, I will definitely advise them… Their trust and estates paperwork is what we’re preparing document wise, and other documents would be like, buy-sell agreements, the occasional operating agreement, although not a whole lot of that, on the business side. But anything pertinent to their estate plan, we do in house. If it’s something that doesn’t fall within our wheelhouse, which is like a real estate closing, or a business closing, or a litigation, we will bring somebody in… Or we’ll just refer them out, actually, we won’t even bring them in. The part that I think overlaps is the advisory part, is, I can’t meet with somebody during one of our quarterly meetings, put on my financial advisor hat, take it off and then put on my lawyer hat, and then take it off and put on my tax advisor hat. So, the advice is all included by the AUM model. It’s when there’s implementation that I think is when they pay the law firm directly.

Michael: Okay. So, as we think about conceptually, the fees are really for documents, it’s document preparation.

Neel: Yeah, I think that’s a good way to look at it, for the document preparation. And I think part of the reason people come to us is they like the idea of that one-stop advisory. So, if I’m advising them, they don’t want me to have to walk out, change my clothes, and come back in and now give legal advice.

Michael: Right. Right. So then, on the advisory side, how does the AUM structure work for you? How does it price? And do you have minimums, or tier thresholds, or anything like that?

Neel: We’ve moved towards a million [dollar] minimum. On the first million [dollars], we charge 1%. On anything between a million and [$]5 million, we charge 0.75, or 75 basis points. And then on [$]5 million and up, I think our ADV has it as 50 basis points, but we start getting negotiable at that point.

Michael: Okay. And so how does it work for the subscription model then that you’re rolling out? I mean, if you were moving towards a million-dollar minimum at 1%, is this like, it’s a $10,000 a year subscription, just priced at $2,500 a quarter? Like, is it up at that level? Or is it lower because you’re still trying to fit a wider range of clients who can’t necessarily afford at that level?

Neel: No, no, you’re actually spot on. It’s close to that. Sometimes it’ll go up a little bit because of complexity, based on what we’re dealing with. We happen to have a fair amount of blended families that we work with, and they have some complex estate planning issues. And even basically dealing with what’s going to happen to the IRA, even though the spouse might be better off getting it from a stretch perspective, you might want to do different things with it. So, for them, the subscription model might be a little bit more…it might be adjusted upward too. But it’s based on complexity, but we price it as if it’s that million minimum. So, 10,000 divided by 4, the way you described it.

Michael: And just out of curiosity, why quarterly as opposed to monthly or just once a year?

Neel: Yeah. So, a lot of trial and error. I played with a few different models here. But I think the conclusion that I’ve come to… And by the way, nothing I come to is independently. I’m pretty sure I picked up a lot of stuff in different places. I just can’t attribute it. But the conclusion that I’ve come to is, if you’re going to charge monthly, you better provide value monthly. And I feel like we have our structured quarterly meetings at a minimum. That’s easy for me to quantify, explain value, even though we might be meeting with a mid-quarter, or monthly, or even weekly in some cases. I just feel like it’s easier to do it that way quarterly.

Michael: Interesting. So, you’ve got a quarterly meeting cadence with clients in the first place. So, you felt like quarterly billing aligned well to a quarterly meeting structure.

Neel: Correct.

Michael: And you literally, like, all clients get a quarterly meeting or check-in of some sort?

Neel: I think this was definitely one of your podcasts here, where it’s like, well, we definitely like you, so we want to force you to meet with me quarterly. Versus some of the clients that we don’t like, we’ll give them the option to meet with us only annually. So, I think we step back a little bit, and just giving our clients the option. The ones that were a little more aggressive in requesting are the ones that are pre-year end, when we’re using our Holistiplan to do some yearend tax planning, or coming into the new year and reviewing the plan for the upcoming year itself, too. So, I like to do a minimum of twice a year. We offer four times a year, we’ll reach out to them. But we kind of take our cue from the client on that.

Michael: So, I get the legal side, you’ve now got like planning work and investment work. So how does it work for each of those? So just I’m envisioning, like, this is a lot for you. I heard Julie supports on marketing, and Valerie supports on compliance and operations, and Hetal supports on particularly all the operations in the law firm side, and then you’re the lead advisor, essentially, across doing legal work, and investment portfolio work, and financial planning work. It’s a lot of stuff. So, how does the planning and investment stuff actually happen? Because that seems like a lot that’s flowing up to you at this point.

Neel: It is. So, I mentioned those are my core four, and we do a great job, I believe. But they’re not the only four. We have these fantastic relationships, Buckingham, that I’ve mentioned. We’ve used a few outsourced planners. And I still have a couple of independent contractor attorneys that help me with the legal drafting side of it too. So, I’ve found sort of my strategic alliances when I needed them, and I compensate them, and they do a great job. And I think the relationships are working out for us.

Michael: All right. So, I want to understand more of that deeper. So, you said you outsource some of the planning. So, what’s getting outsourced? How does that work?

Neel: Yeah. So more specifically, it’s data entry on the MoneyGuide end, and then helping you to develop the financial plan on the backend too. We use a company called Delegated Planning. And they do a great job for us.

Michael: And how did you come to Delegated Planning?

Neel: That’s a good question. I want to say that I had a contact at Buckingham that put me in touch with them. And yeah, they’ve been great. I got the introduction with them. Our MoneyGuide subscription allowed us to work with them through Buckingham. So, they’re actually helpful. So, I will meet with the client and I will have all of the planning criteria identified. I’ll ask them to start inputting the plan, putting it together. And Valerie, working with the outsourced financial planning team, will put together sort of the beginning pieces of it, and then I’ll go in there and do my part. And we’ll have it ready for client meetings.

Michael: And how do you think about outsourcing this versus insourcing this? Like, versus hiring a paraplanner to do it internal for your firm?

Neel: Yeah. It’s kind of the same philosophy when it comes to using the TAMP or the Delegated Planning aspect of it. I’ve hired attorneys in the past. And when you hire a team in-house, great, you’ve got a team in-house and there’s benefits to that, because you’ve got control. You just better make sure that person is the right person. And what my experience has been is, when folks will pick up and move, or if their life changes, or if their skill set changes. It’s difficult to replace people when you get to that level. So, when I had my core four sort of established, now it’s time to figure out who those strategic alliances are going to be. I like the idea of having a team that I’ve delegated to because when you’ve got a TAMP that’s got 30-plus billion or a Delegated Planning that’s got a handful of CFPs on staff. I know that one person taking off for vacation, or I know that turnover, and I know that somebody’s life is not going to disrupt my entire business and my client service offering.

Michael: Oh, interesting. So, for you, hiring a person in the firm means you’re dependent on that person. So be careful what you’re dependent on for a core service like essentially investment work or essential planning work. So, from your perspective, the appeal of outsourcing, particularly to a larger, more established outsourcing provider is, they should have a depth of people, they can figure out how to handle turnover, and vacations, and sick leave, and all that stuff. And you just get to be the client to that point that says, like, “I want my thing that you’re supposed to give me. You all better figure out how to do that.”

Neel: Yeah. And aside from that, Michael, it’s also scalability. As I’m kind of figuring out where we’re going to go from here now too, I am getting contacted by other advisors, by attorneys, by soon to be retiring advisors, even accountants who want to basically be a part of what we’re building. And I can continue to keep adding staff on, but that takes me out of the advisor role, and it basically puts me into the CEO role. I’m not saying that’s not going to happen at some point in the future, but I’m not ready for that right now. Right now, what I’ve built is a very scalable model. And I’m excited for what I’ve gotten right now.

Michael: So, I get that now on the planning end, and the appeal of Delegated Planning. They’ve been around for a long time. They’re one of the larger deeper teams for just a number of people doing outsource planning work under one roof. So, you said you work with Buckingham as well as a TAMP provider. So, I guess I’m wondering, like, A, how does that work? And then B, how did you pick them as you picked Delegated Planning?

Neel: Yeah. They’re my second TAMP. When I first started the RIA, I went with the TAMP that a few of my other friends and other attorney colleagues had gone with. And great group of folks. And I wish them well, they did fantastic. But let’s just say that when I made the move to Buckingham, I was looking for a TAMP that wanted to be in the business of being a TAMP, not just necessarily an RIA, or an investment firm that said, “Hey, we’ve got some capacity, maybe we can add this service to somebody else.” And the support that I’ve gotten from them has been tremendous. It’s been amazing.

Michael: Interesting. So your first TAMP, because this has been a big trend for the better part of 10 years now, that lots of advisory firms, as they build their systems and scale, and get usually to a billion dollars, sometimes a little bit before that, just these firms, like, you’ve got a certain amount of depth of team, and experience, and systems, and software, and all this stuff, where it’s really scalable now to add the next advisor as you grow. Because you’ve built all the models, and the and the systems, and the trading, and the technology. And then you say like, well, if we can add the next advisor without really adding a lot of overhead and work because we built all the systems, why don’t we just do this for other advisors. And there’s just been this trend in recent years of billion or multibillion-dollar advisory firms saying, “Hey, we’ll also be your TAMP. If you want to affiliate with us and keep your firm, but run on our models and systems, we’ll do that for you.” So, it sounds like you started with one of those, but I guess we’re feeling the tension of, but they were also still an RIA for their own clients and weren’t necessarily as invested into the TAMP model.

Neel: Yeah, exactly. And I was going to say, Buckingham, to their credit, I mean, they’re transparent about this, too. They do own an RIA, as well, too. I think it’s actually one of the strengths that they have, because they can tell us what’s working on their RIA side, and they’re sort of working through their merger with Loring Ward. And they’ve been fantastic and supportive. And from a TAMP perspective, I think it’s actually brilliant. If I owned a large RIA like that, and I was able to offer a TAMP, it’s also a fantastic way to develop relationships with advisors who might want to refer at some point. So, you can actually use that as an aggregator strategy as well too. So, nothing to begrudge, but what I found…

Michael: So, what made Buckingham different than… I mean, Buckingham is an advisory firm that also has a TAMP, that you were leaving another firm because they were an advisory firm who had a TAMP. What’s the difference? Is it just a size thing? Is it a culture thing? Is it something else?

Neel: I think it’s both. So, I think the size definitely helps because the size allowed them to have a separate culture. The culture of growth and collaboration, study groups within other independent RIAs and advisors, and helping us with more sort of outreach and marketing, and collateral. And just the emphasis on training. And bringing you on, and Jeffrey Levine on. And just this constant state of growth for themselves and for the advisors itself. So, it was just they emphasized their TAMP offering. They’re almost proud of the TAMP offering. So, I think it was just somebody who was just really happy to be in the TAMP space, was the impression that I got. And I think when I started out, and especially as I was transitioning, and adding on this offering, I really needed more of those services. So, in hindsight, that’s probably what I needed from the get go, and I probably would have accelerated my growth. I’m an education consumer. I love just gobbling up information and implementing it. And Buckingham will spray me with a fire hose if I wanted, and just keep giving it over to me. We have our partner meetings, we have our learning group meeting. So, they’ve just been a very great partner. And I’m very blessed I found them.

Michael: Well, I was going to say, just as you’re… I mean, you said they’re doing things that either you wish the first one had done or would have accelerated you if you’d found it earlier. So, I guess I’m just trying to understand like, what are you getting from them? Or even just what drew you to them? Because I’m sure at the time you were looking for TAMPs, there were lots of choices. What was it that you were seeking that you found that made this so helpful for you?

Neel: Yeah. So, it’s interesting the way I actually got turned on to Buckingham. I’d already started looking for something different. And it was a client of mine on the estate planning side, who is also a financial advisor, who was working with Buckingham, who actually told me about Buckingham. So, I mean, ultimately, when I had my conversations with the folks at Buckingham, and I explained what my vision was of building this family office and building this integrated solution where we can have legal under one roof, I heard nothing but wide-eyed optimism. There was actually sort of, like, ideas being thrown out there. And I guess I’d be lying if I said, I knew exactly what I was looking for. I just knew that what I had right now was going to be a ceiling at that time, so I needed to have something that was going to get me to the next level. And so, I switched TAMPs, and then COVID is happening. And I guess about three months later, I get this email that says that the CFP exam, which was scheduled for the end of July, has been postponed to the end of September. And I didn’t have my CFP at the time. And I was speaking with one of my personal coaches. His name is Josh. I said, “Hey, Josh, do you think I should go for it?” And he’s like, “Well, if it’ll stop you asking me about it, just go for it already. Because I’m sick of talking about it.”

Michael: Always a good reason to pursue the CFP exam, if you’ll stop talking about it.

Neel: Yeah, exactly. Just get it done already. This comes back to that Buckingham story, but I got on my horse and submitted my capstone in four days. And I just put my head down for 90 days, and I pass the CFP at the end of September. And I think a lot of it had to do with the resources that Buckingham had given me. It was certainly 20 years of experience that helped, but I think their hand-holding with MoneyGuide, and the tax tools that they had made available to me. And the investment back office that I had, the fixed income desk, and the relationship with SMEs. Everything they sort of helped me with, it really just came to life during that CFP study process. And I think that helped crystallize what they were offering for me and what I was going to offer my clients.

Michael: And so, as you do all this outsourcing, the planning, and the investment, and the legal end, how do you manage it from a cost perspective? Is Delegated Planning, and Buckingham, and other attorneys that you refer out to or pull in on the client situations. Does that all come off of your P&L as an expense? Or do clients pay for that separately? Or is it some of each depending on what the thing is? How do you handle the cost of all this outsourcing?

Neel: Yeah, it does depend on what it is, right? So, for example, the TAMP fee is completely absorbed by me, Delegated Planning is absorbed by me. Because those are business decisions I’ve made to not hire somebody in-house. If it’s an attorney that’s helping with the transaction, the client pays for that attorney directly. If it’s stuff that we’re doing in-house, obviously, we’re paying for that, too. So, the way that I look at it is, if it’s something that I have made the option from a business perspective to not hire somebody to do, and it’s something that we’ve promised that we’re going to do, that’s on my dime. That’s part of the service. But if it’s an added-on service, if it’s like filing tax returns, for example, we don’t file tax returns for our clients. So that’s something that the client will pay for directly.

Leveraging Education-Based Marketing And Attorney Centers Of Influence To Gain Referrals [1:10:38]

Michael: So, what’s the growth path been? I mean, you said you’re closing in on [$]60 million now. And you launched the advisory firm side about six years ago. So, was it like a fairly straight path of zero to 60 over six years, like, [$]10 million a year? Was it more of a curve than a line? How has the growth actually happened? And where’s it coming from?

Neel: Yeah. We’re just, I think, getting to that tipping point where our financial clients are referring in other financial clients. It’s been predominantly, in the past, from the law firm itself. I think last year, we added about [$]20 million, which was obviously a banner year for us. And I can’t say that we’re going to do that every year. But I can’t say that we’re not going to do that every year. It’s the iceberg analogy, right? We’re just kind of at the tip of the iceberg here.

Michael: After six years.

Neel: Yeah, yeah, after six years. And the goal is definitely geometric growth. But I don’t think we want to do it haphazardly. We want to make sure we’re very strategic about who we offer. Because you let the wrong people onto the bus, and it dilutes what you’re able to do for the other clients. So, I think we want to be very strategic about it, too. Some of it is market growth. Obviously, we can’t discount that. And this year has definitely been rough for that, too. But I think we’re going to continue on this one to two clients a month, sort of average. And if we stick to our minimums, we’re not as tied to the assets under management in the sense that, yeah, it’s nice to have, but if we can find different ways to serve, or I should say, if we can find different ways to get compensated, but provide that same level of service, I don’t think that the AUM is going to be the only metric that we can use there. So, revenue wise, I like where we are.

Michael: And just where are clients coming from? I mean, is this all referral-based, either from financial clients that are now referring or just a base of legal clients you’ve worked with over the years, who eventually come back for legal work, and you get to tell them, well, actually, we do more now? Is it on that end? Or are you still getting referrals from attorneys, or referrals from advisors, or marketing seminars? Where’s it coming from? Because one to one and half a month is a pretty good clip?

Neel: Yeah. And I do think that it’s…we’re definitely finding our voice with the Shah Total Planning, like, with the Shah plan site. So, I think as we found our voice and become more crystal in what our offering is, and helping folks with transition, it’s made it easier for other advisors, for attorneys, and accountants to basically refer us in. I do find that education-based marketing is my best angle. I draw a stick figures, and I do a 10-minute podcast that goes live across YouTube, and Facebook, and LinkedIn, and Twitter, and a few of different social media platforms. We’ve turned that into a quick 10-minute podcast. We have a newsletter list, which is about 8,000 people deep right now, but we’ve never purchased anything. This is everybody that I’ve had some connection with at some point or another. So, that email newsletter is probably our single best marketing source because it’s just education based, and it’s just a chance to stay top of mind with folks.

And I can never say that it’s just one thing or another thing that’s working, but I think 20 years in, we’ve got a reputation. And one thing that I’ve consistently learned about myself through all these transitions is, I’ve done well when I’ve fallen in love with my clients, and not my service or my product. So, if I’m constantly just finding ways to love on them, and make sure that I’m serving them, it might be that I did a real estate closing for them in the past, that’s how I served. It might be that I prepared a trust for them, that’s how I served. And now it might be that we’re preparing a retirement plan for them, that’s how I’m serving. But if I love them, I’m going to continue to find ways to serve them.

Michael: I’m just struck you said, as you’re kind of finding your voice and clarity about how you’re positioning, the flow is going better. So, what changed on that end? What was the voice and positioning before? And how is it becoming different now that it’s picking up the pace for you on growth?

Neel: Yeah. I think the reason why it took us a little while, I think, to get to the point where we found our voice is, it’s unique. I feel like there’s charted courses and a path for a lot of accountants who have entered the space or maybe folks who entered the insurance space and then moved over to the RIA space. I feel like it’s a more proven tradition. It’s been done successfully by so many people. And I don’t see that same path as often for attorneys, and definitely not ones who are still practicing, and still manage a law firm, and kind of offer that. You mentioned Peter Mallouk, who I think is just crushing it. It’s fantastic. But I think that’s more of the exception than the norm right now. So, figuring out how to explain to clients, look, are you an attorney? Are you an advisor? Are you a tax guy? Are you a legal guy? Are you a financial? Who are you? So, what exactly do you do here? So, I think that’s one of those things where, in terms of finding our voice. And I think as we’ve gotten more comfortable with that, and as we’ve been able to synthesize that into a coherent message, I think it’s a lot easier to become referralable. And it’s also a lot easier for us to coalesce our different marketing and our different branding.

Michael: So how do you describe it at this point? So, Neel, are you an attorney, or an advisor, or a tax guy, or a legal guy, or whatever else on that list?

Neel: The answer is yes. That’s pretty much it. The answer is yes. I mean, it’s your one-stop shopping. It’s one-stop shopping. And I get this question a lot when I’m at networking events, when I speak with an advisor, and I kind of get like this nasty look from some of them saying, “Well, isn’t that a conflict of interest for you to be an attorney and a financial advisor?” And I said, “Well, I don’t know. Is it a conflict of interest for me to have a bunch of tools in my toolbox? Or is it a conflict of interest for me to only have a couple of tools in my toolbox and only stick to those tools?” And I kind of flip it around, and I say… And that’s kind of been our voice here is, look, every aspect of your life, every transition in your life, when somebody passes away, when you’re retiring, when you have a business exit, when you have a large inheritance coming in, it’s going to have a legal, a financial, a tax, and some sort of succession sort of vehicle to it. You want to make sure that every aspect of it is covered. And you don’t have the time.

Think about it, if you’re selling a business, or if you’ve just become a widow, do you really have the time to meet with six different people, even if they’re all in the same conference room? You want advice now and you want it implemented now. And that’s where we sleep in. And that’s when I think we provide the most value, is to say, you know what, you go back if you’re grieving, or you enjoy this business exit, enjoying the fruits of your labor, or you make sure that you plan that next retirement trip. Because we’re going to make sure that every one of your needs is at least addressed, or at least we’re having the right conversations.

The Surprises Neel Encountered On His Journey To Building An Advisory Business [1:17:08]

Michael: So, what surprised you the most about building an advisory business in particular, I suppose since you did this on the legal side for a long time? So, what surprised you the most about building an advisory business?

Neel: Michael, when somebody came to us on the law firm side, and we presented a solution, and it made sense, empirically, it made sense on paper, and the math works out. Yeah, let’s do it. Let’s prepare a revocable trust to avoid probate. Let’s prepare an intentionally defective grantor trust because we want something out of our estate. Or why have life insurance as part of our estate. That will meet sense empirically. When I’m meeting with a client who’s working with an advisor that has funds that have an expense ratio of, like, 300 basis points, or if I’m meeting with somebody who’s in their 80s, and has invested like a 40-year-old, or somebody who’s got a variable life insurance policy that’s going to blow up. And you explain to them empirically what the problem is with their existing situation, and you show them a better way.

The resistance that you’ll still get from folks, even though all the math and everything works out, I think I still have a hard time with that. I think embracing my responsibility as a change agent, and how challenging that is, has been a pretty big surprise for me. And I still struggle with it. I mean, you just know that something is just better for the client than what they’re in right now. And they’re still not willing to make the move. And it’s one of those things that, right before I go to bed at night, it will be one of the last things that I think about. Like, man, I can’t believe they don’t want to make that change.

Michael: I certainly remember part of that in my journey as well. I feel like it’s a thing for a lot of guys. The first time you get a client that just has a blatantly, clearly bad thing that they have, or they’ve done, or that they’re set up in. And you show them exactly why it’s bad, and the thing that’s better. And it’s so unequivocally obvious that this is going to make their financial life better. And then they say, “No, don’t do it.” It’s like, what just happened?

Neel: Exactly. I think this is where some of the more life planning or the personal development work that I’ve done in listening and just learning about. It’s never about that financial, it’s because this was the advisor that my late husband found, or this was… I don’t want to be proven wrong, or I don’t want to feel foolish for having done this for the last 20 years of my life. So, usually, it’s more than just the objective part of it. Usually, there’s something deeper going on.

Michael: You frame it well when you talk about this phenomenon of our responsibility as change agents, right? If you come to the table and say, okay. The question is not, how do you help the client diverse out of this concentrated position. The question is, how do you get the client comfortable diversifying out of the concentrated position that was bequeathed to her by her late husband, and it was his focus for 30 years? And she doesn’t want to sell the stock because she doesn’t want to let him go. How are you going to handle that? Still a concentrated stock diversification discussion, but it’s a really different change discussion.

Neel: Sure, is. I love it. I love that conversation. I love being in a position where we can have these meaningful conversations. And quite frankly, in my law firm, you weren’t incentivized to have those conversations, because you had to move on to the next client. Now it’s a quarterly meeting.

The Low Points Neel Experienced On His Journey [1:20:17]

Michael: So, what was the low point for you on this journey?

Neel: As I went through all of this transition, I have made a ton of mistakes. And every time I’ve made one of those mistakes, it’s never seemed as bad after some time has elapsed, and it was probably the necessary mistakes. But when you’re in it, man, it really sucks. I think that’s a technical word. I’ve hired people and paid six-digit salaries to them, and they weren’t who they thought they were going to be. I’ve had a partnership divorce. And if I didn’t go through that partnership divorce, I wouldn’t have this practice that I have right now. But imagine building a business, bringing on a partner, and then being forced out of it, which is pretty much what happened to me in 2010. And every time that happened, I pretty much thought my business life was over. Let’s just get a job somewhere. Let’s be W-2’d and not worry about this.

I’d say they’ve all been sort of low points. But I’ve got good first world problems. I live in gratitude. I live in faith. And I married the girl who sat behind me in homeroom. I’ve got an 18-year-old daughter and a 16-and-a-half-year-old son. One’s going to be in college in the fall, the other one’s going to be in college in the following fall. Everything that matters in life is great for me. I’ve got nothing to worry about. So, they’re good first world problems, so I say those are low points, from a business perspective. We’ve lost money on businesses, we’ve gained money on some businesses. But I’d take my low points over anybody’s low points.

The Advice Neel Would Give His Former Self [1:21:39]

Michael: So, anything that you do know now that you wish you could go back and tell you, 10 or 15 years ago, as you were early on, going down this journey?

Neel: Yeah, I think I spent a lot of time and I try to stay present to this because I still think that it’s somewhere in me too. But I try to tell myself that it’s okay to walk down a path that others have not walked down. Sometimes you got to bushwhack. Sometimes it’s not going to be the charted course or the trail that’s already pathed. And what I’ve noticed in my life, going from a real estate attorney, to an estate planning attorney, to owning an RIA, is, every time I sort of left something that was comfortable, and seemingly from all outside standards seem to be working. But I can’t be afraid to go to that next level. I’ve read this amazing book called “The Alchemist.” I’m not a religious person, but I’m a spiritual person. I read that book maybe two or three times a year. But there’s this analogy about leaving your sheep. It’s okay to leave your sheep if you’re a shepherd, and move on to that next level, because you can always go back to your sheep. And I’ve never regretted the decisions that I’ve made to get to that next level. So, I would encourage everybody to sort of explore what that next level looks like for you.

Michael: Interesting. That sort of reminds me, we had Alan Moore on the podcast years ago, when he was talking about his leap to go out and start a business after he had been an employee for a couple of years on salary. And the fear of going out and taking the leap. And his comment was like, what’s the worst that happens? I go back and get another advisor job? Like, there’s a talent shortage of advisors, there’s going to be a job. I can always go back and get another job. Worst case scenario is, I sat out a year or two of jobs salary while I tried to thing that I had a unique opportunity to go and try the thing. But just it reminds me of that same thing you’re talking about with “The Alchemist,” of the worst-case scenario is you can still go back to your sheep. They’ll still be there, right? We’re not running out of financial advisor jobs anytime soon, right? It’s, like, 40% are going to retire in the next 10 years. So, plenty of jobs.

Neel: Yeah. And listen, I speak with a lot of advisors, or attorneys, or accountants who want to get into the space, I want to see maybe once every couple of weeks at this point. So, I’m having these conversations with folks and I hear what the… And it’s a pretty consistent theme. It’s always afraid to leave good to go for great. And there are different ways to do that. You don’t have to be as extreme as I am. You could certainly find ways to gradually shift from one to the other. You can find ways to dip your toe in the water before you decide to actually plunge in. So, there’s different ways to do it. But, hey, you’ve got one life to live. What are you holding back for?

The Advice Neel Would Give Advisors Considering Adding Law Services To Their Firms [1:24:27]

Michael: So, for advisors who are listening to this, who are fascinated by this one-stop shop thing you’re talking about, but don’t have a law degree, and aren’t admitted to the bar. What advice would you have for other advisors that are hearing this, like, I want to do more of this one-stop shop thing, but I’m not a lawyer. How do I do this or tackle this, if I want to go this route?

Neel: Yeah. So, a couple of things. And I don’t think there’s any one way to do it. Because like I said, no chartered courses here. There’s not a lot of us, but there are a subset of attorneys who are also advisors, which seems like the wrong way to go. But if you find somebody who’s ethical and credible, is not going to put your clients, I do think there’s a benefit to reaching out to attorneys who are also advisors because you speak the same language. You can identify opportunities with held away assets, you can identify opportunities if the attorney can also speak that language. So, I do think there’s a benefit to reaching out to guys like me. I don’t think there’s an organization for these folks.

Michael: I mean, no offense, but aren’t we in competition? I mean, just how does that work practically, if I’m an advisor, and I’ve got advisory clients? I mean, I get it, you do legal work. But as you’ve said, you’re trying to not do legal work for anyone who isn’t also a client to the advisory firm. So, are we still effectively in competition?

Neel: Yeah. Well, I mean, if you didn’t trust the person to not poach the client, and if we didn’t have an abundance mindset, and realize that there’s just a lot of work out there, then I would see that competition. But if the idea is, hey, there’s this person who I think would benefit from this in-house, one-stop solution, and they’ve got [$]40 million. And we’re not landing this client, but for affiliating with Neel. Can we find a profitable number that makes sense for us to either fee split? Can we find a number that makes sense for us to fee split and find a way for it to make it worth our while? It’ll still be the advisor’s client, the attorney will participate in some level of revenue, but you wouldn’t have gotten that $40 million client otherwise. You can certainly hire your own attorney, you can affiliate with another attorney. But look, I’ll tell you, there are other advisors who had me on that until I started my own RIA. So, you run the risk when you hire somebody that they might leave, or you affiliate with somebody and they might leave the space and not be as ethical.

So, I think that’s one way to do it. But certainly, other firms, like you mentioned Peter. Peter Mallouk himself is an estate planning attorney. He’s done well with building a large shop, with hiring their own in-house attorneys. So, if you’ve got the scaling, if you’ve got the capacity to do that, that’s great. I think, if not, it might be a good way to sort of test that model. Because this concept of the ensemble practice, this concept of just adding people to your website, I see that a lot, but it doesn’t really work all that effectively, in my opinion, or I haven’t seen it work all that effectively because you don’t have everybody rowing in the same direction. And I think it makes a big difference when you’ve got everybody rowing in the same direction.

The Next Steps In Neel’s Journey [1:27:14]

Michael: So, what comes next for you on this journey?

Neel: If you had asked me 10 years ago, if I was going to be on this podcast with Michael Kitces, recording a segment about what we’ve built from an AUM perspective, I probably wouldn’t have even known what that means. So, the only thing I know for sure is, I don’t know for sure. I kind of use this analogy of me driving on this desert highway at night, and it’s not very well lit up, but I’ve got my headlights. I know there’s a road ahead, I have faith that there’s a road ahead. I can see as far as my headlights can see. I don’t think there’s a ceiling on my growth. And I think I’m going to continue to love on my clients and keep adapting. I definitely see value compression. I don’t necessarily see fee compression, but I see value compression in the industry. And I think people are going to… You speak about this extensively, Michael, but it’s normal for clients to expect more for what they pay.

And we’re going to continue to provide more of what we can provide. So, whether that means a subscription-based model, whether it means continuing on the AUM side, a hybrid of the two. I can tell you that I’ve had a handful of advisors who are in a different season of their practice life. And there’s conversations about me being a successor there, too. So, growth, I am fueled by growth and by contribution. So, I definitely think growth is there, I just don’t know exactly where that growth is. I could tell you in the immediate future, where the headlights flash right now. I think we continue on the AUM model. And I think we’re going to continue to find ways to serve people who are not ready for the AUM model, using the subscription model, for the foreseeable future.

What Success Means To Neel [1:28:42]

Michael: So, as we wrap up, this is a podcast about success. And one of the themes that always comes up to just the word success means different things to different people. And so, as you’re following on this wonderful path of success with building the law firm, and now building the advisory firm, and gaining momentum, the business is going so well. How do you define success for yourself at this point?

Neel: History is filled with stories of celebrities, and people who, by most objective outside standards, have achieved everything. And if people saw me on social media, and they saw our website, and they know my reputation, at least locally, it seems like I’ve had success as a real estate attorney, as an estate planning attorney. And it looks like I’m having success as a wealth manager right now. And I think that’s nice from an outward perspective. But what history has also told us is, people who have these outside perceptions of success, without fulfillment, is when you see tragic things happen. Like, with a Robin Williams type situation, not to get too deep in any of that. But success for me is, it’s hollow, if it doesn’t come with a sense of fulfillment. And every time I’ve made a business shift, or anytime I made a life shift, I’ve measured it against my life standards.

And my wife and I went through this exercise, where we… It’s kind of morbid, but if you can imagine you’re at a funeral, and you’re hearing a eulogy. And you hear that eulogy, and it’s the most beautiful thing you’ve ever heard. And then you get closer to the casket, and you look in the casket, and it’s you. And it sounds very morbid, but when you hear that eulogy, you’ve actually heard what a beautiful life sounds like. And for me, that beautiful life meant being a healthy grandfather. And even though I’ve got young kids right now, it means the kind of grandfather who can play with his kids. It means leaving behind a lasting legacy. It means impacting a lot of lives and building something that generations will be proud of. And I think when I’ve stepped back at it, all of those things have to be not just, by outside measure, successful, it’s got to be deeply fulfilling for me as well, too. So, yeah, that’s my success, is anything that gives me that fulfillment. And that might change from time to time.

Michael: That’s a good point at the end, and that might change from time to time. I love it. Thank you so much, Neel, for joining us on The Financial Advisor Success Podcast.

Neel: Michael, it’s been a lot of fun and thank you for doing everything you do for the community.

Michael: Awesome. Well, thank you, Neel. Thank you for joining us.