Systematizing Planning To Maximize Clients’ Return On Life

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.

Resources Featured In This Episode:

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Full Transcript:

Michael: Welcome, Shari Greco Reiches, to the “Financial Advisor Success Podcast.”

Shari: It’s great to be here, Michael, looking forward to it.

Michael: I’m really looking forward to today’s conversation and talking about what I think is that interesting dynamic that virtually any advisory firm hits as it continues to grow where you get to this point where you can only handle so many clients yourself before you have to start adding other advisors and, essentially, beginning to scale the business beyond yourself.

And it gets really hard for a lot of advisory firms because, as a founder, you got a certain way of doing it of how you handle clients, how you service clients, just how you do the planning process and interact with clients. And it’s really challenging when that has to go beyond you and you’re going to hire other advisors. And then these questions just start to bubble up, like, “Are they’re going to service clients the way I service clients, the way I do it?” Or like, “how do I even teach them to do it?” And it creates this pressure on us, as advisor and firm founders, to figure out, “How do you systematize the process of what you built to be able to teach others to do it?”

And I know you have been going down that road, for the past couple of years in particular, of how do you kind of turn what you’ve done for years with clients into a system, a thing, a structure that you can teach and train other advisors and bring them into the firm so that clients get that consistent experience even, if it’s not you personally. So, I’m excited to talk about what it’s like to go down that journey when you start trying to figure out how to take all the things in your head about how you do financial planning for clients and turn it into a system so you can teach other people how you do financial planning for clients. So, share with us just some of that journey, what have you been working on in recent years as you have hit this crossroads?

Why Shari Focuses On Aligning Client Values With Financial Goals [05:12]

Shari: Yeah. So, Michael, I want to bring you back a few years. It was 2019, our firm was about 500 million, we had about 7 people. And we had had a lot of success through the years, we started the firm in 2005 and we had grown, grown, grown, and, all of a sudden, we got to a point where things had leveled off a little bit. And, as founders, we had great advisors, they’re still with us, but the founders were starting to get a capacity, David Rappaport and I started the firm. We have another principal who’s actually my husband, Stephen Reiches, but he was starting to get a capacity. And we, our clients loved us, we loved our clients, but we reached a crossroads is, “How can we bring that same level of service, the same expertise that the advisors currently are doing, and grow the firm?”

Schwab has a strategic planning session that we went through, two full days, left the office, went through that. I had gone to, obviously, a bunch of industry seminars, but one of the recent ones I had gone to was a partner of ours, Dimensional Fund Advisors, and we had a session on practice management. And one of them was on articulating your values. And I went to that session thinking, “Boy, I know my values, this could be a waste of an hour and a half, but I’ll go with the flow.”

Michael: “Oh, fine, I’ll do your workshop thing.”

Shari: “Oh, fine, I’ll do it.” They wanted us to leave our phones at the door, there were candles lit in the room, we had to dress comfortably. And we started it with just a little meditation. And I’m a type A run-run person but I went with the flow.

Michael: So, all right, so, I’m just really, you’re coming as a type A and there’s candles and meditation? Okay, so…

Shari: Yeah, I know. And I think I might have opened an eye when I wasn’t supposed to. And then they passed out the list of values. And I started going through it, and I actually have it on the website, the same…our website, the same list of values. And they said, “Pick 30 right off the bat,” and you circle them, and then you went down to 20, 10, and 5. And, all of a sudden, I looked at this list…and I had been living my life by these values but I never really articulated it or knew it. And it was family, it was community, it was health, adventure was on the list. And I was in the process of running a big capital campaign at my synagogue, putting a lot of time. People always ask me, “Why are you doing this?” And then when I looked at the list, I realized it was community, it was family, it was giving back, and I was living my values. But this light bulb went on. And I started thinking, “If I have never articulated my values and I’m living them, have other people done that?”

So, I brought it back to the firm and I had our firm go through this little…I only did it for about a half hour, but this meditation and values. And again, I had Dave, my partner, was kind of a naysayer, my husband was like, “What are we going to do? Are we really doing this?” the Steph found it…but by the time…

Michael: So, everybody was kind of as quintessential type A as you were going into the room saying like, “Candles and meditation, the values exercise, really?”

Shari: And not spiritual at all. And I just was so excited about it and, all of a sudden, Dave looked at me and he said, “Health.” I spend money on all these other things, I spend time on all these other things, but I’m not taking care of my health. And he was sold.

And so, we started thinking, “So much of our industry is missing,” we’re talking about numbers and planning but really it’s more about values and how people’s values can help them make decisions on their retirement, on their spending, or their time. And that’s kind of when this Maximize Your Return on Life was born. And we really started incorporating this value.

So, going back to 2019, between the strategic planning, this whole concept with the values, we wanted to kind of rebrand ourselves, we redid our website, and we came up with this “Maximize Your Return on Life, a Five-Prong Approach,” which I can talk about, but it all came together. And we had a big meeting in December with all the staff where we kind of went through our vision. We called it, “The Road to a Billion,” it was a five-year path to get to a billion. We met with each of our staff to come up with individual business plans on how they could contribute to the growth of the firm. We spent a lot of time with our advisors to come up with their ideal clients so that they could work with those clients and really try to grow their business with their ideal client.

And we got everyone on board and it just became an excitement. And we started it January of 2020, which was probably a tough time to start, but everything’s gone really well and…

Michael: Well, it seemed like a great time to start in January of 2020.

Shari: Yeah, little do we know. But between getting everyone excited we upgraded our technology. And we had actually done that in ‘19, and it was pretty amazing that, when March 2020 came around, with a flip of a button, we were able to, “Everyone go home and work remotely.” And that was only…if you want to grow, you have to spend money on process of people. And we upgraded the technology, since then we’ve hired five people. One of our people that have been with us 14, maybe 15 years, Karen Asbra, she was running our operations, she’s our dedicated COO. Dave is now our chief investment officer, I’ve got the title of chief growth officer, and Steve and our other principal is wealth transfer, he had 20 years of estate planning experience.

So, by having this dedicated COO, it’s just really made decision process and moving things along a lot quicker, as opposed to all of us just weighing in all the time and moving it forward and not making a decision.

Michael: Interesting. So, I’ve got lots of questions there around…

Shari: I know…

Michael: No, it’s fantastic, like creating this pathway and some of the staff and structural changes that you made, as well as sort of creating and institutionalizing this “Maximize Your Return on Life” framework. But I actually want to take a pause and even go one one step further back than that of just this discussion around values and articulating your values I feel like is out there for a lot of people. And I think a lot of us…we say we have a good sense of our values, if you at least put us on the spot a moment, we can probably name a few of them. But I’m struck that you’re sort of talking about this breakthrough that you had and then this breakthrough that Dave had and going through the exercise with this list of values and picking off the list. What’s the actual exercise that’s creating these values insight breakthrough moments?

Shari: Yeah, and before you kind of go through this list, we often ask some probing questions with our clients, as well as when I went to the seminar, and it’s things like, “What is something you used to do that you miss doing? What kind of legacy would you to leave? People that you look up to? What are some of the qualities that they have?” I sometimes ask a question that, if the doctor told you you had five years to live but they’d be really, really good years, is there a regret or something in your life that you would like to do now? Is there something on your bucket list? So, the way that this works is you have to kind of get them out of the day-to-day and start thinking about some of these questions.

And when you go through the list, there’s things like the one that really was very big for me was adventure. When I was younger, I used to be so adventurous. I’d take all these adventurous trips and mountain climb and do all sorts of things and then starting a business and having kids. The trips were always…they were sporting events, or visiting family. And so, once I saw this adventure, I decided that I was going to start taking adventurous trips. So, I’ve gone to Costa Rica and I’ve rappelled down a mountain. Now, we’ve done some back roads trips. And I decided, “Once a year, I have to break out of my comfort zone and do one of these.” And I think, if I had done this exercise, I would’ve forgot about this value. So, that’s kind of how you have to go through this exercise.

I also ask questions like, “What brings energy to your life? What achievements are you most proud of? What are you willing to make the fewest compromises in? What legacy do you want to leave?” So, these are some of the probing questions that everyone is always running on this treadmill day-to-day that never takes the time to think about.

Michael: And so, have you literally created your list of probing questions in that context? Is there a standard list of questions or something else you do at this point to take people through this values exercise?

Shari: Yeah. Actually, we’ll talk about, I wrote a book, but I have about eight probing questions in the book that I ask the readers to go through before they look at the list. And it’s pretty much the ones we just talked about. One other one is, “What areas of your life do you protect the most?” Maybe it’s family, maybe it’s community. And so, I had someone that looked at this and power was one of their values. Everyone’s values are different.

And I work with clients after COVID because your values may have changed, they change as you get older, they change based on circumstances. And I have my clients kind of write these values down and use it as a guide. And so, when they want to spend money, I say, “Does it fit in your budget? Is it aligned with one of your values? If it’s yes, go for it. If it’s not, maybe this wasn’t the right place to spend your money.” And the same with time, time is a limited resource. And we all have the clients that spend without guilt and we have the ones that are guilty when they spend. And I think, by having this framework, it takes kind of a road map for them to decide where to spend.

Creating A Living Financial Plan By Utilizing A ‘CFO Family Checklist’ [16:09]

Michael: Interesting. So, fit this for us into this broader picture of…so, you went to the DFA event, you go through this values exercise, it creates this realization moment for you of impact that can be had with clients when they get clear on this. So, you bring it back to the partners, and David and the others go through it, and it clicks for them and they’re on board as well and you start moving this direction, saying, “Okay, we’re going to make…” I think you said it, ultimately, became your five-prong approach to Maximize Your Return on Life. So, what does that look in practice now? What is the five-prong approach in your firm that you take clients through?

Shari: So, we call it the Maximize Return on Life. The first prong is organization. So, sometimes even we call it the magic bag, we tell our clients, our prospects, “Bring everything, your insurance policies, your disability policies, all your brokerage statements.” Sometimes, we get even envelopes that haven’t even been open. But the first prong is to really get clients organized so they know what they have, because knowledge is power. And we have designed our own…it’s about 15-page what we call “The CFO Family Checklist.” And that is a standard checklist that every client we work with we complete.

And through that checklist, it starts with their goals, their asset allocation, financial planning, their tax information, their estate information, titling, Roth conversions, IRAs, making sure all the beneficiaries are correct. We look at disability insurance, life insurance, health insurance. So, every…

Michael: So, is that, essentially, your version of a data gathering form just to collect all of the client information?

Shari: Yes, but we don’t have the clients complete it because they never do. So, we literally gather all the information and we fill out this CFO checklist. And again, every time we meet, we bring the CFO checklist. And as a group, we decide, “What are your 90-day goals?” Maybe they haven’t had their estate plan looked at in 10 years, maybe they need to work out a budget. So, we work with the client, we say, “What are the things you want to work on the next 90 days, the next six months, the next year?” And we kind of have that list.

Then it’s almost they’re in school. The week or two before the meeting, they’re sometimes scrambling around getting some things done. But then we continually go through the list. So, the first prong is getting clients organized, so that they know what they have. And also it’s important that both spouses understand this. Because sometimes we find that there’s one partner that understands everything, takes control, but we want both partners to know what’s in there, what is the disability insurance, what is the life insurance, things like that.

Michael: So, this sort of family checklist data-gathering process, the idea here is you don’t give the checklist to clients for them to go through, they’re literally coming into this first meeting, they bring everything, they bring all the documents, all the policies, all the paperwork, I guess, and you start going through that paperwork and asking them the questions from the checklist and, essentially, doing that as the process to facilitate the data gathering of all the information that you need?

Shari: Yes. And to be clear, we don’t do this for prospects. For prospects, we show the checklist, we show them what we would do, we kind of show them a sample. And then, once they become a client, we kind of give them a list, we just say, “Give us everything.” And if we’re missing something, we go back. But the first meeting, when we meet with the clients once they sign our investment policy agreement, our investment advisory agreement, then we do all the work. But we try to make it as easy as possible for the clients. And it’s not unusual that even a year after we work with them they find a life insurance policy they forgot about or they have a benefit at work that they didn’t realize.

But the beauty of this is that it’s standard. So, as a principal who oversees many clients, I can go into the meeting I know exactly where everything is if a discussion point comes up. If they want to refinance a mortgage, I know there’s a page with all the information on their mortgage. If they have a liquidity need, I know I could see if they have a home equity loan, I can see…everything is right in front of me and that way we are looking at everything and then, obviously, we quality control the reviews before.

But the clients love this checklist, they just really look forward to going through it. And to tell you the truth, we spend 80% of our meetings on this checklist and maybe 10% to 15% going over performance because we’re a passive firm and clients are getting the market and we go over their asset allocation and things that. But this is what’s really important.

Michael: So, help me understand a little bit further, I guess, just what’s on this checklist or how it’s presented. Because, as you were describing it originally, in my head at least, I was envisioning a version of a data gathering kind of form just where we’re asking about tax info and estate info and titling and goals and assets and liabilities and so forth. But I feel like what you’re describing now is something different or more goes beyond what at least I would think of as a custom-design data gathering form.

Shari: Yeah, it’s not data gathering, it’s much more comprehensive. So, we start at the beginning, all the information about the client, the kids, their ages and things that. Then the first page is pretty much we have an investment policy statement for each client but it, basically, gives the broad range of their asset allocation. Then the next page we talk about liquidity needs. So, are they thinking of a second home or what are they looking for? So, a lot of that is liquidity needs.

Then we have a whole section on financial planning, which is actually this the third prong of the Maximize Your Return on Life, where we have a snapshot of the financial plan that they did. And then we do a cash-flow analysis. If they’re retired, what income do they have coming in? What are they spending? How does that tie into the plan? Is the plan still valid? Do we need to make changes to the plan? So, that whole section is really on the financial planning.

Then we have a whole section on taxes. What carryforwards do you have? What’s your effective rate? Are we in the right vehicles based on your rate? Who’s your accountant? Should we do some year-end tax planning? Is it a good time to do a Roth conversion? Are you retired but you’re not taking your minimum distribution? Should we accelerate income? You know, we’re not doing their tax return but we’re guiding on that.

Then we have a whole section on the estate planning. And sometimes the beauty is Stephen, my husband who works at the firm, was estate planning attorney. So, we flowchart their estate plan. Who’s their current beneficiaries? What ages do the kids get the money? Who’s their healthcare power? So, we go through all that.

Michael: So, this almost feels the financial plan output as opposed to the data we’re gathering in.

Shari: Well, you have to gather the data to have all this but that’s the initial step. So, we don’t just gather the estate plan and say we have it, we look at it, we discuss it, we make sure that this is still what the clients want, we make sure everything is titled properly, including outside assets, 401ks, things that maybe we’re not managing, maybe private partnerships, we look at all that.

Then we have a whole section on other assets. Some of our clients are investing in a friend’s fund or things that, so, we want to make sure that’s coordinated. Then we have a whole section on all of their insurance, liability, their disability. So, it’s extremely comprehensive.

Michael: So, you’re populating it as a checklist, as you’re gathering information, but then it becomes a living version of their plan going forward, which means you keep pulling the same thing back out to look at it, to revisit it, to edit it, to revise it as their life changes. Is that a fair characterization?

Shari: Exactly. And things, as they get older, so, I’ve got clients that are turning 65, so, we will have a whole section on Medicare planning. And again, it may be that we’ve done the work but we can list who is the providers, who’s your Part D, what are you paying? There’s also IRMAA, maybe they had a big income one year and they need to go back and get their premiums reduced because their income, they go back two years.

The clients love it because we go through this whole checklist, we come up with the two or three things, and then we kind of send an email after saying, “These are the things that you’re going to work on, this is what we’re going to work on.” And then we use Salesforce to put tasks up for each of these so that we can follow up with the client. And let’s say we want to do a social-security analysis and they have to get their social-security statement. We might follow up in three weeks and say, “Have you gotten your statement? We’d to do the analysis.” So, the CFO checklist changes as clients get older, as their goals change, and things that.

Michael: Interesting. So, in terms of this first meeting, this first organizing meeting…I guess I’m just trying to visualize how this happens. So, clients come in with the…I guess I was saying “the proverbial or literal shoe box of envelopes and policies and documents.” “Here it is, Shari, I don’t even know all the stuff in there, I haven’t even opened all these envelopes.” And through this first meeting, you’re going through that paperwork and you’re asking them questions to start populating the CFO checklist?

Shari: It goes back a little further than that. So, for every new client we have a roadmap, an onboarding roadmap. So, once they sign our investment advisory agreement, then we usually set up a secure link for them just to forward everything before that first meeting. So…

Michael: And what do you use for secure links and file transfers?

Shari: We’re using our Dropbox right now but we are looking into some other secure links. So, we have them send everything. Then we also, in the meantime, probably transfer the assets. So, that first meeting is to finalize the proposal on the asset allocation and what we’re going to do. And then we start going through that CFO checklist. And of course, we’re not going to do everything the first meeting, but the first meeting is just to make sure we have everything we need, everything is right, and maybe we start on one or two items. So, we start to get that checklist populated before that first meeting.

So, the first meeting we finalized the proposal, we make sure we have all the correct information. And then, usually about four to six weeks later, after we received everything, we implement the proposal, we have the first client review meeting. And we’ve also standardized our client review meetings, which I can tell you, basically, we use Black Diamond, so we have the performance reporting. So, the agenda’s usually we go through the asset allocation, the investments the performance reporting. And then we go into that CFO checklist where we spend a lot of the meeting.

And then we also have market update commentary if markets are tough or people want to just talk about the markets and things like that. And it’s just a living document that just grows and grows. Because everyone is different, some people have stock options, some stock appreciation rights. Whatever their situation is, we put that in the CFO checklist. A charitable giving, we spend a lot of time on donor advised funds, using IRAs. All that is in the CFO checklist.

Michael: And just where did this CFO checklist document come from? Is this an entirely a thing that you made yourselves, is this a template that you bought or built on from somewhere else? Where did this come from?

Shari: It just came over time, it used to be three pages and four pages. Our whole firm meets every Monday, Wednesday, Friday and we talk about interesting planning situations with our clients. And if something comes up, someone will say, “We should really add that to the CFO checklist.” So then we add another element to the CFO checklist.

But it makes it pretty efficient for the associates because it’s the same list for everyone and they know exactly where to pop all the information in. And it’s just been a living document that we’ve developed over time on our own. And our clients all call it their CFO checklist, they’ll be, “Oh, now it’s time to go to CFO checklist. Look at how proud I am, I did this, I got this done,” or, “thank you so much, I didn’t realize we could’ve done something different.” So, it’s really been a great value add to the clients.

Michael: So, the whole firm meets Monday, Wednesday, Friday to talk about client situations? So, tell me more about that meeting.

Shari: So, yeah. So, we started this during COVID. We used to have a Monday morning meeting. And the Monday morning meeting agenda was we talked about the performance because we have centralized investment process so every client has the same funds, they just have them in a different percentage based on their asset allocation tactic. So, we talk about kind of the market and how the funds are doing. Then we go through our prospect list, so, we use Salesforce. So, we code all the prospects one through five. One being they said yes. Two, they’re deciding. Three, we’ve given them everything they need. Four, we’re working at it. And five is an initial introduction.

And then we talk about it as a group because maybe we’re having a challenge with one prospect moving forward. So, the group discusses how we can move it forward. Then our COO will talk about any operation things that need to be addressed, if there’s regulation changes, the newer regulation about transferring 401ks, if there’s something going out to our clients we talk about. And then every week we send a newsletter out, so, we talk to the group about what’s on social media. So, that’s kind of our Monday agenda.

Our Wednesday is where we just kind of talk about client meetings, are there questions that people are getting that we should talk about a group. We keep a list of common questions and answers so that we’re all kind of giving…we want to give the Rappaport Reiches Capital Management answer. So, we talk about, “Interest rates are rising. My bonds are down, why is that happening?” things that clients are bringing up.

Just for example, today, we had a very interesting social security situation where we had a client who was in her 67 but her ex-spouse, she was divorced, was 61, and it’s very complicated with the claiming strategies. So, we have a dedicated director of financial planning, so, she talked about that.

So, we talk about either planning, client situations. And it’s just a way for the group to get together. And then Friday, we call it “Friday fun day,” and we sometimes just talk about our weekends, I might play a game, but it’s just touching base. So, and we’ve gone to a hybrid with our office, so, we have kind of a template that, if you’re less than a year with us, you’re in the office five days, more than a year, you work two days from home. And so, that way it just connects everyone together. And then we try to meet quarterly as a group in person. But the meetings have just been really good. And it’s pretty casual, it’s on Zoom, and we just talk about things.

Michael: And how long do the meetings run that you bring everyone together?

Shari: Half hour, not very long. We do it at 10:00 because we feel that people need to get in and they want to answer emails and get up and running. So, we do it at 10:00.

How Shari Integrates Her ‘Maximize Your Return On Life’ Five-Prong Approach [32:53]

Michael: Okay. All right, very cool. So, I get…so, the first meeting is a combination of you’re trying to get through asset allocation proposal to make sure that dollars can get invested since they’ve been in motion once the client said yes, they were coming on board, and you don’t want cash dollars to sit idle?

Shari: Right.

Michael: And then the second part is you’re at least starting to either fill out the CFO family checklist or may have pre-populated some of it from whatever they were uploading and then you get to at least continue the conversation and get more data points and clarify the more of the checklist in that first meeting?

Shari: Exactly.

Michael: Is that fair characterization?

Shari: Oh yeah, exactly.

Michael: So, and the goal at the end is, “We’ve at least gotten a bunch of the checklist, we’ve gotten your sign off for an asset allocation proposal, and we’ve set some initial 90-day, 6-month, 1-year goals of what we’re going to be working on, so, we kind of know and are agreed on our marching orders from here?”

Shari: Exactly, exactly. And the meetings going forward are pretty similar. The agenda is pretty similar but we just dive deeper into some of these CFO-checklist items.

Michael: I was going to say so then so what’s meeting number two?

Shari: It just pretty much continues. So, meeting number two we go through performance, but the CFO checklist drives it, and Stephen might spend 20 minutes flow charting their estate plan, because we got the copy of it, and going through that. Or we might have done a social-security analysis.

Michael: Because at this point, we tend to be going deeper into whatever they said was their 90-day…

Shari: Exactly.

Michael: …goal, whatever they had highlighted, that’s the thing you end up going in further. So, they say they’re anxious about social security or their estate plan or whatever it is, so…

Shari: Donor-advised fund or whatever they want, right. So, yeah, so, that’s kind of what the meetings really continue with, and we just get deeper and deeper. When they first come in, there’s that stress you see on everyone’s face and, by the second or third meeting, I could just see the stress leave their faces because they feel organized, they feel that someone’s paying attention. And we always say, “We work with clients that enjoy life and want to pursue their hobbies or their work or spend time with their families, they don’t want to be in the trenches worrying about all this, let us work with them and get it in front of them.” So, that that’s the first prong of the five-prong approach to Maximizing Your Return on Life, but that prong continues. But the first one is you can’t even start working with a client till you fully understand them and get them organized.

Michael: So, then what’s the second prong?

Shari: The second is the values. We talk about that in every meeting, and that’s when we kind of show them the values list pretty early on, even in the prospect, the way we have kind of a set prospect agenda, but we talk about the values then. And it’s just been so interesting. We had a couple that came in and said they spent more time picking the color of their car than ever thinking about their values. And we do get people kind of Dave, they the values, we want to talk about it, and then I can’t get them to stop talking about it, “Oh, remember, honey, we did this because that was our value.”

And they don’t have to be grand, I had a client that loves to cook but hates to prep, and I said, “You can buy prep vegetables, you can go to the grocery store.” She says, “Why should I pay $3 for chopped onions when I can get it for 85 cents. And I said, “But is that your value?” So, now she texts me every now, “I just maximized my return on life, I brought the prepped vegetables.” I had a client that had a lot of money and her daughter had a baby and she was sleeping on the couch and she was in her 70s and had backache and they were fighting, and I said, “Isn’t there a hotel close by?” “Oh, but I can sleep on her couch, why should I pay for the hotel?” I said, “Isn’t family your value? Isn’t family harmony important to you?” And she now stays at a hotel, and everyone’s happier. I’m sure if the daughter-in-law knew me better, she would embrace the situation.

So, we try to work with our clients not just to enhance the returns but enhance their life. And that whole values piece…even talking about it brings it to the forefront with the clients.

Michael: So, I guess I’m just wondering literally how you get to the values or handle that conversation with them, is it a checklist, is it an exercise, is it the series of probing questions? Just how do you literally do this with a client?

Shari: It’s a little more fluid, I think. I think just by having this brand that we’re going to maximize your return on life, most people are bought into that and they want to do that. Our discussions are always things, “This COVID has been really tough, we’d love to buy a second home in Florida, but can we afford it? And that might mean that we can’t take trips or it might mean that we might have to get a different car.” And these are all decisions that every client often struggles with and has to make. And we try to bring it back to the values, “What’s most important to you?”

My dad, there’s a quote in the book, at the very cover of the book, my dad said, “You can have anything you want but you can’t have everything you want, so, pick what’s most important to you.” And I have said that to my clients, I just want to bring you back to when I was 16, I’ll be pretty quick with the story, but I had gotten my first job, I had some money and Bruce Springsteen was coming to town and I also wanted a pair of Frye boots, and I thought, “If I go to my dad and say, ‘I don’t have enough money for both, what should I do?'” I thought he’d say, “Go to Springsteen, I’ll buy you the Frye boots.” But he didn’t, he says, “Life is choices.” And he said, “You can have anything you want, you can’t have everything. So, what’s going to make you happy and what’s most important to you?”

And I ended up going to the Springsteen concert. I’ve been kind of experienced type of person with my money, others would’ve bought the Frye boots. But that quote has stuck with me and I have said that to clients over and over and over again. And they repeat it back to me. Everyone has a different amount of resources, it’s not what you have, it’s what you spend and how you spend it. And so, this whole Maximizing Return on Life really brings it to the forefront.

Michael: So, where does this values conversation come in the process?

Shari: It just comes up when there’s a major decision someone has to make. Maybe they’ve been a lawyer for 30 years and they’d like to go part-time. Well, why do you want to go part-time? What is it the value that you want to spend with your family? It might mean that you might have to downsize your home, maybe your value used to be status and you wanted that home. So, whenever there’s a critical financial decision to make, we really try to dig deep with, if there’s a couple with both spouses, are they on the same page? Maybe one wants the bigger house and one doesn’t want to work as much. But we try to bring the group together, focus on what’s important, what the values are, and make a decision. And sometimes we say, “They have to think about it,” they have to talk together and say, “what is most important to us?” And so, it’s like I said, it’s very fluid but, by mentioning it, bringing it to the forefront, it’s brought into the conversations.

Michael: And so, then what’s the third prong for you?

Shari: The third is the full financial plan. So, that, again, ties into the CFO checklist. So, we’ve gotten them organized, we’ve got them thinking about their values. And when we do the financial plan, we spend some time talking about things like, “When do you want to retire? What would retirement look for you? Is it something maybe you want to start a little business on the side, you want to volunteer, you might want to go off council?”

We find a lot of people today don’t want to fully retire, they just want to work less and they want to have more time to do things. So, we can quantify this for people, and we do that all the time, but the other question is, “What will you do in retirement? Where do you want to be in your retirement?” And often they’ve never discussed it. And so, when we meet with the clients, especially if it’s a couple, these light bulbs come up.

And we also talk about their fears, a lot of them have a fear of not having a paycheck, they might have to help a family member, they fear their own health. And so, we talk about all these as part of the planning. So, the third prong is the financial plan, which we use as a guide, we, obviously, like many other planners, we don’t just put it on the shelf, because things change. We use Monte Carlo, we use MoneyGuidePro, we’re very happy with the planning tool that they have. And it’s pretty user-friendly for the client and we can model for different scenarios. And clients really like having that plan but they like the soft side of our discussions as well.

Michael: So, where does that financial plan and MoneyGuide experience come in the process? It sounds like the first meeting you’re getting sorted out on asset allocation, you’re going through the organization process. By the second meeting, you’re maybe even already talking a little bit about performances, dollars have been invested, you’re refining the CFO checklist and whatever their 90-day urgent goal thing was that they wanted to tackle. So, when does MoneyGuide and the full financial plan come back into the picture?

Shari: Yeah, every client’s different. Some clients, they want it right away. I wish they would’ve come to us earlier because it’s better to do a plan, but they’re in their 60s, they don’t love their job, they’re coming with this answer, they want to know how long they need to work, what the resources would be. So, we do the plan. But for most clients, we really want to get to know the client a little better, we want to get some of the urgent things like titling, making sure the insurance and all that is what is needed. And then, usually, probably about six months, maybe the third or fourth meeting, we do just a planning meeting. So, that meeting we try to just talk about the financial plan. We don’t bring in all the performance and the CFO checklist, we just want the full attention to the plan, we have our own retirement ready workbook. And again, we don’t give it to them, because they don’t fill it out, but it has a bunch of questions on there, it has a lot of different scenarios we can do. And we just kind of give them this. It also has the list of values that we can review again. So, we have a good 45-minute to an hour planning discussion, and that helps us to formulate the plan.

Michael: So, do you get issues or worries where you’ve gone through an earlier process of setting an asset-allocation proposal and implementing them and then you get deeper in the planning process and it starts steering you towards a different portfolio or a different allocation, does that come up where the deeper plan changes what the original asset-allocation proposal was?

Shari: No, it rarely, rarely has because we can preset the asset allocation, and often clients are coming in with cash and we might be dollar cost averaging so we can change it, if we need to, but rarely have we seen a time that we’ve had….the input’s really on the plan is spending, and that’s really the blank look that we get when we start to…as part of our CFO checklist, we ask what they’re spending. And they sometimes come up with different numbers and that’s a blank look.

So, that’s why we kind of take some time because we really want them to…we work with them on budgets and really try to figure out what is their spending, what are they going to need? And that’s probably a prudent thing to do. But rarely do we end up changing the allocation based on the plan. Again, we might change it going forward, as they get older and things that. If they’re working, it may be one allocation, when they decide to retire, we might change it down the road. But initially, we find that six to nine months is fine to do the plan.

Michael: And then what’s the fourth prong of the plan?

Shari: The fourth is how we implement the asset allocation. And we have some core principles, it’s really the investment side of our business. And we want our clients to understand the core principles, and we go through this during the prospect meetings, but the first one is that this asset allocation will drive success and that’s a big decision that we’ll make together.

The second is that we’re long-term, we’re not going to be the firm that calls you up and tactically gets into cash, we want them to know that this is long-term. We believe diversification is important, so, we will be in all the capital markets, international, emerging, all the bond markets international, things that.

The fourth one is that costs and taxes matter. So, as part of our investment process, we do overlay taxes. And our investment strategy is very cost-efficient. Again, it’s passive and it’s very tax-efficient.

And then the last core principle is let the markets work for you. And we just talk a lot about the advantages of a passive or indexed approach. And again, we want happy clients, so, we don’t want clients that are thinking we’re the ones that are going to come up with ideas and get them in IPOs and have single stock exposure. That’s not who we are or what we’re doing, we think that this is the best way to maximize their return on life, so, we want them to understand. So, that’s the fourth prong, that’s our investment strategy.

Michael: And then what’s the fifth prong?

Shari: The fifth is that it’s ongoing monitoring and review. So, we continually meet with the clients, we review portfolios, we read the CFO checklist. So, it kind of comes full circle. So, that’s kind of the five-prong approach to maximizing our clients’ return on life.

Why Shari And Her Firm Created A Prospect Book To Attract Clients [47:29]

Michael: And so, how do you, just how do you present this and talk the client through it? Or I guess I’m envisioning even more of the prospect through it, how are you presenting this out to prospects to say, I don’t know, “This is our offering,” or, “this is our process,” or, “this is what we do for you, that you’re going to give us your life savings and we’re going to manage it for you,” how is this presented in the marketplace with your Maximize Return on Life framework?

Shari: Yeah. So, it’s, again, we’ve done almost all of this through Zoom. So, we have two different prospect books. One is, what we call, some clients less sophisticated and then we have another one that’s a little more sophisticated. But we use a lot of pictures. So, we have this prospect book and it’s called “Maximize Your Return on Life,” and we have a pretty picture of a mountain. And then we have the five prongs that we just mentioned. And then through the first page is getting organized. The whole thing is we want them to say, “I want this process,” right? They want to hire us, so, we show them the sample CFO checklist and we show them all the things that we would work with them with that. So, that’s the first part of the presentation.

Then, the second part is we show the list of values and we talk about how we incorporate the values, so, we kind of have a discussion with that. The third part of the prospect book we actually show them snapshots of what a full financial plan would look and we kind of have them envision what their plan would look with us and we kind of show them a sample of our planning tools and the Monte Carlo and how it really can help guide.

The fourth section of the prospect book is we talk about our investment strategy. We show why we believe in indexing, we show our partners that we use, we use Dimensional and Vanguard. We show kind of a sample of what a portfolio might look so they can see the broad diversification. We might show them some asset-allocation charts and just things just to get them thinking about that.

And then the last section of the prospect book is we show them an example of what a client review would look, what we would need, what we would show you, how we’re very transparent, we would show you your performance, what you’ve earned, what you’ve added, what you started with. And that usually gives them kind of a flavor of what they can experience working with us.

Michael: And so, what you’re framing as a prospect book is, essentially, a standard just templated presentation of your offering and what you do?

Shari: Yeah.

Michael: I’m hearing it and sort of envisioning from, well, I guess the pure asset manager, world asset managers often have their pitch book of “Here’s our investment process and our philosophy and some stuff about our performance,” and all the other things that go in an investment pitch book. So, feeling this is sort of a wealth-management pitch book equivalent that just going through your five domains and showing them the version that applies in the financial-planning context. So, “We do get organized, here’s a sample of a family CFO checklist. So, we do a financial plan, here’s a sample of the plan. We talk about values, here’s the list of values we’re going to talk about. We have a certain investment approach, here’s our core investment principles.” And you’re just literally showing them the core pieces of each?

Shari: Yeah, and the goal at the end of the meeting is we say that our goal is that we’d be happy to look at your current investment portfolios, kind of a doctor, do a checkup, tell, “We would do a net worth for you and give you, if you wanted to go to the second meeting, we would give you kind of our thoughts on and things that we think are adding volatility or portfolio, things that we think we could do better.” We might compare it to how we would manage. And then we might take the CFO checklist and make it a touch more customized to them. Again, we don’t want to do the whole planning and all the work but we may, based on that initial meeting, highlight a few of the things that we would work with them over the next 90 days.

So, by having that second meeting, they kind of see our process, they see what they currently have. They also see what we would help with the CFO checklist. And then we also have a checklist at the end that we give if you’re interviewing other advisors and we have like 15 things on there, of course everything we do but, “Are they also doing it?” And so, we kind of give them this checklist, “If you’re interviewing other advisors, here’s a guide to kind of compare apples and apples as you interview other advisors.”

And so, we kind of find that, if they’re committed and they give us their statements and we have that second meeting, our close rate is 80% to 90%. And then we have, basically, everything to really…they should be able to make a decision after that meeting. And then we get them to decide if they’ll sign the investment-advisor agreement and get the paperwork going. So, it’s been a very successful way of prospecting clients. And really, we used to do full plans, we used to do a lot more work but, at the end of the day, we’re giving this for free, do they really need all that information to make a decision? We think they can make a decision if they can kind of see what our offering and value-add is.

Michael: Well, I think it’s an interesting framing to say, “We used to do all these full financial plans for prospects to show our value and now we made a standardized prospect book that shows a sample of a financial plan and the value it creates, and then they can decide if they want to hire us for the whole thing.” So, sort of a robust presentation of sample plan versus actually doing the whole plan for a prospect. And so, where did this prospect book…well, I guess I’m wondering two things, just what is it in practice? Is it physically a book, is this a PowerPoint presentation? What is it? And then how did you produce or create it in the first place?

Shari: Well, we internally created it. We’ve always had prospect books. But again, as we grew the firm, I’m not going to be at every prospect meeting. I used to be. And so, we wanted to make sure that there was this Rappaport Reiches Capital Management kind of template but we also, when we were meeting in person, we would do the meetings in our office and we would have it as a PowerPoint on a big screen because we find, the minute you put a paper book in front of someone, they get nervous, they start flipping through the pages, they look overwhelmed. But if you can just let them sit back, we look at the screen, there’s a lot of graphics and pictures. It sounds like there’s a lot of detail, but it really becomes a discussion. We get to know the client; they get to know us. And sometimes we don’t even open the book, we just talk about the process. But we find people are visual.

So, on Zoom, we do it through PowerPoint. When we meet with the clients, we do it on the screen. I can’t remember too many that we literally had the book. Now, we will send them the book after just because they might want to flip through it, and we have pads of paper, they can take notes, but we just want them to be relaxed. It’s stressful to go to an advisor to begin with but we just want them, at the end of the day, to look at this and say, “Boy, this is what I want.” And if they don’t want it and this is not what they’re looking for, that’s fine because we want happy clients, and we’ll call it a day. And that’s what we always say, this is what we offer at the end of the day. “If this isn’t what you’re looking for, that’s fine, but we just want you to understand what the Maximize Your Return on Life process is going to be.”

How Rappaport Reiches Capital Management Structures Fees [55:35]

Michael: And so, what’s the pricing? What’s the fee structure for the firm and doing all this for clients?

Shari: Yeah. So, we charge 1% on the first million, 3 quarters on the next 2 million, 50 basis points on the next 2 million, and then 25 basis points over 5 million. To get the full CFO family services, we begin at a million dollars, so, that’s our minimum.

Michael: Okay, a million is the minimum for you now.

Shari: Yeah. So, just a 5-million dollar client is going to be at 70 basis points and a 3-million dollar is going to be at about 83 basis points. And because the funds we use are passive, they end up being maybe 15 basis points, like a 60/40.

And so, part of, when we ask for this financial checkup, we often do a fee analysis for them because they think they’re not paying anything. But we’re showing that their funds are at 1 and a half and the turnover is at 20% and things that. So, we kind of do a whole analysis to show them what they have. And we know our fees are not the lowest, we know they’re not the highest but we feel that the value we provide is right in line.

Michael: And how do you actually do that comparative analysis of what they’re currently paying versus your offer, how do you…

Shari: Well, we can look in the internal mutual fund fees. And then we usually will ask them if they know what they’re paying, they usually don’t, so, we can ask them for a quarter-end statement and it’ll usually have the fees on there, so we can kind of analyze it that way. So, it’s very tricky, our business. And it’s not transparent. And then there could be trading costs. So, we try to educate them to really, “It’s not what you earn, it’s what you earn after taxes and fees.”

Michael: And how do you think about just this world of fee compression, pressure on value to be charging 1% for passive portfolios but then coupled with all of the financial planning work that you do? How do you talk about fees and pricing and the value of what you’re getting for what you’re paying for, how do you flow through that with clients?

Shari: I feel the value is definitely there. I’ve had, through my career, a few examples when…I was at another big money-management firm and a friend of mine didn’t have the minimum. And I said, “You could just go to Vanguard,” and I actually showed the funds that this person could do. And they ended up being our first client when we started the firm because people just don’t do it. They get emotional, they get busy, they don’t manage their affairs. And so, it’s not just…yes, we’re passive and sometimes people say, “Well, how do you earn your money being a passive? You’re not outperforming the market,” and I’m just saying, “60% to 70% of people underperform the market, so, I’d rather just be at the market.” But if I can change their lives, what is 1% worth when they can go to bed at night, feel good about their portfolio, feel good that their family is going to be taken care of, that they’re true to their values, that they have a plan, they have a road map, they know what the future is going to look like, what’s that worth? We rarely get complaints about the fees because we’re in line with everyone else. I always say, “We’re number one. If you could do it yourself, go to Vanguard and build a passive portfolio. But can you do it? Will you do it? Are you going to make sure you’re claiming your social-security strategies right? Are you be donating tax efficiently?” We help their children, we do multi-generations. We don’t just work with the parents, they have the children, the grandchildren. Our friends become clients, our clients become friends, but it becomes a full holistic way of helping them.

Michael: And do you worry, as you look out to the future, about dangers of fee pressure or fee compression?

Shari: I don’t. The people that come to us that have been doing it themselves, they’d be happy to pay 3% based on what the results would’ve been. I just think that that’s why it’s so important for us to keep the level of service very high and keep the value-add very high for our clients. Maybe I’m an outlier but I’m really not concerned because there’s a lot of people that need services and we don’t need to have all of them, we just need the people that will value the service that we provide.

Rappaport Reiches Capital Management’s ‘Road To A Billion’ Vision [1:00:14]

Michael: So, where do clients come from for you?

Shari: Yeah, we track that. We’ve, again, through the years, my dad was my mentor, we worked together in the banking business, and he always said to me, “The last person seen is the next person getting the business,” and, “everyone’s a client, they just don’t know it.”

So, what we’ve tried to do is we’ve tried to target our marketing and stay in front of our referral sources, our clients, and our personal networks. So, part of this road to a billion, that we started in ‘19, we really upgraded our marketing. And so, we do a weekly newsletter, we’re very active on LinkedIn, Twitter, Facebook. We’ve offered webinars. We’re getting 200 to 300 visits to our website, a lot of them are going directly to our blogs or webinars or things.

But if I have to think, I probably think half of our business comes from our clients. Which that’s another thing that, when we meet with clients, I bring up and we say, “If you enjoy our process of Maximize Your Return on Life, do you have people that we might be able to help maximize their return on life?” And so, that’s been a great way, through clients. Just our personal networks, our referral sources.

We also get to know the professionals, we get to know the attorneys of our clients, we get to know the accountants. And we often hear from accountants, “You called us to do a Roth conversion. You called us to accelerate income.” They’re very impressed with what we do, so we get referrals from them. And I get referrals from some very large advisors that have like 10-million-dollar minimums and they really feel very comfortable with our planning but they feel very comfortable with our passive approach because they’re not going to be embarrassed that they sent them to someone that did really well or really poorly.

And so, we get a lot of 2 to 10-million-dollar clients from a few big firms in the city, in Chicago, that I don’t want to mention who they are, but that feel that we’re their go-to. And it’s like me, I have a million-dollar minimum, I have a go-to for people under the million. So, that’s been a big source of our referrals.

Michael: Well, I’m struck as well, just that framing that one of the benefits of a more passive approach from a referral source end is one of the things referrers are always going to be anxious about is, “Do I refer you a client who then has a bad investment outcome? Because that’s egg on my face if I referred you in. And if you’re a passive advisor, I don’t have to worry about getting embarrassed with some bad investment outcome I didn’t see coming because you can’t underperform that much if you’re passive.” And that’s comforting for them from a de-risking perspective.

Shari: Right, and they also believe if you’ve got [$]10 million, you could do private equity, you could do hedge funds, you can get into these private…but they kind of think, “If you’re 1 to [$]10 million, you should be in passive, you don’t have enough money to be getting into these things at lower cost.” So, that’s been a big area, and so that’s really been our organic growth.

Another firm merged into ours, it was a sole practitioner who was using Dimensional, we got introduced through them, and he joined us the January of this year. And so, he is going to slowly transition and retire, but that was our first kind of merger. Although it wasn’t really a merger, it was just kind of adding him as an advisor and bringing some of his clients over. So, that was exciting for us.

But this marketing initiative we really started again in 2020, around the same of COVID, but we are seeing people out of the blue, that I haven’t talked to in a while, are calling up with referrals. And I think it’s because you’re in front of them all the time. And they like what we write, we create our own content. We do use some things from Twenty Over Ten, we use some Dimensional, we use some Vanguard, but each of our employees try to write two blogs a year. So, one of my employees just got married, and she talked about budgeting for a wedding. Another employee’s son was going to college, she talked about setting a budget for college and what you should look for and the different kind of plans you can have in college.

Michael: So, every team member has to write two articles per year?

Shari: They don’t have to but they do, and we have an outsource editor that will review them. And yeah. So, I write a lot, probably almost every week I write some kind of article. Some of the most popular ones are tears and fears. I wrote one about my daughter who started her first job and she called me up, she never asked my opinion, and said, “I’ve got this 401k, what should I do?” And I said, “Well, you should go in the target fund 2060.” And she said, “Well, what does that mean? I’m going to earn 60%?” I go, “No, that’s the year that you might retire,” and she’s like, “no, 2060.” So, it was just kind of tears and fears. But things like that people relate to.

Utilizing A Diamond Approach To Centralize Roles And Processes [1:05:45]

Michael: So, as you started this road to a billion vision, you had said a lot of it was getting input from the team about how’s everybody going to contribute to growth. I guess I’m wondering what were the new growth initiatives or things that that you started putting in place.

Shari: Well, the first thing that we did was we started implementing something called a Diamond approach. So, through the Diamond approach, the top of the diamond was the principles. The middle is, what we call, lead advisors. The bottom quarter is our associates. And then the bottom of the diamond is our operations. So, we centralized our trading, we centralized our investment-management process, we upgraded all of our processes, we have template emails that go out to clients. We did everything we could to make it the Rappaport Reiches Capital Management system.

And then for years, and like many of us, I thought I had to handle the clients on my own, I’m the only one that could handle these clients. I’ve had some of these for 20 years, they’re used to my level of service. And it was really hard to go to this team approach. So, what we decided is every client would have a principal, they would have a lead advisor that would kind of be there day-to-day and they would have an associate.

And so, that gave Dave, as our COO, more time to really concentrate on the portfolio. It gave me more time to really mentor work with our advisors to grow the firm and really implement this marketing initiative. It gave Stephen more time to work on this wealth transfer and be a resource for that. And then the dedicated COO gave more time for all of us. Now, we meet as a management twice a month, and the COO has an agenda and she does all the research and everything, and we discuss if there’s things we’re going to change.

But what I have found is the clients like this team approach. They’ve gotten very close with the lead advisors. I sometimes find them going to the lead advisor before they come to me. Now, I’m always there for big big decisions, I attend a lot of the meetings. Sometimes I attend for a little bit, sometimes I stay based on the situation. They know I’m always there if they need me, but I don’t need to be their primary contact. And that was really enlightening for me and I struggled with that for many, many years. “How could I have this woman, that’s got divorced 10 years ago, who I’ve lived with, have someone else involved in the relationship?” But it works.

And so, this Diamond approach has been great. Since 2019, we’ve hired five people. And the beauty of it is some of the lead advisors, who are lead advisors now with clients, they were associates three, four, five years ago. And they sat in those meetings. So, by the time they became a lead advisor for the client, they’ve already been in 10 meetings or 15 meetings, they know the client, they know the CFO checklist. So, it just makes leveraging the firm and growing the firm a lot easier.

Michael: And so, how do you figure out just how to do this, all of this restructuring, everything from the actual process of centralizing trading and investments and rolling out diamonds and templating all of your emails and reassigning all the roles at the firm? Was this something you guys just came together and sorted out? Was this hire external consultants, was this go through a training or coaching program? How did you come to this level of changes?

Shari: It was kind of organic. Little by little, we realized…and we didn’t do all this at once, so, we’ve been doing this for two and a half years now. So, probably the first year we transitioned very few clients, we wanted to test it and see how this was. But a lot of it was natural because we promoted two of our associates to lead advisors. One got the CFP. Another, she was the head of our planning but she’s now an advisor. And they both had been working with a lot of these clients. So, we kind of picked a few clients that they were close with to begin with, and we started with that.

Dave is really good on templates and processes. So, we have standard emails when we send money out, we have processes now when we do cash flows, we have to get verbals and things like that. But it takes being very diligent to set up the process because, when you’re kind of the sole practitioner, “Oh, we could do it this way, we can do it that way.” We try to have very few exceptions, if there’s an exception, it’s got to be approved by one of the principals.

And so, we’ve just, little by little, have have gotten this organization. And every year we look at our books of business and see what would be the best team. When there’s a new potential client come in. Let’s say I’ll talk to that client on the phone, I can usually tell…each of our advisors kind of have their ideal clients, so, I try to match the lead advisor with that prospect who I think will get along really well. And so, the process just works.

Michael: And so, you’d said part of these shifts were to free you up for new and different marketing initiatives. So, what are the new and different marketing things that you’re pushing now?

Shari: So, we started, again, back around January, 2020. We do a weekly newsletter that typically will have a blog written by one of our staff and then, usually, it’ll have some kind of market information. But we find…I do a google analytics, the things that get read the most are the soft side than the market commentary. I’ve spent a lot of time with advisors really helping them to use LinkedIn to add contacts on LinkedIn. In the beginning, we thought we could have our advisors post our content but everyone’s busy. So, my office manager now posts on Hootsuite two to three posts a week for every one of our employees. We’ve added Facebook…

Michael: So, you push out your blog content across all of the team member LinkedIn pages using Hootsuite?

Shari: Right. So, once a week, she’ll email me and say, “We have it spread out in different teams because we don’t want all the same content,” because a lot of people have the same context. But she’ll send me the blog, she’ll send me the little blurb she’s going to use, she’ll send me the hashtags. It takes me 5 minutes, I review it, I say, “Fine,” and then she sets it all up on Hootsuite.

Michael: Out of curiosity, just do you get any team members that say, “No, no, that’s my personal profile. I don’t want to have the company putting things out.”

Shari: I have one, one advisor, because she likes to do things a little more creative. So, we let her go with that, but she still posts quite a bit. And then, we have….

Michael: So, most of the advisors just they were fine, and so you do it for them, and the one who objected you let her do her own thing?

Shari: Right. And then I’ve been coaching them with trying to like things and post comments and like the comments just to get a little more activity on LinkedIn. We kind of had a contest, at one point, of getting more LinkedIn subscribers and things that. We post on Twitter, we have a Facebook page. We haven’t done it quite as much but, during COVID, we tried to do monthly webinars and we did those all in house through Zoom. We do our own content. We did a lot of young adult webinars, we did some webinars for women, we did some investment webinars, market update webinars. So, we do that. And then I spent the last year…I wrote a book called “Maximize Your Return on Life.” And I’ve been on TV and interviewed.

And again, that’s not just to bring business from people that read it outside, it’s really to repost some of the articles with our own network. We have about 2,500 people subscribed to our newsletter. And the book has just…I would encourage any of your listeners to write a book, if they want to, I had so much fun with it. And what I’ve done too is, with our clients, we’ve asked them if there’s anyone that they’d us to send the book to. We sent it to all of our clients and all of our referral sources. And so, I’ll write a personal note and send it. And a couple times people have called us from that.

Michael: And how do you go about…are you a writer type to literally just sit down and crank out a book?

Shari: Not really. I’m a creative type, so, I come up with all of these creative ideas. I’ll be at a function or I’ll be watching TV and I’ll be like, “Oh my god, that would be a great blog.” I did a fun one with my husband, he wanted to buy a new bike and he was feeling guilty…he rides one of those expensive bikes, he’s one of those guys in all the biking gear. But so, there was a chapter on, “Should you feel guilty or not, guilty, Judge Shari?” And he had to come to me and plead his case, and it was aligned with his values and his budget.

So, I come up, it’ll be a Sunday afternoon, I’ll come up with something, I’ll scribble it down. I’m not the best writer, Dave is great, he kind of takes my writing and can help finesse it a little bit, and then I do have an editor, but it’s not I sat down and wrote the book, it was a lot of different ideas and then I kind of pulled it all together in the book. The book kind of starts with having people think of their early memories of money, because that really affects how they handle money. Then I have them identify their values. Then I have them really look at their spending with their values. I have them look at their time with their values. I have a section on maximizing the return on investments and financial planning. Then I’ve got maximizing your return on loved ones, how to teach your family, your children, leaving a legacy, passing on your values. And then I end it with gratitude and then I challenge them about how they’re going to maximize their return on life. So, that’s kind of the framework of the book.

And I turned it into a podcast that started a couple weeks ago. So, I think, by this Diamond approach, it’s allowed the same level, if not better, service for our clients. I’m still involved, I still get involved with the clients, but I’m able to do what I enjoy best.

Michael: And so, of all these different new marketing initiatives, you’re talking company-wide social media and the webinars and the book, what’s working for you at this point, really new things are working? Because you already had a lot of existing systems.

Shari: Again, they always said, “It would take about 18 months,” because repetition, and you want to be consistent. And I think it’s all working. And again, with everything we do at our firm, we streamline it, but we’ve got a very efficient process. We outsource our newsletter, so, we send the articles, I have a marketing graphic designer doing that, we use Hootsuite for LinkedIn. One of my friend’s son graduated in videography, and he puts all of our webinars on YouTube. I have a podcast company helping me with the podcast. I had a book publisher and an outside PR firm. So, we’ve outsourced what we can but we’re very efficient. Our business…

Michael: Give a sense as to what’s driving results as you track results?

Shari: It’s hard to say, I do think we’re getting more client referrals, and I think the clients really enjoy getting this newsletter. The book definitely, I could probably quantify three or four people that, because of the book…one person I met with…what I do is, when we get a potential client, we always send the book out before we might even meet with them. And one woman came in and said, “You sold me with the book, I’m ready to sign up. I just feel like your philosophy is with mine.” So…

I would think the book probably drives it and the weekly newsletter because it is…when someone calls, I’ll say, “How did you find us?” And they said, “Oh, there was an article that really resonated with me, you’ve been on my mind for a couple months and I finally decided to give you a call.” So, I think it’s the newsletter and I think it’s the book.

The Surprises Shari Encountered On Her Journey [1:18:40]

Michael: So, what surprised you the most about just building an advisory business?

Shari: I think it was that I don’t have to touch every single client for them to get the quality that I’d like. We all think that we’re the best and that we’re the only ones that can do it. I also have learned that promoting or growing our own seems…we’ve tried a lot of different models through the years, we started the firm in 2005, we’ve hired some external people, but what we found is kind of growing our own is really the best model for us going forward. And really spending…

Michael: Meaning like hiring much younger people who are new to the industry and teaching the whole thing from scratch?

Shari: Exactly. And what’s really nice now is a lot of colleges have these CFP programs, especially by us, Madison and U of I, and we’ve been very fortunate to get amazing people through that. We have had a lot of success with some external people that we’ve hired but I think the probability is much greater to kind of grow within. So, those have kind of been some of the surprises.

And it’s not as easy as it looks. You have to wear a lot of different hats, you’re sometimes doing things you never thought…you’re making copies and stapling things and doing things that you just…when you’re at a big firm, you don’t do those things. But we always have the model, “You never know when business is going to come in,” and there’s times it all comes in at once. And we all have to work late and do things that we might not normally do but it’s, “Get the job done.”

And I think the biggest surprise has been the joy that I’ve had and that I’m not working less but I’m working more intentional. I have two daughters, when I left the big firm, they were I think six and eight, and I knew that I wanted to see them grow up. And a big corporate environment was not probably the place that that was going to happen. And by starting my own firm, we have 60% of our advisors are women. And our whole motto is, “Get the job done.” If you want to go to your kids’ play or their sporting event, go do it. We know you’ll get your job done, you don’t have to punch a card. And we’ve given people the flexibility. Our COO also has child. One of our core values was to have fun along the way, and I think that we’ve done that. So, those were kind of some of the surprises.

Michael: I do find it amusing though, just relative to, I guess I’d call it “the traditional views of entrepreneurship” and building your own business, the time commitment and the work commitment and the rest, I find it oddly ironic that your path to get more time with family was to leave a large-firm environment and go and hang your own shingle.

Shari: Yeah, you’re always thinking about the job. And some of the best ideas are when you’re away, you’re at the soccer field. And I always say that my daughter was probably one of our biggest referral sources because I think six or seven of the girls’ parents that were on our soccer team are clients. So, you just never know…as my dad always said, “Everyone’s a client, they just might not know it,” and, “you never know where business comes from.” And I think being true to yourself, being trustworthy, that’s why people hire you. And being out there, letting people know what you do.

The Low Point On Shari’s Journey [1:22:08]

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

Shari: I’m a very positive energetic person. My background is my family had community banks, and my dad started a bank in 1962, I went to the family bank, we grew the bank and we ended up selling the bank. I became a president of private banking for the group, it was US bank, and we had five banks. But they ended up doing three mergers in two years, and I decided that I really wanted to get back to the more entrepreneurial spirit.

So, that’s when I went to a large money-management firm out of New York. So, I left the banking business and went there. They were privately held as well. And I think, three or four years in, they got bought out by a large firm. And I started thinking, I wanted the entrepreneurial spirit, obviously, I wanted the rewards of a privately held company, I hadn’t been an owner yet, I missed the boat on that. And so, that was really a reflection time at the time. I was one of the few women there and it wasn’t always understood. The men went and golfed, if I wanted to go to a birthday party, I had to take a vacation time. It was a different time and I just realized that…and I couldn’t control the investments, and if I wanted to control, I needed to go on my own. And that’s when Dave and I started talking about it.

So, it wasn’t a low point, but it was a pivotal point in my career. And I think, through the years of starting this firm, I just love growth. And there were many times when we didn’t have the growth that we wanted to and we had to take a hard look at things. And I think that was a big point, back in ‘18, when the growth wasn’t as strong as we wanted. And why was it? Maybe it’s because the principals were in the trenches dealing with day-to-day too much and maybe we needed to take a step back and, “How are we going to do that?” And it seemed overwhelming. And it took some time to really solidify this whole process. But it’s easy to get discouraged when things aren’t going exactly the way that you want.

And we had a few tough hires along the way, not everything always worked out. And in a small firm, when a hire doesn’t work out it, it really drags down everyone. So, I’d say, along the way, things weren’t perfect. Those hires are in better places and at better firms that are better for them. And so, everyone won on that, but there were some frustrations along the way.

And when we were very small, when we had like four or five people, if one person left, it almost felt like the bricks were going to come tumbling down. And we did have someone leave. And that’s going to happen, not everyone’s a lifer. And, at the time, I think we only had two associates, you lose one associate and that is a big drain. So, those were some of the low points. But I feel really good going forward. We were always running behind on the staffing, we’re kind of staffing for our growth now as opposed to staffing when we think we’re going to need it. Because if we find good people, we’d rather get them up and running and get ready for the growth.

The Advice Shari Would Give Her Former Self [1:25:34]

Michael: So, is there anything else you know now you wish you could’ve gone back and told you from 15 plus years ago, when you were getting launched originally, about building a firm?

Shari: I think patience, because I’m not a patient person. And so, sometimes I want to run before I can walk. So, I think patience and that it’s going to be a long ride. And a friend of mine once said this to me that getting to the end result can sometimes be very difficult and very stressful but when you get to the end you realize that things really were worth it.

I think in the beginning we were so anxious to take clients, we would take clients that really didn’t fit our ideal client persona. So, we would take people that really wanted to buy individual stocks but we didn’t quite hear that and we thought we could convert them to the indexed approach, and they wanted to do IPOs, they wanted us to buy individual stocks, and we just couldn’t do it. We’ve learned that we want people to value our planning. If they just want someone to manage money, we’re probably a little expensive for that and not the right person.

So, I think we have the luxury now of making sure they’re the right fit. In the beginning, we took clients below our minimum, you can always find an excuse why you need to take them. “Oh, it’s the aunt of my friend, it’s the good referral source,” and now we’re really trying to be a little more stringent. And we have good people we can refer these clients to now. And so, I think that was kind of a mistake…not a mistake but things that I’ve learned that you really want clients to fit your ideal client.

Michael: So, what change that you ultimately got more comfortable not taking the clients below your minimums?

Shari: We just realized that sometimes we thought they were doing them a favor, they thought they were doing us a favor. And sometimes those are the clients that really dragged a lot of your time, and we weren’t quite set up to spend that much time. And we just thought that they might be better with another firm that really could deal better with clients at a lower minimum. And it’s hard to really fully diversify and do our whole portfolio under a million. But it took a long time for us to kind of…we started at $500,000 and then we raised it to a minimum a million.

And we do the Schwab surveys, and I think it’s pretty common, but when you look, 20% of your clients are giving you 80% of your revenue. And then you look at these clients on the other end and we give a very comprehensive value add to the clients and we just didn’t think we could continue giving this to that many clients under the minimum. So… And it’s hard because I want to help everyone, but they’re better off at these other firms, they’re quality firms. And I think they’re better off there, so…

The Advice Shari Would Give Younger, Newer Advisors [1:28:47]

Michael: So, what advice would you give other younger and newer advisors getting started today?

Shari: Well, first of all, love what you do. So, make sure that this is what you love doing. Like you said, as an entrepreneur and owning my business, even though you work all the time, it doesn’t always feel like work. So, make sure that this is the industry. And then align yourself…it used to be that you wanted to go to these big firms, but I really think the RIA is where it’s a great place to learn, it’s a great place to get in front of clients a little easier.

I tell our newer associates, “It’s never too early to just start networking. So, make sure you keep in touch and keep with people.” But I think the biggest thing I learned from my dad, because I went with him when I was really young, he was starting a new bank and we were selling the stock for the new bank, and often we’d meet with people and they would say, “No.” And I’d say, “Aren’t you discouraged?” And he said, “Never be afraid of the noes. Because if there’s a no, that means there’ll be a yes around the corner.” And I think sometimes new advisors get so scared of the no that they don’t put their self out there and they never get the yes. So, my advice would be, “Don’t be afraid of the noes.”

What Success Means To Shari [1:30:05]

Michael: So, this is a podcast about success. And one of the themes always comes up, just the word “success” means very different things to different people. And so, you’ve been on this wonderful path for success and the firm is now closing in on a billion dollars over the next few years, but I’m wondering how do you define success for yourself at this point?

Shari: Yeah, I think it’s that I wake up every day and love what I’m doing. And I feel that I am impacting lives. There’s so many times that I meet with clients and they truly have tears in their eyes or thank us because they wanted to get out in ‘08 and they didn’t, or they wanted to get out during COVID, or they didn’t have proper planning and they made some changes earlier in life.

And I want our employees to grow, I want happy employees. So, I think success is that I wake up every day, love what I’m doing, that we add value and change some lives. And when we started the firm, we wanted to work hard but we also wanted a place that people wanted to come to, that people enjoyed coming to, and having fun.

Michael: Very cool, very cool. Thank you so much, Shari, for joining us on “The Financial Advisor Success Podcast.”

Shari: Well, thank you for having me, and I hope that you continue to maximize your return on life, Michael. Which I think you do, so…

Michael: I try, I don’t plan on going anywhere anytime soon.

Shari: Well, thank you, I really enjoyed it. And thanks for having me, I’m a big fan. So, thank you.

Michael: Thank you, thank you.