The Perfect RIA

Latest Episodes:

Coaching Your Clients Off the Ledge [Episode 17] Jan 18, 2019

Show notes

The Perfect RIA hosts have a few action items for delicately dealing with clients during rough financial climates and circumstances.

[#1 Let Clients Frame the Conversation]

Let the client direct the subject of conversation during meetings. This way, you let the client bring information to you: concerns, figures, facts, charts, you name it. The point being that you can let clients take the wheel and frame the conversation.
Don't jump to conclusions! This goes with the aforementioned information; making sure you understand the client's concerns first, and then responding accordingly, is very important. You can then redirect and get them back on track after all anxieties are addressed.

[#2 Make Sure Your Client Knows That You Have a Plan]

This is an extremely important facet of setting a client's' mind at ease. Reminders that there are safety nets, disposable income, and buffers at play can make all the difference, and can help keep a client focused on the long term goals that were set in motion from the early going. Just letting them know that there is still a cash bucket--or as Matthew call it, a "war chest"-- in place can make a big difference.
Once you remind a client about the established, unwavering plan, getting them to articulate it back to you for reinforcement is a good litmus test for the mitigation of anxiety.

[#3 Wait for 7-10 Clients to Contact Your Firm Before Sending Out a Response ]

Micah stresses to not train your clients to be reactionary to every dip and dive of Stock Market. If it falls by 500 points, don't rush to send out a newsletter and to pacify the minds of your clients. Let about 7-10 clients come to your first before reacting.
Talk about the long term, and not the short term trends in the market that will inevitably happen again. Matthew says that his firm tries to not break their twice-quarterly reports, even during times of economic turbulence. This prevents Pavlovian conditioning to every happening in the market.

[#4 Have a Regular Communication Schedule with Clients]

Matthew reminds you that clients need to have a consistent drip of information from your firm. This does not mean bombard the clients with newsletters and resources because they are being bombarded already; instead, it means to have a firm presence and to provide relevant, helpful information to your clients, on a rigid schedule.

[#5 Make Sure Plan is Clearly Communicated]

Matt and Micah tell you to not give canned economic commentary or irrelevant information that takes away the focus of the long term goals. Clearly articulate the plan and information, and make sure that clients understand. Matthew calls this "doing it in crayon," which he learned from an engineer, and which also means to simplify the language as much as possible.
Speak in language that accentuates the long over the short term. It is much too complicated and murky to try and predict a month's time ahead or financially forecast the economy. Clear communication means speaking in long term language.

[#6 Weekly Team Meetings to go Over Market Concerns]

Matthew expresses just how important it is to have weekly meetings with your teams to express concerns about the market, to instill confidence in the overall plan, and strength of the firm. There's nothing worse than having a client call in and have an office manager or team member that doesn't sound confident about the longevity and efficacy of the overall firm, despite the precarious circumstances.

[#7 Talk the Talk/ Walk the Walk]

Micah encourages advisors to do the same exact things they preach to clients. Being on the same page, having investments in the same stocks, being affected by the same market, all of these things are important to communicate for building empathy and reassurance in the minds of clients.
Take ownership, follow the plan and program that you have set in place, don't bend to the whims of clients, and stay consistent in what you say; let your actions stay in step with your words.

[#8 Remind Clients That Your Door is Open]

Matt likes to remind clients after every newsletter, meeting, you name it, that if they need anything to call, send an email, and express any concern they may have. A thank you is always expressed after clients reach out as well.

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More details at: http://theperfectria.com/coaching-your-clients-off-the-ledge

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Produced by Simpler Media

5 Business Lessons Learned From Disney World [Episode 16] Jan 04, 2019

Show notes

Although Matt and Micah realize that vacation is a time for much needed R&R, they couldn't help but notice the strong business practices of Disney during their time at Disney World. This episode is the product of their seizing an opportunity to appreciate some intelligent business principles at work. This episode is thus solidified around 5 central tenets from the Disney World business model that were gleaned during their vacation.

----According to both Matt and Micah, the five biggest business takeaways are as follows:

[#1 Voluntary Transactions]

Disney World is expensive, but they are completely transparent with just how expensive they are. They even have shirts that say "the most expensive day ever." What this creates for those in the amusement park is almost a willingness to participate in the expensive nature of the park. Disney World promises a magical experience with an above average price tag; the biggest part of the experience is willingly forking over the money and getting that return of value that is promised. This is directly applicable to your practice.

[#2 Paid Prospecting]

Once you pay the cover charge to get inside the amusement park, everything else still costs money. And every ride ends in a gift shop, as Micah states. They really don't give you anything for free. This is directly applicable to advisors who set up introductory meetings for prospecting and who stick to their rules about pricing. After introductory consultations, you won't throw free stuff to the client to get them on board, you demonstrate your ability to provide the client value, and it will cost commensurately.

[#3 Saving Clients' Time Through Skillful Guidance]

As the episode explores, there are expert guides one can hire at Disney World who walk you through the park and who know the system well enough to provide you the most rides, attractions, and the most efficiency for your buck. Just like your advising practice, one should be a comparable guide for clients.

[#4 Increasing Pricing]

It is well-known that Disney has no qualms about increasing their prices to line up with their need for profit and growth; so too you need to increase prices to meet goals and to fully bring the quality of work needed for your clients.

[#5 Don't Budge]

Plain and simple, there are rules in place at Disney that are completely enforced. So too one should not bend to the whims of clients in your practice. Prices shouldn't drop, exceptions should not be made. Communicate to prospect and clients that your business model is concrete and its practices unwavering.

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Matt and Micah's Action Items

Be aware of what you need to charge to make 50% profitability (remember, this means after all salaries are paid!) in gross revenue a reality for your firm
Create unwavering rules that are not broken.
Just like the Disney World guide, guide your clients in a similar manner. Be the time-saving expert they can depend on.
When you are on vacation, leave the office at home--and yes, that means the email. And when on vacation with your family in particular, being "there" with your family is the most important thing.

More details at: http://theperfectria.com/5-business-lessons-learned-from-disney-world/

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Produced by Simpler Media

Confessions of a Wholesaler [Episode 15] Dec 21, 2018

Show notes

The content of this episode is anchored in 3 necessary traits for effective financial advising. In addition, Michael provides action items for better financial practices.

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Key Links

Ken Gau and Tom Unger's Program: The Academy of Preferred Financial Advisors

-----According to both Matthew Jarvis and our guest, very accomplished wholesaler Michael Appleby, the most successful advisors have these 3 traits:

[Focus]

Successful advisors have the concentration to take their practice to the next level.
They have garnered enough concentration to understand who their ideal client is (i.e. pursuing a narrow market versus using a shotgun approach).
They also focus on the strengths that bring their team together, turning the practice into a smoothly-functioning mechanism for success.

[Discipline]

Successful advisors are disciplined with time management: their schedule, marketing outreach, every facet of the business.
And they understand the importance of investing the necessary capital in facets that will make their business flourish: prospecting, personal development for the advisors themselves, coaching, or hiring a skilled team.

[An Affinity for Productive Business Partnerships]

Successful advisors are not hucksters; they won't peddle or waste time on small-scale operations with prospects or business partners.
They are focused on establishing productive partnerships with their wholesalers or other connections.
They make value propositions to accentuate the most important aspects of their symbiotic partnership--and they stress honesty during their conversations about what works and doesn't work.

[Additional Topic: Michael's Most Common Advisor Mistakes]

They ceased to do the basic activities that brought them to success: the cold calls, due diligence on prospecting--in short, the important actions that first put them on the map.
Another common mistake is a habitual procrastination towards business planning and forward-thinking types of organization.
Advisors drop the ball when speaking events aren't rehearsed enough: the speaking is flat, the fluidity of the event isn't seamless, seating isn't mapped out, directions aren't given, the organization is clumsy, and so forth.
They don't follow the same advice they give to clients and thus sacrifice their integrity, reputation, and the overall weight of the advice they give.

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Michael's Action Items

Advising isn't a commodity. Offer something that resonates personally with individuals and which communicates tangible value in a way that transcends the dollar signs.
Hire a coach, join a program, plan your work, and network.
Pick a plan and work it consistently. Be persistent with it; it will pay off.

More details at: https://theperfectria.com/confessions-of-a-wholesaler

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Produced by Simpler Media

When, Why, and How to Fire a Client [Episode 14] Dec 07, 2018

Show notes

Let's face it; sometimes partnerships sour. In all vocations, all industries, differences arise between individuals. And for something as valuable as the dynamic between advisor and client, sometimes firing clients is an absolutely necessary action. If an RIA is using time on a client that is less than ideal, that dynamic should be reconciled. Anything but the garnering of massive success for both client and advisor is a recipe for a stagnant practice. So, by necessity, Matt and Micah gather their resources and experiences to walk listeners through the when, why, and how of firing clients.

Matthew mentions an important caveat during the start of the episode: this isn't about cutting off the bottom 20% of your books; instead, it is about analyzing all clients and making a reasonable assessment towards future sustainability with those particular clients. It is also about finding the clients that "fit your mold," as Micah says. If they don't, it is important to mentally admit you made a mistake and then move on accordingly.

Matthew also points out that while you are analyzing your existing client base, the most important thing to consider is the cost. Your cost-benefit analysis of your clients should take into consideration if your confidence is being undermined, your process is being disrupted, or you cringe whenever 'X-Client' calls. Matt also states that if his clients don't follow his advice, they are out. Especially if clients start undoing key steps in the process; or, even more so, if a client keeps missing meetings, one must part ways.

But with all this being said, there is definitely a delicate way of letting someone go. Sending a letter, not going into the details in the document, and refunding the current quarter is Matt's process. And then taking any calls that may come through for explanations. Being delicate and careful on this issue is very important. Micah prefers having face-to-face meetings; but again, he communicates his reasons for firing the client very carefully. Both also bring up the important point that one should never be beholden to a client. This means that you should have a deep enough reserve of clients to keep the revenue stream flowing--even if you have to fire a client who brings your firm a lot of money.

Both Matt and Micah have some action steps for everyone in the industry. The first is to print off a list of every client you have and then ask yourself this: would you hire any given client again? If not, if you can't justify your keeping them, or you cringe whenever you see their name on the caller ID, it's time to part ways. Doing this first by yourself, and then later with your team can be a very powerful tool.

The second action step is to make a commitment to what Micah calls the "graduation conversation"--that is, the firing conversation or letter that will mark the termination of your partnership with a client.

The third actions step is to draw up a statement that clearly communicates your moral code, beliefs, and a line that won't be crossed by any means, to avoid waffling or gray-area conundrums. Outline what a 'fireable offense' is.

A Roadmap for a Value-Driven Financial Plan [Episode 13] Nov 23, 2018

Show notes

Key Links

Episode 5: Always Take the High Road

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Financial Planning Software is scrutinized in this episode. But right away, Matt and Micah are sure to remind listeners that they aren't completely condemning the technology, just encouraging less of a reliance on the tool.

It is certainly true that a lot of planners are required to use some sort of financial software for compliance requirements or for the more detailed reports that clients may ask for. Yet, Matt and Micah still usually don't put a lot of stock in the software's potential to bring value for clients; they both feel that value can be better drawn from the wellspring of positive client interactions over the by-the-numbers approach only received well by those with an affinity to complicated formulae and diagrams (i.e. engineers or financially-minded clients). On average though, the detailed and bulky reports that FP software spits out is too involved for the ordinary client. Eyes will grow glassy and yawns will be stifled.

Instead, simplification is needed. Matt states that forcing mechanisms like one-page executive summaries and up-front fees to determine the value you are bringing to the table is much more important than beating your client over the head with a dense collection of Monte Carlo Simulations. Instead, Matthew states that he only has four key things he goes over with clients: retirement income, risk management, income taxes, and their investment portfolio. Long term goals are always discussed as well, but that is a given regarding the nature of the business.

This leads to the biggest take-home message of the episode: tailor your financial plan to the client. If they want a more involved financial plan then give it to them. Determine how you can bring the most value to your client, first and foremost. Most likely they will want the succinct, one-page summary over any other alternative.

And, like all of the episodes, Matt and Micah preach the merits of taking advice and spurring it into action. They provide three key action points to take: go through your financial plan and seek to minimize the noise e.g. the extraneous noise, learn to effectively communicate your financial planning process in 45 seconds or less, and shorten your financial plan into an executive summary.

Realistic Ruminations on Broker-Dealers [Episode 12] Nov 09, 2018

Show notes

This episode is, as the title suggests, all about broker-dealers. And more specifically, Matt and Micah draw from personal experience to allow listeners to gain their perspectives on the issue. Because both have worked with broker-dealers closely in the past, they know the ins and outs of what to look for in the partnership. They highlight some of the pros and cons to assure listeners that there are many factors one has to weigh in order to make the decision that makes the most sense for your firm: either parting ways or sticking with a broker-dealer is a matter of monetary concern as well as a qualitative concern for your clients.

The pros to working with a broker-dealer are as follows: a BD takes care of all of the compliance in your practice, so that all SEC and FINRA rules are followed. This frees up a lot of time and effort on the part of the business owner, who doesn't have to deal with a lot of the busywork, shopkeeping duties like: email archiving and proper file storage. Working with a BD also looks good when dealing with auditors; you can avoid conflicts of interest that way. On the other hand, some of the cons of a BD include: you have to keep a record of your own stuff anyways. So, as Micah points out, you are working with duplicate systems: the BD backs up your files, but doesn't guarantee that you will have access to them if you part ways or an emergency happens. So, with duplicate systems come duplicate costs. In addition, another con is that the cost can be steep enough to warrant your consideration of severing any ties completely. And with that, there are many other elements to weigh, but these are the biggest that are brought up in the episode.

To end the episode, Matt and Micah provide some actions points for listeners: Create a contingency plan. This means that one should always be prepared for emergencies and should plan for the possible severance of relationship with your broker-dealer. Establish vision between firm and BD so that there is transparency in communication. Measure total monetary and potential qualitative cost between you and your BD. And lastly, Reach out to a custodian bank for the purpose of getting your feet wet and finding out what it's like on the other side (Micah endorses Charles Schwab).

Coach Joe Lukacs Revisited [Episode 11] Oct 26, 2018

Show notes

Key Links

Magellan MasterMind & Network: Page

The financial advising program that Matt references: Academy of Preferred Advisors

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In this episode, the dynamic duo, Matt and Micah, are back to talk about their previous episode with Joe Lukacs. Because of time constraints in addition to the importance of the subject material, Matt and Micah (M&M) wanted to take a whole episode and analyze the insights and principles that "Coach Joe" introduced to listeners. They also express a "hindsight is 20/20" type of regret for these concepts they wished they had known about and implemented in their practice many years prior to their first meeting with Coach Joe/Matthew's respective coach. And so, for the benefit of seasoned pros and fledgling entrepreneurs, listeners are bequeathed the invaluable advice from a man who wrote the book on financial investing.

Micah starts the discussion by explaining his own relationship with Joe and the usual route both Joe and Micah take in their business relationship. This means they talk once a month, go over important details about Micah's practice, and meet face-to-face a few times a year. Coach Joe also has a mastermind group called Magellan MasterMind & Network which Micah is involved with, all for the purpose of establishing highly profitable lifestyle practices, as well as reinforcement from fellow RIA's and professionals. And on the flip side, Matthew shares that he takes weekly calls from his own coach. But despite the differing dynamics at play, both see immense benefit in their respective coaches, noticing positive trends towards forward-thinking in their own lives because of it. Also, as Coach Joe pointed out to both Micah and Matt, it is extremely important to reinvest either 5% of your gross revenue or 10% of your net into your own personal development. To simplify this process, Micah likes to have a separate account just for personal development. The reason being that it can quickly become unnecessarily confusing to differentiate business funds and other financial holdings--the process is made much simpler when everything is financially compartmentalized. They also talk about the importance of being a part of a mastermind--but with a caveat. Joining a mastermind should be done when all parties present have "skin in the game" and where the mastermind itself doesn't become a full-time job.

Some other important topics discussed on the episode consist of not falling for the "next big thing" in marketing or the shiniest widget designed for flawless output; instead, focusing on what you know, on one particular modality, so as not to waste valuable time and energy or spread yourself thin in the industry. The point being that long-term plays are the most important. The truly valuable enterprises will ultimately take a long time to establish, but are invaluable to have implemented. Matt and Micah also echo Coach Joe's sentiments on morning rituals before stressing once again the absolute importance of finding a financial coach.

From Scarcity to Prosperity: Insights and Advice from Coach Joe Lukacs [Episode 10] Oct 12, 2018

Show notes

Key Links

The financial advising program that Matt references: Academy of Preferred Advisors
Joe's free program: PracticePower
International Performance Group: Website
Magellan MasterMind & Network: Page

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Micah Shilanski's coach for the better part of fifteen years, Joe Lukacs, is the guest of this episode. And within the time allotted, Joe disrupts the usual gamut of topics discussed for some interesting insights he has gained over the years. One of the first topics that he brings up is boredom. More specifically, how a coach can handle the boredom brought upon by holding too comfortable a position in the industry. As is common in most vocational positions, Joe knows just how detrimental a comfort zone can become for a coach. He says that human beings are happiest when we are in "expansion mode." That is, we are challenging ourselves, learning, and overall expanding our repertoire. In short, to stave off boredom and to prevent a harmful mentality from developing, challenge yourself and challenge your clients. He says that as soon as one thinks they have figured something out is the first day they start to slide from any lofty position they may have held. Don't hasten the backwards slide and don't let yourself get bored.

Another crucial segment in this talk is when Coach Joe talks about the middle stage that all successful investors must move past to truly reach prosperity in their practice. He calls it the "pivot point to prosperity." According to Joe, there are three different levels of being a financial advisor. The first being what he calls a "scarcity startup." Essentially, this is the stage where advisors are paying the bills and keeping the lights on. The second, advisors are sustainable and abundant--this is the comfort zone and the most tempting stage to never pull one's self out of. This is the stage that advisors need to pole vault out of to reach prosperity. And the last is where the magic happens, where the future is realized and plans of "what's next?" become further cemented and realized. To get there though, failures mustn't be avoided, but instead, encouraged; it is the crucial time to take risks and to avoid regrets of not having taken the chance to expand when the opportunity was there. And Joe encourages advisors to never stop chasing the next thing. Don't be failure-phobic.

Lastly, Joe talks about the importance of surrounding yourself with a network (or tribe as Joe calls it) that inspires you, bolsters your practice, and ultimately reinforces beneficial mindsets of abundance for your personal development. Joining a mastermind is brought up as a strategy for obtaining all of this; meaning that deep, lasting friendships are developed as well as valuable support for your enterprise. This is one of the most important techniques for shifting your mindset from complacency to prosperity. Some other important action points are laid down by Joe, Micah, and Matt. These include, establishing a morning success ritual, reinvesting 5%-10% of your total revenue in yourself for the purpose of personal development, and last but not least, joining a mastermind group.

Don't Underestimate Simplicity: Matthew Jarvis on Streamlining Your Practice [Episode 9] Sep 28, 2018

Show notes

Key Links

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Most financial planners thrive on helping people. In addition to having an affinity for numbers, many CFP's share in common the desire to take in an innumerable amount of clients as a means for bringing more reassurance and financial security to the biggest pool of people as possible. Unfortunately though, there is only a finite amount of clients that one can possibly meet with. In addition, clients also have to bring in enough capital to sustain the entire practice. This means that tough decisions need to be made for the sustainability of the business itself. But how does one go about insulating one's self from unprofitable clients or safeguard one's time from borderline charitable acts instead of profit-driven endeavors? For managing and dealing with complicated circumstance like this, simplicity is key. Either refer unprofitable clients to other ventures who can help them or like guest Neil Rossiter implements in his own practice, send them to a junior advisor instead of another firm. Another way of looking at this is when Matthew states that he likes to give the analogy that some customers approach him looking for brain surgery instead of the heart surgery that his firm provides. And much like the many specialists who comprise the spectrum of the medical profession, so to the financial world is replete with specialists who have their own function. Matthew offers a simple solution to the problem.

In addition, this episode delves into the importance of streamlining the process from which clients can get ahold of the financial planner. Matthew states that instead of wasting time and being constantly interrupted, there is a simple but powerful solution for having too porous a barrier between client and advisor: what needs to be done is that unless in an emergency, the client will always be scheduled to talk to Matt or Neil usually by next day. And then once questioned if the nature of the call is administrative or financial advice, sometimes the admin can actually do the work and minimize the scheduled call from actually taking place. This strategy provides simplicity to what was potentially a convoluted process.

And last but not least, the one-page financial plan makes a reappearance for the sake of streamlining and simplicity. Matthew ends the episode by providing two action items: Don't take incoming phone calls unless by emergency or appointment and start trying and practicing the Carl Richards, one-page financial plan that has been a staple of the Perfect RIA podcast.

The Pitfalls of Busyness: How to Alter Your Shopkeeper Mentality [Episode 8] Sep 14, 2018

Show notes

To start this episode, Micah Shilanski provides a very valuable comparison between the mentalities of a shopkeeper and a CEO. He starts this way to illustrate the often erroneous assumption that many business owners make about the amount of time they should devote per day to their practice. Workdays start to become these open-to-close events that are very quantity-over-quality phenomenons. Instead, there is an incessant need to optimize days like a visionary or CEO would; doing things efficiently will ultimately transcend the quantity of hours spent. Micah also points out that having a shopkeeper mentality doesn't make much sense because most financial advisors or business owners aren't paid by the hour, but instead by result. Sure, if it takes you twelve hours on a given day to see the best results for your client, that might be true, but consistently overworking and creating busywork are bad habits to cultivate.

Matthew Jarvis then rides the momentum of this concept and admits an area in his own daily practice that isn't very productive. He stresses that reading the Wall Street Journal makes him feel like he is busy, but the pressure to always feel busy is detrimental to the overall value of his practice. For the next hour, instead of spending time on bringing actual monetary value to his firm, he spends an hour reading opinion pieces in the Wall Street Journal. By his own admission, the time is perhaps wasted. To keep the ball rolling, Micah states that there should be an alarm system of sorts in place: a self-administered system of checks and balances that one can use to test if the time being spent is worth a thousand dollars an hour (or five hundred); and through that metric, personal accountability is possible and the value of your firm will only increase. And to keep themselves accountable to what they preach, both Micah and Matt use "forcing mechanisms"--a concept they have underlined in previous episodes as an accountability system and value-building mechanism that one forces oneself to stick to. The forcing mechanism that Matt uses is he looks at a picture of his wife and kids on his desk and asks himself if he could look his family in the eye and say something along the lines of: "Hey, I'm sorry I worked late tonight, but I really had to get the Wall Street Journal read." These type of mechanisms really provide a positive framework for how valuable your workday can and should be.

Lastly, during the talk, Matthew accentuates four key things that advisors should do to save themselves from cultivating a shopkeeper mentality: (1) Eliminate pop-ups, alerts, distractions like email or anything that constantly pulls you away from the task you are focusing on.(2) Don't waste time on guilty pleasures: things like social media or games that you find yourself gravitating towards at all times of the day. (3) Implement a backup plan just in case clients cancel or time is freed up in another way; this way time is always spent productively and with purpose, instead of aimlessly. (4) Lastly, train your employees and clients that you are not available at all times of the day, but only in designated slots. And a bonus thing to consider is to have a clean desk policy to minimize all paperwork that accumulates and to clear your headspace.

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