The Perfect RIA

Regardless of the company, staffing issues happen, and it's up to us as leaders to investigate these problems with a curious mindset. In this episode, Matt and Micah discuss the importance of looking into where the system failed, instead of blaming your staff when a problem comes up. You can find show notes and more information by clicking here: https://bit.ly/2Qi46TK

When it comes to generating positive revenue, it's easy for advisors to end up focusing on the wrong things. In this episode, Matt and Micah dive into profitability metrics and discuss the key tips and tricks they use to stay on track. If you're interested in improving in this area, then this conversation is for you. Listen in to get a new perspective on how pride and chest-pounding factor into this and what advisors should really be focusing on. You'll learn where integrity comes into play, where expenses get out of hand, the different accounts that are important, and more. You can find show notes and more information by clicking here: https://bit.ly/2weJLpe

Adding valuable services to your practice that benefit your clients is simple, but in order for things to run smoothly, it's important to understand the whole story. Today Matt and Micah will go over some of the most valuable takeaways from their conversation in Episode 28 with Ed Slott. Ed's detailed and practical training has been a huge game changer for financial planners, and this episode breaks down some of the most important things he shared. Listen in to get examples of what it looks like to add the types of services Ed mentioned and how to implement them so that clients have as much clarity and peace as possible. From tax planning to showing clients how things will play out beforehand, you'll learn how to properly demonstrate and communicate these services in order to get the best outcome for you and your clients. You can find show notes and more information by clicking here: https://bit.ly/2WMELUr

Financial expert Ed Slott shares valuable insights on delivering high-value services to clients. He emphasizes the critical role of tax planning in retirement strategies, urging advisors to fill knowledge gaps to protect clients' savings. Slott discusses the importance of accurate beneficiary designations and proactive planning to avoid costly mistakes. He also highlights the need for ongoing education in tax laws to better serve clients, transforming advisors into trusted partners. Tune in for expert advice on maximizing client engagement and value.

Advisors often fall into the trap of self-deception, inflating their practice numbers without knowing the true metrics. The importance of integrity and tracking key performance indicators is explored to foster growth and efficiency. The speakers share personal stories about balancing work stress with family dynamics, emphasizing open communication. They introduce four essential rules for embodying integrity and discuss the crucial role of transparency in all relationships. Accuracy in communication is vital, as even small discrepancies can have significant consequences.

When it comes to client meetings, we've talked a lot about why grouping appointments is beneficial to you, your team, and the people you serve. But what happens when someone wants to see you outside of the appointment surge? Do you let them come in during a time you haven't blocked off for meetings, or is it better to stick to your pre-established schedule? In this episode, Matt and Micah discuss what it takes to reach that important balance between working with clients to achieve their goals and making sure they don't dictate your full schedule. Listen in to learn how to set time parameters that empower both you and your clients, as well as systems you can put in place to make sure client communication runs smoothly and efficiently in your practice. You can find show notes and more information by clicking here: http://bit.ly/2L0dxII

Too often, people hang onto the idea that anyone who is successful must be lucky. Worse yet, those same people decide that a similar type of success is impossible for them because they believe that they don't have that kind of luck. So today, Matt and Micah are setting the record straight about what really leads to success. Listen in to hear how attributing others' success to luck not only discredits their knowledge and hard work, but also discourages us from taking ownership of our own ability to change our situations. You'll discover where "luck" truly comes from, how to adjust your mindset so you can learn from successful people instead of envying them, and what you can start doing today to create the kind of practice you want. You can find show notes and more information by clicking here: http://bit.ly/2X895Zw

Key Links [Link Needed for QCD/Tax preparation document Report that Matthew generates for clients. He references that if someone emails Colleen, we can get a sample of it for the show notes around the 12:34 mark of the episode] Gear Up Program to learn about taxes: https://checkpointlearning.thomsonreuters.com/GearUp Bob Keeblers site for education resources: http://www.keeblerandassociates.com/about Ed Slott's website for resources: https://www.irahelp.com/ Michael Kitces' site: https://www.kitces.com/ ---- Important Show Note/Disclaimer: When Micah discussed doing paperwork for ROTH conversions/rollovers, he was referring to establishing standing instructions for the client with the custodian so that if a rollover is needed, the 'link' and permission has already been established. Micah was NOT suggesting that you have clients sign paperwork that is held until needed. This would be a huge compliance issue that we strongly discourage. ---- Matt and Micah are back to talk about taxes! Last episode covered a lot of ground, but there was still a few key points that hadn't been addressed. So, this talk covers expands upon the previous themes of bringing massive value to clients through tax planning and a solid communication of your expertise to the client. And as a showcase of the always pragmatic advice of the Perfect RIA hosts, they delineate key tax planning strategies for your benefit, as laid out below. [#1 Tax Benchmarks ] Micah has a system for tax planning with clients that accounts for the next 30 years. He stresses the importance of looking forward and not in the rearview mirror. Because tax codes aren't static (nor are rates), dynamic adjustments are needed. Only forward-thinking moves can adequately handle this. And once this 30+ year benchmark is projected and established, then every tax move with the client is relative to the baseline number that is set. It's a very tangible, measurable way to plan for taxes. And keep in mind, the overall goal is save the client money, so the benchmark becomes a way of adjusting to taxes to make that happen. And one more vitally important aspect of this benchmark is that you have to communicate to clients in a graceful and effective way. Being able to articulate the plan in a way that keeps in mind the emotional aspects of writing X amount of dollars now to save money in the long run can take a lot of grace. Very important to consider. [#2 Enhancing a Client's Tax Benefits Through Charity ] For tax planning, Matthew involves himself with client's and maximizes the return that his client's get for charitable giving. He says that giving to charities is not a means to an end for a tax break, but that it can still be used as a way to leverage tax benefit. They both also bring up the value of Qualified Charitable Distributions (QCDs), which can bring a lot of tax benefit. But Matthew also states that whoever is doing the tax preparation needs to be told about the QCD, or else it might go unreported. And to ensure that clients get the tax benefit they are entitled to, Matthew actually sends out tax letters to the tax preparers of his clients to make sure they know about any QCDs, so they can factor them in. [#3 Asset Sales ] Rental properties, land sales, and other various business aspects are often neglected. Micah stresses that no, RIAs are not real estate agents, but you can still look at demographics and stats that are reinforced by taxes from planning perspective. Often real estate agents won't factor in a long term strategy for taxes like a tax-savvy RIA can for clients. It's all about timing! And good timing often means being proactive with clients about the timing of an asset sale and what that means from a tax standpoint. It could be the difference of saving $15,000 in taxes for a client. [#4 Roth Conversions and Rollovers ] Micah breaks down the combination of Roth conversions and rollovers for increasing the tax value for clients. And Matthew explains what he does in his practice to achieve 'tax liquidity,' where he moves remaining amounts of money in a client's tax bracket to a Roth IRA. ---- Matt and Micah's Action Items You need to start getting tax returns from clients. Every page is key! And make sure you are articulating the importance of getting the tax return so that clients are jumping to send it to you! Continue your tax education. Don't settle for a certain amount of knowledge. Really keep studying and improving your tax knowledge. Micah suggests Gear Up seminars and Ed Slott for tax learning and tips. Matthew suggests Bob Keebler and Michael Kitces as resources. Learn how to articulate this essential tax information to clients. Have a checklist, especially if you're newer at doing tax returns, to ensure that you're covering your bases and asking the right tax-related questions. More details at: http://theperfectria.com/lets-talk-about-taxes-part-2/ ---- Produced by Simpler Media

Key Links Micah's appearance on Michael Kitces' podcast: Adapting the 4-hour work week ---- Matthew and Micah are of the opinion that an expertise in tax planning (not preparation as is accentuated in the episode) is an essential base of knowledge to cultivate for all financial advisers. As they both elaborate, it would be a case of gross negligence to neglect discussions of taxes with clients. In fact, Micah says that taxes are the biggest expense for any client. So you should invest considerable effort in tax planning. This begs the question of tax expertise in your own firm. Are you well-versed in the nuances of the tax code? Can you provide the necessary value for clients on the nature of tax planning? Matt and Micah talk of their own experiences and give advice, represented by these key talking points below. [#1 Difference Between Tax Preparation and Tax Planning ] Micah stresses that he doesn't give advice on tax preparation, which involves gathering the necessary documents, etc. He is involved in tax planning, which means that the future is brought into focus, and things are looked at that might affect the taxes of the client. So, it doesn't hinge on giving tax advice. Matt and Micah share that the role of the tax planner really is about educating compliance officers, CPAs, and the client, about the line between financial planning and tax preparation. [#2 The Infrequency of Tax Planning in the Industry! ] As our hosts state, it is surprising just how little tax planning is being done for their clients. They state that even though clients may have CPAs and other professionals who are handling taxes, what they're really handling is the tax preparation side and not the planning side. This means that ultimately clients are spending a lot more money on taxes than need be because no one is doing the necessary planning. [#3 The Importance of a Client's Tax Return ] Matthew likens a client's tax return as an essential tool for checking the heartbeat of a client. That is, he compares it to a doctor checking the blood pressure of a patient, as an introductory measure. And Micah says that a tax return is a quantifiable way of measuring the value you can bring to your client. It's also key for making tax planning decisions as well. But they stress that you need to know how to read the tax return to a T. That way you can break it down and readily discuss it with clients. And it shows you have a handle of what's going on. It is very valuable. A warning from Matthew though is to really know your stuff before you jump into tax planning with clients. Also, making sure you work as a team with the tax preparers is essential as well. ---- Matt and Micah's Action Items Go out and get tax returns for all of your clients. If they ask why, just simply tell them how big a role that taxes play in getting the big picture and returning maximum value. If you are getting the returns, the next step would be studying the tax codes, knowing the new laws inside and out, and actually using the information to return value to your clients in whatever way possible. Learn how to view a tax return and then communicate that information to clients in an effective manner. It's one thing to know taxes like the back of your hand, and it's another to explain it in a clear way to someone who doesn't. Incorporate taxes into your prospect process. Set up a long term tax planning strategy with every client so that you know their future tax implications. Clients love having that safeguard in place. More details at: http://theperfectria.com/lets-talk-about-taxes/ ---- Produced by Simpler Media

Key Links Micah's appearance on Michael Kitces' podcast: Adapting the 4-hour work week Joe Lukacs' website: http://practicepower.net/ ---- Some common questions that Matthew and Micah encounter are: "should I charge a commission? What about a planning fee? How much of a percentage should I take for that?" And so forth. If you can think of any variation of question regarding fees, Matt and Micah have been asked it. And so in turn, to set your mind at ease, they spend the entirety of this episode setting up simple systems and tips for determining how much, when, and why you should charge a certain rate. Below are the most telling aspects of the episode. [#1 Make a Business Plan ] As Micah states, it's ok to charge different amounts for differing levels of service. When likened to what a motel charges, depending on the amenities, service, and value you receive, the price expected will rise in response. And the way to really know how much you should charge is to break down the financial goals for your firm through a business plan. This is the first thing that should be done. The purpose is to delineate the amount of money needed to be able to guarantee that clients will receive the massive value they deserve. But Matthew confesses that he didn't really have a business plan in place until his practice was a little more profitable. A decade ago he used to charge 1% for certain fees (to keep it simple). So he offers that as an alternative to a business plan until your practice is robust enough to warrant one. [#2 The Many Different Types of Fees ] Income fees, asset fees, hourly fees, commissions, and the list goes on. How should you build a system around the many different types of fees out there? Both Matt and Micah suggest that you don't overcomplicate the issue. Matt also likes to stress that perceptions of fee-only advisors could be that of the slimy used-car salesman. But really, there's no one way of charging that is better than the other. It's up to you as a person: your integrity, character, and the value you bring to your clients. [#3 Don't Stigmatize Any One Type of Fee ] As Micah elaborates in an anecdote he shares, he provides direction to clients regarding insurance. It doesn't earn him a lot of revenue, not by a longshot. But it definitely brings value to his clients who would be thrown out to the wolves in certain situations. Matthew echoes this sentiment by stating that commissions shouldn't be stigmatized. That is, you shouldn't feel the need to protect your clients from certain methods of fees (commissions from an insurance agent), you should only focus on bringing clients as much value as possible. So if that means someone else is getting a commission based on your actions, there is nothing inherently wrong about that dynamic. The outcome for the client is most important. [#4 Transparency With Fees ] Micah expresses his dislike of surprise fees and undisclosed commissions. Again, whatever fee you decide on (fee-based, fee-only, commission, etc) doesn't matter so much. There's nothing wrong with any one of them. But you have to make sure to communicate all you can about fees to the client. And this transparency has a lot to do with your integrity as an advisor as well. Being willing to openly discuss how and what you charge is key for perceptions of your integrity for clients. ---- Matt and Micah's Action Items Let your fees reflect the real value you bring to clients. Not through some abstract interpretation that is far removed from the actual operation of your practice. Jump on Joe Lukacs' website: http://practicepower.net/. For his resources on how to cultivate the necessary internal dialogue for bringing value to clients. He calls it My Operating System (MYOS). Look to see what the non-independent brokers (the wirehouses) are charging their clients. This is just for a frame of reference for what you should be charging your clients relative to the service and value that you provide. More details at: https://theperfectria.com/to-fee-or-not-to-fee ---- Produced by Simpler Media