The Perfect RIA

Every advisor doesn't necessarily need to establish a clear-cut account minimum for their clients. In fact, Micah Shilanski doesn't have one in his practice. He has a system of fees in place which function in a very similar way. But for those who do establish account minimums, like Matthew Jarvis, this all-important number will guarantee, at the very least, the growth of your practice. To ensure that you practice what Matt and Micah consider to be one of the most important facets of the industry, they provide some great advice on the topic through these keys talking points. [#1 Be Ready For Clients Who Are Below Your Minimums] Matt starts off right away with the recommendation that you should know how to react to the select clients who fall below the account minimum you have set in place. A great practice that Matthew likes to utilize when clients don't meet the mark is to refer them elsewhere using an apt analogy. He likens himself to a cardiologist. But what the client actually needs is a neurosurgeon. No hard feelings, just not at the right place. In addition, for those who perhaps get irked that you won't take them on as clients, explain to them that by taking on any more clients, you run the risk of spreading yourself a little thin and taking away value from already existing clients. [#2 It's OK to Tell People No! ] It's hard to tell people no sometimes. If you have a new practice, if you have a more general enterprise versus niche clientele, the idea of turning people away from your venture can be difficult. Micah says one of the quickest ways to grow your practice is to respectfully tell prospects that don't fit, no. [#3 Discounted Fees? Not a Good Idea! ] The question of 'what if it's someone you know?' comes up and Micah states that every instance where he has been involved with a discounted fee situation has blown up in his face in some say or another. But Micah also does state that he has done some pro bono work in the past with strict conditions in place that actually led to the making of very strong clients he still works with to this day. [#4 The Risks of a Hybrid Firm ] Matthew says that making your firm a quasi-charity will probably lead to burnout because you are burning valuable time and resources on many different cases. You aren't really doing anyone that much of a favor. As Micah states this hybrid dynamic (part charity, part financial advising practice) makes for a confusing time for clients. This is because so many clients are part of the same network and know each other. If you have a reputation for pro bono work, recommending clients becomes harder: "Do I recommend those who need cheap work or those who will bring more value to the practice?" [#5 Common Mistakes Most Advisors Make ] All business is not good business. In this respect you risk running into the quantity over quality realm i.e. rushing around in a mad frenzy with too many clients. If you are afraid that your hard account minimum (say $750,000 in revenue) is too much and you'll miss out on so many clients, don't worry! The million dollar clients are out there and will find you. ---- Matt and Micah's Action Items Develop a strategy for communicating with the prospects that you are not interested in working with. Train your team on how to filter phone conversations regarding inquiring prospects who want to join as clients. Determine who your ideal client is: assets, age, profession, location, and so forth. Set your soft and hard minimums. Have an outlet for pro bono cases. More details at: https://theperfectria.com/account-minimums-as-a-metric-for-finding-ideal-clients ---- Produced by Simpler Media

Key Links Book that Micah references: Digital Minimalism by Cal Newport Time blocking series by Matt and Micah: https://theperfectria.com/time-blocking/ 4-Hour Workweek by Tim Ferriss ---- Matt and Micah are here to talk about the importance of what they define as 'return on time'. It's a concept set in place to ensure that time is spent growing revenue. Because revenue and growth are both extremely important for the longevity of your firm, your time should be spent accordingly. To calculate your return on time, Matt simply divides the amount of hours he works every year with the gross revenue of his firm. This then is his 'hourly rate'. There you have it. Simple enough, but oh so crucial for weeding out the work hours that don't serve your practice. If you're in the middle of doing a task that doesn't equate to your hourly rate, it's probably not worth your time. The rest of this episode is spent reinforcing this idea. Here are some of the key principles to echo: [#1 Don't 'Play Office'] Matthew admits to his wasting time with powerpoint presentations and obsessing over the minutiae of the slides, but realizing that if he spent 6 hours on designing the thing, what kind of value was he bringing to his practice? Was he making his hourly rate? Not at all. Again, playing office in this context means spending too much time on tasks that would be best delegated to someone with powerpoint design strength. Someone who could knock out a powerpoint in 30 minutes, instead of wasting 6 hours on font size. [#2 Forcing Mechanisms for Productivity] Matthew likes to set a timer when he's designing a new financial plan. In addition to making the financial plans simple (a different podcast episode entirely), he makes sure he has this simple forcing mechanism in place, or else he can get caught up in the details. Micah, in addition, likes to remind himself that his work should be bringing his practice, his family, and his clients as much value as possible. Another example is that Micah has to constantly remind himself that he does need to delegate tasks to other people. He can get caught up in thinking he can retain and handle a lot of different responsibilities that are best delegated elsewhere. Never underestimate post-it notes! Micah likes to have a note he sticks on his computer that keeps him focused on the 5 most important tasks he has to get done during that day. Essentially, he limits the things he needs done in his day to the most important. [#3 Outside Accountability ] To keep yourself on the straight and narrow of productivity and revenue-producing best practices, your team, clients, family, and so forth can help keep you focused. Having your assistant keep you on track with meetings and to stay less-distracted by 'shiny objects' as Micah states, brings that third-party accountability that is so crucial. [#4 Misconceptions About What is Required for Work ] Matthew says that so many feel that being reactive is real work. In other words, you need to block out the required time for responding to emails: always being on call to the whims of clients or killing your own productivity by stopping and starting projects to respond to an IM (if you can help it) is a bad practice that detracts from your overall value. Don't let your teams interrupt you all of the time. A better system needs to be set in place to prevent your teammates from always interrupting your flow. Social media and news is not needed to be a really good advisor. ---- Matt and Micah's Action Items Check out the time blocking video series that Matt and Micah just put out recently. Put a post-it note on your computer as a reminder to work your true hourly rate. Read or reread the 4-hour workweek by Tim Ferriss. More details at: https://theperfectria.com/tips-to-maximize-your-return-on-time ---- Produced by Simpler Media

Key Links Book referenced in this episode: Eat That Frog! by Brian Tracy ---- Matt and Micah are tired of well-worn assumptions about advising. In particular, about how lifestyle advisors are lazy by nature. On the other end of the spectrum, many think the job should entail 60+ hour work weeks. Both are wrong. It's not about the time spent, but how effective the time was used. Matt and Micah have four words of advice to give to advisors: quit pretending to work. The hosts lay the issue to rest through these tenets: [#1 Evaluate How Much Work You Actually Do] Really dive into the weeds and evaluate what you do every day. If you are reading ESPN articles, stop. If you are on social media, disconnect. If you are working 60+ hours a week, ask yourself if you are just pretending to work. Really be honest with yourself. [#2 Take Time Away From Office] A counterintuitive notion, but one which makes your work practices effective. Schedule time away from work to keep yourself fresh. An advisor who is fresh is an effective and personable client. Someone who is burned out, working 60+ hours a week, is not going to be able to bring massive value to clients. [#3 Work for a Thousand Dollars an Hour ] This means to examine every action you take and ask yourself, "Am I doing something that is worth a thousand dollars an hour right now?" This also means working with clients as much as possible. Making calls, setting up meetings, and helping a client achieve their goals is much more valuable than hiding behind a computer screen. Do real work. Don't pretend. Do the things you find yourself avoiding at the office. They are probably the most important. [#4 Analyze The Overall Scope and Vision of your Firm] Analyze the evolution of your business. Take time to think, plan, and practice forward-thinking with your venture. Work in-house and make sure your team dynamic is strong. If working alone, hold yourself accountable, and look to strengthen your prospecting, process, and overall net revenue. ---- Matt and Micah's Action Items Put an alarm on your phone that reminds you to ask yourself the question: "Am I doing something that is worth $1,000 an hour right now?" Write up a list of things that are not worth your time at the office: social media, websites, ESPN articles. Get rid of them. Set up an exercise where your team holds you accountable for every time they catch you on social media or wasting time. Pay $100 to a lunch fund or for fun team activities. Hold yourself accountable that way. Shorten your work day, as it will make you work more efficiently. Set a hard boundary that bars you from working past a certain time. Let's say 5 or 6 PM. More details at: http://theperfectria.com/stop-pretending-to-work/(opens in a new tab) ---- Produced by Simpler Media

Key Links Books referenced in the episode: Extreme Ownership || The Dichotomy of Leadership by Jocko Willink and Leif Babin The Five Love Languages by Gary Chapman ----According to both Matt and Micah, to truly know your clients, you have to put these key principles to use in your practice: [#1 Learn The Communication Styles of Your Clients and Team] According to Micah, there are about 15 different communication styles out there, but he personally likes to use 4 styles that he and his team attribute to clients and each other: these are the Driver, Analytical, Amiable, and Social communication styles. The Driver is someone who wants to get things done right away. They aren't impatient so much as they are eager to get right to work and tackle their tasks diligently. The Analytical person on the other hand works at a much slower clip because they want to make sure their ducks are all in a row, that all of the relevant data is squared away, and that no surprises crop up. Thirdly, Amiable types of communicators truly value conversation and friendliness and won't open up and communicate effectively until they feel comfortable enough. Opening meetings with conversations and chit-chat is the best way to communicate with this style of person. Lastly, the Social type is more spontaneous. A person with this communication style tells you what's on their mind and is expressive in their decision-making process. Maybe a little impulsive and emotion-driven, but in the best way, of course! [#2 Start Meetings With a Client-First Mentality] Like Matthew states, starting meetings by addressing the needs of the client first has made all the difference in communicating with his clients in an effective way. Start with the phrase: "How can I be of most assistance?" Or a variation of the same phrase. The emphasis should be on turning attention towards the client first, as this will help ameliorate any nagging concern and thus open up a more concentrated meeting thereafter. A follow up question of, "anything else on your mind?" is always a great addition to the aforementioned phrase. [#3 Ask the Client About Their Most Pressing Expense(s)] Micah says a great way to gauge the priorities (and subsequently adjust to them) is to ask what the next 1-2 months of cash flow will be most directed towards. If it's a vacation or a trip versus tuition for a grandchild, then Micah has the information he needs to communicate further with clients. [#4 "Can You Tell me More About That?"] One of the most effective questions in the book, asking if clients can further articulate an expense or a plan can initiate a positive dynamic of trust, as well as unlock information that would have stayed put if not addressed. ---- Matt and Micah's Action Steps Start small! Take your top 10 clients and figure out their communication styles. Next step is to go internal and attribute a style to yourself and your team members. Be honest and take ownership! Lastly, Matthew suggests buying The Five Love Languages by Gary Chapman, which is not only for learning how to effectively communicate with your spouse, but for broadening your mind on the whole spectrum of communication styles and methods out there. More details at: https://theperfectria.com/talking-points-for-true-communication-with-clients ---- Produced by Simpler Media

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

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. ---- 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/ ---- Produced by Simpler Media

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. ----- 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. ---- 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 ---- Produced by Simpler Media

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.

Key Links Episode 5: Always Take the High Road -------------------- 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.

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).