Starting Your Fee Based Financial Planning Practice From Scratch | FEE007 – Transcript

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Well I did it, I bought a Mac. We are now officially Mac users. I feel like I’m starting from scratch though, I mean it’s pretty crazy when you’ve been a power PC user for well over twenty years. I mean being a PC user means that you’ve really struggled through all the challenges and glitches and you know all that goes along with having a PC and all the workarounds and the little things you have to learn just make the thing run. You know it’s been a while and you sort of get used to all of that. So now I’m really well educated as a PC guy but I have no clue how to use a Mac. I mean I always liked the look of Macs, I liked what they did, everybody said they were great but what I never did was I never really sat down and started playing with one, well now I am. So it’s been an interesting experience. I mean frustrating at first because little things like you know to close down a window now you go to the top left corner instead of the top right corner, not that that’s a major thing but it is something that’s different. So it’s just that feeling of wow this is a little different, this is just a little awkward so to speak. So anyways it’s been a little frustrating but the more you use it you just begin to realize and it’s almost like this weight is lifted off your shoulders it’s like wow well that was easy and that kind of makes sense the way it’s set up.

So why did I switch? Well have you ever met a Mac user who doesn’t speak with passion when they talk about using their Mac, who ever really complains about their Mac or I mean who ever really has any problems configuring anything with their Mac. They’re few and far between. I mean I have had a few situations in getting the machine setup where certain things you know that didn’t load as they had planned and so all we did was we reloaded something and it worked just fine, it was the printer driver or something like that that I had to set up. So you know minor things really but I basically just plugged it in and everything seemed to work. Well I switched because I just simply heard so many stories about people who had made the switch and loved it but really for me the reason why it took so long to get to this point and really there’s really one short answer, it was the financial industry. It was the industry that I’m in, this financial world that we live in as fee based financial planners or as financial planners in general I mean the industry is really PC focused. Most of its programs were built on financial platforms and Excel and you know they rely on Windows and anyways the networking you know my office we installed very, very powerful, very expensive server to run everything. So you know we had a lot invested in Windows and you know we had the people come in and IT guys come in and I’ve got an IT guy that I go to for some of the PC issues that we’re still facing with some of the other machines that we’ve got but you know bringing in a server and going that route it made life a lot easier at the time but it also brought with it more struggles.

A lot of programs I used were Windows only programs. So you know of the other challenges that we faced were okay if I make the change over to a Mac what am I going to do with the other programs that I’ve got you know I had things my CRM or the database management system I was using at the time. You know I’ve been through Maximizer and Act and GoldMine you know and as far as I know right now none of those are Mac based. I know GoldMine which is the one we used last, just before our most current one GoldMine I mean it was just strictly PC based and so we had to get everything done and basically we relied on it. We had too many programs that we were using that we relied on Windows, all the financial planning software I haven’t really come across anything in Canada anyways that is Mac based, that is sort of Mac supported. You know I mean we use programs like NaviPlan and FP Solutions, all the fun company free software, the insurance company quoting software all that it’s all PC based or it’s all Windows based. So you know making that transition over was like oh my gosh how am I going to do all that.

Well I mean as a result the hurdle to get over to migrate properly was really, really quite high so I resisted making that move. At the end of the day it was actually easier to stick with the devil that I knew which was a Windows PC than to build a relationship with a new devil being Apple and you know that was really one of the main reasons why it took me so long to do it.

So what changed in my life. Well a while back I was getting so frustrated, I don’t know if I was looking at some financials or what but I was getting so frustrated with the dollars I was spending on IT support just to keep the office running. I mean all the money that was being spent to have IT guys come in to fix you know network issues or if a piece of software had an update oh my gosh I mean every time it seemed that GoldMine had an update I’d get a note saying okay don’t upgrade just yet because there’s still some glitches with it. So we’d hold off, we’d hold off. I remember with Maximizer back in the day you know we would go ahead and we’d upgrade and the problems that we had it was nasty and I mean I felt for the guys that were doing the upgrade for me because they’d show up and they were kind of sold a bill of goods from the company and you know often times that happens when you’re going with software companies they’ll release the program on the date that they promised to release it but in reality it probably shouldn’t have been released. So you know there were lots of problems and I was just spending so much money on keeping things running so I thought you know what I’m just going to go Cloud based.

And so I started looking into Cloud based solutions. So what is Cloud based computing so to speak and if you haven’t heard the term, I mean you probably have heard the term but if don’t know really what it is the easiest way to explain it is to think of Gmail. So we understand Gmail, well Gmail is not installed on your computer, it’s actually on a server somewhere on the internet. Well the internet is really the Cloud that we’re talking about. So when you log on to check your email using Gmail you’re basically logging on through your web browser and all the processing power and all the software and everything that’s running that program is all running on somebody else’s server. So you’re just basically using the website in order to deal with it. So everything is offsite so to speak so if your computer crashes it doesn’t affect your data, you don’t even need your computer you just need access to the internet so you can go to somebody else’s computer. So basically it’s what now is called a software as a service so the service is being used. Instead of installing the software on your machine which is software as a client it’s now software as a service which is where you’re basically using the service of somebody else and you’re accessing it through your internet browser.

The great thing about it is it’s simple. I mean the connectivity between all of the Cloud based solutions – now I shouldn’t say all of the Cloud based solutions but it seems that Cloud based solutions just speak to one another a lot simpler and basically when you have one company who is handling the software on their server for everybody then when it comes time to do an upgrade well guess what they upgrade everybody at the same time. Everybody gets the patches, the updates, the whatever and it usually happens without you even knowing it. So instead of having to have an upgrade come in for your system and you’ve got to upgrade your machine and your assistant’s machine and some of the other support staffs machines and you know all this sort of stuff, it just happens for you. So it’s very, very scaleable. You can just add on more users, you just simply get more licenses or share the licenses that you’ve got but you basically add on more users to your subscription and then it works quite well. So you know that’s been a real big change for us and so we started migrating all of our services and all the software as much as we could to Cloud based solutions. So I stepped away from GoldMine and moved over to what we’re using now which is and you know so I just looked, I said okay if there’s a solution that we’re using now it’s client based that we have to have it on our machine is there a better solution out there that’s Cloud based and so I just started migrating over to that.

So I mean the other thing that it does is you know it protects your business from you know the challenging network issues that really can kind of shut you down until they’re fixed. Now I’m not saying that not all Cloud based solutions you know run a 100% of the time because there are times when they have to do maintenances and you know little glitches come in here or there but that’s few and far between and generally those get fixed very, very quickly because remember if it’s down for you it’s down for everybody that’s using it, all their subscribers. So they have a real, real high motivation of getting it fixed. The nice thing is as well is when they get it fixed they get it fixed for everybody.

The other thing that really changed for me was the fact that I started using a lot of other lifestyle apps. You see when you migrate over to sort of the Apple platform, I was a Blackberry user and then I migrated over to an iPhone. I remember the day that that happened, I migrated over and I thought oh my gosh I’ve made a huge mistake. But again there’s that bit of a learning curve and it took me you know probably a good day to get used to you know typing on the screen on my iPhone and you know just getting used to that type of thing, now you know it’s second nature and it’s not an issue at all. But there are a lot of lifestyle apps that start to come into that. So you know number one we have a sound system or entertainment system in our house it’s called Sonos and it’s a wireless system that you either buy the units that have speakers attached to them or if you have speakers in your room all around the house you can then connect those speakers to these zones and it just allows you to have a great control of your music throughout the house and you can play different things on each zone, they plug into the internet so you’ve got access to all the music around the world, some music stations and there’s you know all the other music services that you get, you can access all that, it ties right into your iTunes account so you can upload your iTunes account on to it and it’s just a great interface. So you know we started using that, we moved over to Google for business so all the Google apps that we’re using there they not only help run our business but they really help run our busy family.

You see when I migrated over I migrated my kids over, I migrated my wife over so now when we are you know putting something on the calendar whatever it’s very easy to connect with other people’s calendars and basically say okay I want to reserve this time and I want you to be part of this time so you basically invite those people in and you know it just works really well. Again that’s another Cloud based solution. I use a program called Evernote which is fantastic, you know I haven’t even scratched the surface with that but it’s a great program using your iPhone, your iPad you know I have a lot of photos, I mean my gosh we have you know hundreds and hundreds of – I don’t know it’s thousands but there’s at least tens of thousands of photos and we got years and years worth of photos. And so on the PC side or the Windows side it’s just I never really found a program that really, really worked well and I’ve heard so much about Macs and how you know using iPhoto and aperture and all the programs that just come installed on the machine already and how great they are. So you know that was a real motivator for moving over and so it was during the Christmas break when Kathy said to me she said you know I really want to get the photos and I like working on the photos and I don’t like working on them on this machine so maybe it’s time that we start migrating over so that kind of prompted things as well I had migrated my mother-in-law over to a Mac, she was a PC user and her PC died and so I said you know what maybe it’s time we go to the Mac and she went the Mac route and she just loved it so you know that was kind of fun as well.

What else did we do, I mean what I have in place right now okay so what I’m using right now for all of our services. So number one we talk about the Cloud based service and this is what I’ve done and I’ve migrated over to. So what I’m referring to is all the software that we’re using that we’re using it as a service. So number one we’re using So that’s the main system we use for our contact management and it is a very, very powerful program. I just actually got off of a development call with one of the companies we’re using it to customize it a little bit for us and you know the ability to map out your workflow and your work processes through the logic behind the system so that you have it set up so that as you move a client through your process certain things automatically happen, like certain tasks get triggered and your staff gets notified okay now the client or the prospect has made it past this particular point in the process so now they’ve got to do this and it assigns everything. So when you and I mean we will talk about this in another episode but when you document how your process works you can now start to automate that and believe me when you can embrace that it really makes a big difference. And anyways the programmer that I was talking with he said you know I was talking with my other colleagues about you and he was saying that we really have embraced the whole workflow nature and we’re really leveraging the power of Salesforce in doing it that way. So he was paying me a very nice compliment because I’ve spent a lot of time learning that and sort of understanding how it all works and he’s saying that we’re just getting so much more value out of our installation of Salesforce so I’m really happy about that.

The other service that we’re using is Google for business. So all of our email is handled through Gmail so when you do have more than one or you do set up for a Google for business account what that does is it basically allows you to have your company’s domain name so my company is Ironshield Financial Planning so Ironshield has it’s so if you email me my email address is So when you email me there I check all my email through Gmail so I’ve got my own reserved sort of account with Gmail that recognizes that anything sent to my company domain name goes through my Gmail account. But on top of that with Google for business it leverages up to the fact that we’ve got the Google Docs and Google Calendar and Google Reader and I mean you just keep on reading and seeing all the different applications that Google has available and they all work together and it’s really just quite an amazing thing.

I also talked about Evernote and Evernote is great for you know the clips and as I say I haven’t really scratched the surface on Evernote, I am using it more and more. I mean if anybody out there is using Evernote and you’ve got some you know interesting unique ways of using it please let me know, send me a note or you know in the show notes or in the comments just comment on what you’re using it for and how you’re using it and some of the benefits you’re getting from that because I understand it is a very, very powerful program when you start going down the route of you know deciding that you want t go more digital. I know somebody that’s basically every invoice and document that he has he’s basically using it as his virtual filing cabinet and so that’s a pretty powerful way to be able to recall anything because it’s all been scanned into Evernote. So that’s pretty cool.

The other thing that we use from a software as a service standpoint is a great program called MindMeister and if you haven’t seen MindMeister in action, I’m actually thinking I might put together a bit of a You Tube video on how I use it because I use it for my ideal work week and mapping out my plan, I’ve used it for working with clients and mapping out their financial plan and how to track everything. It’s really a powerful program. So what I’ve done in the show notes or in the toolbox, if you go to our and click on the link there that we’ve become an affiliate for MindMeister and so you’ll boost over to MindMeister. What I’d recommend you do is when you click on the affiliate link it takes you over to MindMeister, at the bottom it talks about you know signing up and registering but at the bottom there’s a free account and it’s called the basic account. So go down to the basic account and sign up that way and that way I think they give you three mind maps that you can use and just start playing with it and you’ll find that it is such a powerful, powerful program and then if you have any questions for me just ask them. But as I say I think I might put together a You Tube video on how I’m using it in our practice because we are using it in many, many ways. I mean every podcast episode I put together I map out on MindMeister, we map out our workflows, our corporate workflows, our marketing programs, everything is mapped out on MindMeister and it’s a Cloud based solution. So again when you’re talking Cloud based it does show up on your iPhone, they do have apps for your iPad so it gives you a very, very sort of reinforces the whole being virtual.

The other thing that we’re using is a program called Lucidchart and so that’s kind of a cool program if you’re ever wanting to map out or you know if you’re working with a business client and they’ve got a bunch of corporations and you need to map out sort of the organizational structure of all that, it’s a great program for that. If you’re mapping out your marketing workflows or you know any sort of pipeline type thing that you’re using or that you’re following you can map it out and illustrate from a graphical standpoint. It’s really, really easy using this program so it’s pretty cool program.

We also have the social media dashboard so with all of you know our Twitter management and our Facebook feeds and you know our LinkedIn feeds and all that sort of stuff we use two programs. I’m favouring one over the other right now but we use two programs, one’s called MarketMeSuite and the other one’s called HootSuite and so I’d highly recommend HootSuite, that’s what I’m using right now for all of our postings and tweets and whatnot. MarketMeSuite is pretty good, they’ve got a new Cloud based version that seems to be good. It seems to be a little buggy right now, it’s in development. The one thing I like about MarketMeSuite it’s got the auto follow back feature built into it. I haven’t checked to see if HootSuite has that but anyways those are two pretty cool programs as well.

Another software is a service program that I cannot live without and I’m amazed at how important this program has become in our business and it’s probably because I’ve started to do a lot more outsourcing and so we’re managing projects in a variety of different ways, I’ve got more people working for me. So it’s a program called Basecamp and if you haven’t check this out oh my gosh you really need to check this one out because we recognize that you know as financial planners we’re working on you know our client files and whatnot and that’s important but we also are running a business and when you’re running a business you tend to have a lot of projects that you’re working on. So when it comes to project management I was just getting overwhelmed by it, I had so many things on the go and I never knew which one was where and I mean I’ve got a lot of things going on right now that it was very difficult to keep track of. Well in Basecamp that has solved every problem that I have because now I’m able to map out the project, map out all the different milestones and the benchmarks that I want to hit, create to do lists, assign the different components of the to do list to different people so everybody in my organization has access to it and when they’re supposed to do something I mean they see what they need to do, they see it relative to the big picture, when it’s supposed to be done, it does a lot of you know keeping people up to date. But it’s a great tool because I can very quickly start at the beginning of my week, I start at the top of my dashboard in Basecamp, I take a look at all of the different projects that are on the go and I literally just open each one up at a time and say okay what do I need to move forward next and what’s my next step and I just keep on mapping it out. So it’s great when you have multiple projects on the go, it is a fabulous program. I can’t speak highly enough and it’s very intuitive, it’s very simple. I’ve seen some other project management programs and I don’t know they’re a little cumbersome, they do require a certain level of expertise but Basecamp I was able just to log right in, start it up and it was great. So I would definitely focus on Basecamp because it is a great, great program and it does keep all of my projects that are on the go, it keeps them all organized for me.

Now those are all the major software as a service things that I’m using but I still do require certain software as a client. Now on the financial planning side I have made a bit of a change, I you know was always a NaviPlan user, I’ve now recently migrated over to using a program called the Razor you know I highly recommend that. If you check this amazing program out, so it’s called the Razor and you’re going to speak to probably Dave Faulkner or Cory his son, just let him know you found out about this program from me, just you know send him an email or mention it to him when you have questions about the software which I guarantee you will because it does come at things a little differently, it’s a little bit of a different positioning on how to use financial planning software but I tell you when you get into it and you start realizing the power of it I have had so many clients since I have migrated over to the Razor, so many clients come back to me at the end of meetings – I’ve had a few clients actually email me and call me and leave voicemail messages for me after the fact saying thank you for that meeting I thoroughly enjoyed that new program that you’re using because it makes things so clear and concise for me. So if you do decide to use the Razor do me a favour just mention to Dave that you found out about it from me, that would go a long way. I actually might even if I can work out the timing and whatnot I wouldn’t mind putting together some videos with him just to get some more clarity on using it in a more advanced way because it’s a very, very powerful program.

The other thing that I’m using that I do require for client software or sorry I should say software as a client and that’s software that you have to install on your machine is insurance company quoting software. So you can’t really get away from that. some companies I wish the companies would go to a Cloud based solution for that, I think it would make things a lot easier but they haven’t as of yet. The other software that we use is ScreenFlow or Camtasia so I’m actually using both right now because we’ve got PCs and so on our PCs we use Camtasia but for the recording they do have a Camtasia for Mac but now I’ve just heard better things about ScreenFlow so on the Macs I use ScreenFlow and that’s the program that we use for screen capture. So if we do a video and it’s a how to video of how to use a certain program or whatnot we’ll do it in one of those two programs and it allows us to record the screen and record the audio of what we’re doing. I actually use ScreenFlow and Camtasia for internal office processes so if I need somebody to do something for me and it’s you know a routine type task but I don’t want to have to train them on how to do it I’ll just go ahead and the next time I do that task I’ll record it and then attach it to the project or whatever. For example when we do our podcast there’s a lot of editing – well I shouldn’t say there’s much editing but there’s piecing it together and you know getting it uploaded and how to do that so I just went through and did a whole bunch of screen capture video for that and you know my staff says that they’re great because they don’t necessarily then have to come to talk to me they just go to the video and watch it from there.

We use for our podcast recordings we use and we from day one have always used a program called Audacity. Audacity is a free program, you can download it from the internet and it’s just great for audio recording. Now that I have a Mac I haven’t used their GarageBand and it’s just because you know there’s only so many programs I can learn and I’m comfortable with Audacity, they do have Audacity for Mac so right now this podcast that I’m recording as I speak right now it’s being recorded on Audacity. So I’m just more comfortable with it so we continue with that.

So what I would recommend is for finding out what I’m doing you know because I do change some o f the programs that I use every so often and if I do change I want to make sure everybody is notified about it so check out all the resources that I use and they’re all put in one place on the website under what’s called the toolbox. So if you go to and click on the toolbox you’ll see a list of every single program that I’m using, why I’m using it, why I recommend it and it’s not just programs it could be my web host, it could be where I register my domain names, you name it it’s all there. So definitely check that out and yeah if you have any other programs that you think might be worth talking about then let me know and I’ll check them out and if we find them valuable and we find that we start using them in our practice then I’ll definitely put them up there.

So what Macs did I get, so what is the hardware that I’m using? So I went through and actually we did a variety of things. So for Kathy for her we got her a MacBook Pro and the reason for that, we got a fifteen inch MacBook Pro, she wanted to do more photo work so you know we wanted to make sure the screen was big enough but she does need to be somewhat mobile so the MacBook Pro basically solved all those problems there. Now for me I did a couple of things. So number one I actually went with a twenty-seven inch iMac and that was just really because when I have sit down and do the recordings that I’m doing right now, podcasting, some of the video editing and stuff like that I just wanted a nice big comfortable screen that I could sit down and do that at. However on a day to day basis I’m primarily using my MacBook Air. So I bought the tiniest most powerful one I could, it’s an eleven inch MacBook Air but I mean I got every bell and whistle I could possible get on it. I basically maxed out the hard drive on it and the pretty cool thing about that is that it’s all solid state so there are no moving parts in the program. So when you turn that thing on it’s like almost instant on and so that’s pretty cool, you don’t have to wait for it to boot up or anything like that. Very, very light, it’s amazing when you run that computer because you know I have Windows installed on it as well so when I run Windows – Windows actually runs faster on Macs and especially on that computer than it does on my regular PC so I don’t know what that means, I don’t know why it happens but anyways it does, it runs a lot faster. So I love my MacBook Air. I use it everywhere, it’s nice and tiny, I mean it’s powerful, it does everything I need and my briefcase is now jeez it’s an eighth of the size of what it used to be because I’m really trying to streamline things, I’m really trying to make sure things are very, very light and easy and mobile and whatnot. So I’ve got a really tiny little briefcase that just holds the MacBook Air, all the cables that come with it and then you know whatever files or whatever I’m working it’s got a small little spot in there for that. So I like to stay lean and mean and it just allows me to be quite mobile there so I love my MacBook Air and I do love my iMac as well for the bigger projects that I work on that I need to be sitting there for a long time.

But I mean I do feel like I’m starting from scratch and it’s been an interesting experience. I mean it’s shown me how important it is to have people to turn to for help and this is why for the next few episodes they’re going to be talking about starting from scratch and with your fee based financial planning practice and what I would do if I were going to do it all again and that’s you know where I’m realizing that it does help to have somebody to turn to. You know when you’ve got that coach, when you’ve got – you know you start looking around and you think okay of all the best in any discipline you’re talking about, you can talk golf, you can talk tennis, any athletic endeavour, any scholarly endeavour anything like that chances are that person has a coach and the coach often times is not there because if you remember coaches aren’t better often times than the athlete or than the individual but they are able to give that third party perspective that it’s very difficult to have when you’re sort of immersed in what it is that you’re doing.

So I find coaching extremely important. I do have a certain rule though. I will not hire a coach that hasn’t been there, that hasn’t been on the frontlines. For example if I’m working with a business coach or if I’m working with – well I’ll use a business coach, I want to make sure this business coach isn’t just some motivational guy or girl that has read some interesting books and has stolen some interesting stuff from somebody else and is basically trying to you know run their business off of somebody else’s thinking. I want to make sure my coach is at the leading edge, you know has been there, understands what it means to be running your own business. So when it comes to business coaching I only work with entrepreneurs, I only work with people who are running their own business. I won’t work with a bureaucratic environment, I just refuse to do that and you know that has really paid off for me. I tell you the quality of coaching that I get is so much better than I’ve ever seen and it’s because of that rule, I won’t work with anybody who hasn’t been there before and that’s why you’ll see you know all the top in their fields are always using coaches. So you know hopefully a lot of what I’m giving you and a lot of the information I’m providing you with that will be somewhat of a coaching idea. You know I don’t see myself as a coach or guru, I just am a guy on the frontlines and if you can learn through my experiences then all the better.

Now I do want to do a quick update on some of my systems. So you know I’ve talked about it in the past a little bit and I’m going to talk about it more in the future. I’m going to talk about the fee charging process that I go through so previously I indicated that when I charge a fee to a client for financial planning I followed a 50/50 approach and that meant that I went 50% of the fee upfront and then the remaining balance of the fee is due upon plan completion. I changed that and I want to make sure everybody is aware of that because it’s something that I’ve changed, I’ve been testing it for a little while and I’m more comfortable with the new approach that I have. So the new approach that I follow is I’m still using a 50/50 approach but I’ve changed the timing of the charging of the second fee and the timing of that fee is now two months from the plan start date. What I was finding was that in some of our larger plans and some of the larger work that we were doing and the more complex stuff it was taking a very long time to get through it and also as well sometimes clients just weren’t able to get back to me. So we’d have our first meeting, we’d get everything started, we’d have our first review meeting you know go through the draft of the plan and then there seemed to be a lot of time in between whether I’d be working with lawyers or accountants or you know whatever it happened to be stuff would come up and so I was finding that it wasn’t me that was holding up the process, it was my client that was holding up the process and therefore my client was holding up my ability to get compensated and to get the cash flow that we need to run our business.

So I made a decision to change that from the second fee is due upon plan completion to the second fee is due two months afterwards. So if I happen to finish the plan early well so be it, I just wait two months and then the second part of the fee gets billed but I find that in most cases it’s going beyond that and it just allows the cash to flow properly. So that’s a big one, it’s an important one because in our business you do have to watch cash flow especially on the fee based side because if you’re running from a commission based model I mean you’re getting everything upfront, you’re getting your commission upfront but when you go on a fee based model you know you can sign up a big client but you have to wait before the cash starts flowing in. So that’s why I do highly recommend charging fees because it allows you to get that initial cash flow upfront which allows you to operate your business in a more effective manner so it’s much more predictable that way.

So that was the first change that I’ve made from the fee charging process. The other change that I made was the financial planning software. Now I alluded to it earlier where I you know have been a NaviPlan user for years and I still think NaviPlan is a great program but I have made a change. My primary financial planning program now is the Razor, you know Dave Faulkner has put together what I think is an amazing solution and anybody who checks it out if you’re in Canada, unfortunately I believe it is only Canadian based, but if you’re in Canada you need to check it out. I mean he’s the original programmer for the CCH FP Solution programs. So he was the original creator of that and then I guess he sold the company and you know I don’t know what the details are from there but he’s come back into the scene and he’s got this new financial planning approach that makes a lot of sense and as I say if you do decide to sign up and get a trial for the Razor or you speak with anybody there just let them know that you found out about it from me and that would be great.

So that’s it, that’s a bit of an update on what I’ve been up to and you know how it’s gone with the migration to Macs. I highly recommend it, I’m loving it, I think it’s just great. The programs run better. That’s a couple of the updates on my systems and the fee charging process that we changed and the financial planning program that we’re using now has changed and I tell you it’s all for the good. So check it out and we will not move onto the next segment.

Alright so now starting from scratch, if I was going to start from scratch again and just open up a fee based financial planning practice right from the get go and you know what would I do and you know what I do differently from what I did before. Well the first thing and I think it was the biggest challenge and it probably had more to do with the fact that when you’re coming from a commission based model it’s tough to get your head wrapped around a fee based mindset and so my first recommendation is to really embrace a fee based mindset. You see in a fee based mindset you really do need to act and feel like the expert because if you don’t you’re just going to look like a salesmen. Professionals don’t sell investments, professionals don’t sell insurance, professionals don’t sell anything. They create an environment for educating people on their area of specialty to help people gain confidence. So you know fee based financial planning allows for the following process. I mean there’s an education. The one thing people love about fee based financial planning is the fact they get educated so much better and they understand that the education is coming from a pure point and it’s not coming from a convincing situation where you feel like you’re being convinced it’s the right thing, it’s an education process where you’re learning about everything you need to know to make a decision for yourself if it’s the right thing. I say to clients often times look I want to expose you to pretty much everything I possibly can not because I think you need to take advantage of every opportunity that comes your way but I think you need to have the right to say no and the only way you can say no is if you know more about each opportunity. So we really do spend a lot of time educating. So show them what will happen if they stay on their current financial path, this will reveal areas of concern.

So when you’re educating a client from a fee based standpoint your real goal is to educate them on look this is what you’re on track for okay, we’re not going to talk about any solutions at this point we’re simply going to talk about what you’re on track for. Discuss with them what their options are and what areas you’re concerned with you know regarding their current situation right. You know you want to discuss with them whether or not they’re on track to accomplish their financial goals, what they need to do to bring them on track and what they need to do to maintain and keep them on track. So it’s all about educating them on what they’re doing and whether or not what they’re doing is right.

Now chances are I mean if they’re coming to see you something is not working for them. So you need to be able to get to the bottom of it and so you do that through saying look let’s just take a look right off the bat let’s look at everything you’re doing today because maybe not everything needs to be changed, maybe just a few things need to be changed but let’s find out for certain. So what you’re doing there is you’re basically saying I’m just going to map it out for you, I’m not going to put any recommendations in on my first draft, this is what you’re doing, this is what you’re on track for you tell me if that works for you. So when they see the results they realize well for me to continue along this path and you know I’m going to have to put how much away to meet my goals I don’t know if I can do that or you know maybe they’re just not happy with the direction that they’re going or they’re not happy with you know what the results are going to be down the line, maybe what they’re doing now is you know going to create a huge tax problem at their death and so you want to be able to educate them on that topic.

Showing a client what they’re on track for will motivate them to take action, 99% of the time what they’re on track for is either not what they would like or if they are on track to accomplish their goals 99% of the time they will want to review other options okay. So maybe they say look the initial draft is I want to retire at 65 on X amount of dollars of income and educate my kids. So fine you map it out and say you know what you’re on track for that, you can totally do that. Well then they come back and say oh okay well if I can do that well what’s the earliest I could retire and that’s where the planning begins because now you can really say to them look congratulations on getting to the point where you can meet your initial goal but you know deep down people want other things and that’s when it starts to come out. So you can really start to educate them on what options they have and really it’s all about options. So when they see that they’ve got options and they see that those options are all based on information that they understand and it’s all coming as a result of their work with you they begin to really value the relationship.

So what happens then it leads to a discussion of what your recommendations are because then they’re going to turn to you and say okay well wait a minute what would you do. Well I mean you’ll find that your recommendations will be taken a lot more seriously because they paid for them. You see again all of my clients pay me a fee for the writing of their financial plan. My view and it isn’t a phrase that I created but when people pay they pay attention and you will find that when you migrate to a fee based financial planning practice as soon as people start paying out of their pocket for your advice they actually start to listen, they actually start to pay attention, they actually start to implement your recommendations basically wholeheartedly because they understand it better, they understand that yes that truly is the right decision. Logic prevails in this type of an environment, logic prevails when you’re doing a financial plan. So you know the education process is great and you know that’s all coming from your mindset, look you’re paying me a fee I’m going to give you the real goods, I’m not going to candy coat it, I’m going to give it to you exactly the way that you need to hear it and they’re paying you for that so they tend to value that.

So then what you’re going to be doing is you’re going to want to set your meeting process up and really sort of document it. So what I do is I have two initial meetings where there’s no fee charged for those meetings and then I move onto sort of the fee side of things. So number one, initial meeting number one this is where you discuss people’s issues and concerns. Never ever, ever – never ever discuss products at that point. The initial meeting is all about the issues and concerns the prospective client has. Assess at this meeting whether it makes sense to have a second meeting, that’s your sole objective. That’s the sole objective of the meeting simply for you to determine if you want to work with that particular client. Now from their perspective their sole objective is to determine if they wan to work with you. So look at high level, it’s all thirty thousand foot view and then if it looks like something you can help them with suggest a second meeting to look at the details.

So at that first meeting I tell them upfront look I appreciate you coming in today, naturally I’m going to be talking to you about all the different items and things that we’re going to be doing, I’m going to be asking you lots of questions, obviously you’re going to have questions for me but typically at the end of this meeting, typically what we find is one of two things. Number one we find that maybe it doesn’t make sense to work together, maybe what we offer isn’t what you’re looking for or what you’re looking for isn’t really what we specialize in doing. So that may be one option and I hope you’re okay with that, I hope you’re okay that if I say look at the end of the day maybe it’s not the right thing for us to be doing, I don’t think our services are best suited for you that I hope you would be comfortable with me saying that and number two I hope you’d be comfortable to tell me if you felt that it wasn’t the right thing for you to move forward with for me as well because we may not be the right firm for you. You know you may not like something I say or whatever so let’s just lay it out there at the beginning and agree that at the end of the session that we’re both okay if one of us says no.

But then the other thing typically that could happen is one of us feels or we both feel that hey maybe it does make sense to work and maybe we feel that our services are perfectly suited for what you’re looking for and that by moving forward with our services you’d receive a lot of value and you recognize that so if that’s the case then our goal would be is to determine if it makes sense to get together for a second meeting and then I just ask them are you okay with that and it’s amazing that little process that you go through asking them if it’s okay that you say no if it doesn’t work or yes if it does work really, really sort of clears the air and allows people to focus on the meeting and they appreciate that. So I have initial meeting one thirty thousand foot view just talking about issues and concerns and going through that and you know there’s a lot of other details that we go through at that point and we can get into that at a later date but that’s really the high level for meeting number one.

Then we move onto meeting number two and meeting number two again that only happened if we felt it was appropriate to get together for that second meeting and if anybody is coming into meeting number two chances are pretty, pretty good that they’re going to become a client. Chances are really, really good that you want to work with them. Unless they lied to you, unless you know something wasn’t really laid out on the table that’s the meeting where it’s like you know what this is where the rubber meets the road, let’s look at the details and I’ll tell you exactly what we can do for you. So this is the meeting where people bring with them all of their documents, not the first meeting. You don’t ask them for the documents. You want to look different than everybody else tell them not to bring anything with them, tell them that the only thing you want them to bring with them is maybe some questions that they might have or if there’s a real burning desire something that they just have to find out some information about tell them to bring that. But tell them that you really don’t require them to bring anything with them, you will look completely different. Most people are saying look will you bring with you all your investment statements, all of your insurance policies, what are they doing, they’re asking you to bring that so the advisor can size them up to say look is this an account I want to take over, is there any way I can find a way of making a better recommendation on insurance so I can replace some of their insurance. Well you know what people have caught onto that, it’s just not a very comfortable process and so at the end of the day when you say to people look don’t bring anything, I just want to talk to you, I want to find out more about you they love it. So that’s what you want to do.

So at that second meeting it’s sort of a threefold goal that you have. So number one really establishing whether or not your services are a right fit for that prospective client. You really want to look at the details, everything will be in front of you, tax returns, investment statements, insurance policies and goals and objectives and where they want their kids to go to school and you know if they want to buy a cottage and all this stuff it’s all going to be right in front of you then you’re going to have a real clear picture about what it is that they want to do and you’ll exactly whether or not it makes sense for them to move forward with your services. Ensure you have all of the detailed documents so you can do your job. There’s nothing more frustrating than starting a plan without all of the details. So at the end of the first meeting I tell them look here’s a list of items I need you to bring with you to your second meeting. Now that we’ve established that there’s probably an area that we can give you some assistance with let’s take a look at the details so here’s a list of all the details I need you to gather up and bring it with you.

At that second meeting this is when you’re going to present the financial planning fee okay. Notice how we haven’t talked product yet. I mean all of this is about high level education, gather the data, ask questions and then basically say to them look we will do a complete financial plan for you, here’s the process we follow if this is what you’re looking for then this is what the fee will be for that. Well we’re not selling anything other than the financial planning process so people recognize I want what you’re offering I am willing to pay for that service, that’s when you present the fee. So again if you’ve got to the point where they’re coming in for a second meeting chances are pretty good that you’re going to want to start working with them so get ready to present that fee to them.

Now once you’ve presented the fee, everything is good and again you can talk about the fact that you do charge fees for the financial planning at the first meeting so that they’re aware of that and that could be one of the things that scares them off and that’s a good thing because when you start talking about the fact that look I charge a fee for the writing of my financial plans anybody who doesn’t want that well you don’t want to meet with them for the second time. It doesn’t matter how many assets they have, it doesn’t matter what they’ve got if they’re not following that desire for a fee based model then you just don’t want to meet the second time. So if you sort of send that trial balloon out or sort of send that information out there and they say yeah you know what let’s get together for the second meeting then they aren’t going to be surprised when you present a fee to them.

So then let’s assume that everything works out well and they decide to move forward with your services so what I do is I have what I call plan presentation part one and this is when they come back in and I present to them the first draft of their financial plan. Now it’s not the complete financial plan, it’s a draft of sort of the overview. We review their net worth to ensure that we have all the details in our system properly. So the first statement I will bring out is a net worth statement. What I’m going to do is go through each item and saying okay look this is what we’ve keyed in, this is what we have record of have we got everything and get their buy in from that. You want them to say to you yes that is me in a nutshell. You know there are situations where people sometimes you know it doesn’t happen very often in the fee based approach but prior to doing that from a commission based model people would actually hide stuff from you because they don’t want you to know everything about them because if you do know everything about them then they got no leverage against you, they got nothing to you know hedge their bets with. So it’s just a different approach because now you’re saying look if I don’t get all the information from you then your plan is going to be kind of worthless because it’s not going to be based on true fact. So they’re encouraged and they’re motivated to give you all of the details.

So review their net worth with them to make sure you’ve got everything into the system properly, it also gives them some buy in to say okay yeah I acknowledge that’s exactly where I’m at and this is all correct. Then we review with them what I call their do nothing plan okay and this is the plan that shows them what they’re currently on track for and it may or not be acceptable. Again nine times out of ten it’s not acceptable even if what they’ve asked for is doable then they’ll say well that’s doable I wonder what would happen if I you know did a few more things or if I put a little more effort into it how early could I retire or something like that. So you’re going to review their do nothing plan, then at that meeting you’re going to review the adjustment plan and the adjustment plan is simply where you show them what you would recommend that they do for their investment accounts okay or if there’s any little you know massaging or re-juggling or reallocating of their accounts or their affairs you know you can look at some mortgage issues, you can look at their debts and that sort of thing but you’re not going to get into anything to do with risk or estate at this point, you’re really just going to talk about the ideal situation which is if they want to retire at a certain age, if they want to educate their kids then this is what they need to do for all of that to happen okay and that’s the assumption that it’s a plan where they are nice and happy and healthy and they live for a long time then this is what they’re on track for, if they don’t like it these are the adjustments they need to make and generally they’ll move forward and make those adjustments.

Then you record the client’s what if or adjustments that they’d like to make. So when they take a look at the plan and they see what they are on track for they’re going to say well what if we did this and what if we did that and what if this took place and so on and so forth. Well you record all that information. You don’t necessarily have to do the what ifs right then and there unless it’s a basic one you don’t necessarily have to do it right then and there but you can say look you’re on track for this, anything we do is obviously going to be better for you so let’s take a look at those details when we get together next because you’ve gone through a lot of information at that point, you don’t want the meeting to be much more than about an hour and a half because when it goes beyond that chances are you going to start to lose them a little bit and if you present too much at once even though it’s a lot of good stuff you may lose them. So we finish that meeting and I wrap it up and say great thanks so much for that, we’ve established the base plan is in good shape now what we want to do is take a look at the details from a risk standpoint. So we’ve analyzed what well will happen if you live a nice long healthy life but now I want to take a look at our next meeting what would happen if you didn’t live a nice long healthy life, what would happen if you tripped and fell and didn’t get up again. Well we want to talk about all those risks and really just give some exposure as to what your potential risk is or what you’re exposed to.
So the first part of the meeting is looking at the plan adjustment from the meeting part one so this is part two meeting that I’m talking about now. So when we get back together the first thing I do is I sit down and say okay remember all those adjustments that we wanted to make from the last meeting, here they are and we take a look at it and we do a quick review to say okay now all these adjustments now you’re able to get yourself to this point, you can retire at this age and so on and so forth. So then they’re all quite happy because they like the results. The second part of the meeting is all about risk, we talk all about the risk analysis. So at that point we’re looking at – you know we show them you know how we’ve reviewed all the potential risks associated with their financial plan and then we prioritize these risks. So the goal is to help them buy into the risks to the point at which they want to protect against the risks. So in essence in what we’re doing is we’re saying look this is what you’re exposed to, if one of you were to die prematurely then you know this is what the ramifications would be, let’s have a good conversation about all of this so we can determine what areas really, really concern you. Now you got to do it that way because you can’t solve all the risks at one meeting, it would just be too much. You’ve got to sort of work into it fairly slow so generally we look at you know some core living benefits, some basic life insurance just to get them so that they’re properly protected if they left the office and got hit by a bus, I don’t know anybody that’s ever been hit by a bus, but they left the office and something were to happen and they didn’t get back up again then we want to make sure that that’s protected.
Now if there’s still more to be done then we book a final plan presentation. So if we weren’t able to get through everything then we say okay you know what we weren’t able to get through everything, that’s enough for now, good things take time and we’re going to do it step by step. So you book the next meeting and you know if it’s a big plan and there’s a lot of moving parts and a lot going on you may have three or four meetings at that point but it’s all part of the process.

Then once the plan is done, everybody is satisfied, you’ve got this great core plan, everything has been migrated, everything has been you know invested properly and all the policies that you needed to put in place have been put in place and you’re all done now this is the most important step. Now you’re going to move them to a six month or annual review program. This is what they’re paying you for. They’re paying you to keep them on track so this is what you want to do is really focus on keeping them on track this way. So we go through and spend a lot of the time upfront, the heavy lifting is in the financial planning but the power of the financial planning is in the progress reports because I tell you ask any of your new clients when you get to your first review meeting ask them when you open up the plan and you say let’s review your plan and let’s see now six months ago or a year ago we didn’t have this information and the information that we now have your value actually is at today’s date which is six months or a year later from when you started the plan. So during the original planning process we made some assumptions, we made some assumptions as to what the growth rate was going to be on your investments, we made some assumptions as to inflation and so on and so forth so let’s check against those assumptions, let’s benchmark where we are today in relation to those assumptions to see if our assumptions are holding true because if they’re not we’ve got to make some adjustments to that. But if they are holding true then that gives them some confidence as well.

So what you’ll find is you’ll find that by following that process people will really, really buy into the whole process and every year they kind of look forward to the meetings. You’re also going to find, this is one thing that I never even though would happen but now that it’s happened it’s quite amazing, now you get very, very few incoming phone calls and the reason for that is you’re starting to train your clients. When you put together a process like this that gets them through the comprehensive financial planning and then after the comprehensive plan is done you get them on a review program they actually start looking forward to the reviews and so when you know something happens during along the way they may say to themselves you know what maybe I should give Scott a call or maybe I should give Joe or whoever maybe I should give them a call and ask them that question but you know what I’m getting together with them on such and such a date I’ll just save it and ask them then. However if it’s really important they’ll call you. So what it does is it motivates the really, really important questions and it de-motivates or basically gets rid of kind of the questions that really don’t need to be asked or questions that could have waited until their next meeting.

So that’s the overview of the process. That’s how I would have started it. I didn’t start it that way when I you know first started in fee based financial planning. I tried doing it all at once and it just became – this is what’s migrated, this is what’s evolved from the mistakes that I’ve made along the way, this process works and it works well. So give that a try you know and our next few episodes probably we’re going to start talking more about you know how to script your prospecting processes and how to script you know what you say during the meetings and what’s important to say at certain meetings and how you handle objections and anything like this. We’re going to talk about how to establish your fees you know because you do have to start charging for them and when you do that you got to set your fee. So you know what’s your fee going to be and you want to make sure that it’s not something token because you do need to get compensated for the work you do. As soon as you start charging a fee people start demanding more from you which is good but it also means you have to have your process really, really dialled in. So we’re going to talk about how to establish your fees and then we’re also going to talk about how to make sure when you’re going through the transition and you’re you know moving from a commission based practice to more of a fee based one how to make sure you don’t not present the fee. Too many times in this business I’ve seen people say I’m going to go to the fee based model but they don’t feel comfortable, they actually stopped doing it because they want to hide the fact they have to charge somebody a fee because they’re afraid they’re going to get a lot of retaliation from that. Well the reality is you get more embrace from that, you get a more committed client. Anyways we’ll go into more detail on that later.
So hopefully that helps and you know I do recommend you check out the resources in the toolbox on the website and as I said before you know if you do have questions go into the comment section of the blog, write the comments there. If you have any comments, questions anything, if you have suggestions or you know stories about what you experienced when you had to present your first fee, I’d love to hear your fee. I’d love to hear other people’s stories about what was it like you know, how much did you sweat, how nervous were you, what did you charge, how did you charge it, how did you bill it. You know all this sort of stuff I want to know more about it because I think everybody will benefit from that because we’re moving in a direction now where transparency of fees is becoming a reality and in the UK they’ve already banned commissions you know so people really have to go through a full disclosure model. If you don’t embrace the full disclosure model now you’re going to encounter some problems along the way as things move forward. So do embrace this process. It works, it works well and you know ask any questions you’ve got and hopefully we can all build better practices for ourselves.

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Copyright © Scott E. Plaskett 2012 All Rights Reserved. No part of this document may be reproduced without Scott E. Plaskett’s written permission.

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