#FA Success Ep 234: Charging Advice Fees To Help Clients Change Their Money Script, With Yohance Harrison

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Wealth Partners, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Resources Featured In This Episode:

Full Transcript:

Michael: Welcome, Yohance Harrison to the “Financial Advisors Success” podcast.

Yohance: Thank you, Michael. So excited to be here with you today. I can’t wait.

Michael: I really appreciate you coming out and joining us on the podcast to talk a little bit about your journey through the advisory business, and just I think is kind of an interesting approach to building the practice and positioning the practice the way that you have. I know you’ve built a firm called Money Script Wealth Management, have a podcast, “The Money Script.” And I know you’ve done a lot of work around these themes and intersections of financial planning, financial literacy, and, or money scripts, which I feel is sort of an interesting split in our industry. A few people that have kind of gotten familiar with discussions around money scripts and what they are and what they mean, and have read work from folks like Kahler and Klontz who’ve done a lot of writing around this. And then a lot of us that just never necessarily spend any time on this at all, and may not even be familiar with it.

And so I thought, maybe to kick-off, I’d love to just hear from you more about where this whole theme for your business came from around money scripts to the point that it is literally the title of the business and the podcast and so front-and-center.

How Yohance Builds The Work He Does Around Helping Clients Rewrite Their Money Scripts [04:18]

Yohance: Again, thank you. And I appreciate the opportunity to join with all of your listeners here. This is one of my favorite podcasts, in my top 10. And I really appreciate the breadth of different advisors and stories that you bring into the space.

And so, with money scripts, or the idea of money scripts, it was introduced to me probably a decade ago. But it was introduced in the form of a money story. Someone asked, “What’s your money story?” And in the beginning, I didn’t really know what they meant about “money story”. But as they continued to ask me the questions, I started to think a lot about my childhood. And I come from a background where my mother was disabled when I was a teenager. My father didn’t make the best financial decisions. My family had to file for bankruptcy. The home was foreclosed.

I remember one morning, I was a driver at the time, and I woke up one morning to go pick up all my friends in my mother’s van because she couldn’t drive anymore. And I got into the habit of picking people up and giving them rides to school because gas was only a dollar back then. So everyone got charged a dollar, and I got a full tank of gas. But I woke up one morning, and the van was gone. And I’m freaking out. “Dad, someone stole the van.” And he said, “Well, I guess you have to take the bus to school.” I’m like, “Dad, you’re not understanding. Someone stole the van.” And he wasn’t as emotionally charged as I was. But as I continued to poke and prod on it, he eventually just yelled at me and said, “Take the bus to school,” and he used some choice words there.

And when I came home from school, on the bus, my father invited me to come with him to go pick up the van. And it was like, “Oh, you found it. That’s awesome. Was it some teenagers just joyriding? Let me know who it is. I know people in the neighborhood.” And I watched as he went next door to the neighbor. And I saw the neighbor give my dad a wad of cash. We got into his truck. And we drove to a storage yard, if you will. I saw the money exchange hands, sign some paperwork. They gave my dad the key, and my dad threw the key to me and he said, “Come on, let’s go home.” And we didn’t talk about it at all.

And it wasn’t until a couple of years later that my father shared with me that, that day, the van had been repossessed. And I didn’t even know what repossession meant. And he also explained to me that they don’t own the house anymore, that they’re renting the house. And he started to kind of open up about some of his financial struggles.

And it was through that individual who asked me the questions about the money story, she ended with, “Well, how do you think that affects your financial decisions today?” And I couldn’t really make a connection because I’d left home, went to college, and started a financial services career, and just started working with lots of people with money. And then I realized, I was like, “Wait, I really don’t understand a lot about money myself.” I understand enough to have my licenses and talk to people about IRAs or 401(k)s but didn’t understand the psychology behind financial decisions.

And so I just started to pore into that and reading lots of books about financial behaviors and the psychology of money and things of that nature. And that’s when I came across the idea of a money script. And that just resonated with me a little bit more than money story. And part of that was because of my love for theater. And the way I looked at it is, “Look, okay, so we have ‘money’, which is this medium of exchange for goods and services. And then we have the definition of ‘script’ which is kind of a written method or dialogue or recipe of how things are to get done.”

And that’s when it just hit me. I was like, “Yes, everyone has these money scripts in their head. They have how they understand money and how they’ve programmed themselves to act and react in certain situations.” And it happens in less than half a second. If you’re in a position where like, “Okay, my car has broken down, or my car’s not working anymore, I need a car. Should I buy or lease?” And a lot of times people arrive at the decision very quickly without thinking about all the other financial things that have gone on in their life, or whether it’s a decision about how they’re going to decide to pay for school or even something as simple as paying for groceries after they’ve lost a job. They’ve already got these scripts in their mind, that happens in a fraction of a second. They go through a read the script, or recite the script in their head, subconsciously. And next thing you know, they’ve made a financial decision without sitting down to think about like, “Wait, why is my script written this way?” And then being able to realize that, wait, you’re the actor, the director, the producer, you’re the entire cast and crew of this script that you’ve created. And you can rip it up and start writing a new one. But first you have to recognize the one that’s already in your head.

So that’s where it came from. So once I had decided I was going to start my own company, I remember when my wife asked me, “What are you going to call the company?” And it was instant. I said, “The Money Script” is what I started with. But then after doing a little research and talking to some clients I was like, I should probably have wealth and management in there because that’s ultimately what I’m trying to attract. So it became Money Script Wealth Management. And then I decided to dub our marketing and publications arm as The Money Script. And that was the birth of the podcast.

Michael: Very cool. And so, who does the advisory firm serve? What is your typical client?

What Types Of Clients Yohance Serves [09:37]

Yohance: So, when I started my career at American Express Financial Advisors back in 2001, one of the first clients that I got, because when you start off as an advisor, they talk to you a lot about your first 30 or 40 clients, that’s really going to define the type of practice that you’re building. And a few of my first few clients were physicians. And one of them, in particular, it’s interesting to note that from her and her referrals, to this day, 20 years later, they make up about 70% of my practice. They can all be traced back to this one physician. So a lot of the clients that Money Script works with are physicians and nurses and physician assistants. Actually, they just voted to change their name to physician associates. And a lot of them are emergency physicians, OB-GYNs, some family doctors. So a lot of my clients are in that space. And really, because, well, they also love the name Money Scripts because it reminds them of “prescription”. And I have my clients and other doctors that will say to me at the end of the session, “All right, what’s my prescription?” So, I think that’s kind of cool. I’ve really taken on to that.

But a lot of the clients that we work with have come from individuals that just graduated out of a nursing program, or maybe just transitioned from residency to being a practicing physician. So a lot of our clients have a lot of student loan debt. But they have a good income. And sometimes they have a money script in their head that doesn’t quite match the income and the financial power that they now have. And so we have to work with them a lot to help them rewrite those scripts.

Michael: Right. Just all those weird dynamics that happen, well, in general, when you’re a student and suddenly, you graduate and get a job. And any job when you’ve never had a job is like more money than you’re ever used to having around. But perhaps even more so in industries like medical services, health care where you can live very lean and rack up a lot of debt as a student, and suddenly, when you finally get through school and residency, and the rest, and suddenly, have that fully minted job, your income absolutely catapults from where it was. But you spent the past 3, 5, 7, 10 years trying to live a pauper on almost nothing. And it’s really, part adjustment for some people.

Yohance: It is. And they tend to develop this very peculiar relationship with debt. Especially the ones that have $200,000, $300,000, $400,000 worth of student loan debt. Because they try to put themselves in a position where it doesn’t burden them or… Because it is the last thing you want, your ER physician, as you’re being wheeled into the hospital, you don’t want them worried about, “How am I going to pay my student loan this month? Or, Oh my gosh, the interest on my student loans is just so horrible.” So they’ve learned how to compartmentalize and kind of ignore it, but almost to their own detriment.

And like you said, and this is what really happens. They’ll go 2 years making $3,000 a month. And then all of a sudden, in June of that second year, instead of making $3,000, they make $30,000. And that can be a tough transition. And I’ve watched sometimes – as they call it “the windfall” – the lottery effect can really hinder a lot of them in their ability to make smart financial decisions, again, because of their previous scripts. And there’s a lot of doctors out there whose parents aren’t doctors. They come from very impoverished families and their parents are struggling, and their siblings are still struggling, but they’re the ones that made it out and became a doctor. And then they have that overnight success. And they want to help everybody. And so…

Michael: “So you’re making the money now. You’re going to help all the family, right? Like, all the family. Right?”

Yohance: Yeah, they become the bank. And everybody’s calling. One of the rules that I’ve set up with some of those clients is, as I learned some of those things about them, say, “Hey, we’re going to set up a family fund. And when your family calls you for help, it comes from that fund. If that fund is out of money, you don’t have any money to help them.” And a lot of clients have appreciated that because it’s empowered them to be able to say, “I don’t have it”.

And I tell them, they’re going to look at you like, “What do you mean you don’t have it, you’re a doctor, aren’t you?” I say, “Now, so you can send them a copy of your student loans and say, ‘When I get this paid off, then maybe I’ll have it. But until then, I’ve got to make up for the 12 years I spent in school where I didn’t have it. And now just because my name is doctor doesn’t mean that I can become the bank for the family.’” So yes, it’s an interesting dynamic.

So that’s where a lot of our clients come from, but at the same time, we are referral-based. So I learned very early on to ask for referrals. I got a process put in place where I’m consistently asking clients for referrals as they get through different steps in the financial planning process. And they refer. And they say, I’ve got a system in place where my assistant reaches out to them. And the next thing I know, they end up on the calendar, and it works. So I decided not to try to fix it or prod with it, I just keep doing the same system that I was taught way back at American Express 20 years ago. And it continues to work to this day. It’s one of those, if it ain’t broke, I’m not going to try to fix it.

What Money Script Wealth Management Looks Like Today [14:35]

Michael: So, I definitely want to come back and hear more about just what the referral process looks like in practice. But first, just help me complete the understanding of just the advisory firm as it exists today. So it sounds like working heavily with young professionals. I’m going to presume, basically, a lot of people in their 30s because, by the time you get through all the medical education, the residencies, and the rest, and get through it and have the income pop and the student loan pop and all that hit at once, like we’re now into our 30s. And then that’s where you end up with a lot of clients.

Yohance: Yeah, that’s absolutely true. So I went through a 10-year period where I had zero, even negative client growth. And that’s because I was in leadership at my previous firm. So when I started The Money Script, and I went back out to start actively marketing again, the new clients, yes, they were all in their late-20s to early-30s. So, I’ve got a bit of a barbell practice because I have the clients that have been with me from the last 15 to 20 years, and then I have all the clients that have joined in the last, say, 5 years. But a large majority of those clients, yes, they’re in their late-20s, early-3’s. Just starting out with buying homes. I think it was in 2019, inside the practice, I think it was 26 homes were purchased, first-time homebuyers. So it was so many gifts going out for new homes. Lately, as I look at my gift log, what’s on there now is all piggy banks for children. So it’s a lot of young families that are just at the beginning of their financial journey and learning how to manage their student loans. And everyone’s grateful for the reprieve they’ve had on student loans for the last almost 18 months now.

And right now, a lot of our clients are coming to our workshops to talk about, “What are we going to do in October when the moratorium on student loan payments ends? What are we doing about refinancing student loans? How do we fit this?” And for our doctors and nurses that graduated last year, they haven’t made a student loan payment yet because the moratorium was there because of COVID. So now I’m just like, “Okay, well, all right, I did what you told me. I’ve been setting all this money aside. You’re telling me I’m not going to be able to put money in my Roth anymore? Because I have to start putting money in the student loan?” It’s like, “Yes, that’s kind of what I’m telling you right now. So, congratulations, we got a year’s head start on that Roth IRA. But yeah, and we’re going to have to put that money in student loans.”

So, I don’t know the latest percentage, but I know the last time I counted it was in the upper 70% of our clients are on a financial planning relationship where they are on either a monthly or a quarterly meeting basis, where we’re going in and help them build out their financial plan, prioritizing their goals, and putting all the money into the right areas and the right buckets, and also going through the financial literacy process. We have a lot of sessions with clients where it’s not really about products, it’s not really about, “Hey, we’re going to move this money around.” No, I’m actually going to teach you the difference between a stock and an ETF, or if you’re a business owner, a new doctor, a new business owner, let’s just talk about the different types of retirement plans that are out there. Or let’s just talk about how lending works for a student loan, for a home, for a credit card, and helping them on that education that they didn’t get in school.

So that’s really what the Money Script is here to do is to provide that financial literacy, especially to the younger clients. We’re not discriminating against… yes, for my clients to hear this, yes, I will still work with your parents and grandparents, but we feel that we can provide some of the greatest value to the people that don’t have the assets yet but have the work ethic and the money that goes along with it and have a huge desire to learn how to change some of their habits and make better financial decisions.

How Money Script’s Business Model Works [18:19]

Michael: So what is the business model for how you guys operate? What are you doing to actually get paid for this? Are you in a realm of assets under management, charging financial planning fees, charging subscription fees, particularly with younger clients or younger clients with debt where I’m presuming there’s not a lot of sizable IRA rollovers? What’s the business model for how you’re serving these clients?

Yohance: The business model begins with a financial plan. So clients are going to engage in a financial advisory service where they are going to pay a subscription fee.

Thanks to your blogs and podcast. I was listening to one of them and heard about AdvicePay, and I said, Now, that’s awesome. That’s something I can get on board with. And I did. I started with AdvicePay, I think, three years ago, if it’s been around that long. I don’t know.

Michael: Yeah, yeah, you were early.

Yohance: I was early, and it was exactly what I needed to really deliver the financial advice in the way that I wanted to. And so when a prospect comes to a discovery session, they get 45 minutes with me. I will offer the 45 minutes. I don’t have a screener or anything that says if you don’t have this much money or this much income or what have you, you can’t have the 45 minutes. If you can find the 45 minutes in my calendar, it’s yours.

So I’ll spend 45 minutes with them, or up to 45 minutes because sometimes it can get cut short. But I’ll spend 45 minutes and understand what their goals are. And then I’ll offer a subscription-based financial advisory service to them where they can pay anywhere from $100 a month, $200 a month, $300 a month, depending on the complexity of the situation, or offer them to do it on a quarterly basis.

From there, we’ll go into the data-gathering meeting where I tell them that it’s time to get financially naked. I want to know everything. I use eMoney for financial planning. So I have clients connect all their accounts to eMoney. I have an analyst that goes through and helps them build out their budget because I tell every client, “You’ve got to have a budget. You have to. If you don’t like the word ‘budget’, you’ve got to have a spending plan.” Whatever they need to hear to understand that this is going to be the basis of all of their other financial decisions.

Michael: And you build the budget in eMoney? Like you try to do the budgeting and the tracking in eMoney?

Yohance: Yeah. So, a little-known secret about eMoney. There is a client-side to eMoney, where clients can go in and build their budgets. So most clients don’t understand how to do it. So eMoney gives us as advisors access to that as well. And so we’ll go in and put in different rules so that it will remember every time it sees a check for $1,800, that’s rent. Or every time it sees a Zelle for $50 that’s the housekeeper. So we’ll set all those rules, and then it would build itself into a budget. And then we take that budget information back to the client-side of eMoney and plug it into their spending goals so that you can extrapolate, okay, how much are they spending on an annual basis on their discretionary expenses versus fixed expenses, liabilities, etc.

And I learned that by doing it that way, we’re able to build more realistic financial plans, versus in the old days when I would do it, if they weren’t handwriting what their budget is themselves, they would just tell me, “Oh, I spent $5,000 a month.” It’s never true. As a matter of fact, I’ve been doing this for investigative research purposes. I have a questionnaire that I send to clients. And one of the questions says, “What are your total monthly expenses?” And then I put in parentheses, “Include everything.”: Liabilities, payments, credit card payments. Include everything. On average, what are your monthly expenses? Less than 5% of people put in a number that’s within 10%? of the correct number. Okay? And every time, they’ll put, Oh, it’s $3,000 a month. And then I go through their analysis in eMoney I’m like, “Well, actually, it’s more like $5,000.”

And it also helps us build more realistic cash reserves. Because I’m a strong believer that a cash reserve starts with one month of your total expenses, and you build it to two, then you build it to three. And then the next goal is six months. And as you approach retirement, I’d like to have a full year’s worth of cash reserves. And it hasn’t served me wrong and 20 years because I’ve had clients who retired right into COVID. I had clients that were retiring right into the financial crisis of ’08, I had clients that were retiring into the tech crisis back in the early-2000s. So having that bigger cash reserve has served wonders.

So, from the data gathering, and the analysis, then I go and say, “Okay, well, here’s the recommendations. You should think about a Roth IRA, you should maximize your 401(k) at work, you should look at life insurance.” So I’m a life insurance agent. My wife who is my director of operations, she’s also a life insurance agent. She really runs a lot of the insurance practice. Insurance takes a lot of time and energy, and I’m focused on the planning side. So she’s been taking that on more and more. And I have an account specialist who’s also an insurance agent. So if I see insurance opportunities, be it, term life, disability life, long-term care, whatever it is, then I’ll introduce them to Alicia or to Alexis and they’ll continue to help them through that process while I continue to work on starting to opening up some of the accounts. Whether it’s the Roth IRA, the investment account, the UTMA, or the 529 plan, or whatever it may be.

And then from there, it just goes into a review process. So from that implementation or that action session, as we call it, which usually takes about 90 days to get someone from discovery session to action sessions where they’re actually setting up the accounts or they’re rolling over whatever money they may have, or looking at the insurance. From there, depending on their level of financial education, we will either go into monthly follow-up sessions, where they’re getting that financial education for 30 minutes to an hour, depending on what it is on a monthly basis. Or if they need a lot of help with budgeting. Or they’ll go to a quarterly review session where… And I’ll set those meetings right then using… What do I use? OnceHub for calendar, which I probably got from one of your blogs somewhere where I was looking, “Okay, who do I want to use for my calendar agent?” So…

Michael: Yeah. That’s the scheduling app. OnceHub is like a Calendly competitor.

Yohance: Yes, yes. And so then I have some templates built out in there where we will go and we’ll choose quarterly meetings for the rest of the year. So we’ll go and book those quarterly meetings, or we’ll choose the monthly, and we’ll go book 12 meetings.

And usually, I say to clients all the time, “You don’t know what you’re doing on December 3rd, but I do, because I have my calendar and my off days built out for the rest of the year. So let’s put it on December 3rd at 5:00. Perfect, okay. And we’ll do it three months later, the first Tuesday of the month at 5:00. And then three months later,” etc. And clients love it when the meeting comes close if they get a reminder. And if they need to reschedule it, they can just click and do that themselves or they’ll reach out to my assistant if they don’t have the technical savvy to do that part.

So it really makes it easy to manage staying a part of the client’s lives and their financial decisions from there on out. Because clients will save up all their questions like, just yesterday, last night, I was with a client. Like, “Okay, I know we only have an hour. I’m sure you have an agenda. But, I’ve got about 10 questions I need to ask you. Go.” And it’s great because these are questions they’ve been saving up for the last three months. And I tell them if it’s urgent, email me and text me to set up a meeting, and what have you, but for the most part, they will save it all into the meeting, which I think is good that they’re starting to create that relationship with me where they know they have an outlet, they know they have some place that they can go and they can get the answers to their financial questions.

How Yohance’s Planning Process Starts With Budgeting [25:42]

Michael: So, the ongoing model is anchored to this monthly subscription fee for what are monthly or quarterly meetings, checking in on, I guess, all financial planning stuff, but it sounds in practice check-ins are very budgeting-oriented.

Yohance: A lot of them are, yes, a lot of them are very budgeting-oriented because I guess because we’ve got really good at that as a practice, that’s what we tend to create. People that really want that help in budgeting, that know they should improve their dining out budget, or they know they need to improve the shopping budget or know they just need to be more aware of how their children are ordering things on their iPhone and things of that nature and are looking for ways.

So, I’ll give you a great example. It’s very rare that we will meet with the client, no matter what age no matter what money they’re making, where we can say, “Hey, you’re doing everything right. You’re going to be retired when you want to and have financial independence when you want to.” More often than not, people want to have financial independence sooner and want to have more money and more choices.

So, in the financial planning process, we’ll say, “Okay, well, if you want to have financial independence by the time you’re 60, you want your kids to be able to go to school they want and not have the kind of debt that you had, you’re going to need to have a savings rate of 15% of your earnings. Well, right now your savings rate is about 8%.”

“So how do we get from 8% to 15%? Well, you could just flip a light switch and start maxing out your 401(k)s and start stuffing $1,000 a month into your 529 and doing your backdoor Roth IRAs, and then problem solved. But that’s probably not going to make you very happy because that’s also going to mean that you can’t take the occasional vacation, there’s things you won’t be able to do if you just turn the light switch and make all of these savings happen right now. So let’s talk about how to make them happen over time.”

So, with every client, once we have all the data and have where they’re spending all their money in the categories, I just focus on the top five areas of their spending. So we’ll look at 90 days of their spending. And look at the top-five areas. And inevitably, usually, one of the top five is going to be mortgage or rent. And with every category, I say to the client, “We’re going to ask ourselves two questions. The first question is, can you change the number? And the second question is, should you?”

So, for instance, with a mortgage or rent, can you change the number? Probably not. Not today, you can’t. Could you find a less expensive apartment when your lease is up? Sure, you could. Could you look into refinancing your house to possibly have a lower payment? Sure, you could. But there’s nothing you can do immediately, today, to change your rent amount next month, in most cases.

So let’s move on to the next category. And typically, somewhere in that top five is going to be the category that is discretionary. Food is going to fall in there. And with food, we’ll have an interesting conversation because you can click on eMoney and click on food in that budgeting and it will tell you how much was dining out, how much was fast food, how much was groceries.

And I’ll share with clients, like, “Look, let’s just be real. You can swap your dining out for groceries. And depending on your level of dining out, you can typically get $3 to $5 for every $1. Meaning if you put one more dollar in the grocery store, you can reduce your dining out by $3 to $5. But you also are signing up for cooking.” Not everybody is prepared to cook. So, if we’re looking at this dining out budget or this eating budget, and we’re seeing that on average, each person in the household is spending $800, $900 $1,000, and trust me, I’ve seen it, $1,000 a month on eating, how can we tweak this just a little bit?

And so I will share the same story with every single client about a very bad Starbucks habit that I used to have. When I lived in downtown Long Beach, and our offices were on Ocean Boulevard and I was living on Ocean Boulevard, it’s about a four-block walk to the office. But on the way to the office, there was a Starbucks. And I would literally walk in one door of the Starbucks, get my order, and walk out the other door. I had convinced myself that was the most efficient route to get to work.

Michael: Just kind of a part of the pathway. Take this little stroll through.

Yohance: It was part of the pathway. Exactly, exactly. To the point where they knew my name. I’d walk in. “Yo!” They knew exactly what I wanted. And that was my relationship with Starbucks. Well, as my wife and I started to plan a family, we were looking at ways to reduce our spending. Well, I already had a son, so we were planning to have a second child. We were looking at, “Okay, where can we make some changes in our budget?” And looking at my spending, I saw, I’m embarrassed to say this. But I was spending easily, $300 to $400 a month in Starbucks.

Michael: They’ve got a good business, you’ve got to give them credit.

Yohance: A great business. And at the time, I did not own that one Starbucks stock. And I was like, “What am I doing?”

Michael: Please get your ROI. Recycle your dollars back in. Participate in that dividend.

Yohance: Exactly, exactly. And so, now, what I was not prepared to do was to say I’m never going to Starbucks again. I wasn’t prepared to do that. But I was prepared to say I’m not going to go to Starbucks on Monday anymore. And then Monday turned into Tuesday, Tuesday turned into Wednesday, Wednesday turned into Thursday. And then before I knew it, I was only going to Starbucks once a week. Michael, this was seven years ago. I still go to Starbucks once a week. I enjoy going to Starbucks and having some expensive coffee in a paper cup. It makes me happy. It makes me feel like, “Ah, I worked hard for this”. But I didn’t need to do it every day. So, slowly over time, by eliminating that one day that was 20% of the spending, going 5 days a week. So, all of a sudden, my Starbucks went from $300, $400 a month to $250 a month, or $275. It was really easy to make those changes when I was just making small incremental changes over time.

So I’ll share that same story with clients, especially when we’re looking at their dining out because then I’ll click further and eMoney will show me all the days that they ate out. And I was like, “Well look at this. On some weeks you’re eating out four times a week. What if we just say we’ll only eat out on Friday and Sunday?” And I tell them, “Don’t let me make the rule. You make the rule if this is something you want to change because if you can reduce this area of spending, let’s say if we just reduce it by 10%. Well, guess what? That’s an extra $150 a month,” or whatever the number is, that can go towards whatever goal they have. And so, all of a sudden, they’ve now associated something that’s very valuable to them with their goals and their financial behaviors. And all of a sudden, they start to see some alignment. And like, “Okay, wait, I’m willing to change this financial behavior because I value education. And I have a goal of making sure that I can provide some funds for them. All I need to do is not eat out as much, or just be smarter about eating out.” How many of us take home a doggie bag from our favorite restaurant and the doggy bag goes in the trash two days later?

And these are conversations that my wife and I, we had to have, because I was a financial advisor in Southern California. I was making great money. It was not a thing to go out and have a steak dinner a couple of times a week or Starbucks every single day. But starting to associate things that were more important to us, and understanding what our values are, and then looking at our financial behavior, and just looking at and saying, “Okay, I have the power to make some changes here. What am I willing to do differently?”

And so, sharing that with clients, and for some clients, it’s that monthly process of saying, “Okay, let’s look and see how you did on that goal of reducing dining out.” It’s suddenly like, “Uh, Yo, I didn’t have a good month.” And, It’s okay, it happens. But then I’ll show them in some of the other areas and say, Well, guess what, you also haven’t gone on a vacation in six months, because there’s nowhere to go. Actually, now the opposite has started happening. In all of our client’s budgets, I’m starting to see vacations start to creep back in there, again, now that the world is starting to open up again. But being able to have those consistent conversations, going back to what’s important for the client? What are your behaviors right now? What can we do differently? How can we make a small change? How can we improve by 10%? or reduce the expense by 10%? And then commit that savings to somewhere else?

How Yohance’s Work On Budgeting Fits Within His Subscription Model [33:50]

Michael: So, take me back once more to just how does this work from the business model end? Because I know a lot of advisors that have said like, “Yeah, I’d love to work with my clients on the cash flow and budgeting, but holy cow, it’s labor intensive and I can’t get paid to do this. It’s not economically profitable or business viable for me to do this.” So take me back just to the subscription-business-model end. And so, is this what’s essentially covered by the subscription fee? Are there other things covered by the subscription fee? How do you set the subscription fee? Like, what are you doing to make sure you’re getting paid for all this stuff?

Yohance: Absolutely. So, first of all, from a timing standpoint, I don’t do all this work. I hired an analyst, and it is his job to help the clients build their budget. And I also use a service called Loom. Loom is a recording subscription where you can record anything that’s going on in your screen and then you can send a link to someone. You can even password-protect it. So we’ve created some Looms that we can just send to the client of “Here’s how you can go in and modify your budget. Or here’s how you can use the eMoney tool to connect to your accounts,” and all that good stuff. So by using that, that’s a seven-minute video, I don’t have to spend that seven minutes with every single client, I just have to spend seven seconds sending them the link to the video and saying, “Hey, watch this.”

Michael: Okay, because it’s not just that you’re doing live real-time Loom videos out to people. You’ve recorded the like, the onboarding into eMoney Loom video guide, and it’s the same video for every client.

Yohance: It’s the same video with Joe and Bob or Joe and Suzy Sample Client. Yep.

So that is there. And so, going back to just the business model. So based on the complexity of their situation, it’s bronze, silver, gold, and platinum. I think that’s how I did it. Oh no, I think I got rid of bronze. I think it’s silver, gold, platinum, and diamond. There we go. So there’s different engagement models that the clients can choose from. One is going to be really basic. They’re not going to get the monthly meetings. They’re going to get 90 days of intense work. We will probably meet 3 or 4 times over that 90 days. And then after that, it’s just going to be check-ins on a semiannual basis. And then the next year, they get to go through that boot camp so to speak again. And those are usually for the clients that are less than $100,000 in income, really just starting out. A lot of them are young. They’re in their mid to early-20s. College grads, maybe just in nursing or something that, where they don’t have a lot of things going on.

Michael: And what is that price?

Yohance: The minimum price for that is $150 a month.

Michael: Okay. Okay.

Yohance: The next level up then brings in some more subscription services. So that is where we will do some more work on like debt analysis, helping them dive into their student loans, or come up with a debt elimination plan for maybe some credit cards or whatever they may have. And also start to pull in other financial goals, saving for a home, understanding their retirement plans better, etc. And that will start at around $200 a month and will go up to, I believe, about $350 a month.

Michael: Just how do you figure out who’s a $200-month client in that tier and who’s a $300-month client in that tier?

Yohance: So, a lot of it is based on the income that the person has, and the complexity of their situation. So if they’re single, no kids, maybe they don’t own a home yet, they’re just renting. More than likely they’re going to fall into that silver category. Especially if they’re making less than $100,000 a year, they’re in that 20-something percent tax bracket and lower, and it’s W2 wage. Okay? So I’m not going to be having meetings with their CPAs to try to strategize on tax planning control. You’ve got a W2 wage, just like, if you want to use the CPA, go right ahead. But you can probably go to one of those TurboTax or one of those situations and probably get a pretty similar result.

So the next level up is the complexity. Just evolves a bit. So we have folks that have dual income, have children, maybe they have a home, maybe one or both of their incomes include some 1099 style of income, or maybe they’re getting some sort of royalties or other sources of income that just complicate their tax situation a bit. And complicate the… The way I describe it to clients is either you have consistent income or it’s lumpy. And if you have a lumpy income, it can be very difficult to budget at times, because sometimes you have a lot of money, and sometimes you don’t. And so you have to find ways to structure your expenses. Like, for instance, I’ve had clients that are living paycheck to paycheck, but then they get these huge bonuses at the beginning of the year or quarterly. And so I have a conversation, “Why are you paying your auto insurance monthly? First of all, they charge you more for doing that. Let’s just time your auto insurance around the same time you get that big bonus and just pay the annual.” And then all of a sudden you’re like, “Oh, well, now I can save $150 a month into that Roth IRA you talked about.” I’m like, “You sure can.” So that will graduate them up into the gold financial service. And that’s where most of our clients are living in that $200 to $350 a month sort of space.

And then, as their situation gets more complicated, so the next level up. Let’s say if they have maybe some complicated estate planning issues or maybe they’re an owner or partner inside of a business and they’re trying to figure out how to build compensation plans inside of it. Or they have a child that is going into college and they’re trying to figure out how to finance that. And the income is a lot higher.

So people in the next level, the platinum, their household income are generally the $300,000 to $500,000 a year. And a lot of them will sign up for the monthly, just because they have so much going on and they haven’t spent a lot of time focusing on their finances. And they’re really aggressive about wanting to save and hit these financial goals. Because they know they have the means to do it. They just haven’t been taught how. And sometimes those monthly meetings aren’t even with them. It’s like, “This meeting you can attend if you want, but you sign this form so I can talk freely to your CPA. This is going to be a pow-wow between me and your CPA.” And then once the CPA gets on, like, “Okay, we’re going to have this meeting quarterly. Okay? Because I don’t understand why you keep filing extensions for this person. Oh, because they don’t get any information.” But they don’t understand what it means to get you the information. So I have access to most of it. So let’s you and I work together and let’s get on-time filing.

This year, we had five clients that filed on time for the first time in history. All because they were prepared because when CPA sent the thing over, I just forwarded it to my assistant. I was like, “Hey, everything’s in their tax folder, just go ahead and put it into ShareFile and send it over.” ShareFile, now the tool that I use when sharing confidential information securely.

And then, I think we have four clients that are in that diamond range. And those are clients… I don’t think I have anyone that’s in diamond that has paid the full diamond-level fee every single year. The most recent one was a client who, his mother, who was a client, passed away. And he inherited millions. And he was going from his household making a little under $150,000 a year to, all of a sudden, having distributions of $50,000, $60,000 a year from the IRAs and a house that needed to be sold and trying to figure out her pension plan and life insurance distributions and all that good stuff. And he understood. He was like, “I don’t know what I’m doing. I know you helped my mom with all this stuff. I need you to just help me.” So he was in the diamond category. I’ve got another client that is an executive in a tech company and compensation’s over a million a year and 80% of it is in the form of stock. So we’re spending a lot of time when they’re able to sell, coming up with a strategy of how to sell it. Again, working with the CPA for tax planning. They’re managing multiple properties that I’m helping them with managing and seeing how that fits into their overall financial plan.

So again, in the discovery session, I show my clients, “Look, this is the matrix of where your fee is going to fall, based on your complexity. Here’s why I think you are.” And I’ve never had a client argue me down, saying, “No, you said I’m gold, I think I’m silver.” But I have had clients try to argue me up. And I’m not going to stop them. Like, “Hey, you know what? You’re right. You should pay more for this. Let’s do it.” So…

Michael: Well, “If you see value in the upper tier, I am not going to argue with your perception of my value. I appreciate that you see my value.”

Yohance: I think the thing and the times I’m thinking of when that happens is because they’ll see something that’s included in that going from gold to platinum. And one of the things that I include in Platinum is family financial planning, where I’ll say, “Hey, bring in your parents,” who are maybe, whatever their financial situation is. Let’s talk about how that affects you. Because that’s another question that I ask is, “Do you now or will you in the future have to financially or physically care for your parents?” And I ask that because I had to do it for mine. Both financially and physically. My mother-in-law lives with us right now. And so I find that there’s a lot of people – I believe they call us the “sandwich generation” – where we’re caring for kids. Actually, my sandwich is, “I’ve got a hoagie going on here.” I’ve got a child that just got out of diapers. I’ve got a child that’s in college. And I have a mother-in-law that’s living with me that is disabled.

Michael: Yeah, that’s a hoagie.

Yohance: That’s hoagie.

Michael: So, help me understand just how did the last two tiers price? Like $150 a month for silver, $200 to $350 for gold.

Yohance: And then the Platinum is between $400 and $600. And then on the diamond, it’s $10,000 a year, essentially. So it’s $833 a month I believe it is.

How Yohance Structures His Meeting Cadences [43:22]

Michael: So the tiers for you is, I guess, silver has maybe slightly fewer meetings because you do your initial 90-day interval, but then they’re in the semi-annual check-ins. It sounds for the rest of them it’s not necessarily a difference in meeting cadence or how often they see you. It’s more directly tied to the complexity of the stuff. Like, “Oh, you want me in with your affiliated professionals and talking to your parents as well. Well, you’ve got to come up to platinum. We’re not covering that in gold. Or we’ve got to go to a whole other level of depth around managing your inheritance and spending multiple meetings with your accountant and your attorney. That’s diamond.”

Yohance: Exactly. And what I’ll do is each new client gets that initial 90 days where it’s just a lot of intense work. Like, they’re getting financially naked, connecting all of your accounts, setting all of that up so we can see everything and know more about the client financially. But once we get through that, in the gold and in the platinum, I will give the clients the choice of, “How often would you like to continue to meet?”

And I tell my clients upfront. “The fee is quoted on an annual basis, but I give you permission to pay it monthly. I have a great tool called AdvicePay. You can set it up automatically. It can come out monthly, or it can come out quarterly, or we can do semi-annually.” But again, of course, we have some compliance hurdles we have to get over with semi-annually to make sure I’m not taking more than I’m supposed to upfront without getting delivery to service, etc. So I don’t explain that to the client, but I will make sure I steer them into a place where I know that I can deliver the advice and deliver the financial planning and still stay compliant. But I’ll make sure that they understand that they’re not paying to meet me on a monthly basis. I’m just giving them the choice to pay their fee monthly to make it easier.

And I tell clients, “Cancel anytime. If you decide the service isn’t giving you any more value, stop giving me money.” Matter of fact, I’ve told silver clients, “You can get through the full 90 days, have the plan implemented, and decide on month 3 that you don’t want to pay me anymore.” And, Michael, it’s happened twice out of, let’s see, since I’ve been using AdvicePay, I’d have to check out. I think we put 200 if not more clients through AdvicePay and we’ve had 2 that have walked away right after they go through that initial 90 days.

Now, because we went through COVID, I had all sorts of clients in different walks of life through COVID that had income disruption. And they just said to me, “Hey, can I pause the financial plan for a little while?” Like, “Hey, no problem.” “Yeah, pause it.” And you know what?

Michael: I was going to ask how have you found for retention of clients in the model and then retention of clients through an environment like COVID where there were people getting paid off losing their jobs when they’re paying you from the income that comes from their bank account from their jobs?

Yohance: So I found that those that found themselves in that situation where they lost a job, what have you, when we had the meeting and they told me that what’s going on, I was already mentally prepared to say, “If you need to, we can just pause this financial planning fee.” And I had a few of them that said, “I don’t need to pause it right now. But if things get really tight, is that a big problem?” I said, “No, not a problem at all.” And it was like, “Well, what does it mean for our meetings?” Like, “Well, if you don’t have the finances anyway, I think most of your time needs to be spent looking for a job. But if you have some offers, and you want to hop in on a meeting to discuss those offers, and discuss the benefits, by all means, let’s do it.” Because I’m looking at it like, well, if they go back to work, they’re going to start paying us again. It’s that simple.

I can think of one instance where I had someone abusing my graces, if you will. But for the most part, people understand that, look, this is a fee for a service. Part of what you get from the service is access. If you want to set up that access where we’re meeting every quarter, we can do that right now. If you want to set it up where you think we need to meet monthly, we can do that right now. Or I can, here, give you this link for every client… Another service we use is called Rebrandly. And it’s a way to create a shortened link. It’s kind of like Bitly where you can create a shortened link for anything you want. So my assistant for every new client will go into the OnceHub, which is our scheduling system. And they’ll create a unique link for that client where they can click that link at any time and have access to the calendar and they don’t have to put in their name, their phone number, their email address, because it’s their unique link and all that stuff is already in there. And we send them that link and like, “I know you have quarterly meetings, but if you need to grab 15 minutes on my calendar, this is your link. Store it wherever you have my name stored in your phone. Go to the name and store this link in there.”

Michael: So you’re not just making a branded scheduling link for your firm. You’re actually making a firm-branded scheduling link for every client.

Yohance: Exactly. Exactly. And some of the worst things that have happened with giving out those links is that a client will give it to a referral. And then that referral is like, “I was trying to schedule a meeting but it has somebody else’s name.” And it’s like, “Yeah, that’s their link. That’s not your link.”

Michael: Not the worst way for someone to get introduced. Like, “Wow, this advisor has got private links for individual clients. My advisor doesn’t do that,” right? Like, if they’re going to have an accident in kind of getting into your system, “the wrong way,” like, good way for them to access…

Yohance: It was a good way. But it was awkward on that Zoom call. It was like, Wait a minute…

Michael: You are not the person that owns this private link. “Hi, who are you?”

Yohance: Exactly. Exactly. But, again, I think it goes back to like, as you’re saying, and looking at the service model, I wanted to create a model that promoted access because I’m a firm believer that part of the reason why so many people make so many financial mistakes is because they didn’t have access to the information to make a better decision. So I want my clients to feel that they have access to me, even if that access means… I mean, right now, if you go to my calendar, you’re probably not going to find anything until July, because I’m taking the week off in June. But I made sure I communicated with clients like, “Hey, I’m taking some time off in June. It may be hard to find me if you need a quick meeting. But if all else fails, and you can’t find 15 minutes in my calendar, here’s my assistant’s name and number. Reach out to her, she’ll find some time for you. Or just email. You say, ‘Hey, it’s urgent, I need to review that. I don’t need a meeting. I just need to know what to do with this.’ No problem. If I can’t help you answer that, then I have someone on my team that can.”

So, I believe when meeting the client that I want them to understand that I want to give them access. But I also want to have some structure. And that structure is going to be this first 90 days, we’re going to meet about 4 or 5 times. So the first 90 days. After that, we’re going to select either a monthly or quarterly. And I’ll share with them, look, some people that do monthly, by the time they get to the seventh or eighth meeting, they’re like, “I don’t need to do this monthly.” And that’s fine with me. I have no problem with that at all. That’s great. Let’s switch to quarterly.

And I also share with them that sometimes we get to those meetings and we’ll spend more time in that meeting just talking about how our children are doing than we spend talking about actually drilling down your finances because a lot of things we have set up to where they don’t need a lot of work. Because we did all of the work upfront. From there it’s just me monitoring it. And we’re having a meeting so that you can check-in and make sure I’m actually monitoring.

How Yohance Structures His AUM Fees And Services [50:21]

Michael: So, is the business model at this point only subscription fees? Are you also doing assets under management? Do you help clients with investments if they have investment stuff? Or are you solely focusing on budgeting and money scripts and all the conversations that tie into the subscription fees?

Yohance: So, I do offer asset management, and I do offer asset management for a fee. I am acutely aware, though, of the writing on the wall for asset management, and I believe that fees will continue to get compressed. My custodian and Schwab, if you’re listening, stop listening at this point and pick back up in about five minutes. But I watched as Schwab went from charging me $19.95 on average per trade if I decided to put a client in a wrap account to $14.95, to $12, to $9 to $4.95 to $0.

And in that, I’ve been thinking to myself, “Wait a minute. They’ve got to be able to monetize on us somehow, some way.” So I feel like it’s coming. Eventually, they’re going to draw the line in the sand and say, “Everyone that has this much in assets, this is what the cost is going to be to have access to the service,” or something. I feel something is coming, eventually, for us as advisors that will further cause us to have to compress our fees or find different ways of doing business.

And so my maximum AUM fee is 1%. And the only people that pay 1% are the ones that have less than half a million dollars. And I’m building custom portfolios for them. Meaning they want to pick their stocks or want my feedback on the stocks that they’re picking. Or they are at a fee that’s less than 1%, actually, as low as 40 basis points. Because I’m using a subscription sort of model to a robo-portfolio where I’m going out selecting the robo-portfolios, I build it, and then you pick your level of risk and that’s what you go into. And more and more clients are starting to go towards that. I actually had a client, a great guy. He’s an engineer. And he wanted to do a test. He had two portfolios, an IRA and a nonqualified of about the same size. And he wanted to see how the robo-portfolio would perform, which was a bunch of passive ETFs, as opposed to the one where he and I were actively…our best guess. After four years, the difference and return was less than half a percent. Okay?

Michael: But who won?

Yohance: You don’t want to know, because you’ll make everyone go out and say, “Why am I doing this?” Yes, it was the robo-portfolio won by half a percent and less risk over the entire timeframe.

Now, it’s only four years. The study continues. We haven’t switched totally. We talked about it. It was like, “Why are we still doing this?” Like, “Okay, well, there’s more IPOs coming out this year. I want to pick up some of those. Okay, fine.” But we keep looking at that data like, “Ah man, that robo-portfolio is kicking our butts.”

Michael: And so, what are you using to implement this? You’re talking about robo-portfolios, but you’re running on Schwab. So, are you using Schwab’s Institutional Intelligent Portfolios robo offering?

Yohance: Yep, I’m using Schwab’s Institutional Intelligent Portfolios. And I’m using Riskalyze. So that is turning into a form of robo-portfolios. Riskalyze has their auto-rebalancing feature that they have where they will link to Schwab, they will see all of your accounts, your holdings, etc. You can pick from a suite of passively managed or actively managed portfolios via ETFs, Mutual Funds, Fidelity, BlackRock, First Trust, the list goes on and on. And they will give you signals that say, “Hey, you need to rebalance this portfolio because it’s outside of the risk number that the client has selected.” Or “BlackRock has decided to kick out this large-cap fund and add this large-cap fund.”

So, it dramatically reduces the amount of work I have to do. I still have to go in and physically trade, though. So it hasn’t quite removed me completely, like the Institutional Intelligent Portfolios has, but even IIP, because I can’t say it 10 times fast.

Michael: IIP. Yeah, that works.

Yohance: Yes, and IIP, we only have to build it once. But it won’t pull the feedback. So if I duplicate BlackRock’s portfolio in IIP, if BlackRock changes, I still have to go in and physically change it in IIP. Those things don’t talk to each other yet. So it’s still a little bit of work. But it’s less work than just a custom portfolio where the client is picking 10 different stocks and then I’m trying to add some ETFs or some funds in there to balance it out. That sort of thing.

So yeah, I recently started adding some portfolios, or some clients to Altruist. I call it the advisors’ answer to Betterment. And I know Betterment is starting to build some advisor platforms, at least I think I read that recently. But Altruist is a very clean interface. Very easy for clients to understand and use. I think it works phenomenally, especially with your smaller clients where you’re just trying to do a Roth IRA or just a small investment account. And it is a robo-like portfolio. They have some that you can subscribe to, or you build yours yourself. And the client’s money goes in, you don’t have to trade a thing. It gets assigned to a portfolio, it rebalances on its own, and you get to be hands-off. So I just started adding that in April. And so far, I love it.

And Charles Schwab can be a little intimidating, especially, I’ve found, with the client that doesn’t have a lot of financial knowledge. When you get on the Schwab app, there’s just so many places to click and so many buttons, and it’s a lot. Whereas, Altruist it’s a really clean, simplified platform. And the feedback I’ve gotten from the clients that are starting to use it and they love it. I have one client that was on Schwab and then I set them up in Altruist and said, “Why am I at Schwab?” I was like, “I get it.” But some people like having access to all those other bells and whistles. And she did not. So loves the Altruist platform.

Michael: So, I’m just curious, as you’re building model portfolios with Schwab’s Institutional Intelligent, you’re building model portfolios in Riskalyze’s marketplace of models. You’re building some models on Altruist. Do you have just a sense or an expectation? Like, do you expect to keep using all three because it’s different clients get things from different platforms? Do you envision ultimately, like one’s going to get stamped the winner, and that’s the one you’re going to end out working with and focusing on?

Yohance: So, they are the same portfolios on all of them. And I have to say, at this point, I don’t do the manual labor of building them. I do the labor of deciding, “Okay, here’s what’s going to be on it.” And then I have a team member that goes and does all the manual labor of putting everything in and I just check to make sure what he’s put in is correct and what we want the clients to experience.

What I’ve learned is that the Riskalyze platform gives me a unified place to assess and understand how my client interprets risk. And Schwab doesn’t do that and Altruist doesn’t do that. So there will always be a Riskalyze or something like it, I believe, as a part of my practice, so that I know that the client understands the level of risk that they’re willing to take inside their portfolio. So think of Riskalyze almost as…it’s a tool that is necessary no matter where I think I’m going to have my clients’ assets housed.

Michael: So does that mean you’re, by default, starting to anchor that, ”Then I’m just going to end out leaving all of it in Riskalyze because I got to be there anyway,” or, “Hey, I still like the portfolio management stuff of other things better as long as Riskalyze keeps integrating, I’m happy,”?

Yohance: Exactly. As long as Riskalyze keeps integrating, which, Altruist just got like $50 million in a Series B funding or A. I don’t remember what letter. But they got $50 million. And my first question that I was sending out to them was, “When are you going to integrate with eMoney and Riskalyze? I need you to integrate there.” Because right now, it is a little cumbersome. Because if I have a client going to Altruist, that information won’t feed back to Riskalyze. But I still send them the Riskalyze to determine their risk levels so I can pick the portfolio for them. But those two aren’t talking to each other. So yes, Riskalyze right now will continue to be my risk management hub so I can at least document that I’ve had the conversation with the client, that they understand the level of risk they’re taking because the last thing I want… Twenty-plus years and have never had a client complain about their returns or lack thereof. And that’s because I spend a lot of time with clients and helping them understand what risk and loss tolerance really is. And like I said, Riskalyze is my tool to do that.

And then what platform or what custodian that they end up on… Actually, let’s rewind, with Riskalyze I have clients where I don’t manage any of their money yet because it’s also inside their 401(k). But I’ll still have them link that to Riskalyze so they can take the risk analysis, and then I can tell them, “Hey, based on what you just said on your risk, your portfolio doesn’t match that. So let’s make some changes in the portfolio.” And Riskalyze will continue to track that because they connected their 401(k) to eMoney and eMoney is automatically connected to Riskalyze on my side. So yeah. So Riskalyze, yes, it is a portfolio management tool, but it is that risk assessment tool first, and that’s what it will always serve as for me. But the added bonus is that I can overlay it on Schwab and it’ll tell me what trades need to happen to keep that client inside of that risk profile.

How Many Clients Yohance Serves And How His Revenue Is Balanced [59:38]

Michael: So, for the business overall now, how many clients are under the Money Script Wealth Management umbrella?

Yohance: I believe the count is about 225. And that is after a tremendous amount of growth. Last year, we had our biggest year ever of client acquisition. We got 53 new clients. And I’ve never had over 50 new clients in a year. My best year ever was my first year in the business. I got 40. So last year we got 53 new clients. And this year we were at 32, year to date. So it is growing fast. I think that if it didn’t go live today, it will go live in the next day or so. We are looking for another licensed advisor to come on to the team. My analyst is scheduled to get his insurance license this summer and his Series 65 in the fall. So the goal is by the end of the year, that we have a three advisor platform so that I can really start to divide up more of the work. And the biggest thing that I want to get off my plate as soon as possible is all the stuff we just talked about with Riskalyze and Altruist and Schwab. I’ve got to get out of the business of actually trading the accounts. That is something that needs to happen, will have to happen this year, or else we won’t be able to keep growing.

Michael: And what does the business look like? If I can ask from the revenue and the revenue mix end? I mean, in practice, across 225 clients, how much revenue is subscription fees? How much revenue is AUM fees? How much revenue is the insurance business? Like, how does this end up monetizing in practice for you?

Yohance: In practice, subscription fees is growing the fastest. It’s currently about 40% of the revenue. And that is the fastest grower, currently. Another 30% of the revenue is the asset management fees. And then the remaining 20% is in insurance. I think the numbers are right there.

Michael: And what’s insurance business for you guys? I mean, is this term insurance, are you also in a disability insurance realm because that’s popular for working with a lot of doctors?

Yohance: That’s the number one. The number one is disability insurance, by far. And then behind that, as a close second will be term insurance. We are believers in a larger death benefit even though the time period may be a bit shorter. But early on in your career, larger death benefit is going to, we feel, serve a greater purpose than the permanent insurance. I’m not the bang on permanent insurance out there. But I spent years as an expert witness for when our company was being challenged by a client… This is in my previous firm, not at Money Script. But when we were being challenged by a client for things that maybe the advisor did not do properly in the insurance world. And more often than not, it was for a permanent insurance policy that was underfunded. Almost every single time. That’s what it was about. And I saw some really, really sad stories.

And so it changed my philosophy around permanent insurance. And I firmly believe it is for a client that’s already checked all the other boxes. You’ve already maxed out your 401(k), you’ve already maxed out your Roth IRA, or Backdoor, whatever it is, you’re putting the $15,000 a year in the 529, you have some term insurance, and you’re still looking for a place to put some money. Okay, let’s talk about this permanent life insurance policy and how to maximum-fund it so that it doesn’t collapse on you later.

And this is in total contrast from earlier in my career where I would do anywhere between 15 to 20 permanent contracts a year. Now, maybe we do three to five. But every time we do one, it’s max funding. Every single time. So yeah, you’re signing up to put $15,000, $20,000, $30,000 a year into this policy.

Michael: And how are you doing the insurance business in practice? Like, are you operating as RIA and broker-dealer? Or are you sort of RIA and standalone insurance agent but not BD licensed? Just how does that work in practice?

Yohance: Yep, not BD licensed. So any insurance products that we do, they’re fixed insurance products. I have researched and looked into a few of the variable that will now fit under the Series 65 and insurance license RIA holder. But I haven’t done any of it in practice. So it’s fixed in its index, Universal Life and Whole Life. So it’s RIA. And then I’m also an insurance agent, which, of course, I disclose everywhere. So I let clients know that’s what it is. And I tell them, “Actually, I’m going to pass you off to my wife, she’s going to help you get through the process because I’m going to focus on your financial plan and helping you on your asset management.”

Michael: And just do you end out contracted and appointed directly with the companies? Is there a support platform or intermediary that you work with on the insurance side of the business?

Yohance: Yes, there is. I work with Crump Insurance Services. So they are an insurance hub if you will, or a broker of insurance, and they assist with getting appointed with different insurance companies. So I think, collectively, between myself and my two agents, we are appointed with about 20 different insurance companies, everyone from John Hancock to Lincoln to AIG to Banner to, just keep naming them and their principal. And we do have a direct relationship with Guardian. And that is specifically for their disability products. We don’t do a lot of life products with them. But Guardian is a very, very big competitor in the physician space when it comes to insurance products. And we have a direct relationship with MassMutual. So Guardian and MassMutual will compete really hard to get those physician contracts that are in the best interest of the physician. So we are contracted with them directly.

How Yohance Has Been Able To Generate Explosive Growth Recently [01:04:59]

Michael: Okay. So then help me understand just where the heck do 53 new clients come from? Plus 32 more, year to date. And as of when we’re recording, we are not even halfway through the year yet. So like, just where are all these clients coming from? That is a lot of client flow.

Yohance: So going back to when I started my career. So I was living in Charlotte, North Carolina working for NationsBank. NationsBank merged with Bank of America. I was doing great as a teller, personal banker, and then I got introduced to (this in the late ’90s), I got introduced to mutual fund investing. I was like, “Oh, wow, this is where it’s at.” Of course, that’s where it was at. It was 1999. And I wanted to be a broker. And so my branch manager wrote a letter for me. And even though I didn’t have a college degree, it got me into the broker training program. Well, that was shortly after the merger. So they decided to shut that program down.

Michael: The NationsBank, Bank of America?

Yohance: Yes, the NationsBank, Bank for American merger. So that program got shut down. Unfortunately, they shut it down and didn’t tell us. We showed up for work and all of our ID badges wouldn’t let us in the building.

Michael: Oh, that’s really spectacularly awkward.

Yohance: Yeah. So from there, I was looking to get into financial services. And I also had another competing thing happening. I had a child on the way. And so I’m looking to get into financial services. Now, I had a mentor at the time that worked for New York Life. And he was trying to get me to go to New York Life, but I didn’t really understand the insurance world at that time. And I was just focused on brokerage services. And so, I eventually was able to get a couple of interviews. And I was at the interview with Merrill Lynch, that I got turned down for not having a college degree, and lack of experience. And he said, “If you want to get started in this business, go to American Express.” And I was like, “The credit card company? How does that work?”

And so, I did some research, found that American Express branch in Charlotte, North Carolina, and went interviewed with them. And they said, “Nope, no college degree, no experience, you don’t even have a natural market.” They asked me in the interview, which was awkward for me, about the wealth that my family has. And I had to tell him, “Uh, none? I grew up around the corner. No, there’s no wealth there.”

So I walked out of that interview just really disappointed. But as I kept looking for jobs, I saw the article in the paper for American Express. And it said College degree preferred, not required. And I was like, “Oh, that guy doesn’t know what he’s talking about.” So I called up the American Express corporate office in Minneapolis and told them about my experience. And they said, “Oh, well, we have these new employee platform programs happening in Boston, Dallas, and San Francisco.” And so I said “Boston is too cold. San Francisco is too expensive.” And we packed our bags, and I drove to the interview in Dallas. We put everything in storage, we put some things in the car, we drove to Dallas. My son’s mother, her godmother, happened to live in Dallas. And so it kind of worked out.

So here we are in Dallas. I go to the interview. I didn’t know it was going to be a cattle-call-type interview. So I’m in there, standing room only, 30 people in there. They give a presentation. They gave this little aptitude personality test, which apparently, I did well on. So they invited me back to another interview. And that interview, it went well, ultimately. Frank Judge, Frank, if you’re listening, thank you. So Frank did my interview. He liked me. He passed me on to the FPP. The FPP also liked me and he offered me a job the day before I turned 21 years old.

And I said, “All right, the job starts,” well, he gave me a choice. He said, “You can either pay for your licensing on your own or you can become an employee. But if you fail a test, you’re fired.” And so I was like, I will take the employee route. I’m currently popping popcorn in a movie theater. So yes, I will take that employee route happily.

And as an employee, we spent about six hours a day studying, but the other two hours was about marketing. Developing your natural market. And one of the first things they put in my hands was a referral script. And I remember Frank telling me, “Memorize this referral script. Your career depends on it.” And I took it to heart. And I memorized that referral script. And I would practice that referral script on anybody that was willing to listen.

And there was a young lady that worked in the floor below us. And she worked for a company called Heart Place Associates. And she was cute. And she knew it. And I was a handsome young man myself. And so I was flirting a little bit. I admit it, I was. But I also was thinking to myself, “You know what? She probably knows a lot of doctors because she works for this company that provides medical devices for cardiologists.” And so I asked her to lunch many, many times. I just wanted to give the practice my referral script. And of course, she said, “I have a boyfriend,” and I said, “I have a baby on the way. So we can bring our significant others if that’s what you want. But I’d really to talk with you a little about this career that I’m starting.” And so finally, she relented. She said, “Okay, fine.” We went to Baja Fresh; we had lunch.

And she’s sitting there and we’re at the end of lunch, and I am starting to present my referral script. And she said, “Look, I’ve been working here for like four years. I’ve seen all the advisors that come here, I know what you want. You want my list of doctors.” And she reaches into her bag, and she pulls out a Rolodex, old tech, 2001. She has Rolodex with all her business cards.

Michael: “Well, I wasn’t going to say I did, but yes, actually, I do. And right there.”

Yohance: And so now, Frank had also taught me something else very important. And he said, “You don’t want a list of names.” He said, “That’s like me handing you the phone book and saying, ‘Hey, there’s probably some clients under the letter R. Why don’t you call them?’” And it’s like, “That’s cold-calling. So you don’t want a list. You want to get referred to people that they have a relationship with that they’re willing to introduce you to.” So even though she gave me that list, I did not let my pride get the best of me. I still did my entire referral script. Pen in hand, piece of paper.

And I asked her, I said, “Thank you for these doctors.” But because, again, I had a baby on the way, we spent a lot of time going to see an OB-GYN. And that dawned on me and I was like, “Oh, well, that’s probably a referral that I could probably get from every woman is a referral to their OB-GYN because most females have an OB-GYN.” And so I said, “Thank you for all these cardiologists. I’d like to get to know some other doctors that you may know.” “I don’t know any other doctors.” I was like, “Of course you do.” Said, “How about your OB-GYN?” And she said, “Oh, so and so?” And she called her by her first name. So the first thing I was like, “That was weird.” She was like, “Oh, yeah, she and my mom went to college together. As a matter of fact, you might want to reach out to her because I heard she’s trying to start her own practice.” And she gave me that OB-GYN’s phone number.

Those 85 cardiologists, not one of them ever took my call. But that OB-GYN, I called her over and over and over again, got to know her gatekeeper, who still works for her today, Tiffany. And one day I said to Tiffany, I said, “Tiffany, how do I get the doctor on the phone? Every time I call, I was getting… “Well, she’s with patients? I mean, she’s a doctor?” And I said, “Well, she’s got to have a time where she actually takes phone calls.” And she’s, “Oh, yeah, Thursday mornings between 7 and 9. She’s like the only one here.”

It was a Wednesday when that happened. I wrote down the doctor’s phone number on the back of one of my business cards, put it into my shirt pocket, took it home that night. Thursday morning, I’m brushing my teeth, and I’m like, I pull up my Palm Pilot. I’m really dating myself. And I’m like, “Let me call this doctor’s office real quick.” Toothpaste in mouth and toothbrush. I call. She picks up on the first ring. And she says, “Oh yeah, I know. You’ve been trying to get in touch with me. And I really do need to come and sit down with you. Are you available tomorrow?” Now, this is nowhere in my phone script. I don’t even know how to react to this. “Sure, tomorrow. Yeah, what time?” And she tells me the time. Of course, I’m skipping to the office that day. And I’m telling my leaders. “Hey, guess what? I got this doctor that’s coming in tomorrow.” They’re like, “That’s in the middle of phone clinic. You’ve got to reschedule.” “I’m not rescheduling.” “Well, you can’t miss phone clinic.” “I’ll take the risk.” So I found another advisor in the office that joined me for that meeting. And she signed up.

And that young lady or that doctor. She’s actually retiring next year. It was from her that 70% of our clients today came from that relationship. She referred me to a friend of hers who was a podiatrist. That podiatrist referred me to an ER doctor. That ER doctor was probably the most instrumental because she got me into a few different residency programs because she was in a very horrible financial situation. I helped her through all of it. She also went to breast cancer. I helped her through that as well. So she sings my praises everywhere we go. So…

Michael: So it wasn’t necessarily that, like, literally, one client referred this giant slew of clients, but that one client sort of created the branching network of all the different referrals over time that have driven the growth?

Yohance: Yes, yes, yes, yes. And that one client gave me the opportunity to say, “If history repeats itself, and by the way, that’s how I met you, somewhere through this process, you’re going to see an opportunity to introduce me to one of your friends or family members so that they can learn,” how to do whatever hot financial topic is going on at that time for them. And that’s what I present to every single client.

And what happened last year that was able to drive our growth is that my wife, in her infinite wisdom, trying to help scale and take things off my plate, she said to me, she said, “Yo, why are you asking for referrals in the client meeting? Why don’t you just send an email?” I was like, “That’s too impersonal. I’m not going to send an email.” She’s like, “No, it’s not impersonal.” She’s like, “If you tell them, ‘Hey, I’m going to…’ you say whatever it is that you say.” And she rolled her eyes as she gave that comment. “And then just follow up with an email.”

And then I’m looking at her and we’re having this moment like, “Don’t try to tell me how to run my financial planning practice. I’ve been doing this for years, I’ve got a referral-based practice.” I’m standing really tall. And she said, “I’ll just build the email, and I’ll just do it.” I said, “Fine, whatever.” And that’s what she did. So you can build workflows in Wealthbox. So we have a new financial planning client workflow. So what she did is she inserted it into the workflow right after their third meeting, she put in a workflow step for my assistant. So I don’t even do it. And the workflow step, it just says, “Hey, I know you’re enjoying your process of financial planning. And you’re learning a lot thus far. And you’re starting to take action on your financial goals. As Yo mentioned to you. And as you probably know, because you were probably referred to us…” It said something like that. I have to read it word for word. But, “We work on a referral basis. We’d love to take the opportunity to be introduced to a couple of one or two people that you think that can benefit. All we ask you to do is to send them an email and copy us on it.”

Michael, the emails just started pouring in. Because of that meeting that we call a strategy session, I probably do about 10 of them a week. So, all of a sudden, 10 emails are going out every single week asking people for referrals.

Now, couple that with what’s going on with COVID last year, and people really looking closely at their finances…

Michael: Right. Lots of people last year saying like, “Oh, I gotta get my finance stuff figured out. Oh, funny thing. I just started working with Yohance and he’s really good. You should talk to him.” Like, “Boom. I have sent you an email. I’ll introduce you.”

Yohance: I have clients writing dissertations, almost, on these emails. Categorizing all of the things that we’ve done together, how the meetings make them feel, why they think they need to do this. “Hey, I’ve copied him on the email. I’m sure you guys will take it from there.” And then I’ll see the email chain. “Oh, man, that’s exactly what I need.” And mind you, I’m just copied on the email. So they’re just talking to each other via email.

Michael: Right. You just happen to get to listen in and watch the conversation.

Yohance: Exactly. And then I see the emails like, “Hey, I scheduled my appointment.” And then the clients call me. “Hey, I got so and so’s scheduled appointment.” I was like, “I know I’m copied on the email. But thank you. Absolutely.” But it’s funny how it just happened when I’m just copied on the email.

And I never believed that would work. I did not. I completely thought it was not possible. But what I’ve learned is it’s because we have a process and clients are going through this workflow where we’re checking off all these boxes, and they’re doing their discovery session, they’re doing their data session, they’re doing their strategy session, then they’re doing their action session, and then we’re scheduling their quarterly or their monthly is after that. And clients love that process. And it’s really easy for them to insert people in because they can tell people exactly what to expect.

And so that is what led to the majority of the growth last year.

There was also an organization that I’m a part of called the American College of Emergency Physicians. So they have an event once a year where almost 10,000 physicians (it did cost $10,000 too), but 10,000 physicians from all over the world come together for a group session. And I would get a booth at this session. And having a booth was always hit or miss. I mean, yeah, we get some names. We meet some people. And I was able to pluck a few good clients out of there. But once those clients got into the practice and went through the process, then they just got that referral question. And then they started referring.

And one of the individuals I met at the conference was the director of the diversity and inclusion program inside ACEP. And so, as a black man, I said, “Hey, what do I sign up? Let’s do this. I want to support. I want to be a part of this.” And they led me to a residency group that they work with. And so I started doing some Zoom calls for the residency group. The next thing I know, here are clients coming out of that residency group, one by one.

So, last year, it was me having a huge value in having a referral process and being consistent about talking about referrals and telling clients, “This is how we build the practice.” Being okay with trying something new and asking via email and seeing what happens.

And so implementing that as a process. Don’t get me wrong. There’s a lot of clients who just ignore that email. Okay? But I don’t need everyone to read it. I don’t.

How Yohance Decided Where To Place His Referral Request In His Workflow [01:18:35]

Michael: And I’m just curious like, why did you put the email where you did? You could do this after the first meeting, you could do it after the first year as an anniversary thing. Like, why after the third meeting? Why was that the trigger point?

Yohance: Now you sound like my wife, Alicia. So, she asked the same question because he wanted to put it after the first meeting. And I said absolutely not. And my justification behind that was in the first meeting, it’s them just really kind of baring their all and opening up to us. And them not really getting a lot from us just yet. Because they’re just telling us all the things that they want. I’m like, “Okay, well, I can help you.” It’s by the time they have connected all their accounts and we get in that strategy session, that’s where I’m actually starting to educate them and ask them questions like, “Why did you do that?”

And I’m asking the question of “Okay, so, you told me what your values were what’s important to you. You told me what your goals were, what you want to accomplish. But now I’m looking at all your financial behaviors and they don’t match. How do we get your financial behaviors in alignment?” And we start having that hard conversation with them about what’s actually happening. That’s where I tell them like, “Look, numbers don’t lie. If you’re spending $1,800 a month dining out, I’m going to see it. I’m not going to judge you for it, I’m just going to ask you, well, but you said you weren’t going to able to retire when you’re 60. And right now, based on your savings rates, you won’t be able to retire by 60, you’ll be retired by the time you’re 82. So, what gives here? How important is buying everybody drinks at the bar?”

And it’s in that strategy meeting that we’re actually putting, for lack of a better metaphor, the rubber to the road on, “Here are some of the changes you need to make.” And I’ve had clients, after their first strategy meeting, they will send me an email and say, “Man, that was heavy. Like, I feel so liberated. I’m already thinking about my finances different.” Or I have clients to say, “You know what? I canceled Netflix and Hulu. I just did. I can always get them back. But let me see what it’s being without them for 90 days, and see how I feel.”

So I feel there’s a lot of emotional touchpoints in that session with connecting the dots, rubber to the road sort of thing that happened in that session. So it becomes, what we used to call it, what I was told when I was in training, 20 years ago, is you’re looking for those referrable moments. Where you see that the client just connected the dots, they did. One thing that will happen in a strategy session, I’ll look at them and say, “Wait, you’re not putting money in your 401(k)? Why not? Or you’re only putting 3%, they’re matching 4%. One percent is not going to hurt. Listen. We’re on Zoom, just log into your 401(k). Change from 3% to 4%. I doubt it’s going to change your ability to pay your rent and pay your mortgage next month.” “You know what? You’re right.” And they are going to change. So that becomes more like, “Look, you did something great.” And I’m going to go right into eMoney and say, “Let me show you what that does to your retire by 60 versus 82. Guess what? Just that 1% changed it to 79. It may not seem like much. That’s three years. That’s a lot. That’s significant. What if we went up to 10? Don’t do it now. Let’s finish the analysis and we’ll come back to it.” So it becomes one of those referrable moments and we just want to make sure that we are capitalizing on that.

What Surprised Yohance Most About Building His Advisory Business And The Low Point On His Journey [01:21:43]

Michael: So what surprised you the most as you’ve gone on the journey of building your advisory business?

Yohance: What surprised me the most is really understanding that I can’t do this alone. That I need support. That if I really want to scale and I really want to grow, that I’m going to have to hire a team of people. When Money Script started, it was just me and my wife Alicia doing some part-time filing for me, essentially, that’s really all she was doing. And then it grew to myself, Alicia, and my youngest sister, Saidah. And then it grew to an account specialist. And I had a few interns along the way. And now it’s a team of six.

So what has surprised me the most is how much more the firm is capable of when, while I’m on a podcast with you in the middle of the afternoon, people’s financial plans are being solved right now by my analysts. Roth IRAs and 529s are being opened by my account specialist. My marketing specialist is making updates to our website as we speak. So it turns into where it’s not just me that’s doing these things, because now my clients’ associate, Alexis, she’s not a licensed advisor, she’s not making recommendations, but she’s sending them the paperwork to open their 529. And when something’s not right with that, she’s calling them and saying, “Hey, you didn’t put your kids’ social security number on here. I need to get that.”

And so to them now, it’s like, “Oh, Alexis helped me open my 529.” And I’m kind of like, yeah, I mean, she did. But I made that recommendation. I told you what a 529 is. But now they have this affinity for Alexis. “Oh, she’s so helpful. She helped me, we got money in the 529. I can’t wait to share that with someone else.” That sort of thing.

So what surprised me more than anything, and this is just me as being a solo practitioner, is how much greater our impact can be when it was more than just me. Because I got out of a bad relationship. When I left my corporate job, I had a partner that things didn’t work out with and I told myself I’d never have a team again. And I was in management for a decade. And I was running away from management when I left and didn’t want to be in management, didn’t want to have advisors. Now, as you heard me say earlier, we plan to have two more advisors on the team by the end of the year.

So that is what has surprised me the most is how when I realized that I can be the captain of my own ship, how I can really create an atmosphere and a tone and an environment for people to thrive and to improve their own financial lives as well. That we can have a greater impact. And that’s really what I wanted. That’s why I got into financial services in the beginning, because I was looking at the financial situation that my parents were in. I was like, “Hey, how did this happen? How did you not have disability insurance when your company offers it? I don’t understand. Or you declined it? Why? Why are both of my parents dying without life insurance? How does that happen?” “Because you didn’t understand how it worked.” “Okay, got it.” So how do I change that and how do I pay that forward? And the best way I can do it is by having a lot of people that believe in it the same way I do and want to see that success created in other people’s lives. And it really shocked me to find out that I cannot or will not do it alone.

Michael: So what was the low point for you on this journey?

Yohance: The lowest point for me on this journey was being fired from Ameriprise Financial. So the company, American Express, turned into Ameriprise. Well, actually, being fired twice. And in 2007, by then I was in California and I was a district manager and was making great money. More money than I’d ever seen before in my life. I think I may have met you after that. But I was starting to get involved with the FPA. That’s the thing. I first met you, I was with the FPA on a panel there at some point. But just doing just something amazing. I’m helping my parents financially. I’m helping my sisters. I’m feeling really good about life. And then the financial crisis hit. Simultaneously, I was divorcing my son’s mother, which was not going well. It was costing lots of money. And I was in situations I really just didn’t understand what I was doing.

And I made a bet in 2008 that when we separated the assets and I gave her the money that she wanted, and paid the attorneys and all those stuff, I said, “Oh, I’ll be fine. I’ll just pay the taxes and all the stock options that I cashed in 2009. No problem, it’ll be easy.” Well, then the bottom fell out of everything. And guess what? They eliminated the district manager position. And there was no stock option bonus that year, where normally I would get about six figures. That did not happen. And I ended up with a very large tax bill and didn’t have the money for it. And so that was the first time I got fired. They eliminated the manager position. But fortunately, there were a few hundred of us across the country and all the positions got eliminated. And less than 10% of us stayed with the company after that happened because most of us didn’t have a practice anymore, where I’d still held on to my original 100 or so clients that I’d got in my first few years in the business.

Michael: So many moved from production into management and let go of their clients, and so when the management positions got downsized, they didn’t have clients.

Yohance: Exactly. Not only didn’t have clients, they didn’t have jobs. It was nothing. So I still had clients. So I was okay. All I had to do was go find a cubicle, literally. I was like, “Wait, I’m losing my office too? This ridiculous.” Like, “Well, your production isn’t high enough to keep your office.” Like, “Fine. I’ll go to the cubicles, but keep that office open for me.”

And then fast-forward a couple of years later, I took my Series 24. And because they changed the management structure, I was able to become a branch manager in Long Beach. And that’s where I was spending the latter years of my career with Ameriprise.

And at the time, my son was going a little bit older. Right now he’s a teenager. And from his younger years, he had been in theater. And he was really good at it. And he had finally got to the point where he had landed a principal role in “Beauty and the Beast.” And he was playing Lumiere. And after singing classes and coaching and all of these nights and nights of rehearsals, it’s opening night.

And for anyone that’s been in corporate America, and especially in financial services, you’ve probably experienced a point in time where you have your levels of management that are above you that are changing, sometimes maybe too often. And I’ve been in a position where I’m in one of the top branches in the country, we’re doing well. But the management above me had changed at least three or four times in a two-year period, where I kept going through these different either complex directors above me or regional leaders above me. And everybody comes in with their plan of how they’re going to save the world. Well, I was still in one of the best offices. So I kind of had this air about me like, “Okay, great. You’re the new guy, that’s awesome. What we’re doing is working. I’ll listen to what you have to say. But I’m not going to rearrange my whole life and do everything differently because you’re trying to save the whole region.” And maybe that was pompous of me. But that’s how I felt about it.

Well, this new leader that had come in, him and I did not get along at all. And there was a trip that he wanted me to go on. We were going to Arizona to help them learn how to do the recruiting that Southern California was doing. And he really liked it because I had started applying the same referral process and financial planning for clients to recruiting. And it was working. And he was like, “I really want you to go and teach this and also teach them the things you’re doing with the advisors on how to convert their practices to financial planning.” Because at Ameriprise, we were trying to grab all the brokers that were not doing financial planning and bringing them to the dark side. And this is in a public setting. And he said, “Okay, so we’re going to go to Arizona, and it’s going to be Thursday, Friday, Saturday, and we’ll do golf or something on Saturday.”

I said, “It sounds great,” I said, “but I can’t be there on Thursday, because that’s the opening night of my son’s play.” And he was like, “Well, aren’t there like multiple nights of the play?” Like, “Yeah, there is. But Thursday is the opening night, and I’m going to be there.” And he said, “No, I need you to be in Arizona.” And, “I’ll be there on Friday, but I’m not going to be there on Thursday.” And he said, “Can we talk about it offline?” I was like, “There’s nothing to talk about.” And again, this was in a group setting, and so that exchange happened. And this was probably two months before the event was happening and what have you. And my assistant ended up purchasing my flight for that Thursday. And when I got the confirmation, I was like, “Oh, no, no, no, no. I told him I’m not coming on Thursday, change it to Friday.” And so she did. And she got in a lot of flack for it and so did I.

And I remember having a conversation with him on Friday when we were there and now we’re standing at a bar, and he’s kind of telling me about myself. And I said, “Look, you don’t get it. You don’t have kids.” I was like, “So I don’t expect you to get it.” I was like, “I’ve been through a divorce. And that happened to be my weekend with my son. This is opening night. I’m not with him right now, because I’m here with you guys. But I don’t expect you to get that.” And I knew right in that moment, that was the beginning of the end.

So, fast-forward about two months later, I had saved up a bunch of my vacation and PTO time and decided to take three weeks off in the summer. And my wife and I were going to Orlando to see my brother. We happened to have a free trip and a hotel stay in Chicago or something that. And then we were going to come back to Southern California. And I was on the plane… And my complex director is calling my phone. And I don’t answer the first time. And he sends me a text. “I need you to answer the phone.”

So I answer the phone like, “Hey, man, I’m sitting on a plane.” He’s like, “I know. And I know it’s about takeoff. I’ll be brief. I want to let that your services with Ameriprise Financial have been terminated effective immediately. We know that you’re not in town right now. We’re going to pack up your stuff. And we’re just going to send it to your house. And I have HR here if you have any questions for her.”

And I cried. And going from being 20 years old in that final interview, before I turned 21, being offered this awesome opportunity with no college degree, a young black man coming from the hood, no natural market, but they’re saying, “Hey, we’re going to give you a chance.” And then they gave me all the opportunities I needed. I had meetings with the president of the company and all these other folks all over those years and how they were really saying, “Hey, as a young black man in this industry, we really like that you’re here.” And I got awards for hiring diversity candidates. And like, “How do you hire so many diversity candidates?” It was like, “Start by being diverse.” And that was my speech to everyone. I was like, “Sorry, I wish I could offer you more. Hire more diverse people and then put those people in charge of hiring. That’s how you get more diverse candidates.”

But to then just be let go. And their official reason was a violation of the company travel policy. And it was the biggest punch in the gut. And then the guy that fired me, the regional director, two months later, he packs up and goes to MassMutual.

So I was distraught. And Michael, it took me nine months to get back in the saddle. Because I was rethinking everything. Mind you, I still had clients calling me because I had a partnership. I had one of the largest books in the office. And I had a partner that I’d taken on before I became a branch manager. And because we’ve been together for more than two years, he inherited my entire practice. So he went from generating about $200,000 a year in production to about $700,000 a year in production overnight. But all my clients were still calling me. And I’m like, “Sorry, I’m like, I’m not at the firm right now.” And, “Where are you going to be? Are you going to Merrill, you’re going to Wells, you’re going…?” “I don’t know. I don’t know. I don’t know. I don’t know.”

And that was a really low point for me. It took a lot of soul searching, a lot of conversation with my wife, a lot of therapy to figure out because I’d never been fired before. And so that was the lowest point for me.

But then, I still remember to this day, it was a Tuesday morning. And we woke up and we’re still downtown, living in Long Beach. And I remember staring out the window and just watching the palm tree sway. And my wife woke up, and she asked what’s wrong. And I don’t have a job. The bank account is running low. I just don’t know what I want to do. I have some offers, but they’re not really exciting. And she just said, “What are you scared of?” And she may have asked me that question before, but for some reason, that’s the day, well, I know I remember it because I know what I did next. But she was referring to what are you afraid of, of starting your own firm?

And on that Tuesday I just looked at her and I said, “I actually don’t know.” And she got up and walked off to go make her morning tea or what have you. And I picked up my cell phone, and I called a gentleman who I’ve been recruiting for years that was an RIA. And I said, “I think I’m ready.” And he said, “I’ve been waiting on this phone call. Meet me at lunch.” And the rest is huge.

So, Money Management Wealth didn’t start then because I didn’t have a practice. So I couldn’t just go to Schwab or go to TD Ameritrade and say, “Hey, will you be my custodian? I have zero clients.” So I went piggybacking off of another friend of his that had a practice. And he let me set up shop with him, team up under his RIA. Actually, I didn’t get the full $10 million, I got to about $8. And then I was in a position where I could buy someone else’s practice. And I was like, “Okay, I don’t want to do this under this umbrella. I’m going to go to Schwab and see if they’ll take me.” And I went to Schwab, I was like, “Hey, I’ve got eight. But I’ve got a practice and blah, blah, blah. I can be at $10 million within 6 months.” And they said, “You better get to the $10 million.” I said, “Send me the paperwork.” And Money Script Wealth Management was born.

Yohance’s Advice For Newer Advisors And What Success Means To Him [01:34:50]

Michael: So, what advice would you give younger or newer advisors coming into the industry today and getting started?

Yohance: The first piece of advice is you’ve got to be a student of this game first. I’m constantly looking for new credentials that I can get. So just last year, I got my Behavioral Financial Advisor designation. And that also helped compel getting new clients last year, because I was able to really stand in what I believed all this time. I was like, “Oh, this is what I’ve been looking forward to be able to relate the financial behaviors, values, and goals.” So the first thing I’ll say is coming into the business, you get to decide to be a student as well, and lifelong student. And constantly look for ways that you can improve the level of value service that you provide to your clients.

The next thing I would say is don’t get too attached to whatever firm that may be on your business card because firms change. I remember being at Ameriprise when we got the directive from above is like, “Everybody that’s below this production level, you got 90 days to either get them above they’re gone.” And I lost what I felt were good people. I was like, “Oh, this person just had a string of bad circumstances, but I still think they can be a valuable advisor and a person in the advisor community, but sorry because you missed it by a dollar, I gotta let you go.”

So I would encourage you, if you’re going to go with one of the big box firms or something that, to just know that it that may not be where you are 20 years from now. But make sure that you’re creating value in the relationship that you have with your clients. Because that’s one thing that these firms have all learned over the years is that they don’t own the clients. They don’t. The clients have a relationship with the advisor. And a lot of firms sometimes try to use some very sticky financial products to keep people around. And I know it because I saw a lot of it myself. But to this day, I’m included. My life insurance policies are still at RiverSource Insurance with Ameriprise because it cost me too much money to undo it. And I’m not the same health or age that it was when I first signed up for them. But I still have clients that also still have those insurance policies. And they’ll say to me, “Shouldn’t we move this somewhere else? You don’t work there anymore?” I’m like, “No, it’s a great product. It’s serving its purpose. It’s fine right where it is. I can still help you manage the product itself, I don’t care whose name is on it. I care about the value that is providing for you in your life.”

So just understand that you get to make those relationships with those individuals. And if you decide you want to go off on your own one day and start your own firm or go to another firm or partner with somebody else and what have you. If you’ve built those solid relationships with those clients, they’ll go with you. They will go with you.

And the final thing in that same space is after spending so many years in corporate and now being RIA, give me all the headaches that are RIA every day of the week. I get calls all the time. “We’ll buy your practice, we’ll do this.” But “No, no, no, no, no, no.” Yeah, I’ll sell my practice when I’m ready to not do this anymore at all. And even then I’m hoping that it’s one of my children that are the buyers.

But I think there is something to be said for the individuals that are willing to go out there and try to create the practice the way they want to do it. As long as you’re doing it in a compliant manner and you’re taking care of people and creating value in people’s lives, I say go for it.

So if you want to be in this business, I think you get to entertain the idea of what if you built it yourself? Or what if you went to a company that promoted you building yourself versus just being behind some big box label?

Michael: So, as we wrap up, this is a podcast about success. And one of the themes is just, even the word success means different things to different people, sometimes even changes for us as we go through the stages of our life. And so, as someone who’s building the successful business and growing the team, growing clients, and adding a client a week on an ongoing basis right now, it’s an incredible growth rate. I’m just wondering, how do you define success for yourself at this point?

Yohance: I define success today by measuring the problems I’m solving and the value I’m creating in other people’s lives. I measure success by the phone call that I got from a client and in April of last year. He left an urgent message. “I need you to call me. It’s urgent. We got to talk.” And he’s one of my first clients. He’s that podiatrist. So he was my second doctor-client ever. So he’s been with me for 18 years now. So when he says it’s urgent, this might be pretty important.

Michael: Yeah, take that call. Yeah.

Yohance: And I call him back. And he’s like, “Hey, I just looked at my 401(k). And I know you told me not to worry about it. And I’m not worried about it. I’m down 30%. But I’m not worried. I’m not retiring.” I’m like, “Please, sir, get to the point. What’s the concern?” He said, “I haven’t looked at my 529 statement. And you know that my son starts college in the fall. He got accepted. And college is going to cost us like $20 grand a year. What are we going to do if I had lost 20% or 30% in 529? And I just laughed. I was like, “Are you serious? Really?” He was like, “Yeah.” He was like, “Why are you not worried?” “You already have a plan? How are we going to make the money back?” I was like, “You didn’t lose any money.” He’s like, “What do you mean?” I was like, “It’s an age-based portfolio. He’s 17 years old. It’s 20% equities, 80% in bonds.” He’s like, “How much am I down?” I was like, “Let me look.” It’s like, “You’re down 4%.” “That’s it?” He’s like, “How did you know?” I was like, “I didn’t. I didn’t know that COVID was going to happen tomorrow because it was in the fall. What I did know is that the closer you get to the goal, the less risky we have to be with the money. So I set it up in a way that we wouldn’t have to worry about it.”

He’s like, “You mean to tell me 18 years ago, you’ve set it up this way?” “Yes.” He was like, “That’s incredible.” And that was the end of the conversation. We started talking about something else. But that, for me, was a winning moment. I was so excited.

And that is how I measure success. I measure success when a client calls me and says, “We closed on our house. Thank you. I didn’t think this was possible three years ago. And I’m glad I waited until now. Can you imagine if I’d tried to do this three years ago, when I first met you, and you were like, ‘Uh, maybe you should have a cash reserve first before you go and sign on the dotted line? The bank will give you the money all day. They don’t care. FHA is backing that loan, they couldn’t care less. But are you ready for that? And from what I can see, you probably aren’t.’” So I measure success by the amount of people that are saying, “Thank you, because of the information you provided, or the action you helped me take, helped me to create more generational wealth for my family, or helped me be able to provide this opportunity for my family.”

Or, for instance, the client that called me and said, “My wife just had an aneurysm at work. She’s in the hospital. They say she’s going to be okay. But are we going to be okay, financially?” And I’m like, “It’s not going to be easy. But if you’re asking about financially,” I was like, “Yeah, she’s got disability insurance, she’ll be fine.” “Does it cover aneurisms?” I’m like, “If she can’t work it’s covered.” And she’s back at work now. But she’s only working part-time. And then the question was, “Oh, my gosh, but she’s not totally disabled and her disability from work is going to cut her off because she’s coming back to work.” It was like, “Don’t worry, we put partial disability on this policy.” “How did you know?” “I didn’t. I just know that most disabilities are partial. They just are. Very few people are totally disabled. Most of them are partial, or they start partial and then turn into something. I know a part of this because my mother was partially and then fully disabled.” So I’d lived it.

So I measure success by the amount of times that clients are able to say, “Thank you. You helped show me how to do something differently.” And I don’t measure success by the client says, “Oh, we made a bunch of money on ABC stocks.” “No, we didn’t. It went up. We had nothing to do with that.”

But when you say, “Hey, you had me sell that stock that I had that went up a whole lot. And now I have the cash to do something more reasonable with it instead of speculating on what the next hot stock is going to be.” That’s how I measure it. So it’s the value that’s being created in others’ lives, the financial problems that we’re able to solve in others’ lives. And that’s what gets me up in the morning.

Michael: I love it. I love it. Thank you, Yohance, so much for joining us on the Financial Advisor Success podcast.

Yohance: Thank you. And thank you to all the listeners for allowing me the space for me to share the story. And this is the first time publicly, I’ve really told the story about how I left Ameriprise. So that was a little much for me, but thank you for asking it and just letting me answer. But it felt good to get it off my chest.

Michael: Absolutely. Unfortunately, it’s part of the challenging journeys, right? We’ve all got these setbacks. Almost no one really gets the straight-line path to growth.

Yohance: Absolutely not. Absolutely not. I like that. That’s that meme or whatever that goes around that shows what people think the line to success is just a straight line up and what it really is, it’s this squiggly line that’s all over the place that you can’t really follow. Yeah, I’ve been on that squiggly line until now. Still on it. It’s still squiggly.

Michael: Well, thank you so much for joining us.

Yohance: Thank you, Michael.