#FA Success Ep 239: Creating Advisor Value By Helping Clients With Complexity Regardless Of Assets, With Ryan Frailich

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, Ryan Frailich, to the “Financial Advisor Success” podcast.

Ryan: Thank you so much, I am excited and humbled to be here.

Michael: I really appreciate you joining us for the podcast. You had done an article, actually, for “Nerd’s Eye View,” for the blog last year talking about your advisory model that got a lot of interest, a lot of good discussion going that our industry, I think, just historically has spent so much time kind of built and revolving around insurance and investments seems like these days, particularly investments as the AUM model just gets increasingly popular. And there is this sort of other side of the world, not only…we have the asset side of the balance sheet, we have the debt side of the balance sheet, we have baby boomers who are increasingly focused on the assets because they’ve accumulated their dollars for retirement. And you’ve got a generation of folks in their 20s, 30s, and 40s, who are really still focused on the debt side because student loan debt is absolutely enormous.

I think a lot of people don’t realize that total student loan debt in the country is double all credit card debt in the aggregate and student loan debt is mostly people in their 20s and 30s and their 40s and credit cards is everybody across the age spectrum. It’s like twice the debt, half the people, so really magnified. And you have built this business model, this advisory firm around what does it look like when we’re working with clients whose primary issue, in essence, is not asset management, it’s debt management, it’s dealing with big student loans.

I think for so many advisors is just like there’s two types of people, clients who have a lot of money and complex needs and people who don’t have a significant portfolio and therefore, don’t have a lot of complexity in their lives. And I feel like you sort of live the epitome of, yeah, try talking to an early 30s, just like someone in their early 30s who’s getting their career going and trying to make good money, starting a family, buying a house, having kids, five or six-figure student loan debt and everything else that’s coming at them and you could ask them about their financial lives and I’m betting the one thing they’re not going to say is that “it’s simple”.

Ryan: Yeah, complexity without high assets is a thing that many people are facing and I think we all too often equate the two as like, “Well, if you have a lot to manage, your financial life is complex.” And sometimes getting yourself to a place where you will someday have a lot to manage is actually the more complex point in the journey.

Michael: Yeah, yeah, I think it’s a good way to frame it. And yes, there are…well, even just to make the point, our industry sort of has this assumption that if you have a lot to manage, your life must be complex. And I do think there is some validity to that, if only because if that totally wasn’t valued…if that totally wasn’t valid, frankly, the AUM model would blow up. If they really didn’t find greater value with their greater net worth and complexity, they wouldn’t pay the fee. People are not idiots. At some point, if that many people are doing it, assets are at least a decent enough proxy for complexity that the model hasn’t broken, and in fact, it’s doing quite well and growing a lot and a lot of people are going there. But we have, I think, taken it very much to the probably problematic extreme as I think your advisory firm demonstrates, which is this presumption that if people don’t have a pile of assets, their lives must not be financially complex and couldn’t possibly need financial advice for which they would pay, which just doesn’t actually hold in reality.

Ryan: Yeah, not at all. I mean, I think there’s certainly a correlation there with increasing assets, there can be increasing complexity. But there’s also kind of what you described there is typical of a lot of my client households, which is they’re managing so many different things and they have a major change every three or four months. I’m thinking of a couple right now that I’ve been working with for…I mean, I guess it’s close to three years now. But in that three years, they’ve literally both changed jobs, one was self-employed for a while, they’ve had a kid, they’ve bought a car, they’ve paid off their student loan debt, they’ve bought a house, they’re renovating that house, and baby number two is now on the way, and they got married at the beginning of all that sequence there. That is in less than 36 months.

And so, every single one of those things I mentioned comes with changes to their financial life, “What’s coming in and what’s going out and what our obligations and how do we want to do this as a couple now and how is that different than how we did it when we were living together but not married? How does it change when we introduce kids to the picture?” How does it change in that couple’s case now that their student loans are gone? And so, there’s so many moving pieces to people when they’re in that stretch of life, and also frankly, it’s where I am in my life. I’m 35 and we have a four-year-old and a one-year-old. And so, I’ve been personally going through a lot of those same transitions over the same period of time, and so I think that it’s helpful in terms of empathy for me to be able to look at clients and say like, “I get it, no, really and truly, I get it, I am right there with you in so many ways.”

And I think that helps people who maybe haven’t been heard when they’ve reached out to advisors at points in the past. I definitely have a lot of people who will share a story of, “My dad’s guy at Wells Fargo will talk to me now and again about my RIA, but what I really want to talk about is X and we’ve never had that conversation,” right? They’re sort of riding the coattails of an advisor who works with someone else in their family who has a portfolio to manage but because that advisor does something different and has a different business model and a different subject matter expertise for different types of clients, they might share the same title, financial planner, but they’re no more similar than a cardiologist and a pediatrician.

Yes, they’re both doctors but what their knowledge and expertise is and what my knowledge and expertise is has not that much overlap when you really get down to it. We both know a lot about money compared to a random person on the street, but I don’t think I should be in charge of maybe what their client matters…what their expertise is for their clients and they probably shouldn’t be advising on some of the issues that my clients are facing. And I think we would all do a better job of just acknowledging who do we serve and what types of clients do we serve that we can really do a good job with, because just because you have the title “Financial Planner,” it doesn’t necessarily mean you’re going to be great at advising young couples with student loan debt.

Michael: Well, I love even how you frame it of like there can be as much difference between two financial advisors as there is between a cardiologist and a pediatrician. And I think, frankly, part of the challenge we create for ourselves is…doctors figured that out a long time ago, that’s why they don’t just all call themselves doctors, they have labels like cardiologist and pediatrician. And we still call everyone a financial advisor across the spectrum, and I think perhaps even amplify that problem on to ourselves where even consumers can’t tell us apart and figure out which is which and what’s what and who’s who and who focus is where because we have no labels. We’re not sorting ourselves, so they can’t sort through us either, and I think just amplifies kind of the matching challenge of consumers looking for advice and often just struggle to find an advisor who will give them advice on the thing that they’re looking for advice on.

Ryan: Definitely. And I think, I just chose two random specialties that popped into my mind, but I think it’s quick for people to say like, “Well, obviously, you don’t want the pediatrician doing heart surgery.” But I also think it’s obvious that I don’t want the cardiologist working with my four-year-old, right, and figuring out what’s going on with them. Because there’s an area…there’s not just the hard skills of what it takes to be a pediatrician medically with a child, but also the soft skills of working with a child are different than performing heart surgery. I know nothing about cardiology, so I should probably stop this analogy. But they’re vastly different skill sets and it’s not necessarily just like one could do both jobs and the other one couldn’t do the other one’s job.

There’s something in both, and I think I have been surprised at the number of clients that I have come to me who say, “I’ve tried working with an advisor my family works with and it doesn’t work.” And that’s been to my advantage, so for my business, that has been a benefit, but I also think it’s something I would hope that advisors grow increasingly aware of that if you are not set up to deal with the financial challenges that young people face today, then it’s okay, just be willing and able to outsource that or train someone on your team who can become the person who can do those things. Because I know I’m not the only one who hears that, I’ve talked to plenty of other advisors who serve clients similar to me who say, “Yeah, that happens all the time, that someone comes to me because they could not work with…the person that their family works with actually isn’t able to help them or isn’t interested in helping them.” That’s a pretty common story.

The Types Of Clients Ryan Serves And What He Does For Them [11:03]

Michael: So, then help us understand what is your advisory firm? What do you do and who you do it for? We’ve talked about how there’s serving clients different than traditionally AUM clients with models that are different than traditional AUM. So, paint the picture for us of just your advisory firm, what do you do? And who do you serve?

Ryan: Yep. So, my firm is Deliberate Finances, and I’m a solo RIA, based here in New Orleans. And I work currently with 48 clients, both single and couples, and I work primarily with people in their 20s, 30s, and 40s, but 90% of my clients are under age 50. And I help them a lot with everything that you just mentioned, right? So, everything that has a dollar sign on it, it’s something we can talk about, so you’re managing all those complex transitions of being a young person. I’d say a typical client household might be a couple in their late 30s with two or three kids, they’re managing student loan debt, they’re buying a house, they’re seeing a rise in income.

I particularly work with a lot of people who maybe didn’t enter their field because of its being lucrative and have ended up making a lot more money than maybe their younger self may have thought of. So, thinking of people who may be started off as a teacher, and I work with a lot of people who used to be teachers and some who are currently teachers, who then became a principal and is now a CEO of a nonprofit, right? And so, they’ve seen this huge upwards rise in their income and complexity but they didn’t set out on a path to make the $200,000 a year salary that they’re now making, it sort of happened a little bit more organically without them making a decision in their early 20s of like, “What’s a lucrative path so that by the time I’m 40, I’m making a top 5% national income?”

Michael: Well, and I know particularly just when you work with clients who have spent their early careers in much more limited income situations, particularly if they went into professions where they knew there wasn’t necessarily a really high-income upside, there’s actually a lot of struggle and discomfort and uncertainty that comes when they start hitting the, “I never thought there would be this much money moving around my household and I don’t know what to do, I recognize this is a lot of money, I really don’t want to screw this up, and I’m really not sure what to do here.” Like, “There’s a lot of money, help me, what do I do?”

Ryan: Yeah, I’ve had people reach out and a beginning of a client relationship be that they just got a raise of say, I don’t know, $40,000 and that’s more than their annual income was seven or eight years ago and they’re just going like, “I don’t know how to begin to manage this.” And I work…as you alluded to earlier, I work on a monthly retainer basis or a subscription fee basis, sort of the XYPN model for those who aren’t familiar with it. I have subscription fees that are across a range based sort of on income and net worth and complexity. So, those who have higher income and net worth and some more complexity in their life pay a higher fee, it might be $4,000 to $6,000 a year, and then there are also folks…my minimum fee at this point is $1,800 a year, so it might be more simple circumstances, more limited income or net worth, and so they’re paying a lower fee.

And so, it’s just done on a monthly basis. And then I will help certainly with investment, that is certainly a part of this puzzle, but I don’t charge on assets under management just because, A, for a lot of people, they haven’t built up a large asset under management so it wouldn’t be a profitable model. But also, I was really just, when I started the firm, wanting to try to set up in a way that was as free of conflicts as possible. I don’t think there’s a perfectly conflict-free way to do it, but I wanted to be set up in a way where if it makes more sense to keep it in your 401k, then you keep it in your 401k. If it makes more sense to maybe move an IRA into a 401k to open up a backdoor Roth opportunity, I can give that advice without it impacting my bottom line because I’m not tied to the assets that I might help manage.

How Ryan Sets His Fees [14:50]

Michael: So, help me understand a little bit more about just how fees get set. So, I heard it $1,800 a year I think at the lower end, which is essentially $150 a month, several hundred dollars a month at the higher end. So, just how do you actually figure out who’s paying for what, where they end out on this range of monthly fees?

Ryan: Sure. Yeah, so this has been an evolution. I will say my firm technically was, I think, approved in December of 2016, and I first had a client in January of 2017 and at that point, the highest end of my fee structure was $1,800 a year, $150 a month. And I can distinctly remember the first time I got an email back from someone saying, “Yes, we’re on board for that service,” and I ran out of my then home office and elated to my wife saying like, “Oh, my gosh, someone is about to pay me $150 a month to give them financial advice.” And fast forward, here we are four years later, and that is the bottom end of my fee spectrum, up through about $6,000 is about the cap, or the highest I’ll go is $6,000 just because I do think there is a certain point where there is not necessarily a need to continue going higher. If there’s a client that I frankly think necessitates a fee higher than that, I will refer them out just because they probably have enough stuff that’s different going on than most of the rest of who I work with that it’s probably not the right client for me anyway if they necessitate a fee beyond $6,000 a year.

Michael: Meaning at that point, they’re going to have a level of complexity that is too much focused on one client, even if it’s a good fee, this isn’t going to be cost-effective to serve because they’re going to need too many different things than everyone else.

Ryan: Yeah, and I think in particular, and I think it’s important to say this early on, I’m a solo firm and I intend to stay that way, so I am not intending to add advisors or employees. Anything could change, but right now, I really plan to keep a small firm, I don’t have staff, I may, at some point, add a virtual assistant for a few hours a week, but I don’t feel…for me, I’m not building a firm that’s going to be a large firm. And so, having one client that has a totally other set of needs and has a completely different financial life and a set of expertise that’s necessary when you’re building a really small firm just doesn’t really make sense to me. So, it’s not always come easy and certainly, it’s easier now when I have a base of clients than it was three years ago to say, “You know what, you seem like a great person for X other advisor to work with because I know that they, A, can serve you really well and, B, you may be a big fee for me but if you’re taking 30% of my working hours because I’m having to build entirely new systems and structures and workflows and add technology that I don’t currently use, then it wasn’t worth it.”

Michael: It’s a good powerful point that if you’re building a solo practice that you consciously intend to keep as a solo practice, you are only ever going to have so many clients, the number is limited because the time and hours are limited. And so, exactly how many are you going to let onto the bus, as it were, before the bus runs out a room really, really, really matters, and not just who is nice to serve and pays you a good fee but who can you serve efficiently because their needs are similar to your other clients, which means your expertise is more repeatable in what you do with them. That stuff suddenly really starts to matter in not overburdening your capacity.

Ryan: Yeah. And while I haven’t fully gone into a really specific niche as some advisors have, I know there’s someone who only works with Chick-fil-A franchise owners and some other really specific things out there. I generally am working with W-2 professional professionals, for the most part, who earn what I would call a really good but not necessarily overwhelmingly great income. I guess a better way to say this is I work with a lot of people who earn between the 70th of the 90th percentile of income in America, but I’m not working with a ton of people who make $700,000, $800,000, $900,000 a year. Most of my clients, I would say, fall between $150,000 and $300,000 a year of total household income with a few higher than that and a few lower than that. And so, that does narrow the scope of planning issues that you’re working on, right? Because just the way taxes work, there’s rules that I don’t need to worry about because I don’t have clients that it pertains to them. Yeah, so that’s the business, it’s me and my dog Dodger sitting over here on the couch and my currently 48 clients, and to your point, I think 60 is probably the number that I’d ever top out at.

Michael: I was just going to say, “Where do you top out?” It tops out around 60 for you?

Ryan: I think 60. For me, flexibility and time is really, really important. I have done the thing where I work 50-60 hour work weeks, I spent a lot of my 20s doing that, and I don’t intend to return to it. And so, I will be very, very cautious in growing the firm beyond the point that I feel like I can manage it in not just 40 hours a week, but 40 hours a week at some points of the year and a lot less than 40 hours a week for big chunks of the year. We’re recording this a few weeks after you actually emailed me about an invitation to do this because I spent three weeks offline with my family in the national parks recently and that’s something I want to make sure we can do every year. And I think I just want to be really cognizant that if I’m going to stay solo, that I probably have a lower overall cap of clients that I can work with while also preserving the flexibility. I could certainly serve 100 clients if I was willing to be at my desk 50 hours a week 50 weeks a year, but I’m not willing to do that.

Michael: And so, within just this $150 to $500 a month range, how do you set people within that range? What’s a $150 a month client versus a $300 a month client versus a $500 a month client? Is that just your subjective evaluation of what it’s going to take to serve them based on an introductory meeting, or is that a formula thing or service tiers complexity thing? Just how do you actually set people within the range?

Ryan: So, I start with the income net worth calculation that I think a lot of people will use, 1% of income, 0.5% of net worth sort of rough guideline, and I will then adjust from there based on maybe more subjective measures that some might say ‘for complexity’. So, at the lower end of that fee spectrum might be a two-teacher household with a combined household income of $115,000, $120,000 a year where all their benefits are coming from the same place, they don’t have a lot of other accounts, it’s relatively straightforward. Whereas on the high end of the fee spectrum, it might be folks who make $400,000 or $500,000 a year and have $1 million of net worth and have multiple workplace accounts and a pension and a 457 and a taxable account, and they maybe are looking at rental properties as well, so there’s just significantly more things to advise on. And net worth isn’t a perfect proxy, right? And you’ve touched on that I work with a lot of people with student loans…

Michael: Right, net worth is negative.

Ryan: And there’s a lot of complexity. Right, exactly. I have a dozen or so clients with negative net worth, and that’s complicated too because is it…if you’re on track for forgiveness, right? I have a bunch of people who are working to achieve public service loan forgiveness, so those are loans that the number on the screen that it says they owe will never actually be repaid, so it’s not really a great proxy for net worth but they might have a negative $275,000 net worth according to what a balance sheet would say. So, that’s maybe not a perfect proxy for complexity.

Michael: But I was going to say, how does that work in practice then? Are you saying to prospects like, “Look, our baseline fee is 1% of your income plus, 0.5% of your net worth, but then we’re going to make some adjustments from there,” and then you just start adding more complexity or back out the student loan?

Ryan: Yeah, exactly. And I tell people really upfront the way the fee is set…as we go through the prospect call, I will say at the end of the call, “Based on this conversation and the information you shared in the survey ahead of our call, your fee would be this,” I put that number directly in the email that I send to them, it’s very much told to them and then they have an opportunity to ask me questions if they have any questions. It’s in their email, so they have it written so it’s not just like, “Did I remember what he said right?” And that’s also on the agreement when they signed it and they set up in AdvicePay, they set up the recurring payment with it. So, it’s all pretty transparent and really easy for them to know exactly what it is.

And then because I don’t have something that’s really rigid on formula, anytime I’m going to raise a fee, it requires me to have a conversation with the client and say like, “The fee was X, it is now going to be Y as of this date for these reasons,” maybe it’s significantly more complexity than there used to be, rising net worth that’s adding to that complexity, or maybe someone changed jobs and suddenly now they have stock options and a lot more income and it’s like there’s just more planning going on than there was before. But again, anytime that I’ve had that conversation, it’s me having a conversation with my client and them either agreeing or not agreeing to that fee, right? So, it’s not something that necessarily happens totally organically, there isn’t a natural rise in the fee in the way that there might be for AUM.

Michael: Well, I was going to ask, do you systematically recalculate the fee every year or every several years? “So, this is like 1% of income plus 0.5% of net worth adjusted for Complexity A,” like an annual process, or…yeah, how does it change up with time?

Ryan: Yeah, I do a net worth update every January with clients, so I try to do meeting surges roughly January, May, and September. My first meeting surge was January of 2020, so needless to say, the rest of that year didn’t go perfectly smoothly as the Excel spreadsheet that I had drawn up and look so pretty would have held. But any fee raises that I do, I typically try to do in January because we’re already updating the net worth statement at that point anyways and I’m meeting with all my clients. And I certainly wouldn’t do it any more than once a year at the most and for a lot of clients, it’s more like every other year that I will revise the fee.

I certainly think there’s probably some people paying less than what my formula would…no, I should revise that statement. There are people paying less than what my formula would state that they should and that might just be a function of they’ve been around for a while and they’re really great clients and they’re really appreciative and we’ve done a lot of the major planning, and at this point, it feels like a fair fee relative to the time involved with what I’m doing with them and the impact that I’m having. It’s a blessing and a curse being able to…my state that I live in said complexity fees are acceptable, which is wonderful and also does mean there’s a little bit of messiness, which I acknowledge.

Michael: And for you in practice, there’s a bit of subjectivity to the fee that just part of the deal, which in practice happens for almost anyone that’s setting fees on their own and not just using a formulaic thing like assets under management calculation. So, that’s just a reality for you and you set your fees accordingly and if the clients really got a problem with it, then they’ll speak up or not hire you.

Ryan: Then they’ll speak up. Yeah, exactly. And I think there’s no perfect fee model, right? I think I’ve chased this a million ways, I’ve talked to so many people about it, everyone has some things they don’t quite like about their fee structure that doesn’t work for a specific type of client or it doesn’t quite allow them to do exactly what they want to do. And I think just getting comfortable with the fact that it’s going to be imperfect for a few people here and there and that’s just what it is, that’s okay. So, for me, for example, because I don’t charge on assets, if someone were to come to me and say like, “I really don’t make any money but I have a lot of assets, can we work together?” Probably not. I guess if you wanted to make a draw out of a taxable account to pay my fee on a regular basis, sure, but that’s not a type of client that really makes sense for me to work with because I’m charging out of cash flow. And so, there’s probably someone whose model makes more sense for that sort of a client but I think we all probably have some gaps and that’s okay.

What Ryan Does For His Clients [28:00]

Michael: And talk to us about what you do for $150 to $500 a month of ongoing fees, what’s the offering for earning this kind of dollars on an ongoing basis from clients that don’t necessarily have significant portfolios or even any portfolio as we’ve noted?

Ryan: Yeah. And I’ll say there’s a range in the portfolios, right? I have clients that have $1 million-plus dollars of invested assets and I have clients that have $0 of invested assets, so there is quite a range. So, I start with a three, sometimes four-meeting process. So, we do the prospect call, I send them a follow-up email that has what we talked about, a summary of what we talked about, the proposed fee that I mentioned, my client engagement standards. It says really explicitly in that email like, “I’m building a small firm, it’s me, if you’re comfortable working with a solo firm, I plan to work with 50 to 60 total households, I’d love to work with you.” And if they say yes, then we…

Michael: Wait, I got a whole bunch of questions right there. So, one, explain what client engagement standards are?

Ryan: I stole this, I believe, from Carolyn McClanahan, I want to say. I found them…they were on the internet and I was like, “That is great.” So, I think, like a lot of people as they start a firm, signed up some people that maybe I shouldn’t have in hindsight because, A, “Hey, you’re here and you want to get financial planning, so I’m going to give you financial planning even if I haven’t really figured out if you’re a good fit, if I want to work with you,” those sorts of things, and I just realized there were some mismatches of what people’s expectations of what I would do for them and vice versa. And so, it really just is a document that says like, “This is what you can expect of me, this is what I expect of you.” So, some of the things that are on there are like, “I believe in diversification and not chasing the next hot stock, if you’re going to be regularly asking me for what should we do based on X event, “What should we do with my portfolio based on X event that happened today?” I’m probably not the right advisor for you.”

Michael: So, just like, “We’re just going to set some expectations up front of like, “Here’s how it works if you’re going to work with us and if you don’t believe in these things, it’s totally cool, but we’re probably not going to be a good fit to work together.”

Ryan: Yep, exactly, exactly. It says on there, “I’m willing to participate in the financial planning process on an ongoing and continuing basis, and I understand that each part of the process is dependent and requires information or participation from me.” I just want people to know they’re hiring me to help them with their finances, but I will almost always need to work through them to get anything done for the most part. I mean, occasionally, yes, I can do some things without them but at the end of the day, you have to put in that insurance application, I cannot sign it for you, or if I’m waiting on a 401k account statement, whatever it is. I want people to know that, that it’s not like, “Hey, I hired a financial planner and now my problems are solved.”

And most people don’t think that but occasionally, you find someone that does, so I think just being really upfront and honest. So, I include those engagement standards in the prospect kind of follow-up email. I also include them as part of the agreement signing, so they see them both before they agree to become a client and then they see them while signing up to become a client. And then I bring it up in the first meeting and I just say, “Do you have any more questions about the client engagement standards? Is there anything on there you want to know more information about?” People get an opportunity to ask and I’ve found that since implementing that, I have a much better client fit, I think it’s sort of…go ahead.

Michael: It’s striking just hearing you describe it because this isn’t just like, “Here’s the philosophy of our firm, we believe in more passive investments and we’re not going to day trade you,” or things to that effect, but that some of this is pretty direct to the clients, the client is saying, “I will commit to engage in the planning process and respond to your financial planning requests.” This isn’t just the expectations of the firm, this is literally like, “Here’s what you have to do and live up to if you want to get to be a client here.”

And then I was struck as well, you said you lay out pretty clearly upfront like, “And I just want you to know that this is a solo firm, it’s just me, it’s only intended to be me, I’m only going to have 50 or 60 clients.” I know a lot of advisors that I think get anxious and nervous in talking about not having a bench and all these other people, they are concerned that clients might not be happy if it’s just them, so I’m struck that you are happy and willing and interested to put that right out there up front. So, I guess I’m just wondering does that make you worried and where did that come from to do that?

How Ryan Communicates His Commitment To Remaining A Solo Advisor With His Clients [30:20]

Ryan: That’s a great question. I definitely didn’t say that the first year I was in business. I definitely built a website that had a lot of “we” language, despite the fact that it was just me. And I think with increasing confidence over time, I realized the more transparent I can be with who I am, what I believe in, who I serve, what I’m planning to build for my life and my family’s life and what our goals are, and how this is a part of my life, but it’s going to fit in around the other things, right? Like I said, I have two young kids and my wife also works. And so, I am very upfront with people that I’m the person who takes the phone call when daycare calls and said, “Your kid is sick, they need to get picked up.” That’s me. And I just tell people that and I want them to know because I…and again, this is all lessons learned from a time where it didn’t work.

There was a point during COVID where I had my very young daughter at the time on a call because I was having a call with one client and my wife was teaching high schoolers and had 27 16-year-olds on call. If one of us has to have the child, it should be me. And the client was really upset by it and that person is no longer a client because I followed up with an email and I was like, “This is my life and if that’s going to bother you, I’m happy to find you another advisor, but I am not going to build a business that pushes out the other pieces of my life.” And so, I’ve just realized the more upfront I can be with people of saying like, “It’s a small firm, it’s going to be really personal, you’re not going to get handed on to a junior advisor two years from now.”

And for some people, you’re right, it’s not appealing to them and they want to go to a place where they know there’s like a larger infrastructure in place. There are other people that it’s extremely appealing to them because they’re intimidated by the industry, they don’t want a big fancy firm name, they don’t want to feel like they are a customer. They want to feel like they have a relationship with another human being very directly and they find it very appealing. So, yeah, it definitely probably does screen out some people and I’m sure that it has led to some people that I’ve had prospect call with deciding to work with someone else. But I also feel like the people that do say yes are then never surprised that, yep, it really is me and I really do have my dog in my office most days and I really don’t ever wear a suit and tie, never, never, never, because I’ve kind of set that whole expectation from the beginning of who I am and what I’m building, especially because I don’t need to have hundreds of clients, right? The model I’m trying to build, I can be very successful with a much…with a relatively small number of clients. And so, if I can do that, I should be selective about it to make sure that they get the best person for them and that I’m really happy when I looked on my client roster with everyone that’s on it.

What Ryan’s Client Onboarding And Planning Processes Looks Like [32:40]

Michael: So, first, you have the prospect call and kind of the follow-up email we talked about, “Here’s what we talked about, client engagement standards, the fee we discussed, let’s be clear, I’m a solo, make sure you’re okay with that.” So then what comes next in the process for you?

Ryan: Yep. So, if they say yes, we then go into the financial planning process, I think my process is probably not totally dissimilar to a lot of folks. The first meeting…the first usually four meetings upfront, the first meeting will be a lot of discovery in the first call. I would say I am not a registered life planner, I would like to sharpen my skills in that area and get better in that area, but I do ask a lot of kind of big picture questions about what do you never regret spending money on and what sacrifices are you willing to make and what sacrifices aren’t you willing to make. I do have a sort of a modified version of the Kinder exercises that I send ahead of time to kind of get them thinking about what their goals are, so we spend about an hour just really doing big picture discovery stuff.

And then we spend about a half-hour, it’s a very…it’s two very different meetings. In one, it’s like an hour of not talking about logistics at all and just really big picture and what’s important to you and how is money in a relationship and why are you here, and then we spend the last half hour like, “All right, this is how we work together, this is how RightCapital works, this is where to put the documents that you’re about to get from me, this is how to link your accounts, let’s schedule our next couple of meetings,” all those sort of logistical things happen then too. And then Meeting 2 is typically a cash flow meeting, so we make sure that we have a cash flow plan set up, making sure that it’s really clear like what is the total household have coming in, what is fixed that’s going out every month that kind of stays the same, your mortgage, all those other things that stay the same every month.

What are the savings buckets that you’re putting money into and then, how much is left over at the end. So, once we’ve accounted for your fixed expenses and saving for all those things that you just told me are important to you, how much is leftover and we figure out if that’s a reasonable amount to live on for all the other groceries and entertainment and those sorts of things, or if it’s not, and then how to adjust the plan from there. The third meeting typically would then be about investments, so figuring out, “Okay, what do you have going on?” I do a lot of investor education. I have a lot of people who will literally ask question like, “Do I have a good 401k?” And peel back the layers of that like, “What does it mean to say, “Do I have a good 401k?”

But there are a lot of really smart, really talented people who don’t know anything when it comes to stocks, bonds, funds, the difference between large-cap, mid-cap, small-cap. And then there’s also people who know just enough to be dangerous, right? And people have heard like, “I’ve heard I should index,” and then you see that their taxable account that they plan to use six years from now is all in an S&P 500 index fund and I guess there’s worse things you could do but also, you’re 100% in U.S. stocks for the money you need six years from now, that’s probably not what I’d recommend. And so, we go over their investments and give a high level of like what do you have going on, how does that align to the tenets that I just laid out and what are the changes that I’m suggesting you make.

And then the fourth meeting is sort of anything else that’s left in the plan that we haven’t talked about, so it tends to be insurance estate plans. I have a lot of people that come to me and don’t yet have life insurance in place or estate plans in place, that’s often a part of the planning that we’re doing. So, it’s sort of what are all the other things that we haven’t yet talked about so we’ll talk through them, but also then come up with like, “Okay, we’ve talked about a lot of different things, what are the actual action steps from here? So, we’ve just spent a lot of time together over these four meetings, what’s the priority in the next three months?” And then we kind of get our four or five or six action steps and try to focus on those things first before going into a planning process where I meet with people about three times a year to stay up to date and stay on top of what they have going on.

But I also tell people, “The three times a year is for me to make sure I’m checking in with you three times a year and a structure that works for me, but if you have things that come up in your life between those meetings, you are welcome and encouraged to call or email or schedule a meeting because things aren’t going to happen on my meeting schedule, they’re going to happen on your life schedule.” So, after the initial meetings, we go to three a year and I would say, a lot of clients end up being four a year, like the three scheduled and then one for something else, we end up on the phone and as well as emails and texts in between.

Michael: And for this planning process, as you’re going through it, are you using planning software? Are you building things in Word documents? Is this just heavily communication education but not necessarily a big old written plan? Just what is planning look like for you?

Ryan: Like many things, it has gone through a lot of iterations in these last four and a half years. So, I use RightCapital and I use RightCapital as the hub of the work that I do with people because I think it has enough things in one place that are helpful, right? It’s got a task manager so you can list out all the client’s tasks and all the tasks that I’m going to do for them and you can aggregate net worth, and there’s an okay budget tool in there, it’s good for doing a retirement projection at a very high level. I do a very, very high-level Monte Carlo analysis to people. Obviously, with some folks, I don’t even do that because they haven’t started saving yet with others. I put a big old asterisk and say like, “You’re 32, we don’t need to get into the weeds of a Monte Carlo, let me just give you a you’re doing great, you’re doing okay, or you have major changes you need to make, that’s really all you need to know at this point.”

Michael: Right, because at the end of the day, when you’re 30, the range of outcomes is so far, at some point, “You’re currently saving $600 a month, on your current trajectory, according to Monte Carlo analysis, you will have somewhere between $200,000 and $8.2 million.”

Ryan: Exactly, exactly, it’s not that useful of an exercise. I think it’s helpful to show literally just those three things I mentioned, like you’re doing great, you’re doing okay but probably need to make some changes to have more certainty, or you’re really off track, but really don’t spend hardly any time there at all. And then I also supplement that with other things, so as we mentioned, like student loans, I do not believe that RightCapital’s student loan tool is sufficient for student loan planning, I use LoanBuddy for that and I also use Excel, sort of depends on the case, I use some Excel and some LoanBuddy.

Michael: What’s LoanBuddy, just for advisors who aren’t familiar?

Ryan: So, LoanBuddy is a student loan planning software, it’s student loan planning specific, it’s not tied to other pieces of the financial plan but it’s pretty robust, I would say I think LoanBuddy does the best job of the available tools at student loan planning. I still don’t think it does everything I would hope a student loan planning tool would do. So, it is probably the best out there, in my opinion, and please, if someone knows of something that’s really excellent for student loan planning, I’m always all ears to that. But I do think there are still…you want to do some checking of some of the stuff that comes out and there’s some scenarios where there’s going to be big changes in someone’s life that it doesn’t necessarily do that well, but it lets you upload someone’s student loan data and run different scenarios based on forgiveness programs or different income-driven plans that they may have available to them. So, that does not happen in RightCapital.

How Ryan Helps His Clients With Student Loan Planning [39:09]

Michael: And just can you talk a moment further for advisors who do not live in student loan planning, just what do you do? What do you actually analyzing and talking about and giving them recommendations on beyond like, “You have some student loans, it would probably be good to save enough money to pay those off?”

Ryan: Yeah, right, like, “Snowball the debt, right? Just pay more money every month.” That’s how it works, right? So, really, the fundamental question every person has to answer when they have student loan debt is like is the ultimate goal to work this debt to zero by paying it down, or is the ultimate goal some sort of forgiveness? So, that could be either via some sort of forgiveness program, public service loan forgiveness being the most prominent one, but there’s also…if you’re on an income-driven plan for 20 or 25 years, depending on the plan, and at the end of that 20 or 25 years, you still have a student loan balance, that is then forgiven according to current law. And for some people, that is actually going to cost them less money in the long run. Typically, someone who has substantially more debt, I definitely see people all the time who have six figures of student loan debt and might make $60,000 or $70,000 or $80,000 a year, right?

So, for someone in that situation, it will probably cost them less money to stay on an income-driven plan for the next 20 years than to try to pay that debt down to zero. And so, for them, you’re actually trying not to pay the debt off, you’re trying to get the smallest payment possible to free up the ability to do other things in their lives. So, for them, choosing amongst the different income-driven repayment plans, there’s five different plans that tie your payment to your income via some formula but each of them have slightly different rules, and so depending on which one you choose, you might get slightly different outcomes. And some are available to all borrowers but some of the plans are only available to some borrowers, so sometimes I might be talking to someone and say, “Well, if you’re eligible for this one, this is the one I’d use. Oh, wait, no, you have a loan that you took out before 2007, so actually, you’re not eligible for the pay as you earn plan, you need to use the income-based repayment plan,” is one example. So, we’re really deciding like, “Are you working this to zero, or are you going for some form of forgiveness?”

On the form of forgiveness, if we’re going for public service loan forgiveness, which I have a dozen or so people, there’s a whole process around like, “Is your paperwork in order? Have you gotten the monthly credits for the months that you’re supposed to have gotten? Are there any issues?” “Okay, how do we plan for lowering your payment if at all possible because, of course, if your debts going to be forgiven, the goal should be to pay as little as possible.” “Well, your payment is based on your adjusted gross income, so how can we lower your adjusted gross income?” So, maybe someone in that case, it might make sense to…I’ve had people where they were making Roth contributions and I was like, “Oh, actually, I understand why you might have been making Roth contributions but if you’re making pre-tax contributions instead, that’s going to lower your AGI, and since your student loan payment is based on your AGI, you’ll get a lower student loan payment. And since you’re not trying to pay it down to zero, that leaves you more money to do other things.”

Michael: Right. And literally, if the plan is PSLF and everything is going to get forgiven at the end of a 10-year window, literally, getting the tax deduction on the IRA over the Roth to reduce the payment is basically like an indirect return on not going Roth because you’re keeping back debt repayments that you will just get to keep by not Roth-ing.

Ryan: And not doing the Roth, exactly, exactly. So, that’s one example of planning there. With couples who have student loan debt, there’s even additional complexity, depending on who has how much debt and is the higher earner also have the higher debt, or does the higher earner have lower debt? Do either of them have private loans? So, figuring out what the right plan is not just for an individual but as a household can be pretty complex, especially if one person is eligible for public service loan forgiveness but the other person is not and is trying to pay theirs down to zero, so you end up maybe giving different advice on the different loans based on what the ultimate goal for that stack of loans is. And then on the other side, on the folks working it down to zero, it’s more similar to traditional debt planning of like, “Is there an opportunity to refinance and lower the interest rate? Okay, what are the pros and cons of student loan refinancing?”

So, I had a client who had about $115,000 of student loan debt who in… gosh, this was November or December of 2019 I want to say, he decided to refinance his student loans because he wasn’t going for any sort of forgiveness program and he could get his interest rate down several points. So, he refinanced his federal student loans to a private student loan holder. And on paper, that was going to save him…I think it was like $14,000 or $15,000 over the course of the 10-year payoff, so it was really a smart move. And then the CARES Act payment freeze comes into play, so student loan payments haven’t been required since March of 2020 and he’s still required to make his payment because the private student loan holder didn’t freeze payments…

Michael: Because he opted himself out of the federal program by doing the refi to a private firm.

Ryan: Yeah, and I think it’s a good example to show that there are possible downsides to private refinancing, so it’s not always the right answer, it has to be…you lose the ability to do any sort of the federal income-driven repayment programs, the federal student loans have much more generous forbearance provisions than private student loans may have. And then the thing that’s lingering out there and who knows but if there ever is some sort of across-the-board student loan forgiveness of $10,000 or $30,000 or $50,000 or whatever it is, anyone who’s privately refinanced very likely won’t benefit from that.

So, you’re weighing what is the possible benefit of staying in with the federal loans versus the certain reduction in interest if you were to privately refinance. So, for some people, it makes sense to privately refinance, others it doesn’t. So, I spend a lot of time in this arena with people because it tends to be one of the more pressing topics that, in a lot of ways, can be blocking their ability financially but also just kind of mentally to worry about the other spots of their financial life because they are so focused on figuring out how to manage these unwieldy student loans.

Michael: And in terms of the planning process, I’m just wondering, is this…do you get into this as part of your cash flow meeting in the process? Does this come up more in the other call or meeting number four? Where does this actually come into your process?

Ryan: Yeah, so typically, I will say that it would be…especially if they’re significant student loan debts, if someone has $19,000 left and it’s already on a plan and they’re just paying it every month, then probably we’re not going to spend a lot of time on it. Typically, it would be if it’s substantial, that in the second or perhaps the third meeting, because payments have been frozen now for over a year, for a lot of people, I say like, “We’re going to get to that but literally, there’s no action to take for months and months now, so let’s do the things that maybe will have an impact in the next one to three months and student loans don’t.”

So, I actually had a meeting this morning with a client who…we decided in the meeting that she is very likely going to privately refinance her debt based on her situation. However, we are not going to make a final decision on that until late August/early September because we want to see if there’s any more changes that happen in this arena between now and then. And since she literally doesn’t have a payment due between now and then, there’s no reason we should not wait.

How Ryan Has Implemented Meeting Surges [45:42]

Michael: And is there a particular structure around how the ongoing meetings go? You’d said you’re typically trying to meet with clients three times a year and you’d separately said you’re actually working, I think, on a meeting surge structure. So, can you talk more about how the ongoing meetings aspects of this goes?

Ryan: Yeah, I think I picked up the surge structure from a podcast you did with, I want to say, Benjamin Brandt up in North Dakota.

Michael: Yeah, he does. meeting surges.

Ryan: Yeah, it just made so much sense to me of how can I… if I’m going to meet with everyone, how can I get out of walking into every week having three or four client meetings and maybe a prospect meeting and some marketing thing I’m supposed to do and I have to do that planning thing for that person. As a solo firm, jumping and task switching over and over and over, I just felt like it was very inefficient for me. So, I hope to meet on that meeting surge schedule of roughly January, May, and September. And what I always tell people is like, “I’m going to have some things that I want to bring up at least once a year to make sure that we’re talking about them and that I’m not missing anything as things change and move in your financial life, and also I want you to bring to the meeting whatever is most pressing for you,” right?

Just because I want to make sure we talk about X, whatever it is, and reviewing your auto insurance to make sure that you’re properly covered in this meeting. Well, if you just found out that you’re expecting a baby, you know what, I should probably take my auto insurance thing way down the agenda because you’ve got a whole lot of questions about healthcare and 529 and daycare and tax credits and all of the things that come with suddenly having a family for the first time. So, generally, I would try to do a net worth update and goal setting in January, “So, what went well in the past year? What do you hope to accomplish the next year? Let’s get your net worth updated. How do you feel about how this has grown? Let’s celebrate the accomplishments.”

I think for a lot of people, it’s really great for them to actually see once a year like, “Oh, yeah, no, we had X amount of debt at this point last year and look at how much lower it is now,” because they sort of lose track of how much progress they’re making. I have some clients that will say like, “I’m just so bad with money, I’m not doing anything right,” and then I’ll pull it up and say, “Well, actually, your net worth grew by $80,000 last year and that was partially yes, because of market returns, but in your case, because you don’t have a huge portfolio, it was much more due to the fact that you’re saving more and paying that down faster than you were previously.” So, we do a net worth update.

In the middle of the year, typically, that meeting, I will do investment updates, so just sort of like if there’s anything with their investments that needs updating, I will generally push for people to raise their savings rate at that point if they’re not doing some sort of auto-escalation in their 401k. Just right there in the meeting going like, “Yeah, we’re up to 10%, let’s try to get that to 11%. Or do you feel like you could do 12%? How would that fit in?” And kind of nudging people upwards over time, as well as any questions I have about retirement and investments. And certainly, with my few clients who are older and are either in retirement or near retirement, we spend more time on investments and retirement planning side during that meeting. And then the fall meeting is typically like any end-of-year tax planning stuff that needs to happen and then any insurance review or estate planning review.

Sometimes it’s just, “Hey, let’s pull out that estate plan, does it still make sense? Oh, wait, you had a baby and you never added that baby to your estate plan, so right now, it’s going to all go to your eldest and your youngest got left off, let’s get that updated,” stuff like that. But I also always send an agenda to all clients…I send what I have is my agenda as well as a short survey to clients about two weeks ahead of the call and I say like, “Update me on what’s going on in your life and what things do you want to make sure we talk about?” Because I want to make sure we start the meeting by addressing the things that are on their brains so that I’m not trying to lead the conversation to a thing that isn’t their priority.

Michael: And as you stack meetings for surges, how “surgy” are your surges? How much are you actually trying to stack meanings in practice?

Ryan: Yeah, I think not that “surgy”. I’ve heard of people who do five or six meetings in a day and I cannot do that. I think three, maybe four is my maximum, just my brain capacity to do a good job and be a thoughtful listener, that’s about where I land. So, I met with…I can say this, I met with every one of my clients except for one who had just had a baby and so they were not ready to meet. But between April 19th and whatever Memorial Day is, like May 25th, so there was like a 5-week stretch and I met with 47 clients in that 5 weeks, so 12 to 15 a week throughout that stretch. I do open up…I open up one Saturday during each of those surges where I will meet with four people just because I do have a lot of young families that it’s hard to coordinate meeting during the day. And I do some night meetings during those surges, so I’ll do…Tuesday nights, I’ll take a meeting or two, although I’m working to phase that out with my own kids getting older and not going to bed as early as they once did.

Michael: And I’m just struck, though, so 12 to 15 kind of client meetings per week over five weeks, if you’re doing three or four a day before, it just starts wearing on you. I’m doing the math, that really is kind of three to four meetings per day, four to five days a week, it is packed in every week at that level straight through for four or five weeks. But then you get through all of them and aside from the clients with the random needs that crop up, you have no more scheduled client meetings basically from Memorial Day until Labor Day.

Ryan: Yeah, I have some with newer clients who are earlier in that process but certainly…I pulled up my July calendar right here and I’m trying to see how many I have with existing clients, one, two. Two, in the month of July, I have two meetings with clients who are long-term clients. I do have a couple of new clients that I’m in the process of onboarding, so I have meetings with them on there as well. But that leaves me a lot of time to be able to work on the business, I’m going to take a couple of days and go kind of on a solo retreat by myself to just kind of think about where I want the business to be in three or four years and I can comfortably do that because I know I just met with a lot of people. And my family and I are going on another trip, and so we’re spending a week offline doing that. There’s a couple of days where daycare is closed, so I’ll be home with my kids on the days where there’s a closure of our daycare in July. And so, the month of July, I’m working but I’m not working 40 hours a week for 5 days…or 40 hours, 5 days a week sort of thing, I’m working a good bit less than that for a full month.

Michael: And how do you handle preparation for the surge meetings? I know for many visors doing surges, it’s like it’s a firm-wide effort. The whole team is helping with all the prep work and they’re surging on client prep while you surge on client meetings. But you are a solo, so there was not a, “Hey team, get ready to prep all my client files for that five weeks,” that’s on you also. So, how does that work?

Ryan: Yeah, I’m working to do this further and further in advance. Admittedly during 2020 with all the unpredictability of that, it fell down somewhat. But I worked to send out a…I set up a special Calendly invite to clients and I send an email to all the clients about a month before the surge starts. So, I’ll do this the first week of August roughly and I’ll say, “Hey, I would love to check-in for the fall, I intend to talk about any end-of-year tax planning and as well as checking on insurance and estate, but most importantly, I want to hear what’s going on with you, here’s where to sign up for a meeting, here’s the survey to update me, look forward to talking to you soon.” And usually, I’ll get like half my clients signed up just from that. And then I have to send a few reminders and then usually I’ll do a text reminder a week later to any clients who haven’t responded yet and I get to 80% or 90% have probably signed up by the time the surge starts.

There’s a few stragglers, something else has taken their attention and they haven’t been able to do it and that’s okay. So, I don’t get 100%, but I get pretty close. And then in terms of the prep, I then try to make sure that at least two weeks out, I’m then on a rolling basis spending some time. So, my days, like I said, I’m only doing prep for meetings or follow-ups for meetings, so two weeks ahead at the beginning of the surge, I will make sure that I’ve sent an agenda and that survey out to the client, make sure that I know what’s on their mind, make sure that they’ve updated RightCapital with anything. If they put anything in their survey that’s like really big, I might send a follow-up email question just so I have all the information I need before we actually talk.

And then after the meeting, I try to make sure that I have time between each meeting to record notes right away so I’m not trying to sit down at the end of the day and do notes for three or four meetings, I try to space them out far enough that I can take some time to digest to make sure that I’ve written down my to-dos, their to-dos. I keep a Google Doc that is the notes of every meeting I’ve ever had with the client and it’s just running in reverse chronological order. So, for my clients that I’ve been working with for three or four years now, it literally has all of our meeting notes in the same document.

And I find that’s really helpful, both for them and for me, to have a summary of our conversation…an agenda, the summary of our conversation, what I said I’m going to do, what their commitments are to doing at the end of the meeting. And I can always scroll down and see what we talked about last time right there in the same document so I never have to go find like, “What were the notes from that last time we met with them?” And then just add in any of my notes from that day and make sure I email the clients and say, “Hey, here your to-dos and I’ll follow up with mine within the next two weeks.”

Michael: So, out of curiosity, if you’re keeping all of that in a…client notes in a Google Doc for each client, do you not use a CRM system and all that manages from a Google Doc, or are you also living in a CRM system?

Ryan: I use Wealthbox, I will say that I definitely don’t use it to its full capacity. I just find as a solo firm, I use Wealthbox to store important birth dates and social security numbers in a secure way and things like that and I’ll use some of the workflows, but in terms of notes, I just find it a lot easier to have all the notes there. And I also switched recently…not recently, I guess probably a year ago, I put client tasks in RightCapital’s tasks instead of Wealthbox. What I found, it was just hard because I didn’t have a way for clients to see in a software tool. Like in Wealthbox, it’s only facing me, not externally, and so I wanted a spot where they could see what were the things that were involved in financial planning that they were supposed to do. And so, once I put theirs in Wealthbox, I just decided I’m going to put my own tasks in there too…or I’m sorry, in RightCapitals, so I stopped using the tasks feature that’s within Wealthbox. I think this is a problem everybody has, it’s like, “Where do I keep tasks?” And everyone settles out somewhat different. I found that the RightCapital task manager…it does a pretty good job, it sends people reminders of when their stuff is due, I get an email when they check something off. So, if someone completes a rollover and I get a little email notification because it says Michael completed his 401k rollover to his IRA and I get a notification because he checked it off that he did it.

And I like having the things that I’m doing for them listed as well and checking them off as I go. Probably this is like lingering confidence that I should be more confident in but it’s like, “Look, I’m doing things.” I don’t feel the need to do that nearly as much as I probably did three years ago because I think I’m at a place where my confidence is such where I don’t have sort of as much imposter syndrome as I once did, but that’s another reason to have them in there.

Michael: And so just what happens if you get clients that want to meet on top of the surge schedule, right? Even on the extreme, I’m imagining the client who set up the surge meeting the last week of May but then they’re like, “Oh, something happened, I need to meet with you at the end of April.” Or like the client who takes the first surge meeting and then life happens in May and they’re like, “Ryan, I know we just met three weeks ago, I need to see you again.”

Ryan: Totally fine.

Michael: Is that fine? Do you fit it in? Is that like a fear but it doesn’t really actually happen because usually it just doesn’t happen that there’s anything bad or urgent in their life?

Ryan: Yeah, sometimes it happens but I feel like this is a two-way street in the relationship and if you have something that you feel the need to talk to me about, then I should be there for you to talk to me about it. And I’m not going to unnecessarily bend over backwards to create a ton of space in my schedule if you’re asking in the middle of the surge for a second time, but I certainly will try my best to find a time that works for you. And I’m not…by no means is that you can only book in these five weeks and then you have no availability for the next three months, that is not at all. I tell people like…and I had this happened recently where I met with some clients in May and I’ve gotten an email from them since that says, “Hey, we’re expecting a baby, could we talk before September?” “Yes, of course, absolutely.” That’s one of my July meetings that I have on my calendar. Of course, we can. And I know that people’s lives don’t unfold in perfectly smooth ways, and so sometimes we’ll talk more than that and that’s okay.

Michael: But as you’ve noticed, at the end of the day, all 47 clients met over the 5-week window, and so now you have 2 in July.

Ryan: Right, exactly, so I got plenty of time on my calendar. I block some stuff off to do internal work and those sorts of things but it’s not very restrained on where you can find a time.

How Ryan Helps His Clients With Insurance, Investments, And Estate Documents [57:34]

Michael: And I’m also wondering, just a firm where you’re solely charging planning fees, you’re not getting paid for insurance implementation or taking separate dollars for investment implementations, you’re not drawing AUM fees, so what do you do for clients who need insurance, investments, estate documents? How do you handle that in a firm like yours?

Ryan: Yeah, let’s go down the list. So, insurance, I have worked with LLIS a lot to implement insurance. I’ve also experimented with some of the instant online life insurance platforms and some of them better than others in terms of the experience. I find LLIS generally does a good job of helping clients get the right insurance in place, so I try to connect them to the right expertise and have someone who is philosophically aligned to what I am, what my beliefs are and my firm, and let them be the expert in that area.

Michael: So, for advisors who aren’t familiar, what’s LLIS, and what do they actually do with you?

Ryan: Yeah, no, it’s Low Load Insurance Services, so they’re an insurance broker that it’s low load insurance services, right? So, they try to strip out the…I believe they try to strip out a lot of the commissions associated with insurance. And so, I can have a client fill out a survey on their website that puts in all the information, and then I’m copied on all the emails so I know like so and so has applied, so and so is waiting to hear back from Banner [Life Insurance], or so and so is waiting for their medical records to come in, so I’m sort of kept in the loop the whole way and so clients feel that I’m connected to that process even if I’m not personally doing it.

Michael: And it doesn’t bother you that at the end of the day, there’s some kind of load, i.e. commission that Low Load gets for the products that are being implemented?

Ryan: I’ve found that they do a really good job of steering people to what it is they actually need and they also will take the advisor’s recommendation for the people that I’m working with. I believe it’s the…I don’t want to start a holy war here, but I believe term insurance is all that most of them need, I don’t think whole life is appropriate for really any of the clients that I have, there are cases where it is but not for my clientele. And so, if I say a 30-year term policy for $750,000 is what you need, they’re not deviating from that.

Michael: Okay. And then what else? So, that covers the insurance side of things, in essence, just they get referred over to LLIS, LLIS implements whatever insurance they need, they’re coordinating with you, they’re keeping you in the loop, they’re facilitating the recommendation if you had a particular thing and then client gets it issued through them.

Ryan: Exactly, exactly.

Michael: And what about estate planning?

Ryan: Estate planning, I have a couple of local attorneys that I’ve worked with. I can’t bring myself to use some of these online tools, in that they all have a disclaimer at the bottom that says, “We are not a law firm and we cannot be held responsible for legal advice,” and that just doesn’t feel like a language I want on the website of the company I’m referring someone to get their will done through. So, I have some local folks that I will refer to here that I have worked with long enough that I really trust and know what they need. And then there’s also a website called thoughtfulwills.com that I think does a really good job. So, I think what I just referenced is there’s all these platforms that are like tech platforms trying to do legal work, and Thoughtful Wills is lawyers who are using technology.

So, they’re in, I think, 35 states or something, they’re not actually in Louisiana but I’ve referred for clients because I’ve clients in 13 different states. They will use tech to walk people through the process of the documents that they need and get them documents sent and it’s usually a little bit less expensive rate than what you find with some estate planners. And then, again, if a client opts into allowing me to be kept in the process, you can get an update on where they are in the process as long as a client has said it’s okay for me to. So, I’ve had some success using them as well.

Michael: And what kind of costs do you get into for their stuff?

Ryan: Yeah. So, again, client pays directly to Thoughtful Wills, their pricing has changed a few times but I found it’s been between $500 and $1,000 for a lot of the clients I work with. And oftentimes, you go to an attorney for some basic estate plans for a two-teacher couple who makes $120,000 and have a kid on the way and then they ask $2,500 to write an estate plan and they’re just not going to do it if that’s the option that I present, right? Of course, it’s important but they’re not going to be able to carve out that huge sum of money relative to their incomes for documents that they know are important but it’s hard to get them to get over that hump. And so, I found Thoughtful Wills is like a little bit more economical while still being a true law firm and I feel like that’s a good deal.

Michael: Right, so a good deal less than your local attorney that may be $2,000, $2,500, but more than your LegalZoom or equivalent that’s a few hundred dollars for a couple.

Ryan: Exactly, exactly.

Michael: Interesting. And then how do you handle the investment side of things?

Ryan: Yeah, Betterment, Betterment is my answer to that. So, what I believe…Betterment has automated much of what I believe about investing, I believe low-cost index, well-diversify, trade as little as possible, rebalance according to rules, tax-loss harvest when there’s an opportunity, nothing too fancy here. And I think for most people, that’s all they need, right? And I’m not saying that for everybody, but I’ll use Betterment for a lot of clients. Clients are not required to use Betterment, so I have clients that self-manage at Vanguard, I have clients who self-manage at Fidelity, it’s really up to them. I also have clients who have come to me with Vanguard accounts and decided to switch to Betterment even though there’s a small fee associated just because it’s like a really modern platform, easy to use, they like the interface, they found it easier, they didn’t want to worry about going in and rebalancing themselves once a year, they would rather just have it done automatically.

So, I’ve actually had some people switch, but I basically walked people through, “Here’s what’s going on in your investments, these are the recommendation changes I would make. I can help you do it on this platform called Betterment, they charge 25 bps or 20 bps because there’s an XYPN member discount, they charge 20 basis points. I don’t make anything more than I’m making now, so your choice, know that I don’t make any more or less money if you move your money to Betterment. I personally hold my money at Betterment, if that is convincing in any way just because I don’t need to be the one that clicks the button. I understand intellectually what is going on, I understand the portfolio’s that they’ve built, I understand the rules that they have in place around rebalancing and tax loss harvesting, I just don’t want to sit there and do that for myself. And if I don’t want to sit there and do it for myself, I feel pretty comfortable recommending people and outsource that as well.”

A lot of people do and some choose not to and I don’t…and I’ve had some people who after a year of us working together, they’re like, “Yeah, actually, let’s just do it, I think that’s a good idea.” And so, I’ve found a good amount of success with that. And then a lot of people, because of their age, the people I work with, a lot of their money’s tied up in a 401k, so that’s more me advising based on the fund choices available to them and we might literally pull it up during a meeting and switch an allocation during a meeting.

Michael: So, I’m struck by this, that just there’s a lot of using external platforms, you don’t get a piece of it, you’re not a part of it, right? Like Low Load gets their investment fee, the Thoughtful Wills gets their legal feed, Betterment gets their AUM fee, and you get your planning fee.

Ryan: Yeah. And you can add XYTS on the tax side.

Michael: XY Tax Solutions?

Ryan: XY Tax Solutions. So, I had I think 14 people get their tax return done via XYTS this year and I was really happy with it. Again, I’m kept in the loop, I can upload documents on behalf of someone and people really appreciate that. The first thing XYTS asks you to do is like, “Can you upload your last two tax returns after you’ve signed your engagement?” Because they want to make sure they understand what’s going on in your previous returns and I just do that for clients and it takes me 45 seconds because I have the returns in my vault, but it took one small little task off their plate for them. And I’m able to see the return before it goes to the client, and so I’m able to make sure that it includes if we did any Roth conversions or anything that I know has happened and making sure that it’s included on the return and then clients pay directly.

Michael: And so it’s just like, “Here’s a provider that does tax preparation but they work directly with our advisory firm, we can work collaboratively with them so we’ll stay involved in the process and we can save you some time for it.” And you don’t have to worry that they’re going to go off with the client because it’s not a CPA also doing wealth management, it’s just a outsource tax provider for financial advisors.

Ryan: Exactly, exactly. And they’re the experts in what they do and I believe my role should really to be to know enough about all of these areas to help them sift through their options. I have clients that do their own taxes and clients that have existing CPA relationships, so no one’s under obligation to use any of these, but they’re looking to me for expertise and as someone who is a professional in this field and understands what to be looking for, I can give them a recommendation. And I also want to be really clear like, “I’m giving you this recommendation, but I don’t have a financial relationship with this person that I’m referring you to,” and so people can feel pretty confident that I’m advising what I believe is the right thing for them to do, not the right thing just for my paycheck. And, again, when you say to someone, “You’re under no obligation to do this but this is what I think you should do,” they tend to believe in you, right? They tend to say like, “Well, I mean, he has no reason to say this other than because he thinks it’s the right thing to do.”

Michael: And do you ever get an issue of just client saying like, “Wait, I’m paying them for all these things am I’m paying you, I’m paying you for advice on insurance but then Low Load still gets commissioned?” Like, “I’m paying you for investment guidance but then Betterment’s still getting an AUM fee.” Do you get clients that express concern about, “It feels like I’m paying twice for this,” because I hear that concern a lot from advisors thinking about doing this? But I’m wondering, do you see that in practice, or is that we’re all stuck in our heads worrying that clients object about things that they don’t actually object about?

Ryan: It’s what you just said, I’ve never had someone object because if someone objects, they don’t have to do it, right? I have a client who likes to self-manage at Vanguard and once a year, we have a meeting where we go in and rebalance and he enjoys doing that and that’s fine. I don’t really understand why he chooses to continue to do that personally, but that’s fine, I get it, like, “Okay, he’s chosen to do that because it’s like nine basis points in difference we calculated between the funds he’s using at Vanguard and what he paid with Betterment fee, he wants to save that nine basis points and do it himself and click the button himself, then okay, that’s fine.” Right?

But they’re not required to, I’m giving the best advice that I can based on my expertise in the field. I think that’s entirely in advisors’ heads. I think people are hiring the advisor because they’re a person who knows how to navigate spaces that might be really uncomfortable for a lot of people. And so, they know that if…I’m sending you to someone that I trust because I think it’s someone that will help solve this problem that you have in your financial situation and I don’t care whether I get paid for it or not.

Michael: Well, I’m always struck by it because I hear this concern come up around things like, “I feel bad if I’m giving the advice but then the client is paying someone else and insurance commission for implementation,” or, “I feel bad if I’m giving them overall financial planning advice but then Betterment is getting an AUM fee for the implementation.” But I almost never hear anyone say, “Well, it’s really weird that I might be giving the client some tax guidance but they still pay their CPA to prepare their tax return,” or like, “I’m giving the client estate planning guidance but they still pay their lawyer to draft the documents.”

Like it’s “normal”. It’s like it’s normal in the estate planning and tax realm, it’s very alien, I find, for us in the insurance and the investment realm. I’m struck that just your model just puts all of them in one even bucket like nothing’s better or worse, it’s just, “Hey, you pay me for planning and I have a long list of providers that I can refer you to for help in various areas. They do what they do and they get paid for it, but I help you navigate it and figure out which is the right one to pick and make sure that they give you the right recommendation and implement the right thing for you and that’s my role in this process and you pay me for what I do and you pay them for what they do,” and clients are totally fine with that.

Ryan: Totally, completely fine with it. I do think that that is more in our industry sort of a feeling of need to do all of these things for people or be at the forefront of people’s minds at all times and I don’t think we need to play that role. We need to help them solve the problems that they have in front of them, and I sometimes can be the right person to solve that, but oftentimes, there’s actually someone better equipped to solve that problem that has more expertise in that area. And I am wise enough and experienced enough in the field to have spotted the problem and identified that you need it fixed, which a lot of people maybe haven’t even done yet.

The number of people I talked to who are young parents who don’t have life insurance is very high because they haven’t figured out how to navigate life insurance because there’s so many different kinds and how much do you need and how do you get it and what about these new online companies and like, “My college roommate’s brother reached out to me and he was trying to tell me about this life insurance thing and maybe I should go with him.” And so, it’s just overwhelming and they freeze up. And so, they’re saying like, “Hey, we’ve already gotten financially naked with you, right? We’ve given you all of our information, told you all the stuff that we have going on good, bad, and otherwise, and I trust you to tell me how do I navigate this whole insurance thing.” And for a lot of people, that’s LLIS and I have had some people to, where depending on the need, maybe it might be through work or via one of the online platforms if there’s a particular situation where that makes sense.

Michael: So, help me just understand how you think about this at a high level, because for a lot of advisors I know, we want to do things like also be managing the assets or even also be doing the tax return preparation in-house because it’s part of “making the client stickier,” right? It’s just like the more touchpoints we have, the more connected with them, the more likely is that they stick with us and the harder it is for them to terminate and leave. But you’re sort of, “We refer it out and you pay us our fee and you pay them their fee,” is kind of separate from that. So, I guess I’m just wondering, do you think of this as a more touchpoints, more comprehensive relationship stickiness kind of thing? Is this simply a, “Hey, just we’re giving you the advice, we want to make sure you actually do something with this, we’re just sending you someone to do something with it because you should do something with it.” How do you think about where this fits into the business?

Ryan: So, I think it comes back to the type of firm that I’m trying to build, right? I’ve just decided that for me…and maybe to talk about this, it’s useful to go back to my previous career, but I want to be the person on the ground, I like doing the planning itself, I like talking to the clients, I do not want to spend my time managing other adults and doing all the things of running a business that are not being a financial adviser. So, I’m thinking of a good friend of mine, he’s about 30 years older than me who’s a CPA, and I’ve talked to him a ton and I talked to him a ton when I was first getting off the ground and he actually gave me free office space in my first year, which is so generous. And I remember him telling me that he started a firm and it was all by himself and he loved it and he was doing taxes all the time and he loved doing taxes.

And then he took on a partner and then they were doing some more taxes, but he was also doing some types of work with clients he wouldn’t have said yes to. And then a couple of decades go by and they’ve got seven employees and they’re doing corporate retirement plans and he spends all day doing everything except for talking to clients and doing taxes, which is the two things that he actually likes to do. And he said he spent 25-30 years getting to the place where he realized like, “I’m actually taking home only slightly more pay than I was when I was a solo practice and I’m doing all these tasks I don’t want to do, why am I doing this?” And then he pared everything down and now he’s running a CPA practice all by himself again and he loves it and he’s super happy and he has total control over his own time.

And I feel like I watched that lesson and I’m trying really hard to learn the lessons of so many people around me, I don’t have to go learn the lessons myself. And so, if you’re someone who wants to build a big firm, that is awesome and I’m not…great, I’m happy for you. I am not personally someone who wants to do that. And so, if I’m going to build a small firm where I’m really focused on spending the vast majority of my time either doing financial planning or talking to clients about their finances, then I need to have other providers to do some of the things that I cannot do because I’m not going to ever be big enough to…I don’t think a solo shop that also sells you your insurance, that also does your tax return, that also is a lawyer and does estate plans is a viable person. That’s not an expert, that’s just someone doing a lot of things probably poorly. And so, I’d rather, because of the way that I built my firm, be okay saying, “This is a person who can take care of that need for you, go to them,” and I don’t feel the need to get paid on every piece of this puzzle.

Michael: And for you, it sounds like a lot of it drives from just, “I give the value that I give, I know it’s good value, I get paid enough for it that when I do it for the number of clients I want to do it for, the math adds up for me in the income I want to earn and just doing any more than that requires getting larger in a way that I don’t want to get larger for because then I have to manage people and do things that I don’t want to do because I just like talking to my clients and giving them advice.”

Ryan: I am trying to not repeat the same mistakes that both I have made and others have made and that I want to stay doing the job that I enjoyed doing and I don’t need to grow something larger and larger just because I know that in this industry, I could grow it larger or I could serve more affluent clients in order to make more money.

I know those things are possible but I’m actually really happy serving the people that I serve and doing the work that I do with them even if I know I might be not maximizing every dollar of revenue available to me or growing and having something big to sell 30 years from now. I feel like it’s okay to stay making sure that you spend the bulk of your day every day doing the thing that gets you up in the morning. And for me, that’s like talking to people and making them feel like they’re in a healthier financial place than they were before and that they’re making progress towards their goals and they’re making progress towards the life they want to live.

Michael: A lot but it just gets down to you know what your income goals are and you’ve already figured out 60 clients times your average fee gets you to your income, so we’re there. We make this harder than it needs to be sometimes, like, “Did the math, it’s going to work fine.”

Ryan: Exactly, it’s going to work fine and I think it’s another thing I would say is…and I was talking about this a little bit with my study group that I don’t want to be the “poor financial planner” as one of my study group members said. But you and I had this interaction on Twitter where you posted a poll about what does it take to be financially successful as an advisor and it was like…I want to say it was like 68% of people said you need to make $200,000 or more. And all due respect to the advisor community, that’s the 90th percentile of national income, to say that anyone that makes under $200,000 a year or…I pulled it up, actually, 40% of people said you need to make $300,000 a year to be financially successful as an advisor and I just think that is so wildly out of touch with average Americans.

Michael: You’re now talking 97th percentile of income or so. And I guess, technically, even thinking about that, usually, income percentiles are like household income, so we’re not even into spouses and passive income and other income sources that may be supplementing this. You make this point, but it’s just like we live in a world where two-thirds of financial advisors say a single breadwinner has to earn the 90th percentile income in the country just to be deemed successful.

Ryan: Yeah, and that just to me feels so just out of touch with the lived reality of so, so many Americans and I work with certainly a more affluent than the average client…than the average American clientele, but I’m sure that there are probably advisors listening to this going like, “What, you work with the couple in the 30s who makes $130,000 a year? How can you make any money building a business and doing that?” And yet, I’m happy to share this if this is useful, I’m making what in my local area is a 90th percentile income according to the data that I can find for 2020. So, I’m “not successful” according to this one Twitter poll and maybe I’m taking it too personally.

And yet, I have a 90th percentile income in my local region while also having control over my own time and I’m doing it in a job that didn’t require me to go spend years and years in school and take on hundreds of thousands of dollars of debt.

Michael: I want to say we saw even an extended version of this in the advisor wellbeing study that we did last year that when you just look at advisor well-being relative to the revenue of the advisory firm, once you get firms that make more than about $1.5 to $2 million of revenue, well-being goes down as revenue rises. Very unequivocally blatantly, advisor well-being goes down as revenue rises up to more than about $1.5 to $2 million, so basically like north of a $200 million AUM firm to put it in traditional terms.

And we’ve even found there’s almost a perfect negative correlation between an advisor’s well-being and self-worth and the affluence of their clients. So, the more affluent the clients you work with, the more income opportunity, except the more affluent the clients you work with, the worst you tend to feel about yourself. It’s a perfect negative lines correlation, right? If you work with people who are incredibly wealthy, there’s a lot of income fees on the table. The problem is you spend all your time working with people who have sometimes rather phenomenally large amounts of wealth and it’s kind of hard not to feel down on yourself when you could be earning 90th percentile income and feel like you’re a low-earner.

Ryan: If you’re an advisor in a firm that serves ultra-high net worth, you’re probably doing just fine relative to the average American or you’re not even just fine, you’re probably in the 90th percentile of income yourself. But if you’re only serving people in the 99th percentile of income, you can easily feel really down on yourself. Actually, I feel like I could spend an hour thinking and talking about just that study and I want to read it. I think we’ve all seen those things. If you ask people, “What does it take to be rich?” It’s pretty much 2X whatever the person who you asked has, right? If they have two million, “I need four,” and if you ask someone at four, they need eight.

And I feel like maybe I’m erring…or maybe I’m overcorrecting, but I feel like the trope of the person who whatever they make, they need to make $1 more is so burned into my head as like just a cautionary tale. And I feel like if you can build a firm where you get to do a job that you really love and make a really good income while also helping people who are shut out largely by the industry as it exists today, that’s just a win all around as far as I’m concerned and I feel really lucky to have, frankly, kind of stumbled into this. I’m a career changer and had I not gotten lucky enough to have been referred to Jude Boudreaux to be my financial planner, there’s no way I’m sitting here today. But Jude sort of set me on this path when he was my financial planner, so I just feel lucky to have discovered this industry but also to be doing it in a way that I feel like is maybe a little bit oddball or different but works really well for me and my personality.

What’s Surprised Ryan Most About Building An Advisory Firm And What He Knows Now That He Wishes He Knew Earlier [01:19:22]

Michael: So, as you’ve now gone through this journey in building your firm, what surprises you the most about just what it takes to build a successful advisory firm?

Ryan: There’s that quote about like you’d be surprised about how little you can accomplish in a year and how much you can accomplish in a decade or something along those lines, I’m butchering it. But I spent so much time that first year, a year and a half…I mean, I can actually remember about a year in, so this was maybe December of 2017 or January of 2018, so I was about a year in, and kind of the fun and excitement of starting your own RIA had worn off and I was like…I had made a net revenue of $10,000 for all of 2017 as I started from zero clients and zero revenue. And I got like four nos in a row from four prospects over the course of three days, I went from thinking like, “Oh, I’m going to double my firm’s revenue,” to no, no, no, no, and I just fell apart like, “This is stupid, what am I doing? How can I do this?”

I sent a panicked email to Meg Bartelt to immediately called me and spent 30 minutes on the phone talking me down of how much perspective I was lacking in that moment. So, thanks to Meg for doing that, but it was helpful to remember that this is a process and it takes a while to build, but if you’re able to get through those first couple of really lean years, you can really…it’s a beautiful thing to be able to build whatever it is that you want to build. We have so much autonomy to build…if you want to work with 30 really, really affluent people who each pay you $15,000 a year, you can do that. You want to work with 200 people and build a big team, you can do that. You want to work with just a certain profession, you can do that. You want to work virtually so you can travel the globe all the time while continuing to work, you can do that.

So, I guess just going through that really low point to now we only three and a half years later from that really low point, realizing it takes time to build it but we have this opportunity in this business to have so much control over what it is your life looks like while also having a really meaningful impact on your clients has been really cool. I know that was really like more internal focus than the business itself but I do just think this business allows you the opportunity to sort of set up what it is that is your ideal life and then to also help other people work to achieve theirs and I just feel like I’m profoundly lucky to be able to do that work.

Michael: And so, anything else that you know now that you wish you could go back and tell you five years ago when you were getting ready to launch an advisory firm and coming to the industry?

Ryan: Yeah, one, it takes time, so not to have panicked because I happen to get four no’s in a row, it was probably just a random chance that that happened and not to freak out, don’t get too high or too low as you go about the process of building a firm and I think I’ve pinballed from elated to distraught far too often in the first two years I think is one thing. And I think, two, there’s a lot of really great people in this industry who are willing to give up their time and their expertise if you’re willing to ask. And I just feel so lucky for so many people that have helped me along the way, from people in my study group, I have a study group that I started with five years ago and we meet most weeks still. So, Kevin and Gretchen and Kristen and Tyler, they’re my Tuesday, 10:00 a.m., always are, always there, talking each other through business highs and lows, personal highs and lows, and it’s been really helpful.

And then I also have a lot of other people who have been more one time calls, I called so many people in those first couple years just to say like, “What do I do in this situation? How did you handle this? Is this normal? Am I crazy? Help me,” and so many people said yes. And I just think being willing to ask for help and being willing to seek out mentors and seek out peer groups that are able to push you forward is something that I encourage anyone who’s going down this road to do because there’s a lot of people willing to give up their time and their energy and their thoughts and it made me infinitely calmer but also better as an advisor and more focused on what it is I wanted to build as a firm. Because a lot of the stuff we’ve talked about today about building a solo firm, I didn’t necessarily have in my head five years ago, that’s come through these conversations with people who have helped me really focus on, “What is it that you like to do in this business? What is it that you don’t like to do? How do you want to spend your time? Go build that.” And so, I just feel really lucky to have found that community.

Michael: And so when you talk about being in a study group, where does that come from for you? How did you bring it together for yourself?

Ryan: So, we were all XYPN members who were launching around the same time, sort of in the end of 2016. And so, we started actually with Arlene Moss as a coach and we’ve met a few times. And then there was a group of, I believe, 10 of us at the time had been meeting together and that 5 of us kind of decided to keep going and it’s had a couple of changes in who has been able to come and people’s lives look very different, right? Some of those folks have decided to join up with other firms or have made career transitions but there’s this cohort of the five of us that still talks on a regular basis.

And sometimes we have more structured things, we’ve done book clubs and studies, we’ve read…what is the book? “Advice That Sticks” which was really helpful to read as a group and then try to implement in our client meetings and then come back and talk about what worked and what didn’t. And other times it’s much more informal, it’s more like, “Hey, this is what I’m struggling with and I just need to vent to people who get it and thanks for hearing me out,” and, “Oh, that’s a really great idea, thank you,” or, “Oh, that’s actually really helpful perspective to know that you’re going through the same thing.”

So, it’s definitely oscillated from very structured at times to unstructured at other times, but just having the consistency of knowing there’s like a group of people who has seen that whole journey and who was like kind of we’ve all been on it together has been really grounding and rooted me. And I definitely would encourage anyone who is starting to meet bi-weekly or weekly with the same group of people and find your tribe, find your people who you know will empathize with you but also kick you in the butt, for lack of a better word, when you need it.

The Advice That Ryan Has For Career Changers Entering The Industry And What Success Means To Him [01:24:53]

Michael: And so, as someone who came into the industry as a career changer, any other advice that you have for other career changers looking to make the switch and get started?

Ryan: Yeah, so I will say, if you can’t find an RIA that that meets all of your needs to work with before going out on your own, I think you should. That’s my belief. So, I had never worked in another RIA before launching my own and that’s largely just at the time, I knew I wanted to be in New Orleans and I knew I wanted to work fee-only, I was not willing to do some of the entry-level jobs that I know a lot of people have done but I wasn’t, at that point in my life, able to. And so, there just like wasn’t another route that seemed viable at the time in my situation and I think even now, there’s a lot more people were fee-only and there’s also a lot more virtual work being done so it’s probably a different landscape today than it was in 2016.

So, if you are career-changing, I do think if it is possible for you to spend some time working in an RIA, I think that would have shortened my learning curve in a lot of ways and helped me just have some pieces of the puzzle in place more than I did. But I also think if you’re a person who is willing to learn and is willing to iterate and figure things out, going out on your own is not as insurmountable as I think some people make it out to be. Because going back to my previous point, you get to build what you want, and so if you want to build a firm that serves 60 airline pilots, you get to go do that. And if you know something about airline pilots, then cool, you’re going to have an in with them and you can figure out the money stuff because honestly, this is…in my opinion, yes, there’s technical knowledge you need to know, yes, you should know about tax and insurance and investing and those things.

But it’s really a people business, it’s understanding like how do I really listen to this person? How do I really understand what it is they’re trying to accomplish? What the barriers are to getting there and how I can help them to remove those barriers along the way? And how do I make sure I communicate my advice, whatever that advice is, in a way that is digestible and actionable and actually gets done so I’m not just talking at them? And so, it’s much more of a people skill and a people business than it is a numbers business and I think for those who have the people skills, you can learn the finance piece much more easily than, in my opinion, someone who has the finance skills can learn the client communication and relationship piece.

Michael: So, as we wrap up, this is a podcast about success and one of the themes that always comes up is just the word success means different things to different people. And so, you’re building this firm that I think fits your definition of success really well with even clarity of who you want to serve and the revenue they need to generate, how many clients it is, and making sure that wraps up. So, I understand the vision for the success of the business but how do you define success for yourself at this point?

Ryan: So, this is not really my brand but there’s this Japanese concept, I believe it’s called the Ikigai and it’s about to find true happiness and to be really fulfilled is finding work that achieves four things and I feel like I’ve accomplished them all and I feel really lucky to be able to do that. So, it’s the idea of having work you love, that you’re good at, that the world needs, and that you can get paid for.

Michael: And the intersection of those four is Ikigai.

Ryan: Is Ikigai. And I feel like in terms of defining success, here I am, I’m 35 years old and have…due to a series of what I would call, honestly, a lot of luck of being introduced to Jude who introduced me to the wider world of financial planning, it happened to introduce me to the world that I would feel more comfortable with, with working sort of directly with clients and working with some younger clients, but I feel so lucky to be able to do work that I love. I really like figuring out the pieces of the puzzle, I like figuring out, “Okay, well if this piece moves here and this thing happening with your student loans, it’s going to impact this on the taxes, and so we’re going to make sure to watch out for this thing down the line.”

I like that sort of puzzle piece and I also like the fact that it also…this goes to the next piece of like what the world needs. A lot of people are really intimidated by finance, a lot of people are really overwhelmed by aspects of their finance and particularly couples and doing it together when you each come in with your own preconceived notions of what your finances are going to be and so helping people sort through that. So, it’s something I enjoy doing and that the world needs, and then I feel like I’m relatively good at or at least good enough at, and then I can make a good income to do, if that’s not a success, what is?

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