Wallingford

Hopefully everyone is here because we want to learn how to make sure we’re living our passion. Obviously, we’ve got a lot of reasons we do what we do, but why we do it is really the most important. And when Bryson and I were talking, we wanted to share how we’ve modified our practices, taking a look at the practices in the last year and what we’re doing moving forward into the second half of our careers, which seems really weird to me. Does it seem weird to any of you to talk about the second half of your career? It just seems like yesterday that I started 30 years ago.

Today’s session is going to be in three parts. We’re going to talk about how our practices look today, what we’ve done to refocus our practices and give you some implementation strategies that we use and go from there.

I’m going to start out by giving you a little bit of an idea of what my practice looks like and how it’s organized and what frustrations I’ve found. I am the sole producer in my practice. I’m the one who writes all the life insurance, the long-term care, the disability insurance, the fixed annuities and the group medical insurance. When, in 2009, I decided to restructure my practice and move from a practice that was 88 percent group benefits back into the life insurance business model, I knew some of the group benefits would go away just via osmosis.

What I had not prepared for was the loss of my father. Anybody in here go through the loss of a parent in the last few years? You all understand the angst that your heart feels when you lose a parent who you love deeply. That loss was just last year. And that loss caused my business to suffer because I hadn’t planned for that vulnerability. And when I did that, I’ve three assistants on the group side of services and one who supports me. And when I changed the business model, I had two focusing on group, that one person supporting me. But what happened was I didn’t support me. I wasn’t able to produce. I lost my focus and needed to hire someone to help me figure out what was going on.

I hired two coaches last year. Has anybody in here hired coaches? You need to make sure you’ve got the right coach, right? Not every coach is for every person. I found that out and let those two coaches go. And I found someone who knew me and who I trusted deeply, who was a business owner and knew how to run a profitable business. We started looking at my business and where my weaknesses were.

And where my weaknesses were, were in the vulnerability I had exposed by shifting my business model. So, I needed to structure up some of the group benefit side of things and refocus on who my clientele really were. We spent a lot of time discussing what my clients looked like. We sat down and started to write out: Who are my ideal clients? Who do I make the most money from?

And I began to realize that, while I would say that my typical client was between the ages of 50 and 55 heading into retirement, that wasn’t where I was making my money. My clients are 30 to 45 years old, young families raising children. And I realized those are the families that my family was when I was a little girl and we lost everything that we had. We lost our home. We lost my dad’s business. We weren’t protected. We didn’t have an advisor who cared enough to make sure that we had protected our families.

We found that was who I was serving. So, now what we had to do was to go back through and revamp our website, revamp my employees’ compensation packages and revamp the focuses that we had found in the business. And we really had discovered three different revenue streams in the business model.

Some of you have heard me talk about my biggest frustration. Do you ever have those days where you don’t want to go to work? And it’s not because you don’t like your clients, it’s because your staff is really not having a good week. Anybody who deals with individual medical in the United States, your staff doesn’t have a good quarter beginning in October through December. It was a nightmare. I didn’t want to go to work.I knew that had to change. And I’m going to talk about how we discovered that and how I got all three of my employees on the same bus going in the same direction. I don’t have people going in this direction, going in that direction. We’re now all on the same bus. And it allowed me, through my client focus, to realize more about who I was and that’s one of the things we’re going to talk about. How we evaluated that and how we determined what our revenue streams were.

I’m going to have Bryson tell you about his business model and what he discovered.

Milley

Thank you. Anybody in the room ever had that situation where your practice feels like it’s the tail wagging the dog? You’re not in control; you’re just along for the ride? Before I give you a picture of my practice specifically, let me tell you about where I work. Our firm is 17 advisors and we have 40 support staff. Altogether, we’re focused on what we refer to as “integrated wealth management.”

Our firm is owned by the advisors, for the advisors. We each own our own practices and, while we have the benefits of synergy being with a major firm, we also have our own specialties and niches that we’ve developed. Also, within the way we deliver the service, some folks rely heavily on technology. Others rely heavily on people, so they’ll have bigger teams. And when it comes to the niches, some look at age and stage of life and others look at industries and professions.

For me, I have three support staff and I focus on lawyers, doctors, small business owners and retirees from that group. Here’s the thing. That’s always been my focus and my drive, but over 20 years of head down, build, build, build, build, I built a nice practice but realized suddenly that my practice wasn’t filled with just that group. I had a lot of other clients, a lot of very lucrative clients, lots of investment assets, good estate planning needs. But, as it turned out, when I started into the evaluation, a lot of them were people who didn’t fit in my target niche.

Where my turning point came was the spring of 2016. As I mentioned I was feeling like things were a little out of control. Details began to slip. Can we relate to this? You start getting a little out control, details being to slip and the planning you’re doing with the clients or the follow-up that you’re doing. There were a couple of little mistakes. Nothing too severe. We were able to fix it.

But then I had my watershed moment. Rather big mistake. And it wasn’t that I couldn’t fix the problem. Frankly, that was the easy part. Financially I could fix it. What really stuck and hurt was that it was a stupid mistake. It was a stupid mistake because I was too busy and I had missed it. It bothered me also because these were clients who were my ideal clients. But these were people who have been clients for a number of years and I really appreciate them. I like our relationship. I value that friendship. And I hadn’t given them my best. And that’s what really bothered me. I’m sensing you might be able to relate a little bit to that feeling. When it just hasn’t gone the way you envisioned it to go.

Nonetheless, it caused me to step back and have a look and begin making some decisions. What I realized when I stepped back and started doing the evaluation was that I was responsible for 432 families. The planning of 432 families between four people is insane. Yes, every fall we do our business planning and I would do my segmentation like we’ve all been taught to do. And I’d do my ones, twos and threes. But I never paid attention to how big the number fours had become. And it had become the elephant in the room. Frankly, it was that I had just lost focus. Twenty-two years of head down, build it, build it, build it. I had lost track of the actual behemoth that was coming in behind me.

But I also realized a few other things. I realized that what I enjoy about what I do is meeting the clients, getting to know these people, getting to grow with them. Seeing the successes, the personal successes, their families, their businesses. That to me is where I found the real joy in the planning.

One of my favorite things to do with clients is to go back and look at what we talked about or what we set as goals in the years before. I’ll often ask in a conversation, “In the next three years, what needs to happen personally, professionally and financially for it to be a good three years?” And they’d give me the answers and we’d say, “OK. There are our marching orders. We’re going to start working down this road for the next three to five years.” I love going back through that and saying, “Hey, remember we talked about this? Now look where you are.” And 98 percent of the time it’s come true and we’ve been able to do that together. And I realized I wasn’t having that kind of conversation with them anymore because it was always somewhat reactionary in the service that we needed to provide and the efforts that we needed to put forward.

So really, I began to realize that coming into the office was feeling more like an obligation than a joy. The work I was doing was totally reactionary and not forward thinking. And I realized that my practice had become something that, wasn’t that it was a bad practice or that the people weren’t good clients. It was just where my strength and my knowledge and my niche were had been somewhat diluted by everything else that I had been doing.

Now, ultimately it came to a bunch of realizations. Here’s where I am. What are we going to do about it? Where do we want to go with this? But before we get into the actual nuts and bolts, let me tell you some things that became paramount for me. I don’t mind working hard through the workday or the workweek, but my evenings and my weekends are mine. That’s my time to be with my family and my friends and do the things that we enjoy. I like that balance. I also realized that I enjoy doing eight weeks of holiday every year. Some of that, I would argue, is payback to my family. Dad’s running ragged bit by bit Monday through Friday. Let’s have some good fun holidays as a group. And those were beginning to wane a little bit because of the reactionary nature of trying to keep up with business.

So, within all of that, bottom line, 432 families. What are you going to do about it? Now, before we get into our solutions, what I’d ask you to do for the next two minutes is jot down a couple of answers to these questions. In your practice who’s controlling whom? Are you controlling the practice or is the practice controlling you? If things are bothering you through your workweek, what is it that’s bothering you? What are the trigger points? What are the frustrations? What’s the numbness that you might be facing coming to the office Monday to Friday? When was the last time you felt truly happy and valuable in what you’re doing? Where did you have that inner shot of, “This is my calling. This is what I do well. This is what my clients enjoy”? I want you to take just a couple of minutes and jot that down for yourself the things that are bothering you about your workweek, the things that get you happy about what you do and the last time you felt joy in what you were doing.

Wallingford

To get where you’re going, you need to know where you’re going. And I know that seems a little crazy, but oftentimes when we are looking at our practices, we are looking back at what we’ve done. How did we do this quarter? How did we do this month? That’s already done. That’s not helping you moving forward.

When we began to refocus, I had to start with a new coach. And that coach I hired was my sister. She just retired so she needed work to do. I said, “Hey Kath, I’ve got a question for you.” She took a look at my business in a way that none of the other coaches really had. She had to learn the financial services business in a way that those other coaches already knew. She needed to know my business. And we discovered that there were three problems.

When Bryson was asking, “Do you ever have things where this is wagging you versus you wagging that business,” my staff was basically controlling my emotional life between October and December. And I couldn’t have that anymore and I needed to find someone to help me change that. What we discovered is that we had their compensation package structured improperly. I’m going to talk about how I focused that.

My staff time was also focused on a nonproductive revenue source. Which we had to dig into the numbers and show them. And I showed them the numbers. Then we also needed to look at my time. How was my time being spent between the group planning and the individual planning? And how am I going to build up that group department which I do enjoy doing? My dad was a small business owner and small business owners, I feel, are often ignored. I didn’t want to ignore those small business owners but I needed to dedicate a certain amount of my time.

By looking in the rearview mirror, you’re not focused on how you are generating the clientele or how you are bringing those clients into your practice that you want to work with. We needed to focus on looking forward versus looking back. We had to look the key performance indicators that we were doing as a team. Everybody has key performance indicators. And those are all related to their department responsibilities. So, for the group people, how many group referrals did you get? And how are we processing those? And what defines a group?

On my side, how many new prospects are you getting, Kerry? What is your focus moving forward? And what do you expect to do this quarter?

We have a weekly meeting where we’re focused on our key performance indicators. How are we moving in that direction? What do we expect to produce in the next 60 to 90 days from a revenue standpoint, from a premium standpoint? What are we doing on a daily basis to achieve that?

When we crunched the numbers, we found there were three key sources of income: the individual medical, the group department and my individual planning department. Then we looked at the costs related to each of those departments, including salaries, so we could narrow down well what ifs. What if we grow that group department by 25 percent? What if we drop that individual medical department in revenue by 25 percent? What if I grow the planning department by 200 percent? We could put in a number and all the other calculations would drop down and show us what our business would draw to the bottom line.

I don’t know how many of you have done that, if you’ve ever sat and looked at your business like a business and said, “This revenue and these expenses all go together. If I grow this department by 50 percent, this is what it will draw to my bottom line. If I grow this revenue by 50 percent, this is what it draws to my bottom line. Well, why am I spending time over here?”

For me it was an eye-opener and it was also an eye-opener for my staff. And that’s really one of the things I had personally not been good at communicating. And I know I’m in a room with top performers. You probably all have been great at communicating to your staff. And they all just do what you say. But mine were a little more stubborn, maybe. I needed a way to communicate to them where the revenue sources were in our company and what was happening to each different department. And what we noticed was that, and I expected this and when I spoke in 2014 when I had made my shift, the group revenues were going to shift down. But, until I lost my dad, I didn’t know the vulnerability that I had set up for myself. So, I wanted to make sure that my business would be structured so that if I have another emotional loss, I’ve got that core balance.

How many in here do individual investment management? Raise your hands please. OK. So, you all don’t know what it’s like to start your year fresh. Because you start your year on January 1 and you know how much money you’re going to make. Because you have that much in assets under management pulling in money. Imagine, if that goes away, what you have to do every year. It gives you a little angst in the gut if you don’t have that revenue source. There’s a little bit of anxiousness going on for me because I start my year with much lower revenue because I let that group business go.

So, I had to revamp the group department. But what I had to do was to show my team our trailing 12 month revenues from the group revenue department. And what was it doing? It looked kind of like those curves that they showed this morning. That was not a pleasant chart to look at. But it was a real chart and I needed to look at it from my own standpoint. But they needed to see it too.

When you communicate with your employees and you put yourself in a vulnerable position, there’s a certain degree of respect they have for you. I needed to show them my vulnerability so that I could help them understand what we were trying to do. I want to give you raises, but I can’t when the revenues are doing this.

We spent time looking at those two departments. The individual medical department, we decided that that could drop by 20 percent to 25 percent. I was good with that. And I am good with that for a number of reasons. Mainly I enjoy going to work because my staff isn’t so focused on that nonproducing profit center. We’re taking care of the individual markets because those are people for whom somebody’s got to answer the question. But it really wasn’t what I loved to do.

I love working with these families. I love seeing their faces when they actually start building assets. And I love when they come in and say, “You helped me with my budget and you helped me get out of debt and all along the way you were helping me protect my family.” And then you do a little bit of counseling on the side. That, to me, is why I do what I do. I want to make those families feel more comfortable about their financial wellbeings.

So, we had to convince the staff to focus on the right areas. We had to show them the numbers. I carefully looked at my clientele base and who my ideal clients were. And my clients aren’t the lawyers and the doctors. My clients are mom and dad. Joe American. They are real families with good incomes and they’ll come in one month with baby and the next month they’ll come in with the baby and another one on growing in the oven. They’re just popping them out. And I love this because I don’t have grandkids yet, so I get to play with their kids. I realized that those are the people I enjoy taking care of. They need to be taken care of. And these are great income earners.

What we realized through this process was that my website wasn’t telling our story. It wasn’t describing who we were. If you haven’t evaluated your website and ensured that your website shows who you are as an advisor, and why people would want to work with you, tell your story, you need to. It was interesting listening to Ty Bennett, because we do all have stories. If you really sat down and figured out why you do what you do, you would find a story. My daughter, who is co-writing our website, said, “Mom, don’t you just do life planning, but you do it the right way?” She actually put that tagline underneath my logo. It says: “Life planning done right.” And that’s really what we’re doing. So, we are revamping the website.

We changed the compensation models for all of the team so that they’re compensated for the work that we want them to focus on. And not the work that we don’t want them to focus on. If you’re looking at your compensation packages for employees, how are you compensating them? Are you rewarding them as you make more money? Because, if you reward them as you make more money, you’re actually making more money. We set bars. “For everything up to here your bonus is X. Between here and here your bonus is Y. And from here and on up, it’s Z.” The employees know that, as we grow, their compensation grows. I also know by the numbers that, as we grow, my compensation grows, which obviously in the bottom line it’s why we do what we do. So, we’ve got their income changing. We monitor, on a quarterly basis, our key performance indicators. We’re making sure that the referrals are coming in. If we’re not getting referrals, I’m asking them, “Well, how can I support you?”

And, if I’m not getting referrals, they’re asking me, “How can we support you? How can we draw more clients into you so that you’re getting the type of clients that you like to work with?” Understanding what your key performance indicators are is an important way to keep moving your business model forward.

And then, understanding who your clients are. My sister made me go through this exercise of asking: What does your client drive? What do they look like? What do they do? And so, to the car that my typical client drives in the driveway, we know. So, when we’re developing our website, we’ve got pictures of those particular kinds of clients on our website. We’re communicating everything that they’re seeing is themselves, which is ultimately what we want. We want to know who is that client that really gives you great joy. Is it the doctor or the lawyer? Is it mom and Joe? Is it the entrepreneur who’s got a business with 10 employees? Who is your ideal client that, when they walk in the door, you’re excited to see them? And, when they walk out the door, you’re thinking, “Yes. That’s why I do what I do.” You need to understand that. My sister helped me hone in on that.

Like I said earlier, I realized that all of that connection went back to my dad. He was that family with five kids and a small business that didn’t have an advisor. Didn’t have somebody like people in this room making sure they were doing all the things they needed to do as an entrepreneur. Now an entrepreneur doesn’t need to just pay their supply bill, do they? They need to also pay their taxes. They need to make sure that they’re paying their employees well. Somebody didn’t tell my dad something which caused him to lose everything. And that’s why I do the work that I do with these families. We do the life planning.

We’ve got everybody’s focus on the two departments, the individual planning department, not the individual medical, and the group department. We’ve got a website designed that is focused on our clients and my sister has also got me sending blurbs to a local NBC station in our market about an idea about college planning or long-term care planning. We’re pinging them saying, “Here’s a news item.” I don’t know if you all know, but your news stations are desperately looking for good stories. You can only say so much about Trump. They need something good in their news broadcasts. If you give them ideas and just keep pinging somebody in your local news station, they may call you. And that’s what happened with me.

We’ve got the compensation packages fixed. We’ve got 25 percent of my time spent on the group development, 75 percent of my time on the individual planning department. One of the things I’m doing in my practice is holding living room workshops. I have my clients invite friends over and we’ll do a workshop on college. I’ll have four or five families in the living room. Feed them pizza. We’ll talk about college planning. Now I’ve got five people who have seen me in a living room, not in a big library, but a very personal environment.

We do football parties. I am a Seahawks fan. We’ll have Seahawks football parties and I’ll have clients bring their friends. We’ll have the quarterly giveaways. Those are some things I’m doing to encourage the families, because that’s obviously who I enjoy working with.

Movie nights are another great thing. Those are some of the things that I’ve done in the last six months to get the business back focused on who I really enjoy and what I really enjoy doing and helping my staff move away from the things that I don’t want them to deal with. For those of you who don’t know, my offices are on my property. So, for me not to want to go to work is a really bad thing. Because, where would I go? That was one of my big focuses. I needed to make sure that my staff wasn’t so overstressed by doing something that they didn’t enjoy doing. We took that part of it and said, “Let’s let that go down by 20 percent to 25 percent. And focus on this.”

Their whole attitude is better because now they’re not compensated on that so they don’t care what happens. They’re compensated over on the group side.

Milley

Before I get up, one thing that you and I talked about in the past that I think is worth sharing is your Tuesday mornings. Which is all part of the planning.

Wallingford

So, doing what you love. I love kids. I decided I was going to dedicate my Tuesday mornings to the local children’s hospital. That all came out of this planning process, it’s about doing your heart’s work. And getting involved in a local children’s hospital is a little bit challenging for anybody because you’ve got to go through these interview processes. I happened to know a gentleman who knew the director of the foundation and he got me around, did an end run so I didn’t have to worry about getting tackled by the big guy in the middle. I spend Tuesday mornings at Children’s Hospital. And this is the best part of my week, actually. I just go and hold the babies for two and a half hours, which, if you’ve got grandkids, you understand. I don’t have grandkids, so that’s how I get my fix. But it also has to do with doing what you love. And, if what you love is working with kids, I would suggest you dedicate time in your practice to doing that. Then, when you come back to your practice, you’re renewed. You end up meeting people in the hospital or whatever. But for me, that’s a time when I get to really spend time doing something that has nothing to do with my bottom line but everything to do with my heart. And that’s really kind of why we’re here talking about doing your heart’s work.

What was the third thing I said? My living room workshop? The living room workshops, football parties, movie night. Those are all kind of family oriented things.

Milley

As we left off, I discovered my practice had 432 families. What was I going to do about it? For me, it started with my team. I needed to know if we, as a group of four, were doing it right. Were we being as efficient as we could? So, we hired a business coach, human resources consultant by the name of Frazier Engel, who took us through the process. Everything from the procedural things we were doing from the first interview right through to our individual personality traits. Were the four of us doing what we do well?

Frankly, in the end, it was quite reassuring that once we did all this testing we realized each of the four of us had gifts that were being utilized. And what we liked doing best was the position we were in. So that was a nice relief to realize that we had that going. There wasn’t anything significant we needed to do from that front. OK. Blessing and a curse. The blessing was we were all in the right spots. The curse was we still have 432 families and we’re feeling overwhelmed. There wasn’t any quick switch we could flip that would suddenly make us dramatically more efficient.

Through this analysis with Frazier, we started working. OK, Bryson, what’s going to be your ideal workweek? For me, it worked out that ultimately 250 families is the right number. We came to this through numbers. Fifty-two weeks, subtract eight weeks out for holidays that leaves me with 44 weeks. I personally like having Mondays to Thursdays be the meeting days. Fridays I’ll call my clean-up day. Getting all the paperwork done or getting the notes finished. Having management meetings and so on. So realistically, we worked out that 10-12 meeting a week is what I could handle. So that meant I could have 500 client meetings per year. If we backtrack 250 families came out of the idea that I could see these folks twice a year. Which would allow me back to the parts that I enjoy. Getting to see them regularly, having that conversation with them and just being able to be in touch with their lives, where I felt I was starting to get out of hand.

So great, 432 families to 250 families. That’s a big change. And none of us like just leaving people out in the wind and the rain to figure out how they’re going to find shelter. I can’t speak specifically to Clay’s situation, but a colleague and I started realizing we were in similar boats. Between we realized it would be great to hire another advisor. But neither of us really wanted the responsibility of another team member. I was happy with the team of four and I didn’t want it to get any bigger. So we had to find an advisor who we could each move a portion of our practice to, who would be independent. They had to have the ability to run on their own and they would be what we would call a “quasi-employee.” Yes, this person was going to be our responsibility for getting paid but, realistically, they’re income was going to be solely focused on how well they cared for these clients as we moved that business over to them.

In the next month or so, I’m proud to say we’re going to have a woman joining us who has been working for our firm for the last 15 years and was an advisor before she started having children. She wanted to step back from that role and raise her family. Now she’s got older teenaged kids who are independent enough that she can have that freedom. I’ll be moving 130 families to her care and Clay will have a number that he’ll be moving as well. And this immediately relieves a significant amount of pressure. We don’t need to get into all the craziness of trying to sell a practice or, from her perspective, coming up with the capital to buy a portion of the practice. That’s the stress level on the other end that we didn’t necessarily want to put in place. Ultimately, it also allows a synergy of making sure that the clients are being well cared for. So that’s the first part.

The second part is, in going through my practice I also realized as I mentioned earlier, that there are a number of families who don’t necessarily fit my niche. They’re not where I’m at my best. And it’s nothing against them, it’s just what started out as a lucrative client because of assets to manage or estate planning to do, that’s not what I do best.

So, as a firm, we’re looking at this in the context that there are 17 of us. Between the 17 of us, there’s enough uniqueness around us that we can look to move clients to a colleague who does this type of business better than what I might. Now, logically that makes for a whole lot of work. But our back office team is working through how to create a system that will allow for that functionality. Now, if I have a referral come to me and I have that initial conversation and realize they’re not best suited for me but maybe for someone else, that there’s a 25 percent finder’s fee, a referral fee that we still want to acknowledge the fact that there was work done earlier to find this client or create that referral.

So, how do you create that continual revenue stream while at the same time allowing that advisor who’s taken the referral, to be able to run with autonomy and not end up with this gigantic behemoth of unintended consequence of worry about the referral?

Two hundred and fifty is the number I’m hoping to get to. I’ve got 432. Tara is going to look after 130 of them. I still have some adjustments to be made. And part of that is also looking at my clientele that I still have and thinking about whether they might be better suited with a colleague who specializes in what they do on a regular basis. So that’s another step in the evaluation. I haven’t quite come to the confident conclusion on how to do that, but know that that’s in the mindset.

Ultimately, the idea here is I now have things in motion that make me feel better about the prospects of my future and not being that out-of-control tail being wagged. And I can now start to see where this is going. That being said, I also, going forward, want to keep building the practice and finding that transitional method that allows me to stay focused on who my target clientele is. For me, my business building activities have consistently been and will continue to be, focused in one key area and that’s breakfast. I like breakfast. About 2001 or 2002 MDRT in Nashville. OK. Thank you. Robert remembers. At that meeting, Bruce Etherington stood up and gave a business building idea that hit home for me and it was to take your top 20 clients for breakfast and ask them to introduce you to their three favorite people to be around. The logic is simple. Good people attract good people. And if you’ve got a great person as a client, why wouldn’t you want more just like them?

This hit home for me. So, once a quarter, once we’ve got the numbers under control, I plan to get back to that way of building my practice. Now with lawyers and doctors being a big part of my practice, how many will end up in a referral meeting and you’re hoping for some introductions and people are a little hesitant. What I’ve found that’s great with lawyers and doctors is on their websites you can immediately see who they work with and when for lawyers, it will often say where they graduated from law school and what year. Then you just need to go to the law school website and you can see all the graduates who were with him.

So, what I’ve found is a subtle little way to create conversation for referrals to lawyers from a lawyer. I’ll have a list with me. If they seem hesitant, if they say, “Well, you know, I’d like to talk to them first.”

I’ll say, “Absolutely. But it’s helpful if I know who you’re talking to.”

“But I’m not really comfortable giving you names just yet.”

There’s no point in trying to fight that battle. Say, “Well listen. I’ve got this list. This is a working list. These names have come up in the past. I’m just wondering if you happen to know them.” Well, it’s amazing how quickly the conversation begins. They haven’t given you the name. You already have the name. They’re now starting to give you some credibility about whether that name is somebody worth calling. And before you know it, as the conversation goes, “Now I’m going to be giving them a call in a week or so, do you mind if I mention that we know each other?”

“Yes. That would be OK.”

From my perspective, that’s been a great business building tool. It allows me to market from a very focused attention. Doctors and lawyers. It’s very easy. I’m looking for more doctors and lawyers. Who best to give those referrals but more doctors and lawyers? So that’s helpful.

Small business owners, it’s a little trickier because there aren’t those lists. But it’s interesting how small business owners can very much relate to what it is we’re trying to do when building a business. I find them to be a little more sympathetic to the idea of referrals. So that’s been helpful.

The other business building activity that I’ve started very recently is an idea given to me by Gus McLean from Australia. Gus’s idea is to hold a lunch. He does it every quarter. I’m hoping, at this point, to get it to every half year. He holds a lunch for new clients, clients who have referred somebody or clients for whom he feels that there’s a good connection and he wants to say, “Thank you.” He’ll have this lunch in his boardroom and I did the same thing. The key is to have a speaker speak about nothing related to business. It can’t be an investment management person. It can’t be a tax planner. It can’t be any of that stuff. It’s got to be purely for quasi-entertainment.

At the most recent luncheon, I had a friend come who is a world-class professional triathlete. Legitimate contender to win the Iron Man championship in Hawaii. He just competed last week and got stung by a jellyfish in the process, so sadly didn’t finish. But the fascinating part and where the conversation was really interesting was the clients got a chance to network amongst themselves. They also get to hear how they got to know me and how they find working with me. Which begins in a building process of its own for more referrals. And again, I get to be selective as to who comes to these luncheons. So, the contacts that are created out of that are a spill-out effect again of that target market.

But the second thing that’s been great is it gives them a chance to step away from their business day. And in this case, in our conversations with Brent, as a professional triathlete he worked a 9- to 10-hour workday too. But it’s significantly different than any of us in this room. The logistics and the planning and the training and the sponsorship and the travel, it’s just like any other profession. But it just comes with a different animal. So that’s where we found some really good value in that.

For me, from a business building perspective, it really came down to honing back to that referral process. And really finding a way to not end up chasing down clientele who may be great clients, but are not what I want on going forward.

Ultimately, what we’re both giving you are stories that are very similar but significantly different in the implementation, both in what we do as a practice and what we do individually with our clients. And what we’re hoping for, not wanting the doctors and lawyers but the moms and dads driving the Hondas and Subarus versus wanting the doctors and lawyers, but being very focused on the number of people. So, within that, what we want to give you now is a couple minutes to answer three questions for yourself.

The first one is: If we’ve touched a chord with you today that it has you thinking, “I want to make some changes in my practice,” how are you going to make this happen? Who are you going to call? Take a minute and write down who you are going to call. And why am I saying this? Because if you don’t have someone you’re accountable to, the probability of it getting done is significantly less. Whether it’s a business coach or a mentor or a colleague, who are you going to raise this conversation with and who are you going to have help you move through it?

The second thing is: Have there been some solutions we’ve discussed today that hit a chord that you might be able to implement in your own practice? Whether that’s finding a colleague to refer business to, a younger advisor that you might use to help manage the practice, what are the aspects that have touched a chord?

And then the third thing is: What’s the timeline? You’ve got to give yourself a deadline. I don’t know about you, but when clients come in and we do all the discovery work and it’s time to get into delivering a plan, I’ll say, “I’ve got to book the time with you,” because, if I’ve got the time booked, we will get it done. Otherwise it’s too easy to get caught up in the minutia of day-to-day and next thing you know it’s six weeks later and you still haven’t delivered that plan. For me, if I’ve got a deadline, I’ll work to the deadline.

Same thing when it comes to this planning exercise within your own practice and adjustments you want to make to your practice. What’s the deadline? Is it having answers by December 31? Is it having answers by March 31, Q1 2018? Do you want to be implementing things by Q1 2018? What are those questions that you need to answer for yourself in that timeframe?

That’s what we have to present to you at this point. And we’ll have Ashish come and he can moderate some questions. But, if I can, Mickey, dive right into your question. It is a touchy subject in finding that segue process. And I’ve been on the receiving end and I’ve witnessed with other colleagues how their processes work. What we found helpful is the initial contact comes, in this case it will come from me. It will be, “Please meet Tara. Tara is going to be working with me to help with the servicing needs of your situation and being involved on a day-to-day planning perspective. I look forward to introducing you to her personally and in the next meeting we have together we will be working with you together in that meeting.” So, the intent is to have that first meeting together. Then, from that, she’s just going to take the reins and run with it. Now that’s what Tara and I have discussed. Ultimately, it’s going to come down to the clients as well. But part of this is also in our own situation having been on the receiving end of that. Whoever, in this case me, is directing that relationship. I literally have to give that date to say, “On this day, going forward, even if they call or email me, I deflect to Tara to take it on from there.” I have to support that and I need to have her back. And the clients need to realize that I have that confidence in her to do it. If I’m constantly stepping in, I’m not supporting that relationship.

And there’s no denying there is a little bit of awkwardness. I’d be lying to not acknowledge that. But what I found is it will take two meetings for them to gain the confidence that we haven’t sold them down the river. That she has the capability. That she has the ability to continue the relationship and to develop that further. So I can’t say it’s easy, but it is doable and possible. And, generally speaking, I think it would be fair to say there will be a bit of falloff but the significant majority, 90 percent, will be quite happy once they’ve had that chance to develop that relationship. Is that helpful?

Audience Question

[inaudible]

Wallingford

The two questions were, how does the compensation work and retention of that compensation, and then how does it work if this person leaves? Tara is going to be our employee, technically that’s what she’ll be. An autonomous employee. The way her compensation is going to be built is we’re going to look at the gross revenue of this portion of the practice. There will be a portion of income that we’re going to pay her as a draw. And then between the three of us we split the profits thereafter. So, yes, she’ll have a bonus in relation to that and then Clay and I will retain a portion of the revenue thereafter. Because she’s an employee if she leaves the business is still ours.

Ultimately, while not written on paper but discussed, if this goes well and she’s happy and wants to continue, maybe we then put it in a transition process where it becomes hers. But it’s also part and parcel of the anxiety of passing the business over is, is this a person that the clientele is going to enjoy being with? I feel very confident saying yes. We were very fortunate that she happened to be already in-house, so to speak. But that is a key item that factors into the equation for sure.

Peripherally, while not discussed in detail here in our firm, we also have an articling program where we have young people going through effectively what I refer to as a three years master degree in financial advising. They get all the technical knowledge through their CFP and the like, but then we’re developing them to be able to potentially have a book of business of their own. So yes, it’s arguably going to be a continual segue process thereafter.

Part of it was, I used to do these breakfasts early in my career, once a week. And then it became once a month. And now it’s once a quarter. So I may have to pull that back even still. In my perfect world, it would be 250 families all with significant assets to manage and estate planning needs to look after. And that would be fantastic on a going-forward basis. It’s not there yet. But there’s always going to be a little ebb and flow as much as I’d like to say all 250 families will always stay with me. It doesn’t work like that. We know that there’s going to be a half dozen that will move along for one reason or another. So there will always be a need to fill that void.

Audience Question

[inaudible]

Wallingford

I use life insurance as an asset class for two reasons. 529 plans can only be used for college. And with the evolution of a lot of changes within the college process, night schools, trade schools, people might not even need to go to college, I want to make sure the clients have the ability to use the asset for college or not. And it does not add to the expected financial contributions in the states. I don’t know how Canada works.

We use indexed universal life or whole life, depending on the family’s needs, overfunded so that they’re building cash value and then they’ve got that liquidity to use along the way. We’re evaluating their cash flow and what they can put aside, how much they want to have. Then we stop paying during college.

I have other advisors that I work with, that if they want to put money into 529 plans, I can give them to an advisor. Because I can’t do it. I put my securities license down in 2011.

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