The Perfect RIA

Key Links

• Books referenced in the episode: Extreme Ownership || The Dichotomy of Leadership by Jocko Willink and Leif Babin
• The Five Love Languages by Gary Chapman

----According to both Matt and Micah, to truly know your clients, you have to put these key principles to use in your practice:

[#1 Learn The Communication Styles of Your Clients and Team]

• According to Micah, there are about 15 different communication styles out there, but he personally likes to use 4 styles that he and his team attribute to clients and each other: these are the Driver, Analytical, Amiable, and Social communication styles.

1. The Driver is someone who wants to get things done right away. They aren't impatient so much as they are eager to get right to work and tackle their tasks diligently.
2. The Analytical person on the other hand works at a much slower clip because they want to make sure their ducks are all in a row, that all of the relevant data is squared away, and that no surprises crop up.
3. Thirdly, Amiable types of communicators truly value conversation and friendliness and won't open up and communicate effectively until they feel comfortable enough. Opening meetings with conversations and chit-chat is the best way to communicate with this style of person.
4. Lastly, the Social type is more spontaneous. A person with this communication style tells you what's on their mind and is expressive in their decision-making process. Maybe a little impulsive and emotion-driven, but in the best way, of course!

[#2 Start Meetings With a Client-First Mentality]

• Like Matthew states, starting meetings by addressing the needs of the client first has made all the difference in communicating with his clients in an effective way.
• Start with the phrase: "How can I be of most assistance?" Or a variation of the same phrase. The emphasis should be on turning attention towards the client first, as this will help ameliorate any nagging concern and thus open up a more concentrated meeting thereafter.
• A follow up question of, "anything else on your mind?" is always a great addition to the aforementioned phrase.

[#3 Ask the Client About Their Most Pressing Expense(s)]

• Micah says a great way to gauge the priorities (and subsequently adjust to them) is to ask what the next 1-2 months of cash flow will be most directed towards. If it's a vacation or a trip versus tuition for a grandchild, then Micah has the information he needs to communicate further with clients.

[#4 "Can You Tell me More About That?"]

• One of the most effective questions in the book, asking if clients can further articulate an expense or a plan can initiate a positive dynamic of trust, as well as unlock information that would have stayed put if not addressed.

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Matt and Micah's Action Steps

1. Start small! Take your top 10 clients and figure out their communication styles.
2. Next step is to go internal and attribute a style to yourself and your team members. Be honest and take ownership!
3. Lastly, Matthew suggests buying The Five Love Languages by Gary Chapman, which is not only for learning how to effectively communicate with your spouse, but for broadening your mind on the whole spectrum of communication styles and methods out there.

More details at: https://theperfectria.com/talking-points-for-true-communication-with-clients

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Produced by Simpler Media

The Perfect RIA hosts have a few action items for delicately dealing with clients during rough financial climates and circumstances.

[#1 Let Clients Frame the Conversation]

• Let the client direct the subject of conversation during meetings. This way, you let the client bring information to you: concerns, figures, facts, charts, you name it. The point being that you can let clients take the wheel and frame the conversation.
• Don't jump to conclusions! This goes with the aforementioned information; making sure you understand the client's concerns first, and then responding accordingly, is very important. You can then redirect and get them back on track after all anxieties are addressed.

[#2 Make Sure Your Client Knows That You Have a Plan]

• This is an extremely important facet of setting a client's' mind at ease. Reminders that there are safety nets, disposable income, and buffers at play can make all the difference, and can help keep a client focused on the long term goals that were set in motion from the early going. Just letting them know that there is still a cash bucket--or as Matthew call it, a "war chest"-- in place can make a big difference.
• Once you remind a client about the established, unwavering plan, getting them to articulate it back to you for reinforcement is a good litmus test for the mitigation of anxiety.

[#3 Wait for 7-10 Clients to Contact Your Firm Before Sending Out a Response ]

• Micah stresses to not train your clients to be reactionary to every dip and dive of Stock Market. If it falls by 500 points, don't rush to send out a newsletter and to pacify the minds of your clients. Let about 7-10 clients come to your first before reacting.
• Talk about the long term, and not the short term trends in the market that will inevitably happen again. Matthew says that his firm tries to not break their twice-quarterly reports, even during times of economic turbulence. This prevents Pavlovian conditioning to every happening in the market.

[#4 Have a Regular Communication Schedule with Clients]

• Matthew reminds you that clients need to have a consistent drip of information from your firm. This does not mean bombard the clients with newsletters and resources because they are being bombarded already; instead, it means to have a firm presence and to provide relevant, helpful information to your clients, on a rigid schedule.

[#5 Make Sure Plan is Clearly Communicated]

• Matt and Micah tell you to not give canned economic commentary or irrelevant information that takes away the focus of the long term goals. Clearly articulate the plan and information, and make sure that clients understand. Matthew calls this "doing it in crayon," which he learned from an engineer, and which also means to simplify the language as much as possible.
• Speak in language that accentuates the long over the short term. It is much too complicated and murky to try and predict a month's time ahead or financially forecast the economy. Clear communication means speaking in long term language.

[#6 Weekly Team Meetings to go Over Market Concerns]

• Matthew expresses just how important it is to have weekly meetings with your teams to express concerns about the market, to instill confidence in the overall plan, and strength of the firm. There's nothing worse than having a client call in and have an office manager or team member that doesn't sound confident about the longevity and efficacy of the overall firm, despite the precarious circumstances.

[#7 Talk the Talk/ Walk the Walk]

• Micah encourages advisors to do the same exact things they preach to clients. Being on the same page, having investments in the same stocks, being affected by the same market, all of these things are important to communicate for building empathy and reassurance in the minds of clients.
• Take ownership, follow the plan and program that you have set in place, don't bend to the whims of clients, and stay consistent in what you say; let your actions stay in step with your words.

[#8 Remind Clients That Your Door is Open]

• Matt likes to remind clients after every newsletter, meeting, you name it, that if they need anything to call, send an email, and express any concern they may have. A thank you is always expressed after clients reach out as well.

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

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Produced by Simpler Media

Although Matt and Micah realize that vacation is a time for much needed R&R, they couldn't help but notice the strong business practices of Disney during their time at Disney World. This episode is the product of their seizing an opportunity to appreciate some intelligent business principles at work. This episode is thus solidified around 5 central tenets from the Disney World business model that were gleaned during their vacation.

----According to both Matt and Micah, the five biggest business takeaways are as follows:

[#1 Voluntary Transactions]

• Disney World is expensive, but they are completely transparent with just how expensive they are. They even have shirts that say "the most expensive day ever." What this creates for those in the amusement park is almost a willingness to participate in the expensive nature of the park. Disney World promises a magical experience with an above average price tag; the biggest part of the experience is willingly forking over the money and getting that return of value that is promised. This is directly applicable to your practice.

[#2 Paid Prospecting]

• Once you pay the cover charge to get inside the amusement park, everything else still costs money. And every ride ends in a gift shop, as Micah states. They really don't give you anything for free. This is directly applicable to advisors who set up introductory meetings for prospecting and who stick to their rules about pricing. After introductory consultations, you won't throw free stuff to the client to get them on board, you demonstrate your ability to provide the client value, and it will cost commensurately.

[#3 Saving Clients' Time Through Skillful Guidance]

• As the episode explores, there are expert guides one can hire at Disney World who walk you through the park and who know the system well enough to provide you the most rides, attractions, and the most efficiency for your buck. Just like your advising practice, one should be a comparable guide for clients.

[#4 Increasing Pricing]

• It is well-known that Disney has no qualms about increasing their prices to line up with their need for profit and growth; so too you need to increase prices to meet goals and to fully bring the quality of work needed for your clients.

[#5 Don't Budge]

• Plain and simple, there are rules in place at Disney that are completely enforced. So too one should not bend to the whims of clients in your practice. Prices shouldn't drop, exceptions should not be made. Communicate to prospect and clients that your business model is concrete and its practices unwavering.

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Matt and Micah's Action Items

1. Be aware of what you need to charge to make 50% profitability (remember, this means after all salaries are paid!) in gross revenue a reality for your firm
2. Create unwavering rules that are not broken.
3. Just like the Disney World guide, guide your clients in a similar manner. Be the time-saving expert they can depend on.
4. When you are on vacation, leave the office at home--and yes, that means the email. And when on vacation with your family in particular, being "there" with your family is the most important thing.

More details at: http://theperfectria.com/5-business-lessons-learned-from-disney-world/

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Produced by Simpler Media

The content of this episode is anchored in 3 necessary traits for effective financial advising. In addition, Michael provides action items for better financial practices.

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Key Links

• Ken Gau and Tom Unger's Program: The Academy of Preferred Financial Advisors

-----According to both Matthew Jarvis and our guest, very accomplished wholesaler Michael Appleby, the most successful advisors have these 3 traits:

[Focus]

• Successful advisors have the concentration to take their practice to the next level.
• They have garnered enough concentration to understand who their ideal client is (i.e. pursuing a narrow market versus using a shotgun approach).
• They also focus on the strengths that bring their team together, turning the practice into a smoothly-functioning mechanism for success.

[Discipline]

• Successful advisors are disciplined with time management: their schedule, marketing outreach, every facet of the business.
• And they understand the importance of investing the necessary capital in facets that will make their business flourish: prospecting, personal development for the advisors themselves, coaching, or hiring a skilled team.

[An Affinity for Productive Business Partnerships]

• Successful advisors are not hucksters; they won't peddle or waste time on small-scale operations with prospects or business partners.
• They are focused on establishing productive partnerships with their wholesalers or other connections.
• They make value propositions to accentuate the most important aspects of their symbiotic partnership--and they stress honesty during their conversations about what works and doesn't work.

[Additional Topic: Michael's Most Common Advisor Mistakes]

• They ceased to do the basic activities that brought them to success: the cold calls, due diligence on prospecting--in short, the important actions that first put them on the map.
• Another common mistake is a habitual procrastination towards business planning and forward-thinking types of organization.
• Advisors drop the ball when speaking events aren't rehearsed enough: the speaking is flat, the fluidity of the event isn't seamless, seating isn't mapped out, directions aren't given, the organization is clumsy, and so forth.
• They don't follow the same advice they give to clients and thus sacrifice their integrity, reputation, and the overall weight of the advice they give.

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Michael's Action Items

1. Advising isn't a commodity. Offer something that resonates personally with individuals and which communicates tangible value in a way that transcends the dollar signs.
2. Hire a coach, join a program, plan your work, and network.
3. Pick a plan and work it consistently. Be persistent with it; it will pay off.

More details at: https://theperfectria.com/confessions-of-a-wholesaler

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Produced by Simpler Media

Let's face it; sometimes partnerships sour. In all vocations, all industries, differences arise between individuals. And for something as valuable as the dynamic between advisor and client, sometimes firing clients is an absolutely necessary action. If an RIA is using time on a client that is less than ideal, that dynamic should be reconciled. Anything but the garnering of massive success for both client and advisor is a recipe for a stagnant practice. So, by necessity, Matt and Micah gather their resources and experiences to walk listeners through the when, why, and how of firing clients.

Matthew mentions an important caveat during the start of the episode: this isn't about cutting off the bottom 20% of your books; instead, it is about analyzing all clients and making a reasonable assessment towards future sustainability with those particular clients. It is also about finding the clients that "fit your mold," as Micah says. If they don't, it is important to mentally admit you made a mistake and then move on accordingly.

Matthew also points out that while you are analyzing your existing client base, the most important thing to consider is the cost. Your cost-benefit analysis of your clients should take into consideration if your confidence is being undermined, your process is being disrupted, or you cringe whenever 'X-Client' calls. Matt also states that if his clients don't follow his advice, they are out. Especially if clients start undoing key steps in the process; or, even more so, if a client keeps missing meetings, one must part ways.

But with all this being said, there is definitely a delicate way of letting someone go. Sending a letter, not going into the details in the document, and refunding the current quarter is Matt's process. And then taking any calls that may come through for explanations. Being delicate and careful on this issue is very important. Micah prefers having face-to-face meetings; but again, he communicates his reasons for firing the client very carefully. Both also bring up the important point that one should never be beholden to a client. This means that you should have a deep enough reserve of clients to keep the revenue stream flowing--even if you have to fire a client who brings your firm a lot of money.

Both Matt and Micah have some action steps for everyone in the industry. The first is to print off a list of every client you have and then ask yourself this: would you hire any given client again? If not, if you can't justify your keeping them, or you cringe whenever you see their name on the caller ID, it's time to part ways. Doing this first by yourself, and then later with your team can be a very powerful tool.

The second action step is to make a commitment to what Micah calls the "graduation conversation"--that is, the firing conversation or letter that will mark the termination of your partnership with a client.

The third actions step is to draw up a statement that clearly communicates your moral code, beliefs, and a line that won't be crossed by any means, to avoid waffling or gray-area conundrums. Outline what a 'fireable offense' is.