I can do better than that. Here’s a real conversation I had not long ago.
Client - I have to start taking my ex’s pension, since he’s retiring and I’m entitled to half (as of January 2002, when they divorced. About $300 per month.) How can I roll this into an IRA, or otherwise not claim it as income?
Me - You can’t roll it into an IRA. Not with a defined benefit plan. However, you CAN contribute the $3600 per year to an IRA and take the deduction. It works out the exact same way.
Client - I’m already maxing out my 401k.
Me - You can do both. (I did my homework and made sure she was under the “non-deductibility” threshhold.)
Client - You mean I could have been taking deductions all this time? Why didn’t anybody tell me???
Me - Don’t know. Sorry 'bout that. (FYI - I had never prepared her taxes. This was the first time I had ever talked to her.) But I can set up the IRA for you and make sure that we take the deduction in years going forward.
Client - Well, I already have an advisor. She’s very very very very very good. I’ve been with her for 30 years.
Me - “…” (I wanted shoot back with “If she’s very very very good, then why has she never discussed this with you in 30 years?” But I didn’t, because she was a tax client and I didn’t want to offend. This was part of why I left the CPA firm.)
I know how you feel. We have talked and you know I had an RIA within my accounting firm before I made the leap to an advisory firm 15 years ago. You have something unique: CPA and CFA. You can offer advice that very few others can. You need to make that known. Early and often.
We have all been to meetings or conferences or whatever, and every person in there is doing the same thing: asset allocation for a fee and making the client feel like he or she is doing a great job. I was at one Fidelity conference (small, only about 15 advisors) and the moderator asked each person to differentiate themselves. Oh, sure, I specialize in doctors, or entertainment or whatever. Please. They all did the same thing. And likely none better than the other.
When asked what you do, lead with the wealth manager (or whatever name you want to give it. If I were you, I would come up with something even fancier.) Then hit them with you are also a CPA. (CFP too? I forgot) In the end, you do have to be somewhat of a salesy douchebag. It comes with the territory. But you have the credentials and experience to back it up.
Then, once you actually are in front of the prospect, how do you create a need and fill a void without sounding like a salesy douchebag?
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Once you start identifying all these planning issues and opportunities, you start to story tell a bit, use a real life example where you can quantify value and $$ saving for that particular client, illustrate their current planning hasn’t addressed their situation, then ask what do you want to do? Do you want to become a client? Then, just stop talking, don’t say anything until they respond first.
i cant stress how important it is to trash the people they are currently with. but to do it in a very subtle manner! and to show them the dollar value you would have offered. whether it is by tax. or potential growth from your levered etf index plan.
Interesting you bring up EDJ. That’s not at all how they operate. They actually can’t index (or, EDJ makes it nearly impossible). But that’s neither here nor there. What sets EDJ apart from other advisors is their level of service. Did you know they charge the highest advisory fee on average of any broker-dealer? Just their wrap fee (so not including underlying product expenses), advisors charge 1.57%. And, here’s the kicker, EDJ is consistently rated highest in customer satisfaction. High fees and happy clients…what? It’s because they’re part of the communities they live in. People are willing to pay up for the trust, commitment, and overall good vibes they get from their EDJ advisor. It has nothing to do with investments as EDJ basically forces their advisors to use their own home office models.
God I hate their business model. But it works amazingly well.
Well I don’t like to trash other advisors. Doesn’t look or feel professional in my opinion.
I just focus on my process, service model, and help the prospect articulate what is important to them in their life. If you have identified a significant planning issue / gap, you have to stick handle it carefully. You don’t want to be giving away free advice, but provide enough of a carrot to get them thinking about it, and demonstrate how you have helped other clients deal with similar issues. Let them start putting 2 and 2 together regarding the quality of advice they are receiving.
Greenie, I can’t give advice on how to solve this issue you seem to be dealing with for five years. But I would say you should consider looking into remote talent to helping you scale. I haven’t used them, but recently found some Indian firms who do bookkeeping for like $5 an hour. I’m sure there are a lot of low level tasks you can outsource. I personally do it in my job. Pretty amazing the talent you can find for anything (secretaries, book keepers, programming, etc). Once you find some good talent you have Uber style employees who scale up or down with you
Yes, but this time it’s different. This time, it’s not something I can passively ask and then dismiss, because I have a “real” job that acts as a safety net. Now, there is no safety net. It’s time to sink or swim. (Hopefully the latter.)
On your comment about outsourcing–I definitely agree with you. Problem is–you have to have customers to outsource. Right now, I’m the one that is being outsourced to, by other practicioners in the area. Once my time starts to get scarce, I’ll take the next step and figure out what meaningless, low-margin tasks that I hate doing (bookkeeping) can be outsourced to others who enjoy them.