Confessions of a Wholesaler [Episode 15]

In this Episode of the Perfect RIA Podcast:

Accomplished wholesaler Michael Appleby offers a unique perspective on what constitutes a successful financial practice.


It is necessary to seek advice from professionals who have experience in a myriad of different environments. And there’s almost no better position to learn from than wholesaler when it comes to financial advising.

Michael Appleby, the guest of this episode, has seen a lot of ineffective processes, gimmicks, dead-ends, and bad ideas throughout his career. Now retired, and perhaps distanced enough from the trenches of the industry to offer even more perspective, his communication on the issue of successful financial advising practices is extremely important.

Three Important Traits of Successful Advisors

Trait #1 (Focus)

According to Michael, focus, discipline, and a desire to cultivate productive business partnerships are three important traits for anyone wanting to gain or maintain success in the advising world.

During the episode Matthew and Michael start with the importance of focus. Simply put, concentration needs to be central to your business process. Success will come to those who focus on a narrow market and won’t be swayed by every distracting promise or gimmick that comes around; a successful advisor will also know exactly what an ideal client looks like to them. Michael tells the story of how a firm he worked with used to have an ‘ideal client’ plaque hanging up in the office. This plaque had ten defining bullet points on whom their ideal client was. Some of these included characteristics like: the client has to want to work with us, take advice from us, make concrete plans, and so on. That is definitely a recipe for focus, and by extension, success.

Trait #2 (Discipline)

The next trait that is discussed is discipline. And trust Michael when he says that you cannot hope to be a next-level advisor without the discipline required for proper time management. In fact, he says that every facet of your business should be managed. Having the discipline to prospect, make calls, market, and stick to a strict schedule is what it takes to gain massive success in the industry. He tells listeners during the episode that he can always tell the best managed firms by their strict 30-minute meetings. Their time is valuable, and they plan around the clock (to the minute) because of it. That takes discipline to follow such a rigorous schedule, but doing so will bring you the benefits.

Trait #3 (Desire for Productive Partnerships)

As a wholesaler, Michael knows just how important partnerships can be. And where he sees a lot of break down in productivity and efficiency is certainly in this avenue of the business. Instead, communicating honestly, planning for the big-picture instead of playing the short-game, and most of all setting up value propositions that communicate the ‘samepagedness’ between partners is one of the most important traits that are needed in the industry. It is a trait that has considerable carryover for your team, your clients, and your overall productivity and effectiveness as an advisor.

Michael’s 3 Action Points

In addition to Michael’s most common advisor mistakes (which you can find within the episode), he leaves three actions points for all listeners consider:

  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.
  1. Hire a coach, join a program, plan your work, and network. For a program that will bring a lot of value to your life, Matthew is a strong advocate of Tom Gau’s program The Academy of Preferred Financial Advisors
  1. Pick a plan and work it consistently. Be persistent with it; it will pay off. Michael said that even if it doesn’t take you where you initially planned, you will still benefit from the discipline, focus, productive relationships you will garner along the way.

Full Transcript

Announcer: 00:01 Welcome, to the Perfect RIA Podcast, the only show dedicated to helping you build a highly effective financial planning practice. That delivers both an amazing client experience and an amazing lifestyle for you and your family.

Announcer: 00:20 What you will hear today is not theory, but rather real world, tested in the trenches systems that your hosts Micah Shilanski and Matthew Jarvis have developed in their own respective practices, which have been recognized as some of the best in our industry.

Announcer: 00:40 Before we get started, a quick reminder from our attorneys. This podcast is intended only for a professional audience and should not be considered as tax, legal, financial, investing, or even cooking advice. Past performance is no guarantee of future results and you alone, are responsible for you.

Announcer: 01:04 And now, lean forward and let Micah and Matthew show you how to build the perfect RIA.

Matthew Jarvis: 01:15 Well hello everyone, welcome to another episode of the Perfect RIA Podcast. Your host today, flying solo, Matthew Jarvis. My good friend and co-host Micah Shilanski is off on other adventures today. I’m very pleased to have on the podcast with me today, my good friend and actually long-time wholesaler, Michael Appleby. Michael, I’m trying to think how long it’s been? How long have you and I known each other? When did we first start working together?

Michael: 01:38 Matthew, I think it’s coming up on 10 years and you need to change that just a little bit, former wholesaler.

Matthew Jarvis: 01:44 That’s true, my apologies. I go straight to that because the memory that stands out most, Michael, from the 10 years or more that we’ve known each other was about 10 years ago when we first started working together, you had said, “Hey, Matthew, you’re doing a pretty decent job here, but you really need some more help. You really ought to reach out to Tom Gowan and Ken Unger and check out their coaching program.” I have to admit, Michael, at that time was pretty leery. Partly ’cause I couldn’t afford it, but I was kind of leery, and I checked it out and as you know and everybody who listens to the podcast know, that was a really transformative mark in my practice, and it really exploded after that advice that you gave me. That was why I was really excited to have you on the podcast because that piece of advice, which was one of many advices you gave me, was just incredibly valuable. So, I want to publicly thank you for that and really the role you played in transforming my practice.

Michael: 02:36 Matthew, you’re welcome and I’m rather proud of the fact that you listened to a wholesaler who at that time, you didn’t know very well. When I walked in your office, if you recall, I walked in, we said hello, asked a little bit about your business and immediately I saw someone who is bright and I know I’m on your podcast so I don’t want to embellish too much, but I saw someone who is bright, had a lot of potential, but more importantly you asked the question, “What are other advisors doing? How can we take the practice to the next level?” So, you actually asked the right question and candidly you were one of the very few advisors over the years, that actually took and executed on a wholesaler’s advice, to an incredible degree of success, so kudos to you.

Matthew Jarvis: 03:14 Yeah, I want to highlight what you said there just for a minute, Michael, ’cause I think it’s important and I’m glad you brought back the memory of that meeting, which is I do remember asking you, “Hey, what are other successful advisers doing?” I think, and I’d be curious, Michael, your experience, there’s a lot of advisers that like to talk. They talk about what they think should work, they talk about what they read, what they heard, but I’m really only ever interested in hearing what successful advisers are doing. I figured as a wholesaler you had talked to hundreds, maybe even thousands of advisers and you had a unique angle.

Matthew Jarvis: 03:45 That’s one of things we want to talk about today is your unique angle in seeing what the successful advisor are doing versus what the unsuccessful advisers are doing.

Michael: 03:51 Well, thanks. After almost 20 years on the wholesale side of the business, it was very, very interesting because I did talk to and visit with thousands of advisers and everyone will think that they’re successful. Success is really in your mind as to what you want to accomplish. I would say there’s a large portion of advisers that haven’t really defined success in their mind, so they’re always struggling or grappling for the next level. When in a lot of cases, they actually have it because their business is a reflection of what they’ve put into it.

Michael: 04:23 When I look at the most successful practices or advisers, it’s typically the focus and the discipline to take it to the next level. I think that’s one of the things that you’re Perfect RIA program offers is that ability to look at and go to the next level based on focus. When I look at focus and coaching, those are two of the most successful traits that I saw in successful advisers. When I say focus, it’s not just on the business, but understanding who your ideal client is and have those processes repeatable. You can be a one-person office, or you can be a ten-person office with a huge team, a marketing machine, but in either event whatever your particular goal or strength is that’s really where your focus ought to be.

Matthew Jarvis: 05:06 On that note of focus, and again I know this is a little bit anecdotal, but do you think it was pretty consistent in the advisers that you saw that were successful, they focused on a specific market versus a shotgun approach, anybody who has money, we’ll try to help them?

Michael: 05:19 The focused, they knew who their ideal client was. In one of the most impressive offices I ever walked into and I believe they were very successful and actually one of the advisers was a former wholesaler. What they had on the wall was, they had their ideal client identified in 10 bullet points, who was their ideal client. So, if you’re a new prospect or you’re an existing client, when you walked in there you knew that they knew who they wanted to work with and who they best fit with. They got a lot of referrals by identifying who their ideal client was.

Matthew Jarvis: 05:53 Really? So, they just had a plaque on the wall, here’s our ideal client, for everybody to see?

Michael: 05:57 Yeah. It was on the wall of one of the offices I had visited.

Matthew Jarvis: 06:01 Yeah, and you’ve seen a lot of offices over the years. I’m just curious and perhaps too many years have passed, but can you remember any of the points they had on there? Was it sort of like, hey, if you’re a nice person and you have a couple dollars then we’ll work with you or was it really dialed in?

Michael: 06:17 As a matter fact, I think when I first saw it we didn’t have an iPhone at the time, so I didn’t have a camera on it ’cause I wish I took a picture of it, but a couple of the key traits are we want clients that want advice, that will follow advice, that have a plan, that have their destination. Those were some of the keys. That follow advice and don’t mind paying for it. They wanted people who wanted to work with them. They weren’t chasing everyone who had money. Yeah, I thought it was very interesting and they had a very successful practice. They did a lot of marketing, but just from a wholesaler perspective to walk in and to be able to identify who their clients were. They were a real planning firm, but the point of it was that they were focused in on a particular market and they didn’t have on their asset size because I think just through their vetting process of their marketing, they were going to pick up their ideal client.

Matthew Jarvis: 07:07 Sure, sure, that’s a really interesting example. You had mentioned that there were two real keys, focus and the other was discipline, which I suppose some of that can be synonymous or interchangeable, but I was wondering if you could think of any examples of discipline, really specific ones, from successful practices? I know something that Micah Shilanski, who you’ve known Micah at least as long or longer than you’ve known me, we always focus on a discipline of time management. You really have to be disciplined about how you run your schedule and I’m wondering, Michael, if you can think of other specific examples of discipline in successful practices?

Michael: 07:39 Yeah, the discipline in successful practices with time management goes from every aspect of the business. You plan your work and work your plan. From a wholesaler perspective, you really don’t know how deep or how detailed an adviser is managing their time, but a big tip off to that is when they make an appointment and they give you half an hour. They say we only meet with wholesalers on the third Friday of every month and you have your half hour slot. That’s a huge tip off to me have phenomenal time management.

Michael: 08:11 Unfortunately, on the wholesalers side you’re in there for a half hour, 45 minutes, maybe an hour every six weeks or once a quarter or once a year in some cases, so you don’t get a full snapshot, but you can pretty much tell who has their marketing calendar laid out one year in advance and who has their list of preferred vendors. So, there are a lot of tells we like to call them, of who has effective time management, but on that time, management also comes where I think advisers miss the boat, is treating their marketing as a business expense and allocating time in there for it.

Matthew Jarvis: 08:47 That’s a really good point. I know something that Micah Shilanski talks about is in their budget for their firm, they have specific percentages carved out for marketing, for staff development, for technology and to your point, they don’t view it as an expense, they view it as an investment and it’s not like, well, maybe we’ll spend X and next year we’ll spend Y, they have a really set amount. We’re going to spend at least this on marketing, on technology, on personal development, so it’s interesting that you would point that out as well. That successful advisers view marketing as an investment not an expense.

Michael: 09:16 What I like about you two guys is that having known Micah for almost his entire career, is watching you guys grow and flourish and really taking it to the next level using business techniques because as financial advisers, financial planner, asset manager, or however you guys want to categorize yourself, we’re all small business people and we need to treat it as a business as well. That investment is big and the best thing I would say from a wholesaler perspective is that wholesalers want to invest their time and their resources with good partners. What I found as a wholesaler was a lot of times the wholesalers best advisers asked the least, I found it funny. One of the other stories was as a new wholesaler, when you were first making your rounds in the territory, you figured out who the shucksters were real fast when everyone’s asking you for money without any commitment to doing any business with you. It’s very interesting how things play out over time.

Matthew Jarvis: 10:20 Yeah, let’s dive into that a little bit, the shucksters, if you will. I remember one time meeting an adviser when I was earlier in my career and he says, “Oh Matthew, I’ll only meet with a wholesaler if he’s going to bring me a golf shirt and a bag of golf balls.” He was really touting how much he abused his wholesalers. I sort of thought to myself, well that’s going to get you some bad karma in the universe, but really, I thought, I only want to meet with a wholesaler or anybody, I don’t really care if they’re a wholesaler or not, if they can bring value to my practice. I know that’s something that you always did.

Matthew Jarvis: 10:50 By the way, for those of you listening, Michael’s been retired for several years as a wholesaler, so please don’t think this is a plug for his wholesaling. We’re just reflecting on what did we see as good wholesaling relationships and what were not so good ones, even today.

Michael: 11:04 You know Matthew, that’s a great point because at the end of the day the person who … I had those over the years who said, “You can’t come see me unless you bring me a golf shirt or a dozen of your Pro V1’s.” They fell into two camps, one advisor would say, “Well, I want to give those to my clients.” Well, if it’s cost of admission versus lunch, have it, but when advisors are talking to one another, “Yes, I got this, and I took that.” They don’t value their time very much and that’s the unfortunate part. Sometimes people just don’t realize how much their time is worth.

Matthew Jarvis: 11:39 That’s a really good point. I had never considered that. My client never looked at it in that light, so that guy who was so proud that he wouldn’t meet with a wholesaler unless he got a $40 or $50 t-shirt, boy, an hour of your time is worth $40, no wonder you haven’t gotten to the level of success that you could.

Michael: 11:59 Exactly and if I delve back in the wholesaler stories, when I think about what wholesalers are least appreciated for in a general sense, is that they truly, the good wholesalers and I’m going to reach out and say the majority probably are, is that good wholesalers truly want to partner with their advisers and be a resource not just a shopping cart. That they truly bring an incredible amount of knowledge because typically wholesalers are highly trained, their students of the business, and they bring a lot more than just pushing a product.

Michael: 12:25 If a wholesaler walks in just pushing a product, well, if that’s what the adviser would like and they want to know about the product, have at it, but if you want to truly utilize your wholesaler as a business partner, take advantage. They’re typically highly trained in a lot of good ideas, a lot of good ideas.

Matthew Jarvis: 12:41 Yeah and to your point from earlier, and have seen so many practices. They probably have a closer look at a wide breath of practices then really anybody else in the industry ’cause they’re seeing inside of so many. Your point about a relationship, I can think of a wholesaler relationship manager that I’ve got right now with one of the companies that we use and it’s really like you described, it really is a partnership of sorts. I don’t ever call relationship manager, I don’t call him up for freebies or ’cause I want some kind of promo. I call him when I need something that’s valuable to the client and then he calls me when he has something that’s valuable for my clients and so it is really a symbiotic relationship of serving our mutual clients, if you will.

Michael: 13:19 It is and that’s where you’re a partner. Where the challenge get is for a wholesaler, and an adviser is that by nature of the industry things change and sometimes the product and sometimes it doesn’t. I think that what needs to happen is a little bit more honesty on both sides. Advisers have, in my mind over the years, the majority probably were not as honest with their wholesalers and not because they’re dishonest, but because it’s tough to tell someone the truth that things have changed, and I’m not going to be using your product or using you and here’s why. Some people have been very vocal, but that’s something that I think needs to be brought to the table, the value proposition. What are we each bringing to the table here?

Matthew Jarvis: 14:03 Yeah, that’s a good point and I know in my office, my staff has really specific instructions when it comes to wholesalers or product vendor or anybody really. Kind of say, “Hey, this is what we do. Here’s our investment philosophies. Here’s our ideal client.” My staff will say, “Tell us whatever you’re offering would fit to that model?” If we get this, “Our product’s good for everybody or our investment’s good for everybody.” That’s an automatic screening, but if they can say, here’s where it fits. This is to your point Michael, here’s how it fits or here’s how it doesn’t fit. Those are the ones that get my respect. I say, “Great, if you can be honest with me where it fits and where it doesn’t, then we can have a discussion.”

Michael: 14:42 Exactly and it’s fun because at the end of the day even if it doesn’t fit today, what I started doing was, where it didn’t fit and we had those types of conversations, if I could have 15 minutes on the phone with the adviser and I was a big fan of phone appointments, just to establish that relationship and to build the goodwill so that when the time did come, we had the green light to go in there. Just to understand more about the advisor’s business and so product with product and understanding the adviser’s business was really big.

Matthew Jarvis: 15:11 I like that you mentioned doing the phone appointments. A big part of my prospect process and really for anybody, is before I’ll meet with somebody, be it a wholesaler or a prospect or even a referral, I always insist that we have a 15 minute phone appointment first and I position it, I say, “Hey, I want to make sure that we’re a good fit for each other. That our time together could be well spent, so let’s just spend 15 minutes getting to know each other.” Maybe that’s something I picked up from you, Michael, from your appointment days, so I want to give credit where credit’s due, but I think that’s a great approach for advisers, for wholesalers, for everyone to use. “Hey, before we commit to driving to see each other. Sitting down for an hour, even over lunch, why don’t we take 15 minutes.”

Matthew Jarvis: 15:52 Michael, in those 15 minutes calls, what kinds of things would you talk about? I know it wouldn’t just be a 15-minute sales pitch for the company you represented.

Michael: 16:00 Well, that’s actually interesting and I got to tell you also, is that I met you mid-way through my career. If I had learned that technique 10 years earlier, I would have saved a lot of people a lot of time, but that initial phone interview is huge. It’s literally hearing the other person, just to get that comfort level. Hi, how are you? Tell me about your business? Here’s a little bit about what we do, what type of clients, what are your opinions of these? Have you used them before? How have you used wholesalers?

Michael: 16:29 It’s very, very efficient and then there’s that connection or non-connection. You can really tell the way both sides treat one another and it’s a little bit of speed dating here.

Matthew Jarvis: 16:40 Yeah, it really is. When I do my 15-minute meetings and I always, by the way, and I know you did this as well, if I’m scheduled to call somebody at 3:00 PM, their phone is ringing at exactly 3:00 PM. Never a minute late because I’m going to stick to my word right out of the gates, but the very first thing I say to them after I know that it’s them, I say, “How can I be of most assistance to you today?” They’re used to having to be bombarded or have to fight their way to have their needs heard and we’re starting right out of the gate, “How can I be of most assistance to you?”

Michael: 17:11 Well, that’s interesting you say that because that was one of the most surprised questions I think a lot of advisers didn’t expect when as a wholesaler I would dive in and ask a few questions about their business, not to be intrusive, but just to find out what do you do and how do you do it because that way we can then cut to the chase as to where we fit or maybe we don’t fit. Being on the variable annuity side, it was a niche product where there was a love, hate and sometimes you would give them the courtesy of your time and you’d find out, wow, okay, this is not a fit.

Matthew Jarvis: 17:46 Yeah, we could have just talked about this over the phone. I didn’t need to drive out here to hear how you don’t like me.

Matthew Jarvis: 17:53 Let’s switch gears just a little bit and we like to focus on success in this podcast, but sometimes it’s [inaudible 00:17:59]. Not to beat up on people and not to make this list of ways to screw up, but so that we can self-identify. So, maybe my question then Michael, is what mistake did you see advisers make that they didn’t even know that they were making? What was something that was consistently a problem in practices and for you it was so glaring obvious, but they couldn’t see it?

Michael: 18:18 We’re allowing looking for a magic elixir and I heard it often and over and over again. What I would typically ask advisers because wholesalers have seen all the practices, we know a lot of good ideas, but execution is something else. That’s on a resource level, that’s on a personality level, some people are better public speakers, some people are more organized. The key question that I would flip it back around is what did you do to get your start? How did you start in the business? The eye bulbs would always open right up. “Well, I got on the phone, I called everyone. I did this, I did that.” Well, if you’re having a lull in your practice right not, it worked so well before, why did you stop?

Michael: 19:03 We’d laugh about it because it was back to basics. Not to use sports analogies in this PC culture, but it’s blocking and tackling. It’s a matter of what really works and more often than not, after the laughter, advisers would admit that they didn’t want to call, they didn’t want to do the same activities that brought them to success.

Matthew Jarvis: 19:24 Yeah, that’s a good example. I see it a lot and we talk about being PC, this is a sacred cow, I know, people get really focused on digital marketing and social media marketing and the say, “I’ve got 10,000 Facebook followers and 5,000 LinkedIn followers and my podcast has so many downloads.” Then you kind of push them, you say, “Well, how many of your clients did you bring in from that?” Then you get these sheepish responses, “Well, it’s going to come around.” Well maybe it will and here I am on a podcast right now and there are some advisers that are bringing in a lot of clients from podcasts, but it’s kind of goes back to me, I want to know what’s actually working.

Matthew Jarvis: 20:01 To your question, how did you bring in clients when you first got started? I want to know how you’re actually bringing in clients, not what’s got you excited or has your attention right now.

Michael: 20:09 Exactly, and when you go back to basics, this is not a hard business. It’s just getting out there, talking to people, creating activity, and figuring out what is natural to you. Often I look back on my activities as a wholesaler and they’re activities I love to do, but when I sit back at the end of the year for my business review and business planning for the following year, I realize, wow, I spent a lot of time doing this particular type of marketing and it didn’t bring in any results. You look at where did the business come from and there was somewhat of an osmosis effect, but reality was it came from another activity that you thought, “Wow, I didn’t realize that.” And then you change up.

Michael: 20:45 I think a reflection on your business each year and if I could say the one thing that people need is planning and the planning should be happening now, not January one. That’s probably the item, going back five questions here, is what advisers didn’t do enough of and that was business planning.

Matthew Jarvis: 21:04 Yeah, that’s a really good example and that’s something that Micah Shilanski and I, we stress about all the time. You should always have your year in advance planned. Micah and I, we do that kind of extremely, we’re saying, “Hey, we’re not even going to be in the state except for these periods of time when we’re working in the office.” Advisers are the same thing, when are you going to do your client events? What marketing are you going to do and when? How are you going to deliver value to your clients? That should all be mapped out. It can’t just be a haphazard thing. It can’t be like, “Hey, what do you think we should do this week?”

Matthew Jarvis: 21:35 To your Michael, you’ve gotta have this really solid business plan because while we are financial planners or financial advisers, however we want to give ourselves, as you pointed out in the beginning of our call, ultimately we’re small business owners and if we don’t run our business successfully, our planning [crosstalk 00:21:52].

Michael: 21:52 Exactly and then when you do work with wholesalers or you do have new clients or prospects that are elusive, those event are events are on the books. You can utilize resources, you can direct people to those events. You’ve done a phenomenal job, in terms of marketing and seminars and if people don’t have time to meet with you, when you have a particular topic or speaker that they’re attracted to, they’re going to show up. So, you couldn’t get them in the office, but all of a sudden, you’re doing an audition for them on stage and they get to see all of the other happy people that you’re working with.

Matthew Jarvis: 22:23 Yeah, that might be a good segue, I know that you did a lot of events while you were a wholesaler. You and I went, we did a client event the other day where it was one of my client events that you were gracious enough to come and afterwards over a beer or two, we were really reminiscing over the finer points of putting on a really good event versus just a mediocre event. Like I said, Michael, you’ve done a lot of these. I’d really by full highlights, things you said, this really is what makes a good event versus this is what makes a mediocre event.

Michael: 22:51 I’m glad you said that and I’ll put a feather in your cap because one of the comments you had made, which was spot on, is that no word is ever said accidentally. When I look back on my best presentations and seminars, it was when everything was rehearsed. Everything from how the client or guest was stepping out of the car and finding the room to what they were going to see from a tablecloth to who was going to be checking them in. In your case, that was all done flawless, including signs in the lobby. Then, when you’re on stage you have it all well-rehearsed.

Michael: 23:26 I can think of events where I put on, wow, they were fantastic, you’re on your game and I hate to admit, but on occasion I was a little flat and when we did the debrief afterwards, why was I flat? Well, the audience was a little different then I might have expected, or I didn’t rehearse enough with a new presentation. The key to those and I have unfortunately been to too many adviser events where they didn’t rehearse. They walked up there, and it was very, very not good. The clients didn’t know any difference, maybe a few did, but the rehearsal and going through every aspect of the client experience, what they’re going to see, what they’re going to hear, what they’re going to feel, I thought was really good.

Michael: 24:09 Again, that’s why I think your coaching program and providing people these ideas or thoughts, is outstanding.

Matthew Jarvis: 24:15 Yeah, I really like what you said, Michael, and I want to make sure everybody caught that, which is making sure that every piece of your event is intentional. Every word that you say, every aspect of it has been intentionally created. One of the things we recently added to our client event, the one that you attended was, I thought there was a little bit of awkward silence when people were showing up. The house music would be playing over the speakers at the hotel, but this really wasn’t quite right and so I thought, how do we improve this experience?

Matthew Jarvis: 24:44 You might think, well, that’s not really important. The clients aren’t there to hear the house music. Well, they’re not, but it adds to the ambiance and it adds to the experience, so one of my team members found a local musician, an acoustic guitar guy, so that half hour when everyone’s mingling, we had live music playing. So, by the time it got to my presentation, any stress that people had from the traffic or the parking or the rain, since we’re in Seattle, had all melted away and they were excited and energized and it really was the perfect opener for me.

Matthew Jarvis: 25:16 I wonder, Michael, if you can think of other examples that you’ve seen in presentations you’ve given or ones you’ve attended where you said, boy, that was really knocked it out of the park. I know you mentioned rehearsing, which is critical. Anything else that comes to mind?

Michael: 25:31 Relative to your venue, which was centrally located, good venue, and it did everything you wanted it to accomplish, I thought that was fantastic. I’m going to go back to my years in wholesaling where one particular year we were very flush, it was a great year and I rented out a theater for a production around Christmas time. Invited our best prospects, our best clients, I think we might have snuck in a few clients of advisers, so that might have been against the rules but that was then. What we did was, it was in Seattle at Seattle Center and knowing that people would be fighting the rain, fighting the cold and the traffic coming in at 5:00, to your point is how to get people to feel at ease and when they came in before the show, we had hors d’oeuvres waiting for them. We had beverages, alcoholic, non-alcoholic and they just got to relax. We gave them a huge window to arrive knowing that the traffic conditions or weather conditions were going to be tough.

Michael: 26:30 It goes into, when they get there, how do we get them comfortable and they’re not hurried anymore and just get them to relax. For each adviser, which I was happy to see that you didn’t have a problem with is all of your guests showed up on time, that was fantastic, within 20 minutes. I think that providing that window prior to the event because advisers listening, how often have you gone to or been part of an event where you show up 15 to 20 minutes early, on time, but then the event doesn’t start for five, 10, 15 minutes late and you’re thinking, why am I showing up on time and being penalized when we’re supposed to start on time? I think that the success of an event is giving people encouragement or a reason to get there early. That they’re not going to be sitting there in silence or with nothing to do for 20 minutes.

Matthew Jarvis: 27:18 Yeah, that’s a really good example, Michael. If you told people you’re going to start … This goes the same with the phone appointment or anything. If you said, “Hey, we’re going to start at 5:00.” Then, it’s going to start at 5:00 even if you’re the only one there. If there was a traffic jam and everybody else got stick in traffic, you’re still going to start when you said you were going to start. Not to get on a soap box, ’cause that’s a bit of an integrity issue, but clients need to know when Matthew says something, when Michael says something, it means they’re going to do it. Whether that’s something that seems trivial like what time they’re going to call me or something major like how they’re handling my investments or what happens when the markets go down. All of those things and it goes back to your every word counts. All of those things are tied together. None of those details are meaningless.

Michael: 27:59 Exactly and that goes into your credibility, in my opinion, as an advisor. If someone’s going to entrust you with their plans, their assets and their trust, starting on time is a big deal. It might seem trivial, but at the end of the day he said he was going to start at 5:00, he started at 5:00.

Matthew Jarvis: 28:19 Yeah, I really agree with that. On that note and we can edit this section out if I’m getting a little too personal, one of the things that I always admired about you, Michael, is that you walked your own talk. When we would talk about the investments you were recommending, but then as we were talking business, I realized that you were following your own business advice, and you were following your own financial advice. As we mentioned earlier, that you’re retired, and you’re still a young and spry guy, but it was because you followed your own advice.

Matthew Jarvis: 28:49 I’m always surprised when I meet advisers, and I wonder if your experience is different, when I’m talking to them, and I find out that they’re not following their own financial advice. They’re not using the products they recommend, they’re not using the investments they recommend, they’re not following their own financial advice and like I said, Michael, I always admired that about you. What was your experience talking to advisers as far as the credibility of the ones who follow their advice versus the ones that didn’t? Even if their clients didn’t have a way of knowing.

Michael: 29:15 That’s a great question, great point. What I asked advisers as to how I would determine whether or not they’re following their own advice, typically in a one man, two-man office, my question would be is what is your plan B? When you ask that question, what’s your plan B, an individual practitioner, what are your business continuity plans or what is your retirement plan or what do you tell clients? What happens if something happens to you?

Michael: 29:43 I found that very interesting because again the majority of people, advisers, don’t have [inaudible 00:29:50] and it actually helped me quite a bit, achieve my personal goals because wholesaling is a very rigorous, it’s a young man’s game and I was able to exit at age 52 after almost 20 years. We did well, but what I learned early on was what is your plan B? Having a plan B is what happens when you can’t do it anymore or you don’t want to. I find, unfortunately, that most advisers and wholesalers, they’re selling advice or selling product, but they don’t have that same very, very … Disappointing, quite frankly.

Matthew Jarvis: 30:28 Yeah and setting aside the morality of it, if you will, the hypocrisy, if you will, it’s been my experience, I think that prospects and clients somehow they can sort of sense that. They can sense, hey, I’m being told one thing, but my adviser may or may not be doing that himself or herself. I can’t recall that I’ve ever had a prospect, or a client say, hey, Matthew, I want to see your financial situation, which always kind of surprises me that people don’t, but if they did it would look just like there’s. Even the ones that don’t, I just feel like … Maybe Michael, you feel otherwise, but I feel like they just have a way of knowing if somebody is congruent, if they have integrity with what they’re saying.

Michael: 31:05 People can see through that, I firmly believe that, to agree with you. People are very good judges of character to a degree. I had one particular adviser and he was older, and he was nearing the end of his career and I had that question for him, “Richard, what are you going to do? What are your plans? What are you telling clients?” I had already sensed that things did slow down for him and as a matter of fact I saw an adviser the other day who fits that category also, is that clients have a sense of when you’re winding down and while they might stay with you, all of a sudden those referrals dry up or the new assets tend to dry up, clients can sense that.

Michael: 31:47 I had one adviser later on in my career that, he actually, whether it be my advice or someone’s advice, but he actually brought in a junior associate and he was one of the few people who actually gave this junior associate assets and helped him and really brought him into the fold. Not that, c’mon in, I’ll turn the business over to you in five or ten years and it never happens. What ended up happening was it worked. This advisor who was on the last leg of his career actually had a resurgence and they did fantastic and the transition plan worked. It was fascinating because you’re point, clients can tell. They knew and the liked the reinvigorated new adviser.

Matthew Jarvis: 32:28 Yeah, they totally can. I’ll think of one just quick example. As a solo adviser myself, or at least at some time, I noticed some clients would ask, they’d say, “hey Matthew, what happens if you get hit by a bus, and you don’t come into work?” I would tease them, I would say, “Well, that’s kind of a harsh thing to wish on me.” We would laugh and try to lighten up the situation, but then I would explain to them my continuity plan and it actually, Michael, to your point, led to more referrals because Matthew can give us personalized service, but he still has the backing or the safety net of a larger firm. So, I agree 100% with what you’re saying.

Matthew Jarvis: 33:03 To shift gears and to wrap up just a little bit, Michael, if you were wholesaling again, what would you tell advisers? If you met an adviser and he’s trying or she’s trying to build their practice, what would you tell them today? What would be a couple of your real pearls of wisdom for them?

Michael: 33:17 Someone building a practice today, the best advice would be find a practice to buy.

Matthew Jarvis: 33:22 That’s a fair point.

Michael: 33:26 That aside, it’s a tough world because what we’re selling is not a commodity and unfortunately for a lot of people, I believe, they think that financial services is a commodity and it’s really value add. The formula or recipe for success hasn’t changed. It’s that personal connection, it’s offering something that they’re not going to get from … Pardon me if there are any bank advisers on here, but a bank adviser or wire house. There’s something that an independent RIA brings to the table that’s completely different. People don’t want to go into an aesthetic establishment without personal feeling, but if you ask me what to do is, engage a coach, someone to help you.

Michael: 34:08 [inaudible 00:34:08] that your clients are hiring a financial coach typically when they hire you, hire a coach. Join a program, network and most importantly plan your work, work your plan because it’ll work. Whether it takes one year or four years or five years, if you have a solid plan and you bob and weave a little bit, make adjustments, it’ll be a success. I had one adviser many years ago, great guy, never did a lot of business with him, but he was a super intelligent person and the reason why we didn’t end up doing business together was our product just didn’t fit and I didn’t go to the office to see him per se, but there were other advisers in this office.

Michael: 34:44 His story was really relevant because he started off and he thought he had a warm market from his previous employment, but it turned out it was nothing near what he thought it was going to be and that by getting a few referrals from friends of friends, be developed a whole new network and I believe he went into 401k’s as opposed to personal production. Nonetheless, you might have a plan and he worked it in terms of calls, networking, being his activity, but his actual business went in a different direction. This is 13 years later, so those are my tidbits of advice there.

Matthew Jarvis: 35:19 I don’t want to romanticize the past, but I’m pretty sure that’s the same thing you told me 10 years ago when we first started working together. Get a coach and at that time it was, “Hey, you really gotta look up Tom Gowan and Ken Unger. I think they’re the best fit for you.” Then, your second part was finding a plan, pick a plan, and work the plan and it’ll pay off. Sure, enough it has.

Michael: 35:36 Absolutely.

Matthew Jarvis: 35:38 Well, Michael, thanks so much for being on the podcast and thanks for your advice. Again, not just ten years ago, but ongoing. I really enjoyed that relationship and the friendship that’s come of that and thanks so much for being on the podcast.

Michael: 35:49 Matthew, my pleasure and everyone listening, I just can’t encourage all enough to continue listening. I listen to the Perfect RIA also, and I appreciate your friendship and your camaraderie, so have a great afternoon, or day.

Matthew Jarvis: 36:03 Thanks, Michael.

Speaker 1: 36:06 You have been listening to the Perfect RIA Podcast. For more information on how you can build a highly effective financial planning practice, please visit theperfectRIA.com.

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