What You'll Learn In Today's Episode:

  • Why you don’t want to become a commodity.
  • How to answer questions about your fee.
  • What the rumble is and how it will work.
  • How much time a financial plan takes to create.
  • How Micah would sit down and make a plan in 30 minutes (step by step).
  • The importance of challenging yourself and limiting the time you give yourself to do things.
  • What a financial plan is and how it may differ between advisors.

Is discounted service really a value? Matthew and Micah are diving into the world of discounted service vs. massive value, and the hypothetical fists are flying. Matthew put together a challenge between advisors to create a financial plan in 30 minutes on stage. Get out your gloves and listen in to hear about why he’s doing that and what we can all learn from other advisors.

In this episode, the guys also cover the importance of offering a value and premium for your service, as well as what that really means. They also discuss why a financial advisor would take 30-40 hours or more to make a financial plan, ideas on how they might go about making a financial plan in 30 minutes, and real-life examples of where they might be put in a similar situation.

Podcast Article:

What’s Better: Low Fee or High Value?

There are two types of financial advisors: “discount advisors” who take pride in offering lower fees than their competitors and those who charge a premium rate and deliver massive value. But is a low fee really a benefit? In this article, Matthew and Micah share the three questions every advisor should ask themselves to get unstuck and move their business forward.

Action Items in This Article

  • Examine your financial planning value process, from prospect process to communication style, and identify one area in that process that you can improve.
  • Channel Parkinson’s law and control your parameters by setting a timer for dedicated focus time.
  • Join Matthew, Micah, and more on October 8 at the XYPNLive pre-conference event that will transform your business.

What Truly Serves Your Clients?

If you’re a new advisor trying to grow your business, cutting costs might seem like a great way to gain clients. But is this the best way to stand out?

Step back and consider other industries and experts out there. When has a “discount service” ever really been a benefit? As Russell Brunson points out in his book DotCom Secrets: The Underground Playbook for Growing Your Company Online, there’s no use in being the provider with the second-highest price; the real way to win is by offering high value and charging a premium for your service.

The real problem with these discount advisors is that in the long term, they’re doing a disservice to their clients. Show Matthew an advisor who’s proud of their low fees, and he’ll show you someone who can’t afford personal development, an assistant, or better technology (or, for that matter, the $10,000 for The Perfect RIA’s charity challenge at XYPNLive).

“That’s not sustainable,” Matthew confirms. “I’ve never seen a practice at scale that’s operating on a discount business model.” If you’re fighting for your spot at the bottom instead of working to build a stable practice that will be around to serve clients for years to come, your “discount rate” is actually doing your current clients a disservice. 

Are You Confident in Your Fees?

Advisors love to talk about what kind of advisor they are, but at the end of the day, that’s all behind the scenes; clients can’t actually see what you’re doing, so they don’t know what makes you better than your competitor.

“Internally, we fight amongst ourselves,” Micah laughs. “We’re like, ‘Oh, you’re a commission guy. Oh, you’re an insurance guy. Oh, you’re a sales guy. Oh, you just do annuities.’ But to the consumer, there’s no difference.” So how do you turn a skeptical prospect into a client who’s happy to pay top dollar for your services?

If being sustainable and delivering massive value is important to you, look at every meeting as an opportunity to explain all the things you’re doing that your client might not see. This gives clients needed context to truly understand how much they benefit from your knowledge and insight and why you’re worth every cent of your asking rate. Then, at the end of that first meeting, close with this script from Matthew:

“It only makes sense to hire us or some other advisor if the value we deliver is worth some multiple of the fee being paid. And great news: every quarter, you’ll see what we’re being paid, and every quarter, you can look to see what value you’ve received. If the value exceeds the fee, we’ll continue another quarter. If it ever doesn’t, we can part ways as friends.”

Do Your Meetings Have a Purpose?

It’s important to bring your clients up to speed and set good expectations with every meeting. But if your meetings are all info and no action, clients and prospects alike might be leaving your office with more confusion than clarity.

“It’s similar to if you go to your doctor,” Matthew observes, “and you have a full blood workup done, they hand you a 50-page write-up, but there’s no recommendation.” If the doctor advises you to drink more water, reduce your alcohol consumption, or change your diet, that’s something you can take action on. If all you see are numbers, you’re left wondering how to apply what you’ve learned to your life. “You go, ‘Oh great, I see all these numbers. But what do I do tomorrow? What’s my next step?’” 

The same is true for everyone who sits down in your office for a meeting. All of those numbers from your Monte Carlo simulation—even if they’re in cool bands and part of an impressive-looking stack of documents—are meaningless to your clients if you’re not also recommending next steps.

Micah likes to start a client’s first meeting by asking questions designed to uncover the most basic and vital information he needs to understand where a client is and where they’re trying to go:

  • What do you need to do with your cash flow?
  • What do you need to do with your spending?
  • What do you need to do with your taxes?
  • What do you need to do with your estate plan?
  • What do you need to do with your insurance?

As Micah works through the corresponding section of the financial plan he’s building, he’s constantly looking for opportunities to add the most value possible without inundating the client with information they won’t retain.

By the end of the meeting, whether or not the client ends up hiring Micah long-term, Micah will have accomplished his goals: the client will leave his office with new information, next steps, and more direction in their financial life than they had when they arrived, and Micah will have earned his fees by adding value to their lives.


Resources In Today's Episode:

Read the Transcript Below:

This is The Perfect RIA, in case you didn’t know. Bringing you all the strategies to help your business grow. Are you happy? Are you satisfied? Are you hanging on the edge of your seat? Sit back and listen in while you feel the beat. Another myth bites the dust…

Matthew Jarvis:   Hello everyone, and welcome to a special edition of The Perfect RIA Podcast. I’m your co-host and co-founder Matthew Jarvis. And with me as usual and in person here in Anchorage, Alaska — well, excuse me, Wasilla, Alaska.

Micah Shilanski: That’s right.

Matthew Jarvis:   Micah Shilanski.

Micah Shilanski: Dun-dun-dun, Jarvis, it’s so fantastic to be back on the pod. We have had just an amazing time at this trip with our families and whatnot, kind of traveling around Alaska, seeing these beautiful sites and all these things, having you pick fights with strangers, like all of these great things while we’re up here. So, it it’s been quite a blessing. So, thanks for taking the trip up here, bud.

Matthew Jarvis:   Yeah, it’s been a lot of fun. For those of you that have not yet visited Alaska, it’s definitely on the must do list. However, I would like to remind you that Alaska is roughly the size of 40 other states, depending on the states that you pick. So, please don’t assume that you could see all of Alaska in one trip.

Micah Shilanski: Yes, and this wouldn’t be fair unless the Alaskan gave the great Texas joke, which we love telling all Texans that are out there. So, make sure you text your Texas friends; I always like asking people from Texas, what would happen to Texas if you cut Alaska in half? Well, then Texas would become the third largest state.

Matthew Jarvis:   Now, Micah delivers that joke after people hear he’s from Alaska and they say, “How do you like Texas?” And he says, “It’s a cute state.”

Micah Shilanski: It a cute state. Cute state. I guess, that’s picking fights in a different way, so there you go.

Matthew Jarvis:   Yes, yes. Well, speaking of antagonizing people, for those of you that follow me on LinkedIn, which is always a fun and interesting place, you’ll know that sometime recently, I was in a spicy mood and I said, hey, listen, the reason that discount advisors can’t understand why premium advisors — and with discount advisors, I’ll lump in there, people that are proud of charging a low fee, people who lead with their fee instead of lead with value. I’ll also lump into their all internet experts, et cetera.

The reason they can’t understand why you would pay an AUM fee is that they don’t understand that there’s the spectrum of value. In fact, I went as far to say is, “Hey, I bet you double or nothing that I can deliver more value than you can.”

Now, there was a lot of interesting posts. There was a lot of people that posted and they said, “Hey, this really sounds like fun. I’d really love to see this process.” Other people posted and said, “I can’t wait to see this fist fight.”

Some people posted and said, “This feels pretty immature. I’m not sure where it’s going to go.” And then Micah, a final group posted, a minority, very small group of people that said, “This is absolutely absurd, you’re a complete idiot and yeah, we’ll challenge you.”

Micah Shilanski: You know what, I thought it was fantastic because I’m really not on social that much at all, but I know something is picking up when my buddies and other advisors will take screenshots of it and start texting it to me. It’s like, “Have you seen this?” And then I was like, “Oh, maybe I should go check out what’s going on, on LinkedIn.” And so, I get to see that spicy content.

Before we get into the challenge in that other aspect, Jarvis, you know me, I like to step back sometimes and look at other industries and other experts that are out there and say, great. When you talk about this discount service that people are offering, is that really a value?

And recently we started reading a book and something we followed for a long time, Dotcom Secrets by Russell Brunson. And he is the ClickFunnels guy.

Matthew Jarvis:   Yes. Funnels creator.

Micah Shilanski: He’s the creator.

Matthew Jarvis:   Yeah, multi, multimillionaire.

Micah Shilanski: Yeah, yeah, yeah. Fantastic. I mean it cost like a million dollars a year to work with him kind of guy. So, it’s absolutely fantastic.

But anyways, one of the things that he says in the beginning of his book is saying there is no value in being the second lowest price provider. There’s no value in being the second highest price provider. The value comes in offering a value and a premium for your service because consumers cannot understand a distinction between the different ones.

You are a commodity and the problem is being a commodity, then no one knows the difference between A, B, C and D. And that’s the issue I think we have with financial planning services.

Internally, we fight amongst ourselves, be like, “Oh, you’re a commission guy. Oh, you’re an insurance guy. Oh, you’re a sales guy. Oh, you just do annuities” or whatever this other kind of Pete crap is.

But to the consumer, there’s no difference, which is out there. And now, we got this people are trying to call themselves different things. I know Kitces has run up this advisor kind of thing and whatnot, and try to like change that name up.

And I think that’s a cool thought to really identify who are financial planners, but that still doesn’t do it. Maybe he’ll pull it off. I mean, Kitces is amazing. So, he might be able to do this, but I know for me, one of the ways that I distinguish myself versus my competition is in price.

I charge a premium fee because we offer premium value. And in the end, clients come to me and they want this. So, clearly, it works.

Matthew Jarvis:   Micah, what do you say when that question comes up? I guess, A, does that question come up, are you fee-only? And then B, or are you fee-only, how does your fee compare to Vanguard? Like any kind of discount fee sort of question and how do you respond to that?

Micah Shilanski: Yeah, it’s a great question. So, one of the things, when people come and say “Am I fee-only?” I said, “You know what, we are a fee-based financial planning firm. We charge a fee and  then there’s a fee based on the assets in which we manage as well,” which I think is a hundred percent a true statement.

Matthew Jarvis:   Yeah, we always respond with a similar fee-based and I say, the key is whoever you’re talking to, we want to make sure that there’s full fee transparency.

Micah Shilanski: Yes.

Matthew Jarvis:   And then I go into our, hey, it only makes sense to hire us or some other advisor if the value we deliver is worth to you some multiple of the fee being paid. And great news, every quarter, you’ll see what we’re being paid. And every quarter you can look to see what the value is you’ve received. The value exceeds the fee, we’ll continue another quarter. If it ever doesn’t, we can part ways as friends.

Micah Shilanski: Yeah, so there’s great ways that you get to position this to clients. But again, I want to tie this back to the ClickFunnels. You have to (and this is one of the terms of The Perfect RIA actually), which is be intentional. We’ve been on this be intentional kick for a little while; but be intentional is such an important part.

And what are you really trying to do? And the problem with these discount advisors is I don’t think they realize what a disservice they are doing to their clients. And I want to pull apart one of the comments that I think was made on the thread, which was … I guess, before we get to those comments, maybe we should talk about the rumble and the challenge they’re throwing out. Let’s put this in context first. Sorry, jumping ahead.

Matthew Jarvis:   No, no, no, no, no. So, I put out this challenge saying, hey, I can deliver more value than any discount advisor. So, then there’s all these people jumping in. So, it’s like great, well, now this is logistics. What are the logistics? How are we going to measure? When is this going to happen? How much skin has to be on the table, who gets to judge? There’s a lot of logistics that have to be figured out.

So, as people started to get interested, we started trying to figure out those logistics. So, we said, tell you what, let’s do this, we’re going to be at XYPN October 8th doing our own pre-conference. Let’s do it then. Let’s have a real prospect submit and we’ve had several advisors volunteer, which we’ll talk about in a second — have a real prospect. You don’t get to look at the information in advance. You get whatever information from the prospect you normally get.

So, if you ask for tax returns, you get tax returns. If you don’t, you don’t. And then you have 30 minutes to create as much of a financial plan as you can. Now, immediately, everyone’s going to say and have said 30 minutes, that’s not nearly enough. One person even said, I need 30 hours to create a financial plan, which I have to see this, because I just can’t in my mind imagine anything taking 30 hours.

But the point of 30 minutes is all challenges, all feats of strength have limitations to make them more difficult and also, make them entertaining to watch.

Micah Shilanski: This isn’t an educational series of what do you need to know in order to build a financial plan? This is okay, you say you are a value advisor, rock on. Now, let’s learn from each other. Now, let’s do it. Now, we’re boys. What does that mean? We compete. That’s how it works. Jarvis, when you and I travel, we do shooting competitions.

Matthew Jarvis:   Every kind of competition.

Micah Shilanski: We do every type of competition, there is. We do racing competitions, we do all of these things and it’s all about, okay, let me measure my time, let me measure my improvement, and where do I need to improve?

And this is the thing that we are missing in the financial planning community because we hold things so tight because we’re so worried about our ego, about us getting insulted.

Everyone thinks they’re the best financial planning ever, but no one is willing to step out of their own way and say, “No, look, here’s actually what I do, here’s actually what I deliver. And this is why I think I’m a phenomenal financial planner.” And Jarvis, you are, which is fantastic.

Matthew Jarvis:   As I’ve mentioned other things, I almost hope that I get beat. Now, that will be a blow to my ego and I’d rather that not happen. But I would love for someone to beat me because I want to see how it is that they’re doing.

So, the way that we envision this format is however many challengers will sit down on the stage, they will then be given the information. The clock will start for the 30 minutes and then up on the big screen where the competitors can’t see each other, we’ll be able to see whatever they’re looking at, whatever they’re typing up.

That way, the audience can learn from this. Like alright, where are they looking in the tax return? How did they come up with this thing? Then they’ll be able to do a 10 to 15-minute presentation of their plan that the other planners can’t see the other competitors.

So, after the 30 minutes ends, everyone leaves the room. We bring them in one at a time to present to the group, “Hey, here’s the plan that I’ve created.”

Micah Shilanski: Yeah, and just the aspect of that — now, you’re going to jump in there like immediately where my head is going with this Jarvis.

Matthew Jarvis:   Sure.

Micah Shilanski: Well, that doesn’t work because most of my value and how I deliver to my clients a hundred percent. Yep, so this competition’s going to miss that. Okay, fantastic.

You know what, another huge part of value that I have is my whole process in communicating with clients. We educate our clients through the process as they’re making this educated, informed decision before they even come in and see me.

Well, crap, alright, that doesn’t count for value now. Yeah, but guess what? This is a competition. We got to find some way to limit it and to figure out, okay, what’s the best way to do it, then we do it. And then we find out awesome, how do we learn from this? How do we improve from this?

And I don’t know, I’m excited about getting up there and saying, “Great, how’d you come up with this number on the tax return? Now, we also got to give a little bit of grace to our competitors.

Matthew Jarvis:   Of course.

Micah Shilanski: Because keep in mind, it’s 30 minutes, you’re on stage. So, I’m going to say this is probably something no one’s ever done before, because you-

Matthew Jarvis:   Not that I’m aware of.

Micah Shilanski: You’re 30 minutes on stage with brand new information and now, you have the pressure of a bunch of other peers watching over your shoulder and you’re going to miss something.

Matthew Jarvis:   Oh, yeah.

Micah Shilanski: So, is this a hundred percent true comparison to the value that they deliver to clients? No, no, it’s not.

Matthew Jarvis:   No, because let’s just be real here; there’s just no way to do a true comparison. We’d have to say — and somebody even pointed this out a bit flippantly, but a bit true. The plan itself doesn’t count, the implementation counts. And how do we know implementation worked? It could take years, it could take decades.

Really, for some of our clients, Micah, generations, before we would know the full impact. So, I don’t want to wait 50 years to weigh out this challenge. We have a thousand other variables we can’t control.

Is this a perfect match? No, it’s certainly not. If you have a better match, we’ll save that for the UFC fight number two. This is fight number one. Fight number two will change the rules and we’ll try a different version.

Micah Shilanski: Yeah, and I’m excited because this is really going to be … and it is actually well, we could talk about this in a second, but the competitors appears have backed out. So, then Jarvis threw me on stage and said, “Well, I’ll just go against Micah.” I said, “Well, that was great to know. Thanks for bringing me up in the loop and this conversation.”

But even if we did that, so there’s just several different ways. The competitors don’t show up, we could do it’s random person from the audience, you and I could go head-to-head in this stuff. We could just do a team creation, financial plan.

There’s several different ways we can do this, but in some capacity, we’re still going to do this because the amount of information we are going to glean from being able to look at this stuff and saying, “Alright, how do I review this tax return, how do I go through?”

And quite frankly, I’m thinking, well, crap, if you and I go head-to-head, or if we do it as a team, I’m going to use that as freaking training for my next advisor. Because it’s great. Before you talk to me about building your financial plan, go watch this 30-minute video, see how we built the plan.

Watch the 15-minute debrief, then watch the 15-minute recap, with our advisor asking questions, an hour of fantastic content that you’re going to be able to go through and say, “Okay, how am I going to do this?” And it puts that egg timer on the financial plan.

Matthew Jarvis:   Totally, totally. And a couple of things, we are not going to record this and make it available to the public because if you don’t have the level of commitment to show up to participate, this is not for you.

Maybe in the future, we will. But that’s going to be the case there. If you are going to show up, if you’re going to be there October 8th and you have a prospect or even a client, or even your own situation that you would like us to use as a case study, we will of course redact personal information to your level of comfort.

And then you can learn from that and after the challenge is done, be glad to debrief, to take time and say, “Alright, well, how did you come up with that? How did you come up with this, et cetera?”

Micah Shilanski: Yeah. That would be fantastic to go through that.

Matthew Jarvis:   Now, Micah, I want to pivot just a little bit. So, the rumbles is October 8th in Denver. Again, you can email Lifestyle The Perfect RIA. If you want to participate, you can, of course, go to theperfectria.com to sign up. There aren’t a lot of spots left for that. We’re limiting it so that we can deliver massive value.

But Micah, something that came up and we highlighted it briefly was one advisor posted, “Hey, it takes me 30 to 40 hours to create a financial plan. It’s impossible for me to do anything of value in 30 minutes.”

Micah Shilanski: Are you building the software at the same time that you’re doing this? I mean, what is 30 to … I’m not trying to be too flippant with this. I’d really like to give a little bit of grace and think about this.

And I know Kitces, and I didn’t even look this up beforehand so I apologize to our listeners. But there was an article done about how many hours it takes the average person to build a financial plan. And I don’t remember what that number was, but it was a decent number.

Matthew Jarvis:   Yeah, I want to say it was 20 to 30 hours, but it included all of the meetings, it included all of the team time. So, you’re starting to get maybe closer to a number that’s realistic.

I want everyone to imagine … I was talking to Micah before this episode saying that value exists on a bell curve, but it really doesn’t. It’s sort of like a ramp up to a cliff. So, you can deliver more and more and more value until at some point, it becomes just noise and it falls off the backside.

We use the beneficiary report. The beneficiary report says, “Here’s your beneficiaries and here’s how much they’ll receive in dollars if something were to happen to you.” It doesn’t say “Adjusted for the time value of money assuming an inflation adjustment of 3% annually over 27 years, unless they die on a Friday” — that now, becomes worthless. It just becomes noise.

Micah Shilanski: Worthless. Yeah, just like I don’t use inflation numbers and any of that stuff when I’m talking to clients about estate planning. It’s what does the value today?

Well, what about when I die? You know what, well, we don’t know when that’s going to be, so let’s assume it’s next week and let’s just use the dollars today. Who knows what inflation’s going to be? Who knows what distribution’s going to be? Who knows what’s going to happen in your life? Make the decisions for what we have today and this is what we tell clients all the time. So, same thing here, let’s not overcomplicate this.

Matthew Jarvis:   Yeah, a similar report would be like a financial plan. You might say, hey, Jarvis, one page is too short. Okay, that’s fine, I’ll take that. 100 pages is not 100 times more valuable. I would argue that it’s like no value at that point.

And I felt guilty there. I remember using financial planning software and thinking, “Ooh, if I click this button, it’ll do an extra thousand Monte Carlo analysis. And if I click this button, it will show 14 scenarios, and if I click this button …” and it just keeps adding pages.

Micah Shilanski: But again, we go back to that aspect, it doesn’t answer simple questions and, in my mind, which I can answer instantly with the buckets report and I know you can’t do with Google, which is a client says, “Great, I want to pull out a hundred thousand dollars to buy this property, I want to buy this second home, I want to gift this money. What impact that’s going to have on my retirement?”

When an advisor is asked that question and they run a thousand-page report or a hundred-page report, what that means is they have to go back to the report, rerun the intervals and now, they’ve gone from 92 to 87%. What the hell does that mean?

Matthew Jarvis:   Yeah, and again, to connect this to other industries, trying to help us draw correlations and lessons here, it’s similar to if you go to your doctor and you have a full blood workup done and they hand you a 50-page workup on your blood work, and then there’s no recommendation.

So, you go, “Oh great, I see all these numbers. What do I do tomorrow? Like what’s my next step?” I need to know next step. I need to say, “Hey, you need to drink less beer. You need to drink more water. You need to add a little bit more whatever to your diet.” “Okay, I can take action on that.” All of these numbers, even if they’re in cool bands mean nothing.

Micah Shilanski: Well, I’m going to set my hands, so now Jarvis is going to steal this idea for our rumble, but it’s going to be on this thing in this 30-minute financial plan, and when I only have a limited time to review client information.

And let’s put this in real life scenario, this happens. We request information in advance from a client. Then the client doesn’t provide it until that morning or they uploaded it to a non-shared account or some crazy thing happen, where basically, it’s that morning of the appointment for an 8:30 appointment, I get all of their meetings.

Now, you could say, well, the client didn’t get it to us two days in advance, which is what our policy is. You got to give us two business days in advance or else we’re not going to review it. I could say that, but how’s that meeting going to go over? So, I need to give a cursory review to that information.

Now, I’m probably not going to fully read their estate planning documents with 10 minutes to notice. I’m going to scan through some stuff. So, there’s definitely going to be some stuff I’m going to glean, but I’m really not going to fully comprehend. So, I get that in the competition.

But this is a real-life thing that can happen. And this is a real-life thing I’ve been in before. And says, great, I need to bust out my homework sheet, which is where I take all my notes. I’m going to have my homework sheet out.

And then the first thing I’m going to be doing, Jarvis, I’m going to go through here, I want to get the basic information on the vitals, so to speak, on the client. And then I’m going to look for action items. That’s my value-add in that meeting. And now, Jarvis, is going to steal it because I took it from him.

But we’re going to start looking at action items. What does the client need to do? Hire me or not, this is going to be valuable for you. So, okay, perfect, what do you need to do with your cash flow? What do you need to do with your spending? What do you need to do with your taxes? What do you need to do with your estate plan? What do you need to do with your insurance?

I’m going to start working through these sections and on our prospect, I’m going to say, “Great, how do I add the most value possible?” I’m not trying to totally overwhelm them where there’s a deer in the headlights and they can’t take action. I truly believe look, hire me or not, by meeting with me, your life will be better off.

Jamie:        Hey podcast listeners, this is Jamie Shilanski and I’m here to tell you that your goals aren’t good enough. Because if you have a goal, I don’t care, written on a notepad, taped to your monitor, stuck up on the wall, somewhere in your office — it’s not going to get you to achieve any type of results that you’re looking for. Goals without plans are plans to fail.

You know that The Perfect RIA is all about action, and that’s why you have a unique opportunity to purchase your ticket for the pre-conference event of the year in Denver, Colorado.

Join Matthew Jarvis and Micah Shilanski on October 8th, 2022 for the XYPN Pre-Con; a one-day action packed, interactive workshop where you get to work hand-in-hand with other advisors just like you who want to achieve success and are ready to do what works.

Listen to our panel of success. Get your questions answered about what works and what pitfalls you need to avoid in your career. And then we want you up and out of your seat. We’ll be taking out the head-trash, doubling your efficiency, looking for ways of effectiveness, and partnering you up with accountability partners.

It’s time to stop talking about success and start planning for it. Go to theperfectria.com to purchase your ticket to the XYP event in Denver, Colorado on October 8th, 2022.

Matthew Jarvis:   Yeah, I like that. I got to confess, Micah, as you’re kind of walking through your strategy, I’m actually a little bit nervous for a 30-minute challenge. Actually, I’ll be honest; I’m quite nervous because I’ve never tried to do it in 30 minutes without having talked to the client. I’ve got to have to compile the data myself.

But that’s the whole point of the challenge. It’s the whole reason why a football game has a limited time. It’s why baseball has nine innings. We have to make this thing as difficult as possible to really extract out talent.

Micah Shilanski: Yeah, I’m definitely going to have to dust off my muscles on this thing because we built our custom CRM as you know.

Matthew Jarvis:   Yes.

Micah Shilanski: Infinity, and really cool part is our RM team has a lot of stuff in the CRM. And when I’m prepping for appointment, I click print on the homework sheet, and guess what? It grabs all that vital data that I need, and now, I can glean it. I can glance out on one page and now, it’s scattered throughout all these documents that I have to go get under the clock.

But this is actually kind of fun. And we’ve talked about this before on the pod; I was a little bit cocky in talking to another advisor in our office, Christian, who’s doing a fantastic job by the way, where clients are moving over to him, his Roth conversion strategy, he did this last year. We gleaned from Michael Henley — fantastic that he’s implementing, so great stuff on his end.

But about last year or so, I had made a comment about something and he was taking a long time to do tax projection. I said it shouldn’t take that long. He goes, “Well, how long does it take you?”

Matthew Jarvis:   I remember this, yeah.

Micah Shilanski: Yeah, he’s like, “How long does it take you?” It’s like less than 10 minutes. And he’s like “Really respectfully, really politely, I would like to push back on that.” He’s like, “I don’t think that’s possible.” And I said, “Fantastic, let’s bust out a timer.”

So, we jumped on and we timed it. And I said, “You pick the client” and there’s actually one that he was going to work on a tax projection for. I was like “Fantastic, grab that one, we’ll start the timer.”

I was like, “Go.” And I went through the entire taxes, went through the tax projection. Now, I have some background knowledge, I knew the client, might have worked with them before.

So, I did have some institutional knowledge there, but I went through and did an entire tax projection. I found a $60,000 tax error that the CPA made in preparing their taxes all in under nine minutes. Now, a lot of it was now I was flying through that information.

Matthew Jarvis:   Yeah, I had something to prove here.

Micah Shilanski: Exactly, I had something to prove; but the cool part about it was okay, I was running my mouth maybe a little bit with it, but then it really forced me to say, “You know what? This doesn’t take an hour to do. It really if I put that egg timer on, if I start limiting that focus down, in Parkinson’s law, it takes as much time as you allow it to give.”

If you give yourself 40 to 50 hours to build a freaking financial plan, it’s going to take you 50 hours. But if I give myself 30 minutes, damn, I bet I could do 98% of it.

Matthew Jarvis:   I’ve got to believe and I would sincerely love to hear from somebody who’s taking anything north of five hours — I would love to have you on the podcast. And I would love to see a timer on your desk. Like well, we’ll put a quick productivity tracking software on your computer. Like I literally, I cannot picture my mind spending more than five hours on a plan.

I have to believe that that’s sort of like five hours playing office and I also have the plan pulled up. To do 30 hours, I just can’t see … unless you’re in some really complex, like you’re reviewing these insane contract stock options. But even that, I’m just trying to think of anything that could possibly take 30 hours to do.

Micah Shilanski: Even our business clients, which are profoundly more work because we help negotiate contracts in leases and in employee deals, and benefits, and like all this stuff — I can’t imagine it takes much time. Alright but let’s step back real quick, Jarvis.

Matthew Jarvis:   Please.

Micah Shilanski: So, you had said something and I want to make sure we’re defining it here because I think you and I are on the same page, but what is a financial plan?

Matthew Jarvis:   That’s a great question. And this is where I think we struggle as an industry. We spend a lot of time and I’m guilty of poking at this bear too of like, hey, let’s really beat each other up on these few very narrow things we can identify. Like what’s your fee schedule and what’s your search calendar and what are your value-adds?

What is a financial plan? Micah, in my mind, a financial plan is something that leads a client to take action or in case of a prospect, leads a prospect to take action and demonstrates that the value I provide in the prospect’s mind is more than anyone else’s.

Micah Shilanski: Interesting. Okay.

Matthew Jarvis:   How would you define it? I’m now curious.

Micah Shilanski: I think this we’re going to disagree a little bit. I mean, I like what you said there, that it leads the prospect to take action in implementation. I mean, that is absolutely a must, but I was kind of looking for more categories, like what area is it going to cover?

So, if it leads a client to take action, you could say great, you don’t have a beneficiary, go get a beneficiary in your bank account called a TOD.

Matthew Jarvis:   For sure.

Micah Shilanski: Okay, well, that’s taking action.

Matthew Jarvis:   That’s a fair point.

Micah Shilanski: But I’m not going to consider that a financial plan. That’s a passing comment. So, in my mind — I love, this disagreement’s fantastic.

So, in my mind, it has to be more of a comprehensive or you have to define as the advisor, what you consider comprehensive. So, in my world, what I’m going to say that … what I tell clients, is like now, you hear a lot about financial planning, you hear about people saying “comprehensive financial planning,” the problem is no one knows what that means.

Matthew Jarvis:   Nobody.

Micah Shilanski: Here’s what this means in my world; we’re going to cover five areas of financial planning in your world and we’re not only going to help you design them, we’re going to help you implement these; estate planning, risk management (that’s my fancy way of saying insurance), retirement income, investments and taxes.

Now, on these areas, there’s certain ones that we can’t do for you. While I think I would do a fantastic job creating legal documents, unfortunately, the bar association did this thing about being an attorney in law school and this other stuff, and actually says-

Matthew Jarvis:   Monopoly.

Micah Shilanski: Yeah, and monopoly. I say this to clients and they laugh. So, then they get, okay, so I can’t do your legal documents for you. I can’t do your tax preparation for you. But we’re going to do planning.

And so, one of the things with setting expectations with prospects and clients, I’m really defining what that outcome is. And what I love about this, now when they go to talk to somebody else that says they do comprehensive planning, but Micah’s already defined that.

So, if now, they say, “Well, I do comprehensive planning,” which means I’m going to review your investments and I’m going to tell you what your asset allocation should be, whoa, whoa, that’s not comprehensive.

Matthew Jarvis:   Yeah, I love that level of detail Micah, and it’s a great point. I would never just present one action, that would be a passing comment. I put a state planning and risk management in the same category (that’s semantics, it doesn’t really matter).

But yeah, we’re going to have those. To your reference, I love when a prospect says, “Hey, I’m going to compare two multiple advisors.”

Micah Shilanski:           Love it.

Matthew Jarvis:   I love that. I really prefer that because I want to make sure we just get that out of the way early on. And I always tell them, I say, “Great news. I’ll do my financial plan so that you have these action items.”

Take it, study it, and then go interview whoever you’re going to interview. Don’t show them my work because that’s cheating, letting them see what I’m doing. Have them come up with whatever their plan is, you just compare those two; whichever one makes more sense to you, that’s who you should go with.

Micah Shilanski: Alright, I’m laughing because you’re saying that’s cheating. So, if a prospect came in to you and said, “I already reviewed another financial planner and he gave me their plan.” Would you ask for it?

Matthew Jarvis:   Oh, totally.

Micah Shilanski: Oh, hell, yes.

Matthew Jarvis:   Hundred percent I would ask for it. But I want to set up for the prospect. If they have an advisor or they’re interviewing another advisor, if they take my one-page financial plan, what’s the advisor going to say? We can do all those things.

When they have an advisor, I tell them, I say, “Hey, when you go tell your advisor or show them this list, they’re going to say, hey, we can do all those things,” to which you are going to respond, “Why haven’t you done them already?”

And they’re going to say, “Well, we were kind of doing them, we just didn’t tell you about them.” And Mr. And Mrs. Prospect, I don’t know about you, but I don’t like that answer. So, go talk to them but this is what’s going to happen. And this is what happens every time.

Micah Shilanski: Yeah, and in fact, this is one of the things that I also encourage my clients. So, I take this to the next step. I fully agree with you, Jarvis. I have no problem.

Now, one of the things I will add to prospects is saying, “Hey, if you choose to hire another financial advisor, which you’re absolutely welcome to, that means they delivered more value and I’m going to fully support that in any which way I can.”

“I would love it if you wouldn’t mind shooting me an email or calling me and letting me know who you selected and why, because I want to be able to improve the value to my clients. And I’m not going to try to do some backdoor sales pitch on you, I’m really going to be able to take that feedback and say, great, where did we not deliver value to this scenario so we can decide if it’s something we need to improve upon.”

Matthew Jarvis:   Yeah, but Micah, there’s another interesting thing here as we’re sort of making this distinction between premium advisors and discount advisors — and to your comments back about the Russell Brunson from ClickFunnels, if we set aside Vanguard, which has this massive marketing machine, if we set aside venture capital-funded firms, because they’re not living in reality.

I’m trying to think of, I’ve seen advisors or advisory firms that have gotten to high levels of success. However, you define that, having tried to be the discount provider. Now, I have met advisors who it’s just them, they have no employees and they’re very content with their 50 clients paying $50 a month or whatever that is. And that’s fine, like if that’s your definition of success, I get that.

But I have never seen a hyper-efficient, highly profitable practice, I’ve never seen a practice at scale that’s operating on a discount model. And I’m sure there’s one out there and they’re going to reach out to me and that’ll be great. It’s just it’s not a sustainable business model, being the second least expensive is not going to work.

Micah Shilanski: Yeah, it’s just not. I mean, your margins are going to get crushed. And one of the things too, and I guess the fee-only guys will say they don’t have this issue. But say you have an AUM fee and now, that’s where 90% and a hundred percent of your revenue is coming from, and you have no margins in your business whatsoever and the market takes, I don’t know, a 30% dip, what are the odds of that happening?

Matthew Jarvis:   Plus, inflation, yeah.

Micah Shilanski: Yeah, and you had a 15% margin. Well, quick math here, if your revenue drops 30%, you had a 50% margin, you’re negative in that practice. And one of the things my dad taught me from a long time, the best thing you can do for your clients is stay in business.

Matthew Jarvis:   Yeah, yeah. When we talk to advisors who say they’re very proud of their low fee, but then they can’t afford personal development. They can’t afford the $10,000 for our charity challenge that we’re going to do October 8th. They can’t afford to hire an assistant. They can’t afford to upgrade technology.

It’s like great, if you want die on the altar of, “I have this lowest fee,” I guess knock yourself out. Just that’s not a sustainable business model, and I’m going to argue that you’re really doing a disservice to clients, right?

Micah Shilanski: That’s why I get irritated. Like if you want to run your own business, that’s your thing. But you are making a disservice to clients and you’re making a disservice to our industry.

Matthew Jarvis:   Yes. No, like everything, there’s a spectrum. If you’re charging, I don’t know, 2 and 20 way, that’s hedge funds. If you’re charging a hundred percent of a leveraged asset, now, that’s realtors. If you’re charging 30 to 50% of the insurance pro, that’s attorneys.

Anyway, setting aside all those people, there is probably some point where you’re charging so much if there’s not value there. But then again, I don’t know. I like to pay lots of fly first class and you could argue there’s no value there, but there is for me, and therefore, I’m good with it.

Micah Shilanski:           Yeah, value is subjective, right?

Matthew Jarvis:   A hundred percent.

Micah Shilanski: Alright, so on this financial planning challenge, the value off that’s going to be there, it is you don’t get to refine your process. So, we are going to use the way back machine, so don’t even try to game this thing.

And we are going to check if you’re competitive, love it. And again, this isn’t to crucify you on stage. Even the guys that are throwing a lot of shade out there, I have no intent of going there and crucifying you on stage.

This is a gentleman’s game. We’re going to shake hands, we’re going to be friends. I will buy you a beer afterwards. I don’t care which way it goes.

Matthew Jarvis:   A hundred percent.

Micah Shilanski: Let’s debrief and let’s learn from each other because Jarvis, I almost guarantee with any advisor out there, they’re probably doing something that I’m not doing. And I’d love to look at this, “Great. Tell me more about this. How does this improve your practice? Why are you being intentional about this? Where does this deliver massive value to your clients?” And okay, then I can analyze that and say, do I want to bring this into my return?

So, I’m excited about this. This is not embarrassing you in front of 50 people. And I’m just saying that in case I lose, but no, this isn’t about embarrassing it. But it’s about throwing it out there and saying damn it, it is time to raise the stakes and raise the value that we deliver to this industry.

Matthew Jarvis:   That’s right. And to establish that value exists on a spectrum. We all understand that fees exist on a spectrum, great value exists on a spectrum as well.

And Micah, to your point, I love just seeing how other advisors articulate points. How do you articulate Roth conversions? How do you articulate beneficiaries? How do you articulate getting estate planning done?

If you’re having great success, having clients update their estate documents, I would love to see that because that’s a tough spot. If you’re having great success, getting older clients to actually spend their money, I want to see those things. I’m infinitely curious.

Micah Shilanski: And that’s one of the things that again, the value offer misses and it’s just the way it’s going too.

So, the way I get clients to do estate planning documents is when I do my five areas of financial planning; estate planning, risk management, retirement income investments, and taxes. And by the way, Jarvis, can see this, but our audience can’t; I’m actually holding my fingers up and counting one at a time, just like I do with a client.

And the reason I do it in that order (and I tell clients this) — the reason we’re doing estate planning first is because if I save death and dying until the end, you’ll never get it done. But if I don’t answer your retirement question until you have your will done, you’ll get your will done.

Matthew Jarvis:   Yeah, and those are little things that make an incredible difference here.

Micah Shilanski: Alright, so podcast is all about action items. So, number one, October 8th, you got to be there for the rumble. This is going to be fan-freaking tastic. We got some fun things planned for that.

But a good action item, look at your financial planning value process and say, okay, great. What’s one area in your process that you can improve? This could be your prospect process, this could be your communication style. This could be just clearly listing out on one page, what are your action items.

My rule of thumb, by the way in action item, except for the initial meeting, ongoing meeting with clients, I really try to limit their actions to three homework assignments or less because it’s actionable.

If I give them 17 things to do, not a thing going to be done for 99% of my clients. Three or less, I have a very high success rate on. So, what is your process for delivering value and pick one thing you can improve upon?

Matthew Jarvis:   I would say action item number two, I talked about this in my book, we’ve talked about in podcasts, is when you’re doing financial plans or really, any task that requires a creative process; creating blog post, podcast, whatever the case may be — you have to put Parkinson’s Law to work in your favor.

Which again, Parkinson’s Law is that an activity will take as much time as is allocated to it. So, if you’re creating a financial plan, even if you think, well, it takes 30 hours, great. Do it in one-hour blocks. Set a one-hour egg timer doing nothing but that plan for an hour, set it down and come back to it. You have to hack Parkinson’s Law to your favor.

Micah Shilanski: Yeah, absolutely. Alright, and until next time, happy planning.

Matthew Jarvis:   Happy planning.

Hold on before we go. Something that you need to know. This isn’t tax, legal, or investment advice. That isn’t our intent. Information designed to change lives. Financial planning can make you thrive. Start today. Don’t think twice. Be a better husband, father, mother, and wife. The Perfect RIA. The Perfect RIA.

Recommended Podcast

Communicating Through Uncertainty and Filtering Advice

Communicating Through Uncertainty and Filtering Advice

See More

You Can’t Say That!

How to filter advice.

See More

Economic Commentary [Episode 251]

Assessing your communication related to the markets.

See More

Contact Us