Every advisor knows that they need to be meeting with clients regularly, but most of them don’t know what to say in a client meeting. If you are still having trouble knowing what to say and how to add value to your meetings, this is the episode for you. Matthew and Micah jump in to share some of the origins of the value-add, how they struggled in client meetings at first, and what helped them find more confidence in their meeting times with clients and prospects.
You will hear the guys discuss common symptoms that show up when you are not understanding the best ways to add value to meetings. They also share where we tend to get caught up and distracted and how we can focus on things that actually move the needle. From tackling key issues in your office to time management and team roles, Matthew and Micah outline the ways that having a process and creating value-adds will upgrade your practice.
Don’t hide your best value from your clients—demonstrate it in every client interaction.
It’s easy to get frustrated when you feel like clients don’t value your hard work. But clients can’t easily distinguish between different types of advisors, and they don’t always understand what it is you do when you’re not meeting with them. If you’re not highlighting the value you provide in every client interaction, they’re likely to miss it entirely.
While hiding your value from prospects and clients may seem like an easy problem to identify, the condition isn’t always easy to diagnose. Not sure if you’re hiding your own value? Here are the symptoms:
Despite what many in this industry might think, working 80 hours a week to serve 12 clients is not a badge of honor. Those clients don’t care that you’re working yourself to the bone over their accounts; they only care about the end result.
If you’re working too hard and still feel undervalued, you may not be delivering massive value at all—or you may be hiding that value from your clients.
If you’re spending too much time on each proposal or answering your own phones, you can’t spend that time growing your business. Instead, use systematization and delegation to empower your team to do their best work, help you communicate effectively with clients, and free up your time to grow your business.
For example, transfers are a daily part of any financial advisor’s practice. If your team has a systematized process for how to do each transfer, your lead advisor doesn’t have to do them all personally (or be constantly interrupted by questions about them).
With a system in place, you can have younger team members help with those transfers, gaining important experience along the way, and leaving you free for deeper work. More importantly, clients can’t help but be impressed that you—the lead advisor—have an amazing front-line support team full of individuals who help do the work of delivering massive value.
What happens when your office faces a situation that doesn’t fit inside your carefully thought-out systems? Make a system for it.
Regardless of how robust your checklists are and how confident your team is to handle daily operations in your absence, they will inevitably encounter a situation or emergency they aren’t equipped to handle. Rather than leave them to solve these important issues on their own, if a client calls with a request that is truly above what your rockstar team is prepared to handle, make sure your team has a safety valve they can rely on.
For example, let’s say your office approaches what looks like a typical 401(k) transfer, but before you left, you forgot to mention to your team that they should watch out for employees who own stock of their companies inside their 401(k)s, because those are situations you feel you should handle personally.
With a strong system in place, your oversight isn’t a problem; when your team gets to that point, they’re faced with that very question: “Does the employee’s 401(k) include stock of their employer?” If the answer is yes, the team member knows the next step is to go right back to the advisor—and the client knows that any request will always be handled with diligence, timeliness, and respect.
Once you’ve gotten your clients through the prospect phase, it’s time to move them into the client management stage. Depending on how that stage is structured in your practice, this could be as simple as sliding them into a predetermined information cycle. But having all of your clients in different stages of that cycle puts an artificial speed limit on your ability to scale your business.
This is why strategic value-adds are so important. With good value-adds, you can know exactly what you’ll be talking to your clients about for the following year. You’ll know exactly which clients have updated their beneficiaries or been advised on risk. You can set appropriate expectations. And you can do it with all your clients at once, which makes it easier to track down the handful of clients who need an extra prompt.
As a successful advisor, you have to be proactive, not reactive. You can’t get to each new quarter and scramble to figure out what value add would best benefit your clients.
“Value-adds take work,” Matthew notes. “This is not something that you can implement and say [to your team], ‘Hey, tomorrow, I want to mail a value-add. Today, let’s go ahead and throw this together.’” That’s why your entire information system needs to be mapped out in advance with all important topics clearly outlined. A complete yearly plan will include answers to the following questions:
By taking the time now to plan out the whole year, you and your team can see the long view and create a useful, unified value-add cycle for clients that will demonstrate over and over again the massive value your office provides.
You have all this technical knowledge, you’ve done the CFP, and then your RFC or whatever designation that you have, and then you sit down in a real-life situation and wonder, 'Holy crap! How do I communicate this?' - Micah Shilanski Click To Tweet
Somehow you tell yourself that this is a badge of honor to work 60, 70, 80 hours to serve 12 clients when really, it all goes back to the fact that you don’t have a system for delivering massive value.” – Matthew Jarvis Click To Tweet
Because of these value-adds, I know exactly what I’m going to talk to my clients about for the next year. I get to set the right expectations AND I get to do it with all of my clients at once. – Micah Shilanski Click To Tweet
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…
Micah Shilanski: Welcome back to another amazing episode of The Perfect RIA Podcast. I’m your co-host, Micah Shilanski. And with me as usual, the legendary Matthew Jarvis. How’s it going, bud?
Matthew Jarvis: It’s good Micah, I got to confess though, while I normally am fired up to do these podcast episodes, it’s something we really look forward to every single week — I’m a little nervous about this one, because we’re talking about the origins of value-adds.
And while I know all of our listeners and our million plus downloads, they imagine that you and I were both born doing value-adds, we were both born delivering massive value, that was not the case.
Micah Shilanski: Not even close. When we’re talking about value-adds, this was a case that I struggled for years to figure out a solution as to what do I talk about on a routine basis with clients. And Jarvis, I got to step back, not even before clients – prospects. What do I talk to prospects about?
And you think about this, you’ve done all this technical knowledge, all this training, you’ve done your CFP, you’ve done your RFC, whatever other designations that you have. And you have all this great technical knowledge, then you sit down in a real-life situation, you’re like, “Holy crap, how do I communicate this value?”
Just speak nothing about emotional intelligence, didn’t have any of that. Some would argue I still don’t. That behavioral finance, didn’t get any of that stuff either. And so, really was this pain and suffering, went through slogging through the mud, until we discovered how to use value-adds to DMV.
Matthew Jarvis: Now, Micah, I have to confess as I sort of reflect back, and I don’t think I initially realized that not understanding how to deliver value was the issue. The symptoms present themselves a little bit differently.
The symptoms present themselves as in the client is sitting in the lobby to meet with you, and you’re still scrambling to put together the material. The symptom presents itself as you’re meeting with a prospect and there’s no close. You’re just sort of hoping that by some grace, they will say yes.
The symptom is that each client meeting you’re doing something differently. You’re sort of adlibbing it. The symptom is you are spending most of the meeting talking versus listening because you’re hoping that enough verbal vomit will overcome a lack of value.
Micah Shilanski: Jarvis, and could some of the symptom be too, you hope that the meeting reschedules, so it’s not on your plate, because you’re so nervous about it. But you want the meeting, because you need the meetings. But you don’t really have a system to go through.
And I guess another thing too, is when the prospects are sitting in there, you could see in their face, they kind of like what you’re saying, but they have no idea where this is going.
Matthew Jarvis: That’s right.
Micah Shilanski: And neither do you.
Matthew Jarvis: Yeah. And neither do you, yeah. Other symptoms is that it takes you 5, 10, 20, 30 hours to create a financial plan, that you’re working days and nights. You’re not able to take any time off.
And somehow, you kind of tell yourself that this is a badge of honor. Like it’s a badge of honor that I’ve got to work 60, 70, 80 hours a week to serve my 12 clients. When really, it all boils back to you don’t have a system for delivering massive value.
Micah Shilanski: Jarvis, that’s such a … because so much of this in the industry, and I’m going to say in the white-collar industry across the board, it’s about time in the seat is what so much is measured by. You got to put your sweat equity in. You got to put your time in, you got to earn all these things.
And you do. To our younger advisors listening, you absolutely do, but you have to do it smartly. It’s not just time in there. And you have to do the things that make you uncomfortable.
And that’s really the key here, is because if you’re focusing in your sweat equity time, and again, speaking to our younger advisors, they’re spending all this time playing office; it’s because you’re only doing things that you like to do. And those are the things that don’t move the needle, like doing research and financial planning and theoretical stuff.
Okay, I still like to do that sometimes, and I get geeked out. I just do them. I’m a geek in that way, but that does not move the needle in financial planning. It doesn’t really help my clients.
And you’re going to argue and some say, “Oh, well I’ll get this other information,” blah, blah, blah, blah, blah. The answer’s no, it doesn’t actually move the needle in your financial planning, and that’s what we have to focus on.
Matthew Jarvis: Yeah. And I hate to break it to everyone, because it took me a long time to learn this lesson myself; the only person that cares about the designations behind your name are you and maybe your mother. Though, she doesn’t know what they mean, she’s just impressed that you have these.
And so, Micah, there was this belief, I fell for it. You and I both have some designations that we’ve long since abandoned, and I hope that no one ever discovers. We thought, “Boy, if I just get one more designation, then I’ll know how to deliver massive.”
There was even a thread on social media the other day saying, “What should you do after you get your CFP designation?” And the answer is a resounding prospect, you have to prospect.
“Well, you should get this designation and this designation.” No, those are not going to make you a better financial planner. I’m really sorry. Until you have this core competency of being able to deliver massive value, more technical knowledge will not help.
Micah Shilanski: Jarvis, I’m going to push back on that one just a little bit, if I may.
Matthew Jarvis: Please, please.
Micah Shilanski: I do think there’s a third person that cares about your CFP designation, and it’s the CFP board.
Matthew Jarvis: They seem to, yeah.
Micah Shilanski: Yes. Short of that, I’m not trying to throw shade on anyone that’s out there, but try to get out from this aspect that says, okay, that was minimum standards.
Now, we can have a great conversation, whether you should have that or not. That’s a sidebar for this particular moment, but let’s just call that a minimum standard, that doesn’t deliver massive value to your clients.
And if it did, then every CFP out there would be equal. We would see this huge thing across the board, that we see there’s too many clients that’s out there. There’s not enough CFPs.
If this was the case, that every CFP delivered this much value that was out there, we’d all be full up with clients, we wouldn’t need to prospect. And you wouldn’t be able to tell any of us apart. Yet, that’s not what the economics say.
Matthew Jarvis: And this is a good point. And it applies Micah, to value-adds. It applies to so many areas. It’s sort of this illusion to think, “Well, I have a CFP, therefore, I’m the same as every other CFP.” Picking just a single variable.
Micah Shilanski: Sure.
Matthew Jarvis: Jordan Peterson talks a lot about single variable analysis. There’s so much more that goes into that. This is where conferences, mastermind, peer groups, coaches come into place, to learn from people like, wait a second, Micah, to your comment on economics, this guy, or this girl’s making five times as much as I am. Either they’re like this super manipulative salesperson, which is unlikely, or they found out how to deliver massive value in a way that I have not cracked yet.
Micah Shilanski: Yeah, I think that’s such a solid point. Now, this is something, and we’re going to talk about this. And Jarvis, we actually have a webinar coming up, which I’m super excited about. It’s going to be open to the nation, which is fantastic. So, not just for members.
So, if you haven’t signed up for it, make sure you jump online and check it out at theperfectria.com, because we’re going to talk about the genesis of this, of where we came from in our practice and current value-adds that we’re going to be offering to our clients.
And I got to say these value-adds are such a, boy, I want to say lifesaver, lack of a better word right here, Jarvis. Because now, with these value-adds, what I get the ability to do, is to know exactly what I’m going to talk to my clients about for the next year. I get to set the right expectations.
And I get to do it with all my clients at once, which is super important, because before, when I was piece mailing my financial planning, I do a little here, I do a little here, and all my clients were going through a financial planning process. But I didn’t have a way of pulling all my clients together and putting them through the same process together. That means everyone was at a different step in the plan.
And so, now, all of a sudden, the management, that was a nightmare. And then I would go from this conversation, which is estate planning to the next one, which is taxes, to the next one was, “Oh crap, did they update their beneficiaries? Did I do this? Where are we at with risk management?”
And it was this confusion with all of the clients that we were bringing on, because we had finally cracked that code on prospecting. So, we were able to get phenomenal prospects in. We then were able to convert them.
Then it was a management issue that says, “Holy crap, how do we manage these clients?” And by going at a quarterly value-adds, it brought all the clients streamlined together. And I can say our clients frigging love it.
Matthew Jarvis: Oh yeah, clients love it. The team loves it. I love it. And Micah, as you mentioned on that webinar, you and I are going to go through our entire calendar for 2023, because when this podcast airs, first part of October, you already need as an advisor to have your entire 2023 calendar lined out.
What value-adds am I going to do every quarter? When is my surge meeting? When are my mini-surge? When am I taking time out of the office? When am I doing personal development? All these things need to be mapped out.
Micah, you and I actually keep coordinated wall calendars that have this all lined out in a visual format, not just an outlook.
Micah Shilanski: And this is such a key point. Because, you made the comment that our team likes it, and our team really likes it, because they have an idea of what’s happening next year. It’s not Micah, just randomly throwing more crap in the wind, saying, “Oh, guess we’re going to do this this week.”
So, it’s a lot more of a streamlined process. So, the team absolutely loves it. And Jarvis, the other thing that I’m going to say … you know what, I’m going to hold this back. I’m going to say it’s at our webinar. But we’re going to tell you the secrets to making value-adds easy, because they can be really challenging. They can be a lot of work to put together.
But if you do them correctly, if there’s a certain way you put them in other, they are a lot easier than not.
Matthew Jarvis: There’s definitely a formula that we’ve made several mistakes on. There’s also a great criteria for rating sort of the value of a value-add. Now, a lot of value-adds are subjective, but we look at things and we say, “Boy, is it personalized to the client? Does it provide actionable advice that the client can understand?”
Versus, let’s pick the opposite extreme; economic commentary — nothing personalized, no value. All that does is confuse a client. Doesn’t tell them what they should do or action they should take.
But Micah, if you don’t mind, I’d like to take a quick step back. I actually need to give some compliments out to the regulatory bodies that we respond to. Because in fact, for me, in my practice, it was the regulatory bodies that we all love to throw shade at, that got me to do surge meetings.
Micah Shilanski: That’s fantastic.
Matthew Jarvis: As I’ve mentioned in prior episodes, many, many years ago, we were audited by the state of Washington, this was before we were an SEC registered RIA. And they said, “Hey, listen Jarvis, the disclosures on the fidelity statements are custodial statements showing your fees. That’s not enough. Every time you deduct a client fee, you need to send them a letter detailing out how the fee was calculated.”
Micah, funny side note on that, at the time the RIA we were part of, thought it was an important distinction to show the client how many days were in the quarter and to calculate the fee based on days. Because some quarters have 90, some are 91. So, they thought that was a critical distinction.
Micah Shilanski: Absolutely.
Matthew Jarvis: Anyway. So, I thought, “Well, if I’m required to send this detailed letter, detail in my fee, and the client’s going to see that they also need to see value in that same envelope …” Back then we were mailing everything.
So, that’s when I started doing quarterly value. I was like, “Wait, if I’m going to mail them this detailed analysis of my fee, I’m going to also email or mail them a detailed analysis of the value we delivered.”
Micah Shilanski: Oh, Jarvis, that is fantastic. So, thank you for them for putting this together. But this is a great message that’s out there. Especially to our BD folks, especially to our ones that are in larger ROI rollups or something, that your compliance is going to come down and make you do something stupid.
All compliance comes down with some ridiculous thing that we just have to comply with. And really where that line is for me — I know it’s a slightly off the value-adds, but that line is for me, okay, is this back office or this front office? Does it affect the client or not?
If it’s back office, it’s like, whoopty doo, checkbox, let’s go ahead and make sure the team takes care of it. And if it’s the front of the office and the client’s going to see that, “Okay, how do I wrap value around this?”
So, you could take it from this simple example of the 401(k), the DOL issues with the 401(k) transfers. You have this whole compliance thing that you have to do about fees.
Okay, great. Have you turn that into a value-add for prospects, that’s going to show them the value. Because I’m going to argue that just arguing fees on one side or the other really isn’t value that’s there.
You got to say, “How do I step back? How do I actually show this as value to the client? Whichever way they decide to make that decision, I’ve helped them get clear, actionable information for their personal situation.”
Matthew Jarvis: Yeah, boy and Micah, not to do a side tangent on that, but that could be as simple a Mr. and Mrs. Client, there are people in our industry and I won’t name any of them that would tell you that there are no advantages to keeping your 401(k), that you should dump it and you should move it all into an IRA with me. Little bit convenient.
I want to make sure you understand the pros and the cons. Now, we’ve waited out our recommendation is this, but let’s just walk through these pros and cons really quickly. Because there are pros and cons of any decision. So, that’s how we pivot it from like, “Hey, here’s one more form the attorneys make us sign.” No value there.
Micah Shilanski: And for me on the TSP, the Thrift Savings Plan, which is where we specialize at, it’s okay, great, you want to start taking out $5,000 a month from your TSP crown, perfect. This is how it would work versus this is how it’s going to work in the IRA.
Now, if you’re familiar with the TSP, you know it has proportionate distributions. So, we go into the buckets presentation. This is how you should be taking distributions. This is why it makes buckets superior in a presentation with clients.
Jarvis is laughing a little, but we go through the bucket presentation of why you should be taking distributions from cash and not from the market when it drops 20%, the TSP does not allow that.
Now, great, the TSP is phenomenal in many areas, but now I’ve taken this from a theoretical thing about pro rata distributions to a client who wants to take out $5,000 a month. How are they actually going to do that? This is value while going through that disclosure.
Matthew Jarvis: Well, I love it. Something that always comes up Micah whenever we talk about value-adds is advisors that’ll say, “Hey, my broker dealer, my wire house, my whatever, won’t let me do this. What is your suggestion?” Leave.
Micah Shilanski: That’s option one.
Matthew Jarvis: That’s option one. Actually, I went back and forth with an advisor for some time. He’s like, “Hey, I’m asking my compliance department for the 12th time,” like listen, and we need to quit having this discussion. We need to talk about where you can deliver massive value.
But you’ve got to approach compliance as a partner. If you approach them as an enemy, even if you feel like they are an enemy, you’re not going to get anywhere. That’s where you’ve got to go to compliance and say, “Hey, really appreciate the work that you’re doing to keep our firm out of hot water, to keep me out of hot water. I was hoping we could collaborate, help me understand how come all these other advisors are able to do this. Like what do we need to do so we can do it here.”
So, it’s got to be a collaborative approach. And we can talk about that a little bit more in the webinar.
Micah Shilanski: Jarvis, I want to take a little bit of a pivot real fast. So, there’s a pushback that we get sometimes, and it’s less and less because value-adds are really taken off in the industry, which is fantastic.
But there is a pushback, we get a little bit that says, “Hey, when I systematize everything from my clients, now they’re in assembly line. Now, they’re not people anymore. Now, it’s a book of business.” Or whatever BS language they want to put inside of there.
And so, now they’re saying that because you’re systemizing that, because it’s an assembly line, you’re treating them like a cog in the wheel versus an individual person. So, what’s your thoughts on that?
Matthew Jarvis: I just always think if I went in for a surgery and the doctor said, “We’ve always removed appendixes from the front and today, we’re going to try to remove it from your left shoulder. It sounds like fun.” You know what I mean?
And being facetious aside or a pilot, whatever the case may be, if you’re not systematized, you can’t customize. Jocko talks about this. In his books, he talks about, hey we systematize everything including like how we talked on the radio so that we could save mental bandwidth and awareness for being dynamic in this situation.
And speak about a situation that needs to be dynamic, if you’re in war, in the heat of battle, but everything has to be systematized. So, Micah, that’s the foundation that allows you to provide customized advice. It’s not what keeps you from it.
Micah Shilanski: Not too many of our advisors are getting into firefights on a daily basis. So, why is systemization really important to us in our practice? And I really think that’s because it more empowers the team with effective communication.
So, easy example, what is something we do, do every day? Transfers. We transfer funds from other providers over to Schwab, over to our management all of the time. And our team has a systematized process of how to do this.
And now, the benefit of this is we don’t need my leads to do all the transfers. Now, we can have younger team members in order to help with those transfers because we have a system in place, how it’s supposed to be done.
But more importantly, Jarvis, there’s things that says, “Great, once it’s outside of the system, then I escalate.” Now, the team has a proven method to escalate things.
So, for example, let’s say I do a transfer of one of our 401(k) plan for a public traded company. And for whatever reason, I forgot to put in the notes that, “You know what, watch for employer owns stock inside the 401(k), 404, 404(e).” Something like that.
So, anyway, so perhaps I forgot to mention that in notes. Well, fantastic. In our processes of transfers, it’s one of the questions that asked; does the employee own stock of their company in their 401(k). And if it’s yes, boom. It goes right back to the advisor. Because now in our process of systemization, we can make sure that happens.
Now you could say, “Well, it says, Micah, you specialized with federal employees.” Guess what, you can’t own stock in the federal government. And that is correct, in the TSP, there’s no stock inside of there, but because federal employees actually have spouses which have spouses with 401(k) plans, we have to do those 401(k) plans too.
So, in all of our transfer processes, that question is there to make sure we’re systematizing it, so we can add massive value to our clients.
Matthew Jarvis: Micah, another example that comes up with that, reviewing estate documents. So, a value add we do on a regular basis is helping clients remember how old their documents are. And who’s been named as their trustee, as their attorney in fact, et cetera. Now, again, we’re not providing legal advice. We’re simply reminding them, making them work.
So, one option would be, I could manually one at a time, I as the advisor, pull up the estate documents, read them, type up an email to the clients and send those out. A small hint for you, that’s going to take a lifetime to do. You could do it.
Another option would be, I could have my team go through, create a spreadsheet or in our case, Micah, in our custom CRM, document this. The CRM that you’ve built out that we use together, say, great, have the team pull … they have a power of attorney or they don’t. It was created in this year. Like they could pull out that information.
Now, can they get to a hundred percent? No, but they can get to 80%, which will save me countless hours. Now, I can look down this list, and I can say, “Oh, there’s three clients that don’t have a power of attorney. I need to talk to those three clients and make sure that I’m delivering …”
Micah, back to your customized advice to those clients, I’m not going to send a generic letter to every client saying, “Hey, make sure your power of attorney is to date.” Because the clients had just updated theirs last week. That’s a stupid letter. That’s the opposite of value. And the client that has never done a power of attorney, they don’t need that letter, they need a phone call.
Micah Shilanski: Just like when we created our 37-point checklist for tax reviews. Now, I’ve empowered my team and how to deliver massive value with taxes because it’s a process to review.
We also have an estate planning checklist because I was hearing from a lot of advisors that’s saying, “Hey, we do estate planning.” And I was saying, “Great, what does that mean to you?” “We recommend that they go see an attorney and talk about estate planning.” Okay, we call this different.
When I say I do estate planning, it’s a little different than handing them a phone number and saying, good luck. We actually go through an entire estate planning process. What’s a will, a healthcare directive, a durable power of attorney, a trust, a testamentary trust, a HIPAA release form, digital assets …
We go through this entire thing that’s there, but we have a checklist and we have a process to empower our team, Jarvis, to your point, because now guess what? I can give that checklist to my team and say, “Great, when we have a client coming with a legal document, go through this checklist. Go make sure we have these bits of information. This is where to fill it out,” in an Excel spreadsheet, or as you said in our custom CRM.
And now, guess what, I’ve freed up my time, I’ve systematized it. And our team members can go out and deliver massive value to clients by checking these things without having to go through 20 years of education in the school of hard knocks in order to learn this stuff.
Matthew Jarvis: Micah, this makes me think we’ve all sort of heard this analogy of (and it applies to every professional service) your skills as a practitioner, and then your skills as a business owner. And I used to picture that as a really black and white line, but it’s very gray.
So, we use this value-add example. So, you may have immense (to stay on estate planning) estate technical knowledge, but if you don’t have the business skills to figure out how to deliver that in the systematized way to leverage your team, it won’t work.
And the converse is true. Like if you don’t have any technical knowledge on estate planning, you need to get that. But you have to have a balance of both the business skills to run these in a systematized way, using your team, and the technical skills to know what in fact this means, or at least have someone who can help you know what that is.
Micah Shilanski: And since we’re talking about value-adds, one of the things that we can show on the webinar and go through is our estate planning value-add, which basically, we summarize the client’s entire estate planning documents. Attorneys love this. We take their 70 pages of work and turn it into one page.
And it’s like this is (with pictures) what happens when you die. This is what happens when you’re disabled. This is where your money goes. And I got to say Jarvis, to your point, clients absolutely love that. You’re talking about so much value here, because when they pick up their legal documents, they don’t know what the heck it says because it’s all legalese.
Versus they got a one-page summary from us that says, “Great, when Bob dies, this is what happens. When Sue dies, this is what happens. Bob and Sue dies, this is what happens, and here’s who’s in charge.”
They’re like, “Aha, now, I get this. Now, this makes sense.” And when I ask them to review their estate planning, guess what? They can pull out that one-page summary real quick, and they can make sure that those people and those key places are really, really important.
Versus when you tell your client, “Go review your estate planning documents. Well, are they really going to pick it up and read those 4, 5, 6 different sets of documents and compare each person and make sure they’re in their correct role? Sometimes, sometimes they will. Most of the time they will not.
Matthew Jarvis: Well, and this ties so nicely, Micah, back to our comments earlier in this episode about delivering customized value.
So, you’ve got this one-page illustration of their estate documents. Now, you can sit down with the clients, you can sit down with their family if they so choose, and say, “Hey, let’s talk from a single point of reference here so that we’re on a high level.”
I’m not pointing out, “Hey, you’ll notice on page 37, paragraph two, chapter three …” whatever that is. No one’s going to understand that, we’re all visualizing the same thing. So, this is where again, we’re able to deliver so much more customized value because we streamlined the fundamentals.
Micah Shilanski: And if you missed the podcast I did with Rod Zeeb, is a phenomenal estate planning attorney. We talked a lot about that, in doing a one-planning meeting with the family.
The importance of this document too, one of the key steps inside of here is get it blessed by the attorney. Attorneys don’t like to bless it. There’s a certain way you can go about it, that you have a higher chance of them doing this.
But you don’t want the attorney to come back and say, you can’t give them that because it’s legal advice. We had a whole discussion on that. I don’t feel it’s legal advice depending on how it’s set up and how it’s placed.
But it’s much easier just like with any other COI to work with the COI on these to make sure it’s clearly communicated, and you’re all on one team working with the client.
Matthew Jarvis: Yeah. Micah, that’s a good point you bring up with COIs and this kind of line. And we’re actually working with Steven Jarvis, CPA to do an entire white paper on what counts as tax advice versus not, but this can be a gray area. And so, we want to make sure that these are positioned as educational pieces.
So, we’re coming up to year-end as this airs. We should be getting ready with our 1099 letters for January. This is again, where we’re positioned as, “Hey, this document is for your tax preparer to use. In fact, I’ve enclosed two copies, one for you, one for your tax preparer.” And we’re making sure this is an education piece. And it’s going to say on there, “Hey, this is not tax advice …” et cetera.
But again, we’re looking for streamlining, how do we deliver massive value to the center of influence, so that they look forward to hearing from you. They don’t see, “Oh it’s Jarvis, I know his client’s going to have seven accounts, I’m going to have to track on the 1099s for each of them.”
Micah Shilanski: Yeah. And at the end of the day, when your CPA, your client’s CPA has two different advisors, one of them is sending them a 1099 letter, “Here’s the seven accounts. By the way, we did a Roth conversion. We had QCD money that we did, and we did a transfer from an employer account, no longer employer account over.” And this one document shows all seven accounts and has notes that we did all these.
Versus, rando advisor that’s out there and a client that’s getting it doesn’t tell them about the QCD, doesn’t tell them about the Roth conversion; “Oh, that Roth conversion actually was just a rollover. It wasn’t actually a conversion.”
Doesn’t have any notes inside of there whatsoever. And now, everything gets screwed up on their taxes. And you find out with a love letter from the IRS when … or even the worst part Jarvis, at a QCD, you may never even find out, because the IRS really doesn’t know about it.
Matthew Jarvis: Yeah, probably not, it’s probably just lost money.
Micah Shilanski: It’s probably just lost money that’s going to be there. So, all of a sudden, the CPA has two different advisors in front of them. You got Jarvis, which is rock starring it with this one-page 1099 letter. And you got rando advisor that you have no idea what the heck they’re doing; who do they want to work with?
Matthew Jarvis: Totally, now something, Micah, that we’ll talk about in the webinar, and I think we’ll talk about next week on the podcast as well, value-adds take work. This is not something that you can implement and say, “Hey tomorrow, I want to mail a value add. Today, let’s go ahead and throw this together.”
Your team needs time outside of surge to gather the information, you need technology in place that can generate these. You need a quality control. Last thing you want to do is send out the 1099 letter and it’s missing a closed account.
Not saying that’s ever happened. It’s an easy miss. By the way, on the 1099 letters, you close an account midyear, so it doesn’t show up on the reports, still generates a 1099.
So, there’s steps. You need a process to follow just like everything we do in our practice.
Micah Shilanski: Yeah, and there’s some secrets to putting that in place and what that process is. And we’re going to talk about this in the October … come on, we got to give you some reason to sign up.
So, make sure you come into the webinar, make sure we go through this. And again, this is a process in a system-driven thing. And the more, and the more that I systematize my practice, I go into with value-adds.
And Jarvis, one of the things that we struggle with, I think in an industry as a whole, is head trash. Now, for so many years, I thought it was just me. If only I got this designation, I wouldn’t have head trash. If only I brought in so many clients, I wouldn’t have head trash. If only I had a hundred million in AUM, I wouldn’t have head trash. If all these things — yeah, it’s never gone away.
But now when I’m coaching and talking with other advisors, one of the things I learned; we all have head trash. It manifests in different ways, but we all have it. And I got to say, one of the biggest things that helps me with my head trash is when I can look at my calendar, it says, “Holy crap, look at all of the value I’m going to deliver to my clients this year.” I got four set value-adds, I got two backups that are going to be there.
You got at least six value-adds that are going into every single one of our clients this next year in 2023, and that’s just what we have on the docket now, much less what’s actually going to happen in 2023. It is a minimum of six, potentially more for our clients. And I can look back and says, “Holy crap, we are delivering a ton of value to these clients.”
Matthew Jarvis: This helps with head trash around fees. When I look and say, “Great, there’s a discount advisors out there are saying that you should charge pennies.” Like well, if you’re delivering pennies, charge pennies. If you’re delivering, Micah, all these value-adds that you outlined …
Also, when we have head trash about clients and SEC audits, when the SEC comes in — again, I can’t speak for them. But in my experience and experienced advisors that have been audited, whether they’re compliance attorneys; when you can clearly show the SEC here’s all the value that we’re delivering to clients, it makes your life a lot easier.
Now, that will not paint over egregious stuff. But when it comes to discussions like, what are you doing for your fee? And you can line all that out, they’re going to high-five. I imagine that they high-five, I’ve never actually gotten a high-five from an SEC examiner, but I’m holding out hope.
Micah Shilanski: There’s hope. Jarvis, that was on ours, because we had an eight-month examination, it was all virtual, so lovely to go through all those things. But when it came to that section of what are you actually doing for ongoing financial planning? And we started rolling out all the value-adds that we had, it was fantastic.
It was like, okay, done, next. There was no other questions on it. They were moving on to the next thing. Again, this is not a get-out-of-jail free card. This isn’t saying this is all the value. You still have to honor everything that you’re supposed to be doing.
But this is (compared to a lot of other offices that are out there) a phenomenal way to be set up.
Actually, Jarvis, I want to tell a funny compliance story, if that’s okay. I think I’ve told it before in earlier pods. So, our office in Anchorage, Alaska is located about two blocks away from the Alaska Division of Banking and Securities.
So, before we were SEC registered, the Division of Banking and Securities about every two years would swing by, because we were one of the larger RIAs and we were two blocks away.
So, one day, they called me up, the guy, I won’t mention his name, but he was a nice guy, good examiner. And so, he called me up and says, “Hey, we need to schedule this time.” He’d always work with us on the dates, because he knew we were doing events and traveling.
So, we set up a time. I walk up front, Jarvis, at the time of the event, told that they’re there and there’s six examiners in the front of the office and I’m like, “Oh crap.” There’s only like one person here. Like, “Oh crap, what the hell is happening?”
And so, he introduces them all, whatnot and I show them into the conference room. And I get them … we have all this stuff outlined-
Matthew Jarvis: There’s only two chairs.
Micah Shilanski: Yeah, there’s only two chairs, because like I didn’t expect this one. So, yeah. All of our stuff’s out there, they start, “Oh, and sorry Micah, we’re going to let you know if we have any questions.” So, I shut the door, go back to my office.
They call me up in like 45 minutes and one examiner’s like, “Hey, I see you’re doing A, B and C, you can’t do this.” And I look at it and I’m like, “Oh, well must be confused on the rules because I thought the rules were 1, 2, 3, et cetera.” And everyone looks around, looks at the head examiner and he’s like, “Nope, Micah’s right. Okay, Micah, you can go.”
And I leave. And about an hour later, they call me back in and they do the same thing again, Jarvis. They pull me up and says, “Hey, you’re communicating this information. It’s tax advice. You can’t give tax advice.”
I say, “Well, actually, I don’t think that’s tax advice, because tax advice is A, B and C, and here’s actually what we’re communicating, just what happened in the CPAs, in the loop, in this communication.” Everybody looks around and looks at the head examiner and head examiner’s like, “Nope, Micah’s right. He’s good.”
I was like, “I’m sorry, dude, what is going on?” I was like, “What am I missing?” And he’s like, “You know what, Micah, I probably should have told you in advance. We just had an entire staff changeover and we needed to train them.”
“And we thought the best way to do it was to take them to your office. And so, they could go through everything, because you guys do a fantastic job. And so, we’re just having them run through all of the stuff so they can get a great baseline of education for exams.”
So, yay. So, we had that for a week in our office. And so, I guess that is the risk of doing a good job. Maybe you’re going to be held to that standard, but all turned out really well in the end, which was fantastic. But it was a very interesting week experience of compliance people in your office.
Matthew Jarvis: So many side rants possible on that one as far as did they send you a check for your time? If you’re an RIA in the state of Alaska, listen to this, know that Micah’s practice is the bar that you’ve got to clear for exams?
Well, Micah, this podcast is about taking action as are all our podcasts. And I don’t think that we have an action item like you could go out and implement value-adds tomorrow. I just don’t think you can go from zero value-adds to like these massive intense estate planning value-adds.
Micah Shilanski: And in fact, I’m going to say Jarvis, we actually tell you not to. Do not go from zero to six. That is a huge leap.
Matthew Jarvis: And also, even in my own practice in recent years, I’ve made the mistakes of going to the team and say, “Hey, I have this great idea for this super elaborate value-add.” And then we go through our process and we step back and say, “Okay, what data do we need? And where’s this data going to come from? And how are we going to compile this? And how are we going to QC this? And how does it meet all of our other requirements?”
So, my action item, Micah, would be wherever you’re at in the value-add spectrum, you’re delivering six a year and you’re questioning it, you’re delivering none a year — you need to surround yourself, you need to find an environment with advisors who are delivering massive value in a quantifiable way so that you can learn from them.
This podcast is a great introduction to that. The webinar next week is a great introduction to that. But you need to say for 2023, where am I going to get exposure to advisors delivering massive value such that I can learn from them.
Micah Shilanski: That’s going to be an absolute key thing. Right now, slightly biased in here, I’m going to say everybody just needs to sign up for our webinar because at our webinar on October 12th, we are just going to crush it. And we’re going to go through the secrets inside of this, about how do you really crush value-adds.
Not just what are we going to be doing this next year, which is i.e., things you should be looking at, but what is the secret to crushing them with you and your team? So, that’s going to be really, really important.
Jarvis, I’m going to say the other thing with value-adds, focus on what’s an area of head trash that you struggle with. And okay, if you struggle with, “You know what, I don’t think I deliver value and taxes, I don’t think I deliver value on risk management or insurance or estate planning.”
Whatever that head trash is, you know what, maybe that’s a great place you should start for a value-add, because it’s going to be twofold. This is going to be hugely valuable to your clients, but it’s really going to help with your head trash. And the more you eliminate that, the better advisor you become.
Matthew Jarvis: That’s a great point. If it’s Roth conversions, it’s year-end tax planning, it’s estate planning, it’s risk management — we talked about this a few months ago, preparing for fall surge, in our fall surge right now that we’re in the middle of, we’re going through social security withholding for every client.
And so, part of that was pulling everyone’s 8821, their tax transcripts from the IRS, which you can get through Retirement Tax Services. Seeing what their social security tax withholding was, if any, and then approaching those clients one at a time saying, “Hey, I see you’re withholding X and really we need to be withholding Y.”
Versus again, Micah, a bad example would be send a blanket letter to every client, “Hey, you should look at your tax withhold on your social security, no value there.”
Micah Shilanski: What does that mean? Okay, I looked at it now, what do I do? How do I know if it’s right?
Matthew Jarvis: Where do I look at?
Micah Shilanski: Great point. Where do I know if I’m going to look?
Matthew Jarvis: If I need to change it, how do I change it? Yeah, so many things.
Micah Shilanski: What should it be changed too? This is a fun one, like how many times do you have to send it into social security office before they’re actually going to update it? Because it’s not once, at least in our office, you got to send it in multiple times, that sucker just gets lost. It doesn’t actually get done. So, these are really key things that can add tremendous value.
Matthew Jarvis: I love it. Well, as again, October 12th next week is our webinar on delivering massive value on value-adds for 2023. Join us at that webinar where we’re going to outline what it is we’re doing for all of 2023.
Of course, wherever you’re listening to this podcast, go ahead and give it five stars. Micah, I have to confess every once a while I get a kick and I filter for like the couple of three-star ones. There was one the other day like “Matt and Mike had just agree with each other all day.”
Well, because we’re both doing what works. I don’t know, what am I to say? Like, “Hey Micah, you really should quit doing value-adds, because that’s what I’m doing.”
Micah Shilanski: Surge meeting sucks. Don’t do those, why don’t you start lowering your fees. I don’t know if that’d be a great podcast. I don’t know. Maybe that’s an April 1st podcast. Maybe that’ll be coming for next year.
All about taking action. Make sure you guys go out and take action this week. And until next time, happy planning.
Matthew Jarvis: Happy planning.
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