Rentals can easily go wrong, and the data you get from other renters and realtors is often questionable. But today, Matt and Micah will share a simple solution that helps everyone make the best, informed decision on whether or not to go forward with the property rental, and they’ll shed light on what you need to know about the Secure Act.
Listen in as the guys share how to communicate with your clients around this act and other tedious, wordy subjects in a way that is beneficial to them. You’ll learn the most important way to think about the delivery of information, how Matt and Micah personally deal with important client interactions related to the Secure Act, and more.
How you sell matters. How your sales process is set up matters. But how your clients FEEL about the process matters the most. - @ThePerfectRIA Share on X
The Secure Act is an opportunity to deliver massive value. - @ThePerfectRIA Share on X
Get a feel for the information they want hear. They might just want a one-word answer or one-sentence answer. Donât assume that they want to know the full depth of your information. - @ThePerfectRIA Share on X
This is The Perfect RIA, in case you didnât 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 dustâŠ
Matthew Jarvis: Hello everyone. Welcome to another episode of The Perfect RIA podcast. Iâm your cohost, Matthew Jarvis. And with me as usual, the man, the myth, the legend, Micah Shilanski. Micah, how are you my friend?
Micah Shilanski: Iâm doing excellent. Iâve got no big complaints. Broadcasting again from Maui, so and getting a little bit of sunshine in here so Iâm not going to complain too much about that.
Matthew Jarvis: Yeah, I keep telling Jackie that we ought to⊠We have a second home but to sell that one and get a second home on the Big Island instead. But our current summer house is two-and-a-half-hour drive versus a six-hour flight. So, I donât know, maybe weâll stick with what we got.
Micah Shilanski: I was talking with a lady here at Maui and she owns a property and she actually has a timeshare and she owns a lot of timeshare weeks and I said, âWell, howâs that working out for you? Sheâs like, âGood. It actually cash flows. And Iâm like, Whoa, Whoa. What do you mean it actually cash flows? Sheâs like, âWell I have 72 weeks and that pays for a year. If I get them all rented out.â
Matthew Jarvis: 72 weeks pays for a year. Is this like Saturn where Saturn..
Micah Shilanski: No, this is, she needs like a year-and-a-half of rental to pay for one year. So she was joking that it doesnât actually cash flow, right? She need more income than in a year. So she rents it for over 70 weeks. All of her weeks of her timeshare. It pays for one year. Thatâs going to be there. So yes, you could buy a place on the big Island. It may or may not cash flow for you. Iâm just throwing it out there.
Matthew Jarvis: Yeah, it wouldnât be for cash flow; interesting. And this is not the topic of our podcast today but interesting. I was talking to an advisor, how so many of the industry studies are, in my opinion, not reliable because the information is being volunteered or itâs not being verified and itâs whatâs called a selection bias. So only people that have things they want to talk about volunteer for this study.
Matthew Jarvis: And this gentleman pushed back and he said, âWell, Matthew, maybe you keep really good records in your office, but most offices according to this gentlemen, donât keep good records.â And so we couldnât verify the information. And I said this, what made me think about Micah, with your timeshare example. I said, âThis is really not difficult information to look at. We look at gross revenue, which youâre reporting to the IRS on your federal, your corporate tax return. And we look at adjusted gross income that youâre reporting on your personal tax return. Those are the two numbers we need, right? We know how much your practice is earning and we know how much youâre taking home.â And thatâs a good starting point. So again, donât massage the numbers. This stuff isnât complicated.
Micah Shilanski: And actually this isnât the purpose of our podcast, but it kind of brought it up right there. When I have clients buying rental properties, I actually, I look at the same thing with them. When theyâre going to buy investment properties and whatnot we go to whoever the seller is and we actually request an authorization to pull their tax records on their Schedule E or their LLC property, et cetera. Then theyâre like, âWell, why are you doing this?â And I said, âVery simple, because no one overestimates their income to the IRS, right?â So when youâre buying these other properties, these rental properties or clients that are buying them. The sales person will say all of this great stuff thatâll be there. The person selling it says, âOh look at all of this stuff.â You pull their tax returns, you get a totally different answer. And I think thatâs the same thing with advisor practices. No one overestimates their income to the IRS. And if we use those benchmarks, that are there, what actually gets reported to IRS? Thatâs our verifiable information and weâd have a hell of an accurate study.
Matthew Jarvis: Boy, I really like that. So letâs go delve a little bit deeper on this. This is not what we planned to talk about.
Micah Shilanski:So much for the SECURE Act.
Matthew Jarvis:So much for the SECURE Act. Weâll get to that. Itâll still be here. So, but I want to highlight this rental property example Micah, and I donât want to just flatter you because yeah, thatâs what we do. But it would be so easy. I see so many advisors who get sucked into arguing with the real estate sales person, right? So the realtor says, âOh this thing cash flows at 27% annually.â And Micah could say, âWell, thatâs ridiculous. No piece of property can cash flow at that rate.â
Matthew Jarvis:But now itâs an argument between Micah and this guy and itâs just arguing opinions, right? And neither one has the higher ground. But Micah, as soon as you say, âHey, letâs just pull the tax returns, I always find those to be most accurate.â Thatâs not an argument. You seem like a genius to the client at that point. Because then you have the numbers. Well you say, âWell, Mr. and Mrs. Client, Iâm not sure what the realtor was talking about. They said 27%. It actually looks like theyâre losing money on this property every year. Somethingâs not adding up here.â
Micah Shilanski: Well, I love to do it with a real estate agent there.
Matthew Jarvis: Iâm sure you do.
Micah Shilanski: But yeah, I mean those little things like that. And also sometimes you need a why, right? Letâs focus on this. Sometimes you ask for the tax records. They are going to be like, âWhy?â Weâre like, âWell, weâre probably going to get a business loan because this is a business property.â And so the easiest way to justify that is to show the business income. Having a historical income is a great way to do that. And thatâs a why. And if you have a why with a request man, nine times out of 10 itâs going to go through. So yeah, thatâs a great little thing to do. You donât get in an argument about what the actual projected numbers are. You get real historical data. You can make great decisions with that.
Matthew Jarvis: I use a similar approach when clients say, âHey, Matthew, I want to retire. Iâm retiring and I want to buy rental properties for cashflow and retirement.â And thereâs a lot of ways this can go wrong, right? They have no experience in rentals. And I used to, early in my career, I would jump in, âWell the three Tâs, toilets, tenants, and taxes.â And I would kind of go to this and now I just say, âYeah, you know what? That can be a great idea. Iâve seen a lot of people do that successfully. Why donât you go out and look for some properties and weâll see how the numbers look and then weâll talk about it more.â Now, nine times out of 10, itâll stop there because they really werenât that interested. They just wanted to throw that out.
Matthew Jarvis: One time out of 10 theyâll find some properties and will say, âHey, letâs look at the cashflow.â Micah, to your point.âWow, this thing has like a 2% free cashflow. And thatâs assuming that the toilets never back up. And when youâre in Maui, whoâs going to take care of the backed up toilets?â âOh yeah, Matthew, this does not seem like a great plan.â âOkay.â Versus me trying to beat up on their idea. Now I become the enemy, right? If I say, âMicah, thatâs a terrible idea. Let me give you 15 reasons.â Now Iâm their enemy.
Micah Shilanski: And I love this too, especially when we have spouses that have different desires, right? One wants to buy a rental property, income property and one doesnât. I always like to lead with, âYou know what, letâs make an informed decision. So letâs not make a decision either which way to go right now. Letâs just make an informed decision. So how about we go get this information, then we can have great information to make a decision and then weâll just say, âDoes it line up to your goals?â
Micah Shilanski:And I love framing it that way with clients because whoâs against making an informed decision, right? Letâs get the information, now to your point, Jarvis, theyâre going to self-select. And then I got the other little piece that I threw in there, which is letâs make sure it lines up with your goals. And then thatâs another easy thing. Great itâs generating 2% cash flow. You really need a five, 6% rate of return in order to stay retired. Is this really what you want to do, right? We donât have to be the bad guy on this. We just help make them an informed decision and theyâre going to self-select the right decision, 99 times out of 100.
Matthew Jarvis: Yeah, they really will. One other line that I use that I find really, really successful and especially when you have a couple where they have different opinions. I like to say, âYou know what, Iâm just the numbers guy here, so letâs get the numbers together and then you guys can make that decision. But Iâm just a numbers guy here, so letâs make sure we have all the numbers.â And again, thatâs an easy way to draw out the numbers versus me. But I donât want them to feel like Iâm backing them into a corner, right? Where a sales person, if you go into the used car lot theyâre going to say, âOh, what kind of monthly payments can you afford?â And every question you answer, theyâre baiting you. I donât want people to ever feel that way with me.
Micah Shilanski: No, I love it. Well, folks that wraps up our talk on the SECURE Act. I hope you found this information useful. All right. Back to our topic today. Sorry, thank you for that little tangent.
Matthew Jarvis: Back to the SECURE Act. Back to the SECURE Act. Well actually I want to start with just a small tangent on the SECURE Act, which is, we probably are all familiar with the Aretha Franklin song Respect. Where she sings R-E-S-P-E-C-T, find out what it means to me. Micah and I were trying to flip quarters on who had to actually sing that song, but interesting. No, so Aretha Franklin, right, made this song. Itâs like a culture icon, right? Everybody knows the song. Everybody can sing it, but she wasnât actually the person that wrote the song. There was a gentleman by the name of Otis Redding who wrote the song originally and he wrote it as a song complaining.
Matthew Jarvis: He says, âBoy, canât I get a little respect? I go to work all day, canât I come home and get a little bit of respect?â And it wasnât popular at all. It wasnât until Franklin said, âThis could really be a fun jazzy song and kind of sing it with some attitude,â that it became a bestseller. And I mention that not because you should start singing in your office, you really should not. I mention that because advisers often get hung up in the technicality of things and they try to communicate all this technical jargon to clients and they lose interest. Just like you donât want to hear a song about some guy complaining about not getting any respect. Clients donât want to hear you recite 47 pages of the SECURE Act. Or, really anything else for that matter.
Micah Shilanski: Right. And it goes back to kind of our leading quote, right? Itâs talking about not, how you communicate with clients, itâs not what your process is. Itâs how your clients feel about that process. How are you delivering that information to them so that they can understand it? They feel empowered with that information. Youâre not eliminating decisions for them. Youâre not making it a negative experience. Youâre empowering them with these decisions so they can go and accomplish their goals. That is what is the most important part of this entire process.
Matthew Jarvis: It really is. It really is. So just like required distributions that we talked about in the last episode. The SECURE Act is really an opportunity to deliver massive value. Even if it doesnât translate into massive dollar savings or massive changes, it can be massive value. We want to highlight a couple of examples of these. One is just getting in front of clients with the information. So similar to RMDs, you donât want to send clients a 42-page report about SECURE Act. Thatâs kind of a waste of time. You would be great to communicate with them and say, âHey, you know what? With the changes in the tax law now would be a great time to look at your beneficiary. In fact, I have a report here with your beneficiaries and letâs walk through what might happen if you were to pass away and leave this money to your children or to whomever youâre leaving it to.â
Micah Shilanski: Yeah, thatâs great. And if youâre a member of the backstage pass, weâre going to throw up a copy of our beneficiary report so you can see actually what it looks like. But the big part about this, and we talk about this with no industry jargon, is we donât use percents thatâs inside of there. Itâs dollar amounts that are going to be there. So youâve got $1 million IRA, you got three kids, okay. Each kid is going to get 333,000 Is that okay with you? What is Johnny going to do with over $300,000, right? So these are, itâs dollar amounts is kind of the really important thing. Now as youâre communicating this with clients, itâs really important when youâre communicating the SECURE Act. I think two things, at least weâre going to focus on in our office.
Micah Shilanski: Number one, letting all the clients know that weâre on top of it. Okay? Now this can be generic. This doesnât have to be, I donât need to send out 400 different emails to every individual person in our firm that says that you know how weâre individualizing taking care of this in an email. What I need to do is let them know that we know about the law change. Weâre looking into it, weâre getting answers and at our next client meeting, which is coming up in a couple of months, which reminds them that we have a meeting coming up. Weâre going to talk about how this affects them personally, right? So weâre answering two questions. Number one, do we know about it or are we on top of it? Check, we are. Number two, more importantly, how does it affect me? Great. Micahâs on it.
Matthew Jarvis: Totally. Totally. And the answer might be, does it affect you at all? Or if it affects you in ways that arenât significant. But yeah, to get ahead of that, somewhat related, you donât need to be a master in all aspects of the SECURE Act or anything else. Now you need to be really competent in that and weâre going to talk about some resources for that. But Micah, you had mentioned an example, a client had emailed you the headline of something about how the SECURE Act could blow up your trust. And that can get kind of a weird nuance thing and you had actually kind of looked that up. There is some weird obscure scenario where if your trust was written incorrectly, the SECURE Act could cause problems with that.
Matthew Jarvis: But itâs perfectly fine to tell a client, âThatâs kind of a nuanced aspect of the SECURE Act. I will look into that and get back to you.â Or the really classic answer is just tell why youâre interested in that? And it might just be because they have an itch to scratch, right? If theyâre asking about the exemption to the early distribution penalty for adoption and you know theyâre not in a situation to adopt people. I might just be like, âHey, listen, why do you ask?â âOh, Iâm just curious.â All right, well thatâs different than something else.
Micah Shilanski: All right, well then generically hereâs the answer versus, âOh, my daughterâs going to adopt and theyâre thinking about dah, dah, dah, dah, dah, dah.â Okay, great. Now this is something good to know, right? This is part of our family planning that we want to know about. So asking, not just answering their question, but Jarvis, I love that. Asking them why this is important to them. Getting a little bit more, tell me more about that, right? Something you often say, getting more information from the client before you dive into the answer because you could be going off the wrong direction entirely. So really important to think about that.
Matthew Jarvis: Yeah. You also want to get a feel for how much information they want here. They might just want a one word answer or a one sentence answer. Donât assume that they want to know the full depth of your information. I was in a meeting recently with a âexpert,â not related to our industry, and she was essentially reading this report to me and it was driving me crazy because Iâm like, âI know how to read and if I just wanted to read the report, I would just read the report. I wanted your assessment of it and how it applies to me.â So donât be guilty of that in your practice, be it the SECURE Act or anything else.
Micah Shilanski: And I will say this is something I struggle with, right? Because I always want to flex my knowledge and everything that Iâve done and read and research and go, âOh, it used to be this and the law changed to this. And then this came through and this is what weâre spending and dah, dah, dah, dah, dah.â None of it matters to the client, right? So this isnât about you, itâs about the clients. Itâs not about you flexing your knowledge and experience and expertise in front of the client. Itâs about helping them achieve their goals. So you really, for me thatâs something I constantly have to make sure that Iâm answering the correct way, not just vomiting information on the client that doesnât apply to them.
Matthew Jarvis: I completely agree. So some of the aspects of the SECURE Act that weâre going to bring up specifically with clients, of course one would be the change in the required minimum distribution start age. And thereâs going to be a lot of confusion around this and there will probably be confusion around this for, I donât know, maybe a decade-
Micah Shilanski: Five years.
Matthew Jarvis:⊠until they change the law again, five years. So weâre going to communicate like we talked about with required distributions. Weâre going to communicate with every client, age 68 or older, letting them know the impact of this. Either you were impacted by it and congratulations, your new start age is 72 or you were not impacted and weâre going to stick with what we were doing already, which is dah, dah, dah, dah, dah.
Micah Shilanski: Okay. Now focusing on what you just said right there, right? I want to highlight this. Thatâs going to be there, this is so important. Jarvis didnât say, âOh, you got screwed in the SECURE Act and you still have to take your RMDs because you turned 70 and a half in 2019. He said, âOh, youâre not affected by this. Youâre just going to take it normally.â He did not focus on the negativity of the SECURE Act and how it was, quite frankly, not as beneficial for them because their birthday happened to be in May of 2019, turns 70 and a half. They got to take the normal RMDs. Theyâre not kicked out to 72. He focused on, âOh, you werenât affected by the change. This is our plan thatâs going to be there.â Donât make your appointments about negativity, and I love how you highlighted that real fast.
Matthew Jarvis: Yeah, thatâs really, really a key. You donât want to have any kind of negative energy, and I donât mean that in a kind of a fufu way. I just mean youâre right. Our brains attach emotions to things. And if weâre complaining about politics or tax laws or something like that, the brainâs going to associate that negativity with you and your office. Even if Iâm 100% aligned, if they say, âThis was the stupidest thing and so-and-so is the stupidest politician.â And if I, 100% agree on all of that, Iâll go back to like we talked about with the RMDs. âHey listen, mine is not to understand the âwhyâ, that politician did not call me before they made that decision. Otherwise, I wouldâve been glad to give them a piece of my mind.â And I smile and we laugh. Say weâre just going to try to implement this in the way that best accomplishes your goals. Is that okay with you?â âOh yeah, Matthew. Thatâs really what I want.â Perfect.
Micah Shilanski: Yeah. I like to make a little joke of it, right? Iâm like, âLook, I called the White House, I called the Senator, they didnât return my phone call. I would have told them how to fix this. So, but at the last we couldnât connect, our calendars didnât align. So this is what happened.â So make a little joke out of it. Move on to how it actually affects your clients. Now, so weâve got the RMD change, which is there. Itâs another thing that really talk about with clients is, and I think this is reviewing your beneficiary designations, is so important, is the stretch is gone, right? So we all know kind of how that works. Yes, sure.
Matthew Jarvis: There is that.
Micah Shilanski: Yeah. Eligible designated beneficiary, which is a little exemption that could be there for some stretch capability, but now weâve got that 10-year window to take money out of. So I think these are important things to communicate with clients. Or if a client already has an inherited IRA, right from 2019 or beyond, how does that affect them? So bringing up these differences with a client to let them know, âOh no, itâs okay, youâre still under the old rules. Weâre going to still take this.â Or âNo, now you have to take the 10-year out because there was a death in 2020.â But articulating this decline and how it affects them is really important if they have an inherited account already or if theyâre going to potentially in the future, like when they die, how are their kids going to get the money? How is the spouse going to get the money? You donât have to go into a big diatribe about it, but you need to communicate how it affects them.
Matthew Jarvis: Yeah. Yeah, and I drop in there every time weâre talking about technical subjects. I always add in there, but donât worry, weâve got this all under control.
Micah Shilanski: I love that.
Matthew Jarvis: I also, this is an interesting thing I started doing recently, Micah. Anytime Iâm emailing with a client about a subject, Iâll always end the email with, âIf this is all about as clear as mud, letâs sit down together and discuss it in person.â And itâs a kind of a funny thing. But it gives clients permission to say, âGeez, this stuff really is complicated and maybe I do need to sit down or maybe I just need to trust that Matthewâs got it under control.â But yeah, I put that anytime you, âHey, this is all about as clear as mud,â smiley face. âLetâs sit down and weâll talk about it together.â But I mentioned that because in your client meetings, same thing, watch for the clientâs body language, which this is universal.
Matthew Jarvis: If they are just sort of nodding along like theyâre waiting for you to shut up and move on to the next subject. Listen to the questions they ask. So if you explain something and they ask a question, thatâs what you just explained, thatâs on you for not explaining it well. Donât say, Oh geez, a clientâs not very smart. All right, how can I articulate this more clearly? How can I translate this into language that they understand?
Micah Shilanski: Yeah, I absolutely love that. So letâs talk about a couple of great opportunities that are out there with the SECURE Act. And I know Iâm going to be talking about with clients on Jarvis, I know you are as well is one is a little bit of a a window fora QCD, a qualified charitable distribution, right? So kind of the cool thing thatâs out there for clients, RMD did get pushed to 72, they can still take QCDs at 70 and a half.
Micah Shilanski: So this does give us a pretty fun little planning window thatâs going to be there. I mean also Roth conversions. Thatâs another fun little planning thing is now our window is extended on Roth conversions because RMDs are potentially kicked out. So how does that fit into our tax plan? These are great opportunities to bring the clients that this is affected by and saying, âGreat, look at this law change. Now, hereâs how weâre going to change your tax planning to reduce your tax liability over the next 20 years.â This is something Iâm often saying with clients is weâre going to make a plan to reduce your tax liability over the next 20 years. This does several things with this comment. Number one, it gets them focused long-term. I donât want them focused one year at a time. Every year is different. I want them focused long-term.
Micah Shilanski: Number two, it gets them thinking about tax planning in the future versus just filing returns and dealing with them one year at a time. Weâre now planning a long time in the future. So I love that and it also puts me in their future for the next 20 years because weâre building that long-term tax plan. So I really love articulating it that way with clients. And also taxes are an easy game to win when we got a 20-year scope, right? One year at a time, that can be a little challenging. 20 years, man, we could beat the IRS out of a whole lot of money legally over the next 20 years.
Matthew Jarvis: I like that. You know what? A line that I use a lot related to that is, âMr. and Mrs. Client, our philosophy is,â and again, weâre here on the left coast, so we need to be a lot more sensitive to some of these things.Matthew Jarvis:I always say, âMr. and Mrs. Client, our philosophy is weâre going to pay the IRS every dollar we owe.â And we all kind of nod and I say, âBut weâre not going to leave them a tip.â And they all say, âYeah, I donât leave the IRS a tip.â Perfect.
Micah Shilanski: Yeah. Tipping is stupid.
Matthew Jarvis: Yeah, tipping is stupid, thatâs a whole other discussion. I want to tie this Micah, briefly to the 100K challenge, right? Which is to add $100,000 of new revenue to your practice this year. And itâs easy to think, Oh, Hey, what does this have to do with the 100K challenge? Adding $100,000 in revenue? But my experience has been, and Micah, Iâd love yours. Every time I go to clients with massive value, things like this, they always result in more referrals-
Micah Shilanski: Amen.
Matthew Jarvis: It comes up with their friend around the water cooler. Oh, the SECURE Act. Of course, they wouldnât say the SECURE Act. They would say, âOh, I heard that my beneficiaries are going to get ruined.â âOh, I just talked to my advisor. Heâs got that whole thing under control.â âReally? Whoâs your advisor?â âItâs Micah Shilanski. Yeah. You really ought to talk to him.â This also is a talking point. When you hear this come up when youâre just talking around potential clients, right? They say, âOh, my beneficiaryâs ruined.â You can just say casually, âOh yeah, we just helped a lot of clients with that.â And then end right there and they say, well, either theyâll say nothing, in which case, great let it lie. Or theyâll say, âWell, really? How did you help them?â He said, âThis really is not the place for that. You can give my office a call. Iâd be glad to look at it. Itâs pretty nuance depending on your situation. Iâm sure your advisor already looked at it with you.â âNo, they didnâtâ. âOh, interesting.â
Micah Shilanski: I was just about to throw that in there. Iâm so glad you did. Yes. You always throw in there, âIâm sure your other advisor already looked at this, dah, dah, dah, dah, dah,â and then shut up, right? Nine times out of 10 theyâre not because theyâre not really an advisor. Theyâre just a broker masquerading as a financial planner, so they didnât look at it and increased that little bit of seed of doubt that shows that you were different. That shows that youâre being proactive and thatâs so important in this is knowing⊠Your clients knowing that youâre taking care of it, prospects, knowing that youâre always forward looking and taking care of this stuff. Really, really important.
Matthew Jarvis: Yeah. One last point on this kind of subject, when people ask me, weâre all asked, âHowâs work,â right? Everyone says, âHowâs work?â Itâs like in our culture, is the number one thing to ask. And most of us just say, âItâs good, itâs busy, itâs whatever.â I like to say, right now, I say, âOh, itâs great. Weâre helping a lot of clients save money with this new tax law.â Wait, what, you asked? Thatâs what weâre doing. Weâre helping clients save money. This new tax law. Can I get it on that? Right? The window was open to me, right? They asked me, âMatthew, howâs work?â And I told them in one breath, howâs work? Instead of just wasting the opportunity with âgoodâ, âbusy.â âYeah. Just helping a lot of clients save money with the new tax law.â âWell, that sounds really interesting.â
Micah Shilanski: But what I love about this, this isnât a sales gimmick, right? This isnât a trick to bring them in to sell them a big life insurance policy, right? Which is always what I get concerned when people say theyâre doing tax planning. Okay, what do you mean? Right? Well, youâre an insurance agent. Great. All this tax-free revenue. But no, youâre actually talking about saving real tax dollars in place because this isnât a sales gimmick. Itâs a real thing that youâre doing. No, right now, first quarter, we are looking at saving clients money over the next 20 years in tax planning because the SECURE Act. Thank you for the law change. I love these law changes. Itâs what a great way to highlight our expertise. What a great way to find new opportunities to help clients achieve their goals and thatâs what these law changes do if you get in front of it, right?
Micah Shilanski: And I know this is what we talked about a little in the last one, but I think itâs so important. These things you have to be in front of. You canât be behind. Now I did have a client email me, it was like the day after the SECURE Act passed and saying, Hey, he got this title from this some online thing. He got sent any copy of the title and send it to me. No link to the article whatsoever, but saying how heâs retiring, his trust was going to blow up his retirement plan, right? It was a great title. I forget what it was. It was a great title. Didnât apply to him in the slightest, but it got him concerned.
Micah Shilanski: So youâll have some clients like that, but everyone else, you really want to stay in front of this, get in front of them with that. And again, going back to those two things, every clientâs going to get communication that this changed or on top of it and we know whatâs happening. And number two, weâre going to talk about how it applies to your personal situation at our next meeting. Really important to make sure weâre checking those boxes.
MatthewJarvis: Thatâs right. And with our pattern of R & D rip off and deploy, backstage pass members will get copies of the newsletters weâre sending out, the email footers, those kind of things that weâre sending out to clients so that you can just adapt that to your language and get that out to your clients.
Micah Shilanski: I love it. Well this podcast is all about action items which are going to be there. So clearly, your first action item is our shameless plug, buy the backstage pass. Now one of the things with that too, I do want to go ahead and just make sure our listeners know with the backstage pass is youâre going to get a couple of really cool things. Is number one, youâre going to get the documents that we talk about on a podcast. Anything we go through or that and we have in our office, weâre going to throw up there for you so you can see.
Micah Shilanski: But Iâve got to say number two, and we havenât talked about it much in the last few podcasts is our 100K challenge. This is a pretty amazing thing where weâre challenging advisers out there to add at least 100,000 in new top line revenue, or 20% this year, whichever is greater, and Jarvis and I have sat down and weâve mapped out a strategy for the next four or five months that you have to do to get there. Now this is work, right? This isnât a magical silver bullet that doesnât exist. This is actual things that you have to do, but oh my gosh, what would I paid for that? For people to outline that for me and for like, do this, do this, do this, and itâs not rocket science stuff. Itâs just stuff you have to do to add that type of increase. I mean, oh my gosh, I canâtâŠ. Itâd be amazing if that was there 20 years ago. So itâs a great benefit thatâs out there. So thereâs our shameless plug.
Matthew Jarvis: And weâll add a quick⊠I always feel like I beat up on this all the time, but to have that available to us 20 years ago from someone who had done it, right?
Micah Shilanski: Oh, yeah.
Matthew Jarvis: I spent a lot of money on a lot of programs that said they would give me $100,000 in revenue and it turned out they hadnât actually done it. Their $100,000 dollars in revenue was-
Micah Shilanski: It was their 100,000.
Matthew Jarvis: All right-
Micah Shilanski: Tested in the trenches, right?
Matthew Jarvis: Tested in the trenches, action steps number one, you need to get a solid understanding of the tax act as it applies to your client demographic, your niche. Thereâs some great resources. Kitces has some great stuff on his website. Micah, I know you follow Ed Slottâs stuff really closely. Know how it applies to your demographic. If you have younger clients than yeah, understand how the adoption and provision works. But if you have older clients like Micah and I do, then understand how the RMD portion works. QCDs, Roth conversion windows, those kinds of things.
Micah Shilanski: Yeah. And then communicate that with your clients, right? So communicate that. Thatâs going to be the second thing that youâre going to do. So understand the information. Donât send them a Kitces link, right? God, I love him. I love the information that he puts out. That is not for the average consumer. It is way too much information. Youâve got to distill that bad boy down to one page and get some basic bullet points to clients, communicate that youâre on top of it so that they know they are taken care of. Thatâs a really important thing because thatâs your second action item you got to do.
Matthew Jarvis: Can I, can I confess? I have sent Kitces links to a couple of clients with the goal of overwhelming them and maybe thatâs nefarious. But I had a client who really wanted to get nuanced on a subject and I said, you know what? Hereâs kind of, hereâs the action items. Hereâs the summary for you. If you really want to dive deep into here, hereâs five white papers, four Kitces articles and two books you can read on the subject. Because I want them to be like and by the way, these all things I have read, but if you want to get versed on this, if you want to go to the nets behind on this, help yourself.
Micah Shilanski: Boom. There it is. There you go. So thatâs one strategy for doing it.
Matthew Jarvis: Not recommended.
Micah Shilanski: Are they still a client?
Matthew Jarvis: Yeah. Like I said, Iâve only done it once or twice and it was a client. Theyâre like, âHey, could you tell us about what page 437 of the tax act means?â No, no, not going to waste my time there.
Micah Shilanski: So, all right, so your third action item, Iâm just going to share, number one is youâve got to understand the rules thatâs there. Number two, youâve got to communicate with clients. Itâs going to be there. Number three, youâve got to educate your team on this, right? So one of the things I think we often miss as advisors is we think about kicking stuff out to our clients. We think about how itâs going to affect us in our lives. We do not step back and educate our team on how this goes out and we got to know this because otherwise all questions will focus on me. One of the things that we implement in our office, itâs actually working out fairly well. I think we talked about a few podcasts ago, but whenever my team comes to me with something, they have to come with a recommendation and a âwhy,â right?
Micah Shilanski: What are they recommending and why? Now maybe thatâs not to the client-facing, but I want to see it because I want to see for two things. One, are they on the right track? And number two, what was the thought process to get them there? So forcing our team to give me recommendations has really helped us educate and itâs really shown a gap in my quality of education level I provided to my team of what I need to highlight. So thatâs a good little tip for you that maybe thatâs helpful. But go to your team, educate them, give them the information on how itâs going to affect the clients. How it potentially affects them so that they know they can answer questions as well or at least understand when clients have questions coming in.
Matthew Jarvis: Thatâs a really important reminder, Micah, and I appreciate you bringing that one up because itâs something that I sometimes forget about, right? Iâm like, Oh, Iâm totally versed on it. Iâm sure my team is too. Of course, theyâre not. But in a real perk there is, when you articulate this to your team like you would to clients, theyâre going to give you feedback that clients wouldnât necessarily give you. Theyâre going to say, âMicah, Iâm sorry, I still donât understand this.â Which means that your client has had no chance of understanding it. So yeah, use that as your opportunity to practice, to refine that message, right? And that was going to be my action item number four, know your and rehearse and your talking points for your next client meeting. How are you going to communicate these couple of things to clients in an articulate way, right? Youâre going to say, âMr. and Mrs. Client, the RMD moved for some people, not for youâ or âIt did move for you, right? Couple of bullet points that youâre going to be able to articulate in just a minute or two.
Micah Shilanski: I love it.
Matthew Jarvis: Micah, anything else that you got on that list other than backstage pass members? Be sure to log in and R & D, and as always give us five stars on the podcast services. We appreciate that. It makes us feel good inside.
Micah Shilanski: It does and itâs really helping to grow our listeners and thank you for our TPR Nation, especially those that have listened through all of this other stuff that have made it to the end of the podcast. You are dedicated listeners. We appreciate that. We appreciate the feedback that you give us. By the way, because the podcast has changed over the last year, if you have feedback, please go ahead and let us know privately because we are egocentric and but share it as well. Get this out to other advisors that we can help and improve the industry and itâs until next time, happy planning.
Matthew Jarvis: Happy planning.
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