What You'll Learn In Today's Episode:

  • The importance of putting family first.
  • How Floyd Shilanski got involved in the industry.
  • Why he recently decided to become RIA only.
  • What pushed him to write his book.
  • Why advisors shouldn’t be so reluctant to up their fees.
  • Why you should be increasing your fees often.

Providing your clients with massive value is something that is talked about often on The Perfect RIA, but it’s also important to ensure you have time for your loved ones while also showing up with the right mindset every single day. No one knows these topics more than Floyd Shilanski, the President of Shilanski & Associates, Inc. In this episode, he will be sharing his wealth of knowledge from his many years of experience in the financial planning industry, as well as the most valuable tidbits from his book, Registered Investment Advisor (RIA) From Scratch.

Listen in as he describes the utmost importance of doing the right thing, no matter how much harder it may be. You’ll also get to hear his surprising story about how he got involved in the financial industry, why understanding the value you bring to the table is key, how he respectfully handles deaths or disputes with the families he serves, and so much more.

 

Podcast Article:

How to Remain a Successful Financial Advisor for the Long Haul

Do you have what it takes to maintain your success through an uncertain future?

When younger financial advisors first commit to growing their businesses, they tend to focus exclusively on their bottom lines. Unfortunately, they don’t always focus on laying the groundwork that will ensure their ability to serve their clients for decades to come. Drawing lessons from his forty-plus-year career, Floyd Shilanski, author of the book Registered Investment Advisor (RIA) From Scratch: 50 Lessons to Consider Before You File, offers his top tips for succeeding as a financial advisor and maintaining that success for the long haul. 

Action Items in This Article

  • Whatever you’re charging, raise it by 10%. You don’t always have to grow your business by leaps and bounds; the small steps add up too.
  • Believe in yourself. If you don’t know in your heart that you’re the best option for the clients you serve, do whatever it takes to become the best.
  • Pick up Floyd Shilanski’s book, Registered Investment Advisor (RIA) From Scratch, for important industry context and tips on running a powerful business today, tomorrow, and for years to come.

Family First: What’s Really Important?

Forty years ago, when Floyd Shilanski was just starting out, he found himself in the kind of permanent scramble so many new advisors would come to find familiar: He spent his days cold-calling people, he was completely focused on his business, and his stress was through the roof. Business was thriving, but he wasn’t spending enough quality time with his family.

Then, something happened that changed everything: the birth of his first granddaughter. From then on, it didn’t matter what Floyd was doing or who he was in a conference with. When he saw his grandchild on the other side of the glass, he would call her right into his office to sit on his lap or play with her toys. Now, Floyd had a new perspective on everything, and he couldn’t have been happier.

Sure, some people might find children running around the office disruptive—but Floyd decided early on that his simply wasn’t the right advisory firm for people who weren’t interested in the idea of putting family first. By putting his own family first, Floyd didn’t just reconnect with his loved ones; he transformed his office culture, strengthened his client relationships, and attracted more of the kind of clients he loved.

The Three-Step Formula for Lasting Success

“Here’s the deal,” Floyd explains. “In the next ten years, what we do is going to be more and more in demand. Not because of the COVID crisis—it’s the fact that we’re seeing the erosion of us founders, gray-hairs getting out of a business. But you won’t be in business in ten years if you don’t take care of yourself, you don’t take care of your clients, and you don’t price yourself to be successful in what you do.”

Is an office that supports frequent incoming toddlers the right workplace culture for everyone? Maybe not. But it was exactly right for Floyd. Through focusing on what you really want out of your career, you can forge your own path to long-term success. Here’s how.

1. Set the Right KPIs

We all know that in order to measure your growth, you need to establish KPIs, goals and objectives that will best help you understand where you are in the process. You’ve probably seen these KPIs as numbers and percentages, but they don’t have to be. As Floyd’s granddaughter taught him, sometimes you need to step back from the bottom line and consider the bigger picture.

After Floyd reconsidered what was really important to him, he decided on these two KPIs to keep him on his chosen trajectory:

  1. Make his wife happy.
  2. Travel frequently.

Your KPIs may look different depending on your priorities—and that’s exactly the point. Maybe you value frequent mountain biking trips with your friends or living on a sailboat for six months. Whatever it is, make sure the KPIs you use to guide your growth consist of more than just dollar signs.

2. Raise Your Rates

When you’ve been in the financial industry as long as Floyd has, you learn that skillfully managing accounts and being a good financial advisor aren’t always the same thing. In an industry where there seems to be a race to undercut the competitors, it can feel impossible for advisors to keep their prices steady, much less increase them. But that’s exactly what you have to do.

“Whatever you’re charging, raise it by 10%,” Shilanski advises. Small steps like this add up. If you have headtrash around raising your fees, ask yourself: Do you provide a higher value than the bargain-bottom investment management firms? If you’re a small- or modest-sized practice with 100 to 200 account, you can bet you do. Your clients aren’t just numbers to you; they’re faces. And for a relationship your clients return to during the highest and lowest points of their lives, that matters.

Younger advisors especially can get stuck worrying that the bargain-price robo-advisors of the world can do the same things they do but for a fraction of the price. That may be true from a wealth management perspective, but a grieving widow can’t call a robo-advisor in the middle of the night and receive compassionate advice to take the time to grieve, hug their children, and wait before do anything rash with her money. 

“You can’t put a price tag on that,” Floyd asserts. “They’re not getting that advice anywhere else. So to say, ‘Hey, Floyd is neck-and-neck with this lower-price offer’—that’s just not the case. To have that experience, that emotional maturity—that doesn’t exist at a lower cost. It’s important for people to realize that.”

3. Be Your Clients’ Best Solution

If you need heart surgery today, you don’t go to the neighborhood clinic—you seek out the very best heart doctor for your situation. There are some things you just don’t shop for price on, and for your ideal clients, high-quality long-term wealth management is one of them.  Let other financial advisors worry about being the cheapest; all you should worry about is being the best.

And if you don’t feel like you are the best for your clients, you need to become the best. As far as Floyd is concerned, trying to recruit clients you know full well would be better served somewhere else isn’t just disingenuous, it’s fraudulent. To achieve long-term success in financial management, you must truly believe you’re the best there is for the clients you serve.

 

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. Welcome to another episode of The Perfect RIA podcast. I am your co-host Matthew Jarvis, and we have a special guest with us today. Normally, of course, as you know, it is the man, the myth, the legend Micah Shilanski. But today we have his father, an industry legend in his own right. Floyd Shilanski here to join us. Floyd, how are you today, sir?

Floyd Shilanski:   I’m doing fantastic. It’s 20 below up here and I’m ready to go to the island. So things are good.

Matthew Jarvis:   That’s great. Well, Floyd, you and I were just talking before we hit record on this podcast. Of course, we’re recording and it’s mid-November and we were just talking about setting KPI, setting goals and objectives. This is an exercise you’ve been through dozens of times, but you’ve told me that you start your planning, not with revenue, not with days out of the office per se, not with profit or margins, but with two very important measurements. And I’d love to kick off with that.

Floyd Shilanski:   I’ll be happy to tell you that. My first one is to make sure my bride Rosa of 51 years is happy with what we’re doing. All right. And that’s what I’ve judge everything about, is making her happy. The second thing is, we plot and plan our trips. Those of you that don’t know us, we have a five year vacation schedule and they’re some exotic, some aren’t exotic. And once we figure those I back in, okay, how much money do I have to continue to earn bottom line to make sure when she’s had, we can travel and do the things that we want to do?

Matthew Jarvis:   Boy, I love that. Talk about starting with the why, right? It’s easy to say, well I want to add another X amount of revenue or this many clients, or this many days out of the office, but to start with what makes my spouse happy. And then what allows me to do what you’re most passionate about, which is travel with you. And of course your family as well.

Floyd Shilanski:   Amen. 40 years ago was all about how many appointments… What do you call that? You dial and smile on your project 100, right? So a hundred people, here’s a phone number. Hey, you want to buy some life insurance? You want to buy a mutual fund? Hang up, hang up, hang up and your stress, goes through the fricking roof, right? Change it around though. And do the things that’s most important to you. And in my world, it’s my family. And of course my bride of 51 years, and then Jamie, Micah and all the grandkids and all my great-grandchildren are the most important thing. If you knew me 30 years ago, you would wonder, how did I become so successful. My staff will tell you the day, my first grandchild was born, I changed.

She comes to the office and you’ve been in our office and every conference room has a glass door. She would walk up or crawl up, look inside. I would tell her to come here. She’d sit on my lap for about 90 seconds. And then she’s off to something else. And someone said, well, does that disrupt you? Having your grandchildren come to the office? And my response was, if you don’t like that, we don’t need to do business because it’s not about family and taking care of the family first, we’re not the advisory firm for you.

Matthew Jarvis:   Well, I love that Floyd because a lot of advisors get head trash around this idea of taking vacation, right? And if they knew your vacation schedule, maybe they get head trash around that as well. But I think… And correct me if I’m wrong, you approach that with clients the same way. Hey, this is really important, but my number one priority is spending time with my family. And if that doesn’t work for you, then we’re probably not a good fit.

Floyd Shilanski:   Amen. We’re family oriented period. All right. A lot of firms when I go into it, you see their big 20 inch LDD screens in the conference room and they got CNBC or the Wall Street Journal or some crap showing. We’ve got pictures of the family. I have clients that say, well I wait three minutes. I want to see that section again, come through. So my clients grew up watching Micah, Jamie and my kids grow up. So when it comes to talk about transition, it’s a mute issue. They know if I get light beamed off the planet, who’s going to step up. It’s not an unknown factor.

Matthew Jarvis:   Well, I love it. Having been to your office several times. That is in fact the case. You’ve got your big screen with pictures. There’s pictures of the family on the wall. It’s really special to see. Floyd, rewind the clock for us a minute. You mentioned… Of course you’ve been married more than 50 years. You’ve been in the industry now 40 years. Tell us about how you got in the industry, I’ve voiced on this to be a fascinating story.

Floyd Shilanski:   I know how fascinating it is, but when I separated from the military, all right, a defense contractor pursued me heavily because of my training to come to work for him. So I did and I was making more money Matt than I ever thought was feasible. All right. A hundred thousand dollars income tax free. And back in the seventies, still a lot of, but then it was just like died and went to heaven. And my associate, I worked with says, “Floyd, you got to find this financial planner.” “What the hell’s a financial planner?” And anyway, so we went through that and I retained this guy’s service and his big deal was tax shelters. Right? So bought some property down in Billingham, north of your area. All right. And it was a gold mine, supposedly. So several people bought into that.

And then he came to me and said, “Floyd, oil’s really hot. We need to buy some leases.” Well, that was reasonable for an old west Texas boy, let’s buy some leases. Then it was, “Let’s get into oil business.” “Well, I’m not sure I don’t have time.” Blah, blah, blah, but let’s throw some money together. So, he raised several hundred thousand dollars. All right. And went off to buy a drilling rig and a water tank and leases and just going to drill oil. Well, he disappeared, literally calling the phone, no answer. Just kind of disappeared. So mentally, I’d kind of written it off and I was working on this military installation and a headquarters called down on and said, “Hey, someone wants to talk to you.” So I go up, take the phone call.

The guy says, hey, my name is X, Y, Z and hear you’re an investor in this program. I go, “Yeah. And?” He says, “Well, this guy stole all my money and I don’t know what to do.” And I said, “Look, I’m really sorry.” I written it off. I’m done. Goodbye. Click on, hung up? Well, the scout master in me. And at that time I was a scout master for almost 20 years up here. I couldn’t sleep. So I ended up finding the guy and said, “Okay, let’s have a story.” And he, blah, blah, blah, go through it. So I knew where this guy’s office was. Right? So I would show up at 2:00 AM, 6:00 AM, 10:00 AM. Nobody was ever there. So one morning about two o’clock in the morning, I was just kind of pissed. So I entered his office. All right?

Matthew Jarvis:   Sure.

Floyd Shilanski:   Yeah. And they call it breaking and entering, but I entered the office and I’m sitting there just kind of going, “Okay, what the hell am I going to do now?” And I sit down at his desk and the drawers open. So I’m just kind scanning the files. And there’s this file that says oil lease, drilling rig, truck title. I pull it up, lease in Floyd Shilanski, title to a drilling rig, Floyd Shilanski, title to a Mack Truck, Floyd Shilanski. I own this shit. Okay. So I’m pulling these things in my hand and the phone rings. And that was back in the old days where you had an answering machine. Beep, beep, beep.

Matthew Jarvis:   Yeah, that’s right.

Floyd Shilanski:   Got your message. You could hear the other person. Well, there’s this S-O-B on the phone. So I pick up the phone and I say, “Chuck.” He goes, “What are you doing?” I said, “I’m sitting in your office.” “Why are you sitting in your office?” Well, I’m just looking at my drilling rig and I’m looking at… “You shouldn’t be there, I’m going to call the cops.” “Call them.” Possession is nine-tenths of the law. And I got them, right? Click. So I go home, my wife, Rosa, just pissed. What are you doing? You’re going to go to jail and so on.

Matthew Jarvis:   And you’re living in… This is all in anchors.

Floyd Shilanski:   Still Alaska.

Matthew Jarvis:   Yeah. It’s all anchors. Yeah. Perfect, keep going.

Floyd Shilanski:   Yeah. So we kind of worked through that and through my resources, I found out this guy was going to be in New York city, stand at the Waldorf story, so I said, “Interesting.” So I got a ticket flew across country, walked up, knocked on his door and you should have seen his face, Matt when he opened it and it was me. “How the hell did you find me?” “That’s not the question. Where’s my money?”

Matthew Jarvis:   Yeah, yeah.

Floyd Shilanski:   And this long story short, I could have ended up coming back, maybe a hundred thousand dollars. And I got these people together and I counted everyone’s money say, “Look, this is what I got, we’ll split it, good luck, goodbye.” So on. And this regional guy, Jim looks at me and he says, “Floyd, take the money and invest it.” I go, “Ooh, time out. I hired a planner too because I don’t know this stuff. That’s the reason I wanted it.” And he said, “Nope, take it and go learn.” And that was 40 some odd years ago. His surviving widow is still a client today. But I take on people from the top of my head, to the bottom of my toes. And they become friends over time. And you always do the right thing. In fact, in my book is… If you’ve read it, I use a comment, first do no harm. All right? Don’t sell them a product they don’t need, sell them life insurance that they need, not the commission that you’re going to get.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Don’t invest it if they don’t need to have it invested, they may need a 911 account first. They need to do the basics first before you sell them a commission driven product or an—

Matthew Jarvis:   Sure.

Floyd Shilanski:   That’s my opinion.

Matthew Jarvis:   Yeah. Yeah.

Floyd Shilanski:   So that’s how I got here.

Matthew Jarvis:   That’s a fascinating story, Floyd. I always love to hear that. Speaking of your book, which is registered investment advisor RIA from scratch 50 lessons to consider before you file. Now, Floyd, as you mentioned, you were in the industry long before RIAs were even a thing. Right? And for our younger listeners, that’s a foreign concept. But of course, everyone that’s been in, as long as you have started through the insurance and broker dealer channels, tell us how you kind of evolved from that channel into the RIA channel.

Floyd Shilanski:   Way back when you had Dutton… What was his name, Dutton? Yeah. Dutton and all the guys that started the original college of financial plan and… Lauren Dutton, there you go. And five or six other people. And they came up with this thing called Financial Planning. Right? And when I listened to it, it wasn’t a podcast at the time it was on a CD. Right? You get the CD. It comes and I go, “That’s what I’m doing. Financial Planning.” That’s what it is. Right? So I hung up my shield as a financial planner. And of course who’s my first person through the door, the local banking securities, boys and girls. You’re a financial planner, let me see your ADV form. What’s an ADV form?

Matthew Jarvis:   Yeah. Yeah.

Floyd Shilanski:   Right? And he goes, “Well, if you’re holding yourself as a planner, you have to be a registered investment advisor.” And you read under the forties act, my opinion. The forties act says a financial… A registered investment advisor is encumbered to do evaluation and pricing of securities. Well, I was doing budgeting, life insurance.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Estate planning. It had nothing to do with mutual fund, nothing to do with stocks and bonds. It was all kind of down in the bottom of the household pyramid. “Well, no, you had to be a registered investment advisor.” So we filed an ADV form and became a registered investment advisor. 1978, I think it was way back when. Yeah.

Matthew Jarvis:   Wow.

Floyd Shilanski:   Yeah. So I tell people, I backed into the securities world. I backed into selling life insurance literally because I was sending all the insurance off to one of my friends and he sat down one day and says, “You know how much rich you’re making me?” And he goes through the numbers I went, “Huh?” He’s says, “Go get licensed Floyd.” I went and got licensed. And man, to tell you how naive I was when I started to doing the securities work. All right. You got to take this test. Series seven test, right?

Matthew Jarvis:   Yep. Yep.

Floyd Shilanski:   So one of the… Come study for a week, we guarantee pass rates, whatever it is. I went to San Francisco to do that. And I’m knocking it out of the park, 95s on every test. And about Thursday, the instructor says everyone have their ticket. And he goes around the room and I pulled out my airplane ticket. He said, “I’ve got my ticket right here.” He says, “No, Floyd, the ticket to take the exam.” “What?”

Matthew Jarvis:   Oh, no.

Floyd Shilanski:   “You have to have a sponsor.” “You got to have a what?” “You have to have a broker dealer.” I couldn’t take the test. So packed up my crap, flew back home. Just livid, just livid. So I go knocking on all the measure firms up here. We, at the time we had EF Hutton, we had Foster Marshall. We had Bacher, Merrill. Everyone laughed at me. Couldn’t find a sponsor. Right? So I’m talking to my friend in the FPA, he’s down in Portland and he goes, “Floyd, there’s this new brokerage firm down in San Diego called summit securities.” Right, it was Central Securities, my apology, Central. The guy’s name’s Larry calling. So I call this Larry guy.

Matthew Jarvis:   Yeah, yeah.

Floyd Shilanski:   And I said, “I need a sponsor.” And he goes, “Well, we’re not in Alaska.” I say, “Okay, well, so what do we got to do?” And he says, “You know Floyd, if you pay my registration fees to bring my broker dealer there, we’ll support you.” So I paid the fees, got him there, still a friend today. And every time we’re jointly talking on a circuit, he always says… And he’s going to tell you that he brought me to the state of Alaska and says, “Is that not true?” So yeah, we backed into all of that. Some, 40 years ago, my life insurance license in the state of Alaska is 080.

Matthew Jarvis:   Huh.

Floyd Shilanski:   And now they’re like 3,800 and something number. Right? So that tells you how long I’ve been in the business. Yeah. Seen a lot of changes.

Matthew Jarvis:   Oh yeah. Well, so speaking of changes, you only recently in the last few years went RIA only isn’t that correct? So you’ve been with the BD clear back to day one almost. And then just recently made that kind of final step if you will.

Floyd Shilanski:   Yep. Should have done it 20 years ago. Right? And we have a lot of conversations within the family. Why did we wait so long? And it comes from relationships. So take the first one, Central Security. Send the guys out there, Larry. We became friends. I’d go fishing with him. He’d come hunting with us. We become friends. So you create relationships. And I stayed because of relationships. Well, Central was ultimately bought by big insurance company. And then I went to another broker dealer was bought by a big insurance company.

So four broker dealers later with all the steak dinners and those beautiful plaques that I burn on the wall. I made no money except our earnings. So, the next time I jumped, this was 1999 or 2000, right before the towers went down, little company in the east coast, summit securities, the friend of mine was running it. And he lured me to come down to become his trainer so off to go to teach stuff. Well, he ultimately sold and was bought by another company, but I got stock options along the way. So I always said, “I came for the stock options, but I stayed because of relationships.” And those relationships with this last company was 19, 20 years.

Matthew Jarvis:   Wow.

Floyd Shilanski:   15 of it, too long. Should have went many, many years ago. But what was the worries? Number one, didn’t have all the acknowledgements, the top 10 producers will come to Boca, go here, go there, flying around the world first class. And then it plays to our ego, right?

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Well compliance. Oh my God. They do the compliance for us. Right? So what we would be without them. You start putting the pencil to it and offer three, $400,000, I can fly first class about anywhere. I don’t need their Ritz-Carlton and Cabo, you pay for it myself. Oh, well, we got to worry about, this compliance crap for 50, $60,000, we hire a compliance guy. All of a sudden headaches went away… And we’re doing the same thing. Many big producers, right? You don’t have to be top or not, but many big producers, we get locked into the perks. Right? And the broker dealers play to us. Right? But the challenge with that, they’re not playing fairly because they’re recruiting because of the names that they bring in to all these other producers and these other producers don’t make the revenue that the big guys do. All right. So who gets that spread? Well, the broker dealer gets the spread. I love to talk to people that tell me, LPL’s giving me a hundred percent payout.

Yeah. Right. Let’s go through the numbers. All right. Well, I got to not 95% payout. Where’s the other 20 going? There’s no other 20%. You’re telling me that your back office is run off of 5% of your production. Doesn’t pass a straight face test. Let’s get back into that. And broker dealers, they have to make 12 to 20% off every rep they got. And that’s just the magic number. If they don’t, they won’t be in business. The reps need to understand that. All right. And don’t stay there because they have your back. They have your back until the road forks and it’s them or you, and they’ll throw you under the bus. Lickety-split, no matter how well your relationships is with top management,

Speaker 4:          You already know that The Perfect RIA podcast is jam packed with actionable advice for financial advisors because it’s co-founded by financial advisors. But what you may not know is we don’t stop there. The Perfect RIA offers membership levels for financial advisors looking to take their practice to the next level, whether you’re a solo practitioner or a multi advisor office, we’ve got the solution for you. Come find out what the top 3% of financial advisors across the nation are implementing now to revolutionize their practice, jump online to theperfectria.com. We are what you’ve been looking for.

Matthew Jarvis:   So Floyd, it sounds like… And please correct me if I’m wrong. Kind of in the end for you, it was adding up. Here’s all the benefits I get… And there’s definitely benefits. Like you said, you, the awards, the plaques, the friendship, the community, the ego strokes. Right? We can all be honest about that, but it sounds like if you weighed that against the cost, which wasn’t five points, right? It wasn’t a five point cut. It was a 15 or 20 point cut. That started to become a very large number for you and your team. And you just kind of ultimately said, all right, the trade, off’s just not there.

Floyd Shilanski:   Well, you can imagine sitting at a conference and the top three producers, two of them have the last name Shilanski, and we’re not talking small numbers. And then you start putting 20% on three or 4 million and you go flip. That’s an awful lot of cash for this fancy trip. So it didn’t take long. Of course, I had your friend and my son kicking me in there. Every week, we got to change that, we got to change that. So it took me a while to change, but yeah, all worth it.

Matthew Jarvis:   You mentioned you would’ve done it 20 years ago. If you had known what you know now. And I suppose it would be easy for an advisor to say, “Well, when I get to three or 4 million in production, then I will make that change.” But if you could go back, is there a dollar amount that comes to mind where you’d say, “Boy, I really wish I would’ve made a hard decision at a million, at 500,000.” Is there a number that you think is a real awakening point there?

Floyd Shilanski:   Not really. I think it comes down to understanding what your freedoms are or what they’re not. Right? So Matt, you’re a CFP. So at a CFP, at a broker dealer, they may say the maximum you can charge for your advice is $55 an hour. All right. Some number, but it’s below number. Right? But if I take my car to Chevrolet and I want my car worked, what’s my shop rate. 80, $90?

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Yeah. So all of a sudden, all my training as a certified financial planner is worth less than the company over here that’s working on my automobile, I’m up in people with their lives and they’re working on my car, but I can’t charge that. I mean, that’s number one. Okay. And number two, not realizing that the broker dealer is really there for the company, not for you, no matter what they say.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   And I’ve been with guys and girls that… The placation is great. And if someone said, “Floyd, I want a broker dealer today.” I would still refer them to Marshall Leads. A lot. All right.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   But the reality is, you understand why you’re are you doing that. You’re doing it because you have a perception of a safety net underneath you, take the safety net. There’s no place else to fall. Nothing’s going to catch out. What’s the opposite of that? There’s no cap on the upside, right? So we get rid of the safety net, our risk go up. So our ability to earn more goes up. I’m not a smart guy, I was senior class president four years in a row. It took me a while to understand it. But here we go. I mean, it’s… Yes. It’s math, but it’s also freedoms, right? When the towers went down and my relationship with the broker dealer, he said, “Floyd, I don’t care what you tell your clients just don’t get us in trouble.” Well, that meant a lot to me because now we could be the confidant to talk to them about the risk of what was going on. No other world their stock market wasn’t going to zero. No, either money was going to be okay, hang tough.

All right. Today, man, you got to run everything… If you’re in a broker dealer world, everything goes by the attorney. You can’t say this. You can’t say this. You can’t say this. Our clients hire us for peace of mind to know that one’s watching out. And all of a sudden compliance says, “You can’t save peace of mind.” What? Whoa, you don’t understand what we do. All those were catalyst. And it just builds to the point, where the straw breaks the camels back. And with Micah jumping on the straw, it cracked a little simmer.

Matthew Jarvis:   Whatever you learned that from.

Floyd Shilanski:   Yeah.

Matthew Jarvis:   Rosa, for sure.

Floyd Shilanski:   Of course. Yeah.

Matthew Jarvis:   Let’s let’s talk Floyd just a little bit. You mentioned about one of the reasons for leaving the broker, was that they would had some control or influence on what your fee schedule was. Let’s talk a bit about fee schedules.

Floyd Shilanski:   Sure.

Matthew Jarvis:   About advisors reluctance to raise their fees about kind of this mindset in the industry that unless you’re lowering your fees, you’re making a mistake. Tell us from your 40 years in the industry some perspective on this.

Floyd Shilanski:   Back in 1978, 79, I started charging fees. I wasn’t licensed. It was no commissions. All right. I started charging a thousand dollars to write a financial plan, 45 years ago.

Matthew Jarvis:   Wow.

Floyd Shilanski:   Thousand dollars and $600 a year. Of course today coming forward, my minimum fee is $10,000 to work with Floyd. All right. My renewal fee is $10,000 to work with Floyd.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   And we started at 2% on the money. Million dollar, $10 million. It’s 2%. Why? Because of the value that I add. Okay. And those are huge things. And I was sharing with you when we were kind of gibbering beyond the front end of this thing that way back in the eighties, I was president of the… Used to be international association of financial planning, wharfed into the FPA today. But every year at a conference, there was a guy I liked a lot down in San Francisco. His name was Larry Crouse. And as we would wrap up the conferences, he would get up to the microphone and says, “And remember, go back and increase your fees by 10%.” And everyone kind of laughed at it, but I took it to heart. All right.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Everyone, listening to this podcast, I don’t care what you’re charging, increase it by 10%. Incremental improvements. All right? We as an industry, do not understand our worth. 40 years ago, Lauren Dutton and crew, and a big split between the College of Financial Planning and used to be the IFP. All right.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   What do we do? How do we define ourselves. And 18 months ago, there was an article by an incoming or outgoing FBA president that says, “You know, as financial planners, we need to define a role as planners.” And I sat there and the kids go, “Dad, what are you laughing at?” I said, that was the same question 30, 40 years ago. We have wealth advisors. We have brokers, we have financial advisors, we have insurance agents. All right? What does all that mean? What do we really do? All right. What we should be thinking of ourselves is that confident advisor that gets the trust of the individuals to understand the family, their wants, needs, and desires and help them achieve their goals. Avid Reader, Matt. Have you ever read the book A Random Walk Down Wall Street?

Matthew Jarvis:   Indeed, I have. Several additions of it.

Floyd Shilanski:   All right. Did you read the next one? Where Are the Client’s Yachts?

Matthew Jarvis:   I don’t know if I ever read that one. I’ve heard of it.

Floyd Shilanski:   The idea was that after the Random Walk Down Wall Street, I think it was actually the same author his next book is, if we’re so good, where are the yachts, where are all the clients? Because everyone at that time was working off eights and six and 12 on the commission side. Right? That came up about three weeks ago with probably Micah and I and Jamie. And I said, let’s go through that. All right. So I took my book of 40 years, right? 72%, I’ve made… I haven’t, they have made millionaires out of themselves. Right?

Matthew Jarvis:   Wow.

Floyd Shilanski:   This is an inheritance. Stuff your money in your 401(k) plan, give me your excess and work on budgets. And all of a sudden, I got so many millionaires. They go, “Floyd, I never thought I’d have this money.” And they give credit to us. It’s right time. Right place, markets worked well. All right. But we had the discipline to say, this is what you’ve got to do. This is what you’ve got to do. Follow this. And you will win. Like Nick Murray always says, “Your train will get to your destination. The question is, will you be on it?”

Matthew Jarvis:   That’s a great example, Floyd. I think too often our industry… And again, love your thoughts. We get hung up on what the fee means in this one year. So I say, “Well, Floyd charges a 10,000 planning fee, plus 2% on the assets. What could he possibly do this year that’s worth that?” And I would argue a lot of things, but to your point, Floyd, when you say, “Hey, I’m going to work with this client for not just a month, not just a year, but decades.” And really, Floyd for larger clients, their entire life, correct, the value there is incredible. Not just the wealth that you’ve helped create, which is substantial. But you had mentioned to me before we hit record that one of the downsides of being in the industry, as long as your clients are kind of on the tail end of retirement. And often you are their first or second call, when someone passes away, they’re not calling someone else, they’re saying, “Well, we have this relationship that we’ve established. And Floyd’s our person that we go to.”

Floyd Shilanski:   Reluctantly, I’ve just had in the last 10 days three deaths. All right.

Matthew Jarvis:   Wow.

Floyd Shilanski:   When we anticipated, military guy, he’s had challenges. Knew it was coming, talked to his wife and him one Friday night, literally feeling better, next morning, 6:00 AM my phone rings. It’s her phone call. And I knew he had passed away that night.

Matthew Jarvis:   Oh, wow.

Floyd Shilanski:   She didn’t tell me, but because she was calling me so early and it was tears, what do I do?

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Where do I go? All right. First thing I always say, “Cry, hug the kids. Don’t worry about money.” Sit there.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Do your grieving.

Matthew Jarvis:   Yep.

Floyd Shilanski:   You got a lot of stuff to do. Remember your husband, remember the good times. Not the bad times. We’re off the sickness. Just hug the kids. Tell them you love them. Okay. We’ll work through the rest. Now in the background, my office goes to work, right?

Matthew Jarvis:   Yeah.

Floyd Shilanski:   The email goes out. It’s the reaching out to insurance companies that we know them. We want the death claim. We put everything in place. All right. And then we say to her, “Don’t worry about it. There’s enough money.” Right? I tell people early on in relationship, Matt, I’ve had people die, spouses die. And they don’t like their spouse that left them in this world. And it always seems to happen when there’s not enough money. When I have to sell the house, when I have to make changes in my life, when I can’t do what I thought I was going to do. Right? Conversely, every time we have clients that significant revenue, it’s no irreversible decisions. The first 12 months, you don’t sell the house. Well, I don’t want this big house.

I don’t care. You don’t sell it for a year. Well, all right. Well, I’m worried about this. That’s my job to worry about this. We have more… We have a 911 account. Pay your bills. We’ll settle it up. Do the grieving, cry, kick, cuss, whatever you got to do to get to that point where you say, I still love you wherever you’re at. And then you’ll know when it’s time to move on. All right. The second one…

Matthew Jarvis:   Oh man.

Floyd Shilanski:   This devastated me. Saturday, I got the phone call. Guy is 71. I’m 70. So he’s slightly older than me. This summer had a heart attack. Three stents. All right. He was doing well. We talked 10 days ago. Helped him buy $20,000 snow machine. He was ready to rip the snow and have a ball. And his wife called me Saturday morning and said he died. I was her second phone call.

Matthew Jarvis:   Wow.

Floyd Shilanski:   It’s like, what do you do? Right? Well, you’re there, right? Like I said, no irreversible decisions. He died at home. You’ll probably have an autopsy. I’m requesting one. And we kind of work through the stages. And she says, I don’t know what to do next. I say, “Cry, holler, kick the bed. Whatever it is.” “Well, I got to do all this stuff.” “You got to do nothing but grieve.” Right. “Do nothing but grieve. Yeah. You’re going to have to cremate him. Fine. You have to figure all those things out. Got it.” All right. Then no irreversible decisions. “Well, I don’t want this blank, blank, blank big house.” “Fine, but don’t make a decision today. We’ll work through it, you’ll grieve, you’ll know.” Right? You can’t put a price tag on that.

Matthew Jarvis:   Yeah. And that’s what I wanted to pull out Floyd for our listeners. Especially for younger advisors, there’s the kind of… You can get stuck in this mindset of saying, Hey, Vanguard or robo-advisors or whomever will do… Well, they’ll say in their mind, they’re like… Quote on quote, they’ll do what Floyd does for a fraction of the price. But that widow cannot call into a robo-advisor and they’re going to tell them, “Hey, yell, scream, hug the kids, don’t do anything.” They’re not getting that advice anywhere else. So to say, “Hey, Floyd is neck and neck with this lower price offer.” That’s just not the case. To have that experience, that emotional maturity to do that, that doesn’t exist at a lower cost. And it’s important I think for people to realize that.

Floyd Shilanski:   Well, think about Vanguard for just a second, right? So you and I work with a client and they want to buy a Tesla. Right? And so you set the budget up, set the money up in place and you reserve it. Call into Vanguard and say, “How’s my Tesla account going?” And the robo-advisor’s going to say, wait a minute let me your file and read it. And you’re going to say, “Hey, we’re about $5,000 short.” “Well, I just came from Vegas and I went 10 grand on the blackjack machine. Can I buy it for you?” “Let’s go do it.” Perfect.

Matthew Jarvis:   Yeah.

Floyd Shilanski:   Right. I mean the meeting that Jamie and I had right before you is a litigating attorney, we just told him to carve out a hundred thousand dollars and go on a cruise, go take a trip. How’s Vanguard going to know that? Unless they’re asking the questions, knowing what the wishes desires of the clients are. Yeah. I always start with… My questions are always, how’s the family, how’s your health, how’s your cash flow. And the answer’s always, “It’s flowing.” Right? And, and we get a good laugh out of it. But I want a five year plan. Where are you traveling to? In this surge, I will tell you, if we had a travel company attached to the firm here, I’d kept them busy eight hours a day booking flights, because the market’s been great. So let’s pull some money off, go take a trip, go have fun.

Matthew Jarvis:   Yeah. I love that.

Floyd Shilanski:   Yeah.

Matthew Jarvis:   Well, and Floyd, again, that just speaks to me, the importance… I just came back from a conference. It was really focused on, boy who can be the lowest cost provider and people get hung up. I don’t want to beat up on this too much, but to instead look and say great, an advisor like Floyd, who’s able to deliver premium value. Let me not get hung up on his fee. Let me instead ask if this advisor’s able to charge a higher fee and able to deliver more value. How do I match that value? And then flood your earlier point, go back and raise your fees accordingly. But it’s really about seeking out who’s delivering more value than me. And how do I learn from them?

Floyd Shilanski:   Matt, here’s a simple answer. If you needed a heart surgery today, do you want the guy at Walmart?

Matthew Jarvis:   Yeah. I’m not shopping for price on that one. Yeah.

Floyd Shilanski:   That’s right. You want the best. I don’t care about bedside manner, I want the best. So why don’t I give good bedside manner in the best service? And when I was on the speaking circuit. I’d always… Yeah. Go to a room and I’d say, “Hey, who’s the best financial planner in your hometown?” You see one or two hands go up and I’d go, “Everybody raise your fricking hand because if you don’t think you’re the best, why are you in the business?”

Matthew Jarvis:   Yeah. Yeah.

Floyd Shilanski:   Why are you being fraudulent and trying to hold yourself out if you inside, do not believe I’m the best there is? And in my world Shilanski Associates is the best there is.

Matthew Jarvis:   Yeah. Hands down.

Floyd Shilanski:   Never heard about you? Well, that’s because we’re a small boutique financial planning firm that only deal with a special group of people. All right. Sorry. You haven’t heard about us. Funny thing about us is once you hear about us, you can’t stop hearing about us.

Matthew Jarvis:   That’s true.

Floyd Shilanski:   Yeah.

Matthew Jarvis:   That’s true.

Floyd Shilanski:   Yeah.

Matthew Jarvis:   Well, Floyd, for those advisors who don’t yet feel like they’re the best and I completely agree with your assessment. If you don’t feel like you’re the best you need to become the best, because how dare you try to recruit clients in the way that we be better served somewhere else? I would strongly recommend everyone pick up your book. You can get it on Amazon I believe. Registered Investment Advisor from scratch, 50 lessons to consider before you file… It was fun, Floyd to go back and read some of these lessons, ones that I’d learned from Mike and ones I had heard from you directly. But there are a lot of valuable takeaways in here that for any advisor, I think regardless of your career stage, whether you just got your CFP marks or you’ve been in the industry for 40 years, there are a lot of key takeaways. Floyd, any action items or lessons that really send out to you for our listeners?

Floyd Shilanski:   Believe in yourself, right? But don’t believe in yourself so much that you start believing your own BS. Okay? And I see that a lot with advice. “I’m so great.” No. You’re not. We are blessed to be in this industry, a service industry that can have so much effect on the people that we come across. Right?

Matthew Jarvis:   Yeah.

Floyd Shilanski:   We can help them achieve their dreams. They will help us achieve our dreams. But always put the client first. You have to take care of them first. That’s our livelihood. And so many times you become numbers. They’re not numbers, they’re names, right? And if you ought to recognize that voice on the phone, right? Because if you don’t, you don’t have that relationship yet. And they’re going to be looking for someone… I believe they’re going to be looking for someone that has that relationship, right? Believe in yourself, please go back and raise your rates 10%. And one of my last public talks probably three years ago in front of this group of advisors. And I said, “Here’s a deal. In the next 10 years. What we do is going to be more and more in demand.” Not because of the COVID crisis. All right.

Just the fact that we’re seeing the erosion of us founders, gray hairs, right? Getting out of a business, all right. Who’s going to replace us? And quite honestly, my firm doesn’t have enough capacity to take all of your other clients away from you because you won’t be in business in 10 years, if you don’t take care of yourself, you don’t take care of your clients and don’t price yourself to be successful in what we do. The takeaway: raise your rates, believe in yourself. And of course buy my book.

Matthew Jarvis:   And of course buy your book. Well, Floyd, I really appreciate your time today. It’s always been an honor to work with you and learn from you. And of course your book, registered investment advisor from scratch 50 lessons to consider before you file. Even if you’re an advisor who has no intention of becoming an RIA. In my mind, that’s not really the point. The point is, these 50 lessons and they are invaluable. So Floyd, thank you so much for your time. Any other parting words of wisdom you’d like to share with our group?

Floyd Shilanski:   The holidays are coming, be safe, embrace your family, love them because you never know what next year is going to bring. And if you ever need help, I’m more than happy to talk.

Matthew Jarvis:   I appreciate that Floyd. Well, thank you so much into all our listeners until next time. 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

What Works Wednesday – Being Intentional With Your Niche And Your Emotions With Don Hilario

How Don Hilario structures his day to maximize productivity, and his advice for any advisors searching for a way to be more intentional with their work days.

See More

Helping Team Members Triage Client Requests [Episode 171]

How to make the best of your team’s time.

See More

Follow Up Friday – Do I Need To Fire My Team?

Action items from this week’s episodes.

See More

Contact Us