The Right Size Financial Plan [Episode 108]

When it comes to the length of a financial plan and what documents you should use within that plan, there are a lot of varying opinions. Today Matt and Micah will be discussing these opinions and sharing how they ensure their financial plans for their clients are efficient and easy to understand.

Listen in as the guys explain the importance of having obvious advice in your financial plan so that your clients are not left wondering about their next steps or options. You will learn how to effectively communicate with your clients so you can identify their values and why it’s crucial to ensure they are a part of the process.

Listen to the Full Episode:

What You’ll Learn In Today’s Episode:

  • How to correctly communicate with clients about their financial plan.
  • What documents you should use in a financial plan.
  • How to know what a client values.
  • The importance of having your client understand their financial plan.
  • What should absolutely be in a plan.
  • How to identify direct goals for your clients.

Ideas Worth Sharing:

What’s the best financial plan? The one the client does. – @ThePerfectRIA Click To Tweet My job is to decide the best strategy for them. Outline what their options are and how they should implement it. – @ThePerfectRIA Click To Tweet What’s the number one thing we put in a financial plan? The client's goals. – @ThePerfectRIA Click To Tweet

Resources In Today’s Episode:

Enjoy the show? Use the Links Below to Subscribe:

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…

Micah Shilanski:  Welcome back to Perfect RIA nation. This is your co-host, Micah Shilanski. And with me as usual is the awesome Matthew Jarvis. What’s going on, Jarvis?

Matthew Jarvis:   Yeah I’m coming to you live, or I guess this is a recording, but it was recorded live from Cabo, Mexico. As you longtime listeners know, usually it’s Micah, who’s calling in from an exotic location. This is my turn, so I want to be sure to mention it every single episode.

Micah Shilanski:  That’s right. Every episode, every chance you get, go ahead and do it or you’re just in front of a curtain. That’s in my mind, that’s what I’m seeing. You just moved in front of a closet, you have a curtain behind you because there’s no background because the sun is too bright. So that’s what I’m going to go with.

Matthew Jarvis:   I’m still in Escala, Washington with a foot of snow outside. It’s perfect.

Micah Shilanski:  That’s right. Hey, we have some pretty exciting things to chat with you guys about today. And kind of stepping back this little series that we’ve been running unintentionally, quite frankly, has all been about the financial plan, right? How to deliver value, how to communicate, how to do a tax projection in less than 10 minutes. Right? All of these things are kind of going through and in essence, what are we talking about? We’re talking about the financial plan. And you want to talk about a religious argument, man, at right next to fees would be the length of a financial plan and what documents you should use in a financial plan.

Matthew Jarvis:   Yeah. And it’s an interesting one because where is the debate on performance or indexing active versus passive? That’s usually backed by lots of numbers and statistics that have been kind of really manipulate or drawn out to make one’s point. The whole financial play argument is super arbitrary. In fact, I maybe can count on one hand the number of financial plans I’ve seen from other advisors. And Micah, I’m curious if your experience is different, but I have often, and I put a lot of my financial plans out there, right? The backstage pass is full of them. I have often asked other advisors, “Hey, I’ll show you mine if you’ll show me yours.” People in fact have written entire books about the length of financial plans and not shown a single financial plan. And so I’m just sort of curious, we have this religious following, but we’re not even willing to open up the scriptures and compare notes or something.

Micah Shilanski:  Totally. One of the things that actually, I just recorded a mini pod on this, it’s going to go out as well but, what happens when a second opinion happens to you? Right? What happens when someone else reviews your financial plan? Because it happened to me and everything worked out really, really fine. The other advisor was impressed with everything that we did. So I’ve had my work evaluated, I don’t care, right? Because I know the value I’m going to deliver. And I’ve probably seen, I don’t know, probably two to three clients a year I will get from other advisors and they will come in with other plans. So over the time I’m going to say, I probably seen 20 to 40 some odd, different financial plans, unintentionally, correct?

Matthew Jarvis:   Yeah. I’ve seen a few of them. People bring in and actually I have a mixed reaction, Micah, and I’m curious yours. On the one part I cringe, not because I feel threatened by it, but I cringe on behalf of our industry. I think this is what my brother or sister and financial planning gave this client, this huge ream of papers and the client or the prospect says, “Matthew, I’ll be honest, I really have no idea what this says. I don’t know what’s on page one or page 10. I don’t know why it’s a hundred pages long. All I wanted to know was how much I could take out of my nest egg when I retire next year. And I’ve got this ream of paper that says something about the city of Monte Carlo. I don’t even know.”

Micah Shilanski:  You know what, I am elated when I see those things. I try not to jump up and down in my seat because I know that if I like them, they’re going to become my clients. And then through that cabinet on the right, because I’m very much about my three Ps and bringing on client, one of his personal, right? Really got to have a good connection I’m solving for joy with this one. But when I see they’re coming with another financial plan, Jarvis, you hit the nail on the head. They have no idea what it says. And even when I open it up and that advisor that built this has circled things, has highlighted things. How did you get that past compliance by the way? But anyways, they’ve inserted sheets in addition to MoneyGuidePro or eMoney or whatever software that is there. They’ve ensured that all these extra documents to help explain things.

                           And the client to your point has no idea what’s going to happen. And I look at the Monte Carlo says, good news, there’s two different scenarios, one you’re broke at 70, the second one, you’re as rich as Warren Buffet. I don’t know. I mean, look at the graph anything could happen in this middle. So the client has no idea what’s taking place. And it’s a phenomenal time to hit the pause button and say, this is no longer an education argument or an academic argument, right? This is a communication argument that we need to have. And what’s the best financial plan? The one the client does.

Matthew Jarvis:   Your hands down, right? That’s really the measurement. Do they implement the advice which we need to take a step back and say, is there in fact advice in this plan?

Micah Shilanski:  Sure.

Matthew Jarvis:   I like to recommend to advisors. And when I see these big plans, I do the same thing. I say, “Pull out a highlighter, open this thing up and just highlight every line that gives specific, actionable advice to the client.” Just highlight those lines. Tell me those wouldn’t fit on one page. So I’m not talking about the 20 pages of disclaimers. I’m not talking about the four paragraphs of noise regarding ideal distribution rates. I’m talking about the line that says, when you retire at 62, you can have $4,320 a month of income. The line that says, I recommend you do a $13,000 Roth conversion, et cetera. Pull out that highlighter and say, is there really advice in this plan? Or have I, in fact, just duplicated Google that the client can type in, when should I retire, and they get two million search hits.

Micah Shilanski:  One of the things I often explain to prospects and clients is what is their job, and what is my job, right? My job is to decipher the best strategy for them, outline what their options are and how they should implement it. Their job is to help communicating what they like and don’t like about these options so I can do my job better. Where in my job was it to show them all of my work, right? Granted in grade school, we had to show our work when we did math problems. Yes, I got in trouble that all the time, I would just put the answer down and move on with life. Same thing with this though, this is not the same. You don’t need to show all of that work because it’s overwhelming to the client. You got a deer in the headlights look, and if they can’t follow your advice, are you really helping them?

Matthew Jarvis:   Yeah. Now the other way I test this hypothesis that less is more, is before I present a financial plan to a prospect. When I’m first talking about the process, I say, “Mr and Mrs prospect, I used to really nerd out on financial planning. I really loved it. I would create these elaborate lengthy, a hundred page financial plans,” and I could see the fear coming in their eyes. And I would say I would really geek out of it, but I discovered that no one wanted to read them except for me. And they get this big sigh of relief, Matthew you’re right, I don’t want to read these either. I say, perfect, out of respect for your time, I’m going to boil the whole a hundred page financial plan down to a single page of actionable advice. That way, you know exactly what you need to do, whether you do this on your own, whether you do it with somebody else or whether you do it with me, is that okay with you? And they all universally say, that’s perfect. That’s exactly what I want.

Micah Shilanski:  You know what Jarvis, one of the great takeaways I had from your podcast before was, how do you know what a client values? And I love using this. And I was doing it so unintentionally before, and you just brought delight to it, which was at the end of a meeting I don’t have anything bound. All of my papers are loose-leaf because I want the client to pick and choose what they want. What they walk away with, what they say, “Hey, can I get a copy of this? Can I take this with me?” And I’m physically grabbing it right off my desk, right? When they want to grab something like that, that is what they value. And in my office, those are the one-page documents and my drawings, and by the way, I did not go to art school.

                           So when I am basically drawing out simple concepts, whether it’s tax buckets, whether it’s a state planning strategies, A-B Trust concepts and things, right? When I’m going through those things, those are what clients actually want to pick up and take with them. And then I joke about it. I say, do you want me to autograph that for your kitchen so you can put it on your refrigerator? But that’s what they really value.

Matthew Jarvis:   Totally is. Now, We have to confess we have made all of these same mistakes. So all of these things we’re railing on, we’ve done these in our own practices. We did the hundred page reports. I would bind them, right? To make them fancier-

Micah Shilanski:  True.

Matthew Jarvis:   … like when I bind these, then there’ll be valuable. Then I can charge a planning fee. Right? And what happened is, it essentially became a beauty contest. I was saying, hey, my plan is more beautiful, not more valuable, more beautiful than the next advisor, therefore, please, please, please, please, please hire me. Whereas now I say, here’s what we’re going to do when we work together, bullet point, bullet point, bullet point. If that makes sense to you, if that seems more valuable to you than our fee, perfect. If not, also great, go in peace. So it’s not that we started this, it’s not that we’re hypothetically thinking it up. I mean, we’ve learned this through painful experience. Painful experience.

Micah Shilanski:  Yeah. Painful experiences, that’s right. Now, Jarvis, what about those one-offs that are going to be there, are lovely engineers, right? What about when you have, I always get this client or this comment when I’m talking to advisors, coaching them through this process, they’re like, what about the client that wants all of data? Right? Well, we could argue whether the client really wants it or not, but how do you handle the engineers that asked for those things?

Matthew Jarvis:   My practice is in Boeing territory so we end up with a lot of engineers. High-level Boeing executive engineers, right? They look at technical stuff all day and some of them, I think, they feel obliged to ask for more numbers. So they’ll say, “Hey Matthew, I really like to see all the details.” So I respond with, perfect Dave, no problem. Let’s go through the executive summary and then as you have more questions, we will dig deeper. But I want to start at the top level and we’ll dig in from there. Is that okay with you? Now? I will never get past the top level until they agree to become clients because I’m not going to spend a lot of time chasing pennies, unless I’m getting paid for that.

Micah Shilanski:  Now, is there ever come to a point, I want to drill into this. So I always call it the 30,000, you call it top level. I say, “Hey, we’re going to start at the 30,000 foot view, same thing. Right? And I say, we’re going to work our way down and just making sure we’re in agreeance with everything, right? That’s kind of how I phrase it when I work with a client. Do you ever have a client that comes back and says, well, all right, after the top level, they’ve hired you, et cetera. Now they want all these details. They want these reports, they want a cashflow distribution. They want a different scenario for social security early or late or anything else. What type of pushback do you get from on that?

Matthew Jarvis:   Every once in a while, so if I think through my whole client book, which right now is about 150 clients, a little over $200 million in assets, I think I’ve got three clients that really like to get into that nitty gritty. They really like to have things cash float out to the last dollar. And I usually push that back on them. I say, “Hey, listen, I use round numbers. We’re going to get this closed. We don’t need to get it to the last penny. If you want to take it to the last penny, knock yourself out.” Right? So I have one client I did a recommendation for a Roth conversion. Let’s say it was $23,000. They said, “Matthew, I went back, I did the numbers. I think it should be $23,216.12.” Great, I don’t care. But I’m not going to take it that far that’s not what you pay me to do. How about you Micah? How many of your clients get down to that level of granularity?

Micah Shilanski:  Decent amount of engineers, right? Federal employees, again, is my niche. They really want to see the details and the research kind of behind things. However, very, very few want to get down into that detail. The furthest detail that I’m going to go and I’ll show clients, is I do show them a cashflow projection because the federal employees are pension starts and stops, right? They have multiple sources of income, it changes over time. So they have a few more questions, that maybe this is my own justification, just to be fair. So we do have a one-pager that shows them the cash flow for that first 10 years in retirement. So that is more detail that I am going to get into, much more than that my answer is no, because they don’t have questions. Even when they push back on it, one of the things I say is, you know what, that’s my job to make sure I’m going through and I’m filtering out the data to what’s the best advice for you. And this is where I think we should move forward.

                           And another reason that I don’t want to do all the data, it’s going to change, next year is different, right? These Monte Carlo scenarios, and again I’m not picking on MoneyGuidePro or eMoney for the companies and the things that they’ve built, I am picking on delivery of information. This is what I am picking on to be a hundred percent clear. Because guess what? Any MoneyGuidePro any eMoney, any whatever report you run, is not valid next year, because everything is different. Tax laws have changed, right? There’s CARES Act money. Whatever apocalypse visual we’re talking about is now affecting the client. And so we always put it in current context for them. And I think, Jarvis, this is one of the thing that really helps is saying, look, every year, we’re going to reevaluate it to make sure it’s the best plan. And it doesn’t make sense to do these 30 year projections when we know every year it’s going to be different.

Matthew Jarvis:   Totally. A hundred percent agree. And the other reason why I steer away from these long plans, one, I don’t find them effective, right? I very rarely meet successful advisors who can show me their EBOC, right? Their profit, and they’re crushing it. And they say, “Hey, I got to here because I relied on these big plans.” Usually what I find is wholesalers or product reps that say, I was an advisor, AKA, I washed out, but this seems really cool. But setting that aside, if you’re producing the same thing that a hundred thousand other advisors are doing, that’s not a differentiator, right? That’s why, not to get too much of a ramp, initially there was this big spike in consumer interest over fee only or fiduciary because it was something novel and different. Not because anybody knew what it meant, but like, oh, I don’t know how to tell 10 advisors apart, one says, they’re a fiduciary. That’s a big word. That sounds fancy. I will go with that advisor.

                           Micah and I are going to compete on that game. We’re going to say, “Hey, here’s exactly what happens when you work with us, and if somebody else is telling you something better, you should work with them,” hence nobody’s telling you anything better.

Micah Shilanski:  Amen. And we will encourage clients. Again, when I got the second opinion, there’s more of this than the tips from the trenches that was there, I highly encouraged them. I said, I think it’s great that you went out and got a second opinion. I don’t feel like you’re cheating on me, I don’t feel any violation of our relationship. This is perfect. If they have better advice, I would love for you not only to follow it, I’d love to talk with them and be able to learn more about the situation to make sure you’re getting the best advice, is that okay? And they love it.

Matthew Jarvis:   By the way, that’s what they were going to do anyway, we talk about this all the time in the prospect process, they owe you no obligation to not get a second opinion. And so if you get defensive, no, and Micah be curious. It’s easy to get the head trash like, oh, did I screw something up? Is this guy going to come back with a plan? That’s going to blow me out of the water. Right? That’s there, but I’m always going to give people permission to do what they already have permission to do. Hey, listen, as soon as you think that the value we provide isn’t worth our fee, we’re going to part ways as friends, is that okay with you? Well, of course it’s okay because that’s what they were already going to do.

Micah Shilanski:  And that’s one of the things I want to highlight that head trash comment. All right. When these things come up to me, it’s not I’m like, oh, this is perfect. This is great. It’s going all according to plan. I do have that oh, crap moment as well. I mean, I’m subject to head trash just like everyone else is, in some cases probably worse. And those are areas that you just have to deal with. Right? And say, great, what’s the best for the client? How do I effectively communicate? How do I encourage them to make the best decisions? All right. Jarvis, let’s pivot this just a little bit if you don’t mind.

Matthew Jarvis:   Yeah, please. I’m so I’m so excited. I’m fired up on this topic.

Micah Shilanski:  I know right.

Matthew Jarvis:   As long as we keep talking about it, I’m good.

Micah Shilanski:  Perfect. So let’s talk about what is really in a financial plan, right? So, okay. So we just said these 400 page reports. Now I know we’re exaggerating by that number. Even a 30 page report is way too long, but we said these are too long, right? So throw disclosures out the window, whatever your compliance department says, focus on the key elements, what’s really in a plan.

Matthew Jarvis:   Let’s start at the top. And for those of you who are members of our backstage pass, of course, basically all of my one-page financial plans I’ve done recently are in there. If I’ve forgotten any, we’ll get them put on so you can see what really worked with real prospects and real clients. But the one-page financial plan or two pages or three pages or whatever-

Micah Shilanski:  Oh, I’m sorry Jarvis, I have those in the pipeline. If you’re not a member of backstage pass, we have some pretty awesome things in the pipeline due to one page financial plans. So that is something that is coming. We very rarely open up the cart to a lot more people in the backstage pass, so just throwing that one out there, please continue.

Matthew Jarvis:   Yeah. Really exciting stuff. Okay. The plan is always going to begin with and entirely focused on whatever the client told me their goals are, no matter how absurd I think those goals are. So for example, I had a prospect who became a client, several million dollars. And I said, as I always do, Mr and Mrs prospect, tell me, please, what questions or concerns are top on your mind? How can I make this time most valuable to you? And this prospect, she says, “Matthew, I think I need a Nevada asset protection trust. Now my initial reaction in my mind is, you’re retired, all of your money’s inside of an IRA account, you don’t own any rental properties, you have no risk, please look at my thumb, that’s a complete waste of time in Nevada asset protection trust, but that would not have been productive.

                           So instead I said, “Perfect, asset protection risk management is a big focus area of ours, can you tell me more about what’s interested you about asset protection trust or what kind of things you’re worried about.” But if I had dismissed her comment out of hand or ignored it or argued with her, boom, whole thing blows up.

Micah Shilanski:  And now I want to stop you right there. Right? If I may dive into this a little bit more, because there’s a huge nugget. Can you tell me more about, right? This is such a great question because how often in our minds has this happened in client meetings, a client says something like, oh, my required distribution, I got to take blah, blah, blah. And you’re thinking about their RMDs, but they’re 68 and they’re just thinking, oh, I need to take money out to live on. Right? So how many times do definitions get confused in meetings between us and clients and when you ask that very simple question, very poignant, can you tell me more about X? It allows a couple of things. The client to communicate, allows them to talk more, which is always great during the meeting, and it allows you the opportunity to be right, because if you jumped into something that was incorrect and the client meant something else, now you’re backpedaling or justifying how you are right, none of which is productive in the client meeting.

Matthew Jarvis:   Yeah. And by the way, this prospect, Micah, of your point about always wanting to be right. She could have followed up by saying, well, actually I’m going to get sued by four different people because I’m part of this or that or that. And if I had said, “Hey, asset protection trusts are a bad idea,” oh wait a second, maybe actually in your situation they are a good idea. I’m also going to reorder my financial plan based on that concern, that was her number one concern. That’s going to be the first thing in her goals, protect assets from creditors and other lawsuits. And asset protection is going to be at the top of the list, why? Because that’s her top concern. And if I push that to the end, like I often do, she’s going to ignore everything else until I get there and now, again, I sound like every other advisor who’s just on an autopilot track.

Micah Shilanski:  Absolutely. Right? So I love this. I was actually kind Of jumping up and down when Jarvis said, because some of this we pre-plan, some of this we don’t. What’s the number one thing you do in a financial plan, the client’s goals. And we all say that, but how often do we actually do that? Right? So if their number one goal is not running out of money. Awesome. I want to put that in dollars, right? So it’s not just enough, I want to run out of money, I want to keep their cashflow going in a manner which is comfortable to them. So we’re going to have this conversation about cashflow in articulated in dollars. I want $8,000 a month take home pay. Perfect. Now the primary thing we’re solving for is $8,000 a month take home pay in today’s dollars for the rest of your life. Every decision we make is based on achieving that goal.

                           And this makes it so beautiful in the financial plan Jarvis, because now anytime a client asks a question about saying, Hey, can I take money out? What if I invested in this? What if I did this other thing, et cetera, it’s all going to point me back to what their goal is. And say, well, if our goal is to have $8,000 a month, does this help us get closer to that goal? Or further away? I never tell a client, no, in this particular case, because it’s their decision, right? What’s their primary goal, that primary goal changes, perfect. Again, I’m not wrong. It doesn’t create any animosity between the clients and I. They don’t want 8,000 a month anymore, they want less to do go do something else. Perfect. We’re always directly solving for that goal. Not indirectly. Retirement solve is an indirect goal, $8,000 a month is a direct goal.

Matthew Jarvis:   So many things here that separate out good and even great advisers from truly elite advisors. Notice the $8,000 a month thing. In the client’s mind, I am absolutely certain that client was thinking of a net dollar amount. They’re thinking this is how much I need to live. I need $8,000 in my bank account and Micah is going to use whatever terminology. They say, I need $8,000 of income or I need $8,000 distribution. If I need $8,000 of spending money, whatever terminology they use, that’s the terminology he’s going to use. Now, does he still need to factor in taxes? Of course, right? That’s a major component. With a client saying, “Hey, I need eight grand a month in my account.” Perfect. I’m going to save it to Micah’s point. Mr and Mrs client, you told me your top goals have eight grand a month, they’re exact words, in your account. Here’s all the things we’re going to do to make that happen, is this okay with you? Did I miss anything here?

Micah Shilanski:  And one of the things, dishwasher role, right? Let’s make sure we’re getting credit for things that’s there. It says, you know what? Mr and Mrs client, your goal is to have that $8,000 a month and take home and our job is to help with that. Now, part of my job so you don’t have to worry about it, I have to figure in the investments, I have to figure inflation. I have to figure in taxes to make sure you get that $8,000 a month. So, because we’re not going into detail, please know it’s still taken care for you.

Matthew Jarvis:   Yeah. I love that. Now here’s another part about this financial planning process that has to make them aware of why they need you. Right? So if people, advisors and I got hung up on this all the time. Hey, I can’t do that because it’s manipulative, it’s salesy. No, because if they don’t work with me, they’re going to either do it on their own or work with some schmuck and they’re going to miss things like social security or Roth conversions or all these things. So to Micah’s point I’m going to say, hey, great news. We can get $8,000 a month. We’re going to have to do a handful of other things that are very important, but I don’t want to waste your time on that, I just want you to know that I’m going to take care of that for you. Is that okay with you? But, yeah, I’m going to see problems that they’re not aware of like, hey, what’s your strategy for claiming social security? I don’t really have a strategy. Good news. We’ll work on one for you.

Micah Shilanski:  Yeah. And none of these. And I’m going to push back and get pretty much soapbox, right? If somebody says these are manipulative, because in no way are they. And in no way is what this is, any negative to the client whatsoever. This is solid communication and plan delivery. And there’s no way that giving someone 30 pages of information, that’s no advice, that’s not helpful. That’s a research project, right? They’re coming to us for direct advice and direct things. What should they do? They want this accurate information. And Jarvis, we talk about, it’s like somethings as simple as in the one-page financial plan, max fund Roth IRA, X amount of dollars, right? I mean, that’s right there is what we’re going to say is what they need to be doing in their particular situation. That’s advice.

Matthew Jarvis:   Yeah. Another great piece, I think I mentioned this on a podcast a while ago. But as I am going through the one-page financial plan with them, I’ll say, hey, one of the things that we’ll need to do is this, and we’ll need to do this. And I had a prospect, she stopped me, she said, “Matthew, I have to ask when you say we, who do you mean,” great news? We can mean the two of you, as a husband and wife. Right? We can mean the two of you and some other advisor. We can also mean the two of you and my team, in which case my team will do essentially all of that work. Which one of those options sounds best to you? Well, Matthew I’m actually really relieved you said that, I would love for you to take care of it because I got to be honest, I don’t know if I would be able to implement this. Perfect. That’s what we’re here for.

Micah Shilanski:  We’re going to make sure it gets done. Now, one of the areas that we kind of differ a little bit, right? Is how we deliver our financial plans. We’re still in the one-page concept, I just called mine executive summary. It’s a one page, same concept that’s there. And I break my planning process up into five different meetings; estate planning, risk management, retirement income, investments and taxes. And we do those all five different stages in the client relationship because we handhold through every single one. Jarvis, you accelerate your process, but at the end of the day, we’re still solving for the same thing, which is simplified advice for the client they can take action on and get done so they can have their quote financial plan implemented.

Matthew Jarvis:   I will highlight, people point this out sometimes they say, “Oh, Matt and Micah and your practices are so different,” but they’re only in the most nuance of ways. But it’s something that’s very similar. Then again, the people miss is Micah and I are both delivering massive value right out of the gates. We’re not playing our cards close and well, hey, if you become a client, we’ll do good things for you. Now, Micah is charging for that initial meeting, I’m not. There’s reasons for that, we’ve gotten into that in other discussions, but right out of the gate, here are all the things I’m going to do. Great news. If you want to go implement this with somebody else, by all means, you want to implement it on your own, also fine with me. If you want my help with it, perfect, glad to implement it. This is what we do every single day.

Micah Shilanski:  Yeah. And again, going to the aspect of it of saying, well, when you come with me, I’m going to tell you X, Y, Z, no. If we talk about Roth conversions, I’m going to tell them the exact logic I’m going to go through. Now, I may not be able to have a dollar amount for them, this is, look it’s a little too complex for me to do on the fly, but here’s exactly my thought process on how I’m going to figure your Roth conversion on what you should do. You can take that and go apply that yourself, right? It’s your point, it shouldn’t be $23,000, $20,823, the client wanted to do more information. Perfect. Go ahead and do that. But empower the clients with this information. Because guess what? They have Google too, right? They have access that gets us to website as well. Right? None of this has kind of secret sauce, it’s all about us making our client’s lives easier. That’s the key in the financial plan.

Matthew Jarvis:   Oh man. So much here. We’ve done entire webinars inside the backstage pass for this. I mean, there’s really a lot. It’s going to fit in part of a bigger prospect process and there’s so many different pieces here. But Micah, before we jump into some action items, what are just some other things that come to mind based on the mistakes that we’ve made and the successes that we’ve had in this financial planning process?

Micah Shilanski:  I would say number one is assumptions. Be really careful on any assumptions that you make from spending the cashflow, a judgment which is there as well. I got to say telling clients they don’t need to spend X amount of money on something. They don’t need to afford A, B and C. Right? That’s absolutely something I did when I was first in my career doing financial plans. If a client couldn’t, quote, afford to retire, I’d go through and line item stuff out of their budget they should cut. Oh, it was horrible. It was horrible. Right. And all we did was create an argument for 45 minutes on what they needed or didn’t need. That’s not my job. Right? And so really finding out where that sweet spot is. So assumptions, judgment of course on how they’re spending the money. My job is to tell them how much they can to generate that, their job is to spend that money, right?

                           And then forecasting in the future and setting it up for things are going to change. That would be the other aspect of it that I think is really, really important. Understanding that this is a living breathing thing and that, again, as we said on the Monte Carlo scenarios, it’s the most accurate inaccurate report I ever generate because none of these things will ever happen because life is different tomorrow than it is today. It’s just part of the game, right? So based on that, what do you need to do? How do we make this a living document? So it changes with the clients.

Matthew Jarvis:   I will, as you’ve mentioned that Micah about the budgets, one other part of, and this is really the financial planning process, not the plan itself is, please do not make this difficult for the client or prospect. I was recently approached, I’ll be careful with terminology here, by a firm who wanted to us to hire them. And they sent me a five page intake form, which included questions like what’s my telephone number and web address. Don’t be so lazy, fill it out yourself. Why are you making this difficult for me and advisors do this all the time for clients. Get us your social security numbers, tell me your budget. How much did you spend on cable TV? No, just give me the documents that you’ve got. Anything you’re missing we’ll work on with you to get. Don’t make this difficult for them, right? They’re hiring you to make their life easier. If the financial planning process is a pain, you’re setting the stage that working with you is a pain. Doing it is incredibly easy. We say, bring your documents and we’ll take care of the rest, that’s it.

Micah Shilanski:  I don’t have them scanned, I just have in paper. Perfect. I’ll give you a digital copy of them. Whatever that is or my CPA has all my taxes. Great, sign this letter, we’re happy to communicate with your CPA. Oh, you have an estate planning attorney. Perfect. Sign this letter, we’re happy to communicate with estate planning attorney. How do we remove those pain points? Just huge.

Matthew Jarvis:   Totally. Even things they’ll say like, “Hey, I don’t get statements from my investment, they’re all online. And I’m not sure how to get the statements.” Great news. Our RM she’ll log in with you over Zoom and help you download those things. It’ll just take about five or 10 minutes. Is that okay with you? Yeah, that’s great. Or if that doesn’t work, just bring your login information with you, we’ll log in together. We’ll download that information because I know that’s all in Greek, lucky for you, I speak Greek and I laugh and I smile about that. We’ll get that taken care of

Micah Shilanski:  That applies to custodial plans. Right? I was on a client call couple of weeks ago. Client has an ESOP plan, that’s going to be there.

Matthew Jarvis:   Oh yeah.

Micah Shilanski:  Yeah, some interesting things are going on. We ended up doing a conference call and I knew the plan was confusing. It was a new employer, so one of the things I just came out of the gate with this is okay, I know these plans are super confusing, they’re confusing for me as well. Is it okay if we do a conference call where I can talk directly with the provider and ask some questions? She’s like, “Oh my gosh, that’d be great, can I be on the call too?” I said, “Yeah, I would love it.”

Matthew Jarvis:   Because they’re not going to talk to me if you’re not on the call.

Micah Shilanski:  Right. Yeah. I would love that. So the RM set up the call, they patched me in, they patched the client in. Now the secret to the sauce, I’m not going to have the client wait on hold for 30 minutes while they’re playing hold music waiting for someone, our RM is going to call the client saying, “Hey, we’re going to give a call and as soon as they’re available we’re going to call and patch you in, is that going to be okay?” Great. Go ahead and do everything. It’ll take somewhere between 5 to 20 minutes, if it takes over 15 minutes, we’ll call you anyways and just give you an update. And then our RM calls the custodian who knows how long that’s going to take. Once they’re on the line, then they bring the client in. Clients love it because they’re not on eternal hold.

Matthew Jarvis:   That’s so brilliant. Now we can do a whole sidebar on this, on calling custodians and 401(k) providers. But another thing that I know Micah does that he doesn’t mention is, set the expectation with the client how this call is going to go. Mr and Mrs client, we’re going to call in, they’re going to ask for your permission to have me on the line. By the way, sometimes they forget whose money this is and so they might try to put us through the ringer, they might want you to try to take it off speaker phone, no problem. Just say, “Hey, I’ve got my advisor Micah, you have my permission to speak with them,” and then let me just take it from there. Now to take that even further, sometimes I’ll say, hey, we call into this company all the time, let’s say Boeing retirement, they’re going to ask you these four questions. Here’s how these questions need to be answered or the whole thing blows up. Now, if you’re not comfortable answering it this way, we need to take some steps ahead of time but not on the call itself.

Micah Shilanski:  Absolutely. Super important if you understand that process in advanced. TSP has those fun questions as well. The other one that’s going to be there, one of the things I’m always trying to do is whoever I’m talking to they’re resistor, I’m trying to endear them, right? I’m trying to make sure that we have good relationship. I’m asking them questions. Even if I know the answer, I’m allowing them to tell me what it is. I’m not losing credibility in front of the client because the client trusts me at the end of the day. Well, I want to know how they think the plan works. Nine times out of 10, I got plan documents or they’re sending me the plan documents and I can read. But it’s going to be that aspect of making sure we have a good relationship so they can help me as much as possible.

Matthew Jarvis:   And this all blows back to our original topic. At least I’m trying to pull it back, right? Which is, are you delivering value in this process? Are you differentiated? If you tell them, hey, you have to call your 401(k) provider and change your beneficiaries. That’s what everybody else is telling them, that’s not delivering value. When I say, “Hey, listen, I’ll get on the phone with you,” by the way, I would do it for you, but they won’t let me, so I’ll get on the phone with you, we’ll take care of this. I will take care of these things so you can enjoy your retirement.

Micah Shilanski:  And I also means your team just to be very, very clear, right? Your team is fully empowered in order to that. We should have a whole podcast just on how to do this with third party custodians and bringing team members on. All right, so we’re getting a little long in the—you want to transition to some action items?

Matthew Jarvis:   Yeah. Let’s totally do this. Where by my first action item, I mentioned at the end of the podcast, which is the highlighter test also Micah’s, is what are you going to take home tests. So no matter what your current planning process, however long or elaborate or hand drawn or printed, highlight what is specific actionable advice and then ask the prospect or the client, “Hey, listen, I can recycle or shred any of this just let me know which pieces you’ll take home. And that is what is value to them, which is all that really matters.

Micah Shilanski:  I love it. Outline your one-page process and fight to get it on one page. Yes. Sometimes it may move to two, but by heavens it is never more than two pages, right? You have to be able to condense that information down to one page in the client’s language, right? With direct, actionable advice. That is the key of those one-page financial plans. And of course you remember the backstage pass, you have access to ours and you can see exactly how they work.

Matthew Jarvis:   Now, which segues into the last section that I’ve got, which is whatever planning process you’re going to use, I want to see what really worked with real clients. So I don’t want to know what worked 10 years ago, I don’t know what the sales guy says. I want to say, show me your last five prospects you took on as clients, show me their situation, show me the exact plan you presented them and that’s what I want to duplicate. I don’t want to duplicate your big ideas or your theories or whatever your developers can come up with, I always want to do what works.

Micah Shilanski:  Amen. And that’s one of our keys to success, right? We have four keys to success and one of them is doing what works. Learning from those who are already have been here before, right? This isn’t new stuff. There’s new finance and nuances we’re going to put on it, but it’s not new things that we need to do. I love it. And of course our last action item vote early, vote often jump, online to iTunes, give us five stars and a wonderful review. If you give us a great review, make sure you tag us in social. We’ll get you out some awesome swag. And until next time. Happy planning.

Matthew Jarvis:   Happy planning.

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

Share the love!