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A
few years ago, Gary felt like he was spinning his wheels.
Every month he would exhaust himself trying to generate
enough commissions to pay the rent; and as each new month
began, he started the process all over. "I was on
a commission treadmill," he told me. By 2001, he
was desperate for a more level, predictable income, especially
in light of the severe market decline.
Today, he has just that - plus the knowledge that he is
living a full, abundant life and staying true to his values.
How did he travel from point A to point B? This is Gary's
story.
IN NEED OF CHANGE
One reason Gary was uncomfortable with the commission
model was that it ran counter to his values. "The
guy in our company making the most money was the guy who
was over-promising his clients," Gary told me. "I
didn't want to do that. I didn't want to over-promise
anymore - I wanted to be able to fulfill my commitments."
Another problem, he says, was the sheer volume of clients
he had to manage - more than 900 in all. "It was
just impossible for me to deliver the kind of quality
I wanted to," said Gary. "I also wanted to stop
thinking in the short term and start thinking about my
long- term health and the financial health of my clients."
Gary faced a major challenge, however: switching to a
fee model would mean an increased expense for his clients.
With his broad base of clients, Gary couldn't be sure
that the move to fee-based business would be met with
approval. And since he works for a credit union, many
of his clients are very frugal.
"I'm in an environment where we often struggle to
charge our clients an annual $35.00 IRA fee," Gary
told me. "But for me, the fee-based approach is a
more valuable way of giving the client what they deserve.
I think it's a better platform on which to run a business."
REBUILDING FROM SCRATCH
With 900+ clients and $58 million under administration,
Gary had to make some major changes right off the bat.
To manage this change, Gary's firm hired a second advisor,
and is in the process of transferring at least 200 of
his accounts. He plans to bring on three to four additional
advisors. It's a win-win situation, he points out, because
these advisors can learn the ropes and build a client
base. Gary told me he plans to continue transferring clients
until he has approximately 200 accounts and $100 million
under his direct management.
In the process of transferring clients, Gary discovered
that some clients were not willing to change to the fee-based
approach. In fact, when Gary told his largest client he
was changing his business model, the client decided to
transfer his account to another firm. Gary was concerned
because this gentleman was a major center of influence
in one of Gary's primary niches. He immediately contacted
his other four top clients at the same firm.
"I went right for the heart and explained why I was
making the change. I explained that when I believe in
something, I just do it," said Gary.
As it turned out, this group of top clients all decided
to stay with Gary, because they liked the idea of the
fee-based approach. When Gary learned that these clients
were staying, he began to see the light. "I started
to see that this would be a much more stable source of
income for me, and a much better way to serve my clients,"
he told me.
The biggest challenge, said Gary, was in his own head.
He thought his clients would object to the fees if they
saw them deducted from their account. What he didn't realize
was that many clients would support his change.
"A lot clients liked the idea that they would get
more of my time because they were in a smaller group of
select clients," Gary told me. His experience is
not uncommon. In fact, clients often are very pleased
when you tell them that you are narrowing your focus and
will be working with a smaller group. This approach helps
turn your clients into raving fans.
As part of his new business model, Gary is focused on
clients with at least $300,000 investable assets. A client
with at least $500,000 investable assets is ideal, he
says. His big-picture goal is to have 200 clients with
100 million dollars under management within three years.
As he accumulates these clients, he has one thing in mind:
providing stellar service.
BLUE-RIBBON SERVICE
"One of the reasons I made this change is because
I want a deeper and more meaningful relationships with
fewer clients," said Gary. He accepted the fact that
some clients would not want to take part in his new fee-based
approach, but he did not lose sleep over the matter. "There
are two types of people," he explained to me. "Those
who love people and use money, and those who use people
and love money. I want to work with the former, and they
are the most likely to appreciate the fee-based approach."
Getting to know his clients better has been a wonderful
experience for Gary. "Some of them are becoming cheerleaders
for me," he said. "They're excited about my
progress and interested in where I'm headed. They're also
excited about the fact that I'm involved with a nationally
known consultant in the financial service industry."
One of his clients even prays for him every day. "Clearly,
my level of involvement with clients has deepened since
I've started the Effort-Less Advisor Coaching program,"
he told me.
Converting his business to fee based money management
not only helped Gary provide better service, it also is
helping him increase his number of ideal clients. He has
gotten to know one contact who is a great center of influence
- and from there he has been introduced to at least six
other potential clients.
"This contact retired in July and he's investing
1.3 million dollars with me," said Gary. "One
of his referrals is retiring also and has about a million
and a half dollars. So I'm looking forward to those large
additional accounts coming in very soon."
Another lesson Gary learned is the importance of perception.
"It's really amazing the way people perceive you
when you follow the Effort-Less Advisor program,"
he told me. "I have a number of clients who work
at the same pharmaceutical company and I'm creating quite
a buzz among these folks. The general feeling at that
office seems to be 'Gary is the man.'"
His personal approach definitely sets Gary apart. He tells
the story of a woman who brought her husband in for a
consultation. The woman was considering rolling over her
401(k) plan and her husband was rolling over his $700,000
- but he was planning to give that to another money manager.
Gary talked to the couple and listened carefully to they're
concerns and asked questions he learned in the coaching
program.
"The husband was sort of a technical person, but
I really tried to get to know him through empathetic listening,"
said Gary. "Most brokers simply don't ask these sort
of meaningful questions. It turns out this guy really
appreciated the way that I got to know him. Both he and
his wife transferred their accounts to me. I ended up
the additional $700,000 because of the new skills I learned.
All that for just being a good listener and offering a
service that made sense to a sophisticated investor. It
was wonderful."
LIVING A NEW LIFE
Since moving into the fee-based accounts business model,
Gary has seen changes in all corners of his life.
Financially, his future is more stable and secure. He
has raised his stated minimum, or what we call "the
person who can benefit most from my services," to
half a million dollars. Already he has converted about
13 million dollars, and the pace seems to be accelerating.
"Every three months, I get a large quarterly payment
from my company and I see it getting bigger and bigger
every quarter," Gary told me. "I know in a period
of two or three years, my income will be back to the level
I hit at my high commission point in 2001. The good news
is it will be recurring revenue as opposed to transaction-based.
I'm finally off of the commission treadmill."
When I asked Gary about his quality of life, he really
lit up. He told me it has improved dramatically. "I'm
removing a lot of stress from my life," he said.
"I know this is just the beginning, and my business
is growing nicely. In fact, my clients are referring new
people to me who have even larger accounts. I'm starting
to get those phone calls now and I can just see that this
will get bigger and bigger."
ADVICE TO READERS
Gary said that the Effort-Less Advisor Coaching program
has made a huge impact on his business and personal life.
"The insights you helped me achieve were extremely
valuable," he told me. "I've probably only implemented
about 25 percent of what you provided in the coaching
program, but it's already made a big difference. Now I'm
planning to go through the second year to absorb the other
75 percent. I know there is still a lot of insight I can
gain."
One of the key take-aways for Gary was finding the courage
to approach his clients about his change in direction.
"I learned that I can't be afraid to simply tell
my clients the truth: that my old business model wasn't
working very well for me and that I had found a way of
doing business that would be better for everyone,"
said Gary. "I realized that my best clients don't
want the cheapest service, they want the best service.
I finally have a business model that supports the people
who really appreciate it and appreciate me."
As Gary summed it up, "I just wish I'd made this
transition 5 years ago." Now, Gary is able to confidently
land sophisticated, large accounts and manage them with
personal attention. He is living in alignment with his
values and he has eliminated the stress that was weighing
him down on the "commission treadmill."
That's what the Effort-less Advisor Coaching Program is
all about.
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