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FROM
RAGS TO RICHES
When
Jeff started working with me he’d been in financial
planning for about 15 years and was working out of his
home. He decided to make the transition to fee-based money
management but wasn’t sure how. By converting some
of his existing clients, he had managed to put about $2
million under management. But, after he had tapped out
his existing client base, he was stuck.
Jeff
turned out to be one of my very best students. In fact,
in the first year he put an additional $12 million under
management and after two and a half years he gathered
over $50 million.
Jeff
started his career right out of college in the life insurance
industry. His clients were constantly asking for help
and advice in tax planning and investing—two areas
his insurance company didn’t offer services in the
early 80s.
“My
clients literally forced me to help them with problems
that insurance products alone couldn’t solve, Jeff
says. He set up his financial planning business and ultimately
merged with another planner in town.
“I
decided to merge with this planner because he had a larger
staff than I did,” Jeff explains. “I thought
I could do more planning —without the administrative
or computer work. I wanted to focus on helping clients—not
running a business.” Soon they had four offices in
four major cities in the Midwest and a staff of 25. As
Jeff says, “We had a lot of people to feed.”
Jeff
was feeding them strictly through retirement planning
seminars, which they advertised in the newspaper. They
were spending $15-18K a month in advertising and grossing
over $100K a month. Initially, their ads pulled a lot.
They got 50-60 people per seminar and it was very profitable.
But eventually attendance dwindled to the point where
they were getting only 5-10 people at each workshop. They
were still spending $15-18K a month for advertising, but
getting people to the seminars was “like pulling
teeth.”
A
lot of the clients I’ve worked with have experienced
this same phenomenon. Marketing that worked extremely
well in the past, becomes less and less effective. I call
it a “grind.”
Over
the next year, things started to go down hill for Jeff.
“My partner, who I originally thought was going to
be a big asset, turned out to be a huge liability,”
says Jeff. “I ended up having to carry the whole
business myself.”
Jeff’s
hectic pace started burning him out as well. He was working
100 hour weeks, his overhead was killing him, and his
best planners were leaving to compete with him. The worst
thing was his partner had essentially retired from the
company but was still withdrawing a large paycheck.
With
four offices and 25 employees, Jeff remembers, “We
had to make a heck of a lot of money just to keep the
doors open. I never made any serious money because by
the time we paid the staff, the overhead, and my partner,
there just wasn’t anything left.”
Jeff
was making around $75,000 a year—which was less than
$17 per hour. Even though he was extremely skilled at
what he did and was willing to work long hours, he couldn’t
earn a reasonable income.
Finally,
Jeff called it quits and split up the partnership. “One
of the things that was really a blessing in disguise was
my partner owned 51% of the business,” Jeff says.
“So he was the controlling shareholder. He refused
to pay me anything for my share of the business. But I
was just happy to be free of the business and all its
liabilities.” Jeff left with nothing.”
Jeff
made a strategic decision to move his office back home
to gather his energy and create a strategy for his future.
That’s when he joined my coaching program and began
to redefine his purpose and processes.
Jeff’s
story is similar to many of the stories of advisors we
work with and those that I talk to as I travel around
the country. Because they focus on activity, rather than
having a compelling vision of the results they want to
achieve, they end up creating an organization that—rather
than supporting their ideal lifestyle—turns out to
be their biggest nightmare.
So
when I first met Jeff, he was licking his wounds and deciding
what he was going to do next. He decided that he wanted
to build a very functional and effort-less asset management
business.
Jeff
created a strategic alliance with a third-party money
manager so he could concentrate on building his client
base around helping wealthy clients—the types of
activities that he enjoyed most.
Jeff
says, “During this time I was doing some commission
business just to bring in cash flow. But I knew ultimately
that that business model was going to hurt me. I made
a strong commitment to go into the fee-based business.
But I was floundering. I was trying to learn a new business
and trying to keep the wolves from my door. I realized
that my experience in the insurance industry had created
a lot of bad habits that I needed to change if I wanted
to be successful in the asset management business.”
So
Jeff started working through my five step process of,
1) creating a compelling vision of success, 2) targeting
profitable niches, 3) researching to identify specific
opportunities, 4) positioning to attract qualified clients,
and 5) communicating his benefits effectively to his targeted
prospects.
Jeff
set a goal of building a business worth a million dollars.
He developed a profile of the people who could benefit
most from his services. Then he segmented his clients
into “As,” “Bs,” and “Cs”.
He transferred the “Cs” to another planner and
started interviewing the “A” clients.
He
quickly focused in on dentists and podiatrists as the
target niches that he most enjoyed working with. During
an interview, one of his dentists gave him a list of 300
dental professionals in his area. They all matched Jeff’s
profile of the ‘People Who Can Benefit Most from
My Services’.
He
also set appointments with a number of his physician clients,
but because of their busy schedules, they kept canceling.
It was a frustrating experience for Jeff. I asked Jeff
if he had considered interviewing another niche, franchise
owners. It was a market I knew there was a tremendous
amount of money in.
Jeff
interviewed a McDonald’s owner that he knew casually.
His goal was to determine if there was truly a need for
asset management services in that industry—and if
so, how he could match his business to fit the unique
the needs of McDonald’s owners.
Much
to his surprise, the McDonald’s owner was extremely
willing to help Jeff. In fact, he needed Jeff’s advice
on a number of personal financial issues. He asked Jeff
if he would be willing to speak for 25 other McDonald’s
owners who were meeting later that month. He told Jeff
that they had a strong need for financial planning and
investment advice but he didn’t know any advisors
who understood their unique needs.
At
that point, the referral floodgate opened. Jeff was referred
to another McDonald’s owner who had $330K in his
pension plan and needed his help managing it. This McDonald’s
owner also referred Jeff to an attorney who specialized
in the franchise marketplace. Jeff interviewed him, and
over time Jeff has become an expert in the specialized
problems and concerns that McDonald’s owners have.
Through
this process of meeting McDonald’s owners, Jeff was
invited to make a presentation to the local Ronald McDonald
House. The board members were impressed with Jeff’s
processes and asked him to manage $3.5 million of the
charity’s money. They also invited Jeff to sit of
their board of directors.
Jeff
says, “I think that the interview process helped
me a lot. It helped me get focused on the kind of market
that I want to work in and got me away from doing many
of the things that were distracting me from the real business
that I wanted to be in.”
Jeff
still does financial planning when it is appropriate.
He says, “I quit looking for financial planning business
and started looking for money management business. During
the interview process, I learned a lot about myself and
why people want to work with me. Hearing my clients tell
me why they liked working with me boosted my confidence
and helped me feel more comfortable asking for introductions.
I knew that I could help these new people as well as I
could help my existing clients.”
By
using the interview process, Jeff penetrated the dental
market and picked up a $900,000 account from a dentist
who was referred by an interview subject. He decided to
focus on dentists, podiatrists, franchise owners, and
not-for-profit organizations. He found out through research
that his local zoo has $120 million in their endowment
and recently made a proposal to them for $10 million.
Jeff
holds intimate meetings in his office every 60 days for
the people that he has interviewed or met during that
two-month period. He invites one of the executives in
from the investment firms that he represents. These seminars,
in combination with the research interviews, have become
a key conversion tool for Jeff.
“I
realized through the interviews that many people were
looking for someone like me, but didn’t have any
way of finding me,” Jeff explains. By going out and
meeting with them, I can build relationships with people
that I don’t already know. The interesting thing
is that these people would never come to a publicly marketed
seminar, but they are happy to talk to me if I am well-introduced.
If you do it right, one interview leads to another. Like
a daisy chain, you move from one qualified person to the
next. Ultimately, many of them turn into great clients.”
Jeff
says that many of his clients are committed to helping
him any way they can. “My clients are big advocates
because I believe in it and they believe in me. I am continually
amazed at how willing my existing clients are to help
me,” Jeff says. “I’ve essentially converted
them into my marketing apostles.”
“I’m
now making more substantially money then when I was working
100 hours a week, and I’m now working less than half
that. What really hit me over the head about this business
was the equity you can build. The fact is you can control
your time and have your business support your ideal lifestyle.
When I left my transaction-based business, we were generating
over $100K a month. But my ex-partner eventually declared
it worthless. I was just glad that it was a zero value
for me instead of a huge liability.”
“Since
I joined the Effort-Less Advisor Coaching Program, Steve
helped me transform to a fee-based asset management model,
the people I work with are wealthier, more enjoyable to
work with, and much more willing to introduce me to their
colleagues and friends.”
“I’m
now capturing over a million dollars every month in new
business. Ultimately, I’m going to end up with some
of this institutional money and I can see myself in the
near future having over $100 million under management.
In fact, my goal is to do that in the next three years.
I believe I can build a business worth $5 million in the
next five years. I’ve gone from having a completely
dysfunctional job to having a highly functional business.
It is allowing me to work reasonable hours, build equity,
and help people in a way that is really meaningful to
their lives.”
If
you’re in the same situation that Jeff was in a couple
of years ago, now is the time to make a change. Get the
help of an outside expert who can guide you as you convert
from a dysfunctional job to a life-enhancing business
of your dreams. You too can become an Effort-Less Advisor!
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