May was a good month for production. I had my best month of the year and now I am slightly ahead of last year's pace. I am still not bringing in any new assets yet, but that may change soon.
A struggling financial advisor in the office came to me for help. His production was down and he is in the penalty box, which means his payout on commissions is cut to 25% from 37-40%. He didn't like the trend that was developing in his business and he had been doing some research and asking management for help. He discovered that a Bank of America business banker was looking to form a partnership with a financial advisor team. This banker specialized in working with medical practices. The financial advisor, Scott, asked around and nobody in town was holding themselves out as specialists in working with doctors.
With that in mind, Scott has set out to build a team that will look impressive enough to Jon from the bank that will give him the opportunity to work with these clients. Scott has asked me and another financial advisor, Carol to help him form this team. I have met with Jon and came away very impressed. He has a lot of good clients and is very knowledgeable about the Medical field.
Jon has been impressed with our team and has already agreed to send a letter to all the doctors in one practice (approximately 30)asking them if they would like to meet with a financial advisor. That of course will be our team. Now I don't think that 15 doctors are going to take him up on the offer, but I am excited that Jon is already comfortable enough to recommend us.
It will be an interesting political dance to see if this whole plan comes together. Currently if a doctor comes to Jon and says he needs help with his portfolio, then Jon is supposed to submit the name into the referral system in which it will randomly come out to a qualified financial advisor somewhere in the valley. Jon does not make any additional money for making the referral and he is hesitant to just hand off his client to some random advisor. That is why he wants to set up this partnership, so he can feel comfortable that his clients are well taken care of.
Meanwhile, our Regional Manager has said that eventually financial advisors will have to stake out a claim as an expert in certain niches and they will receive the referrals from the bank that fit in those niches. This is not official policy yet, but he says it is coming.
Therefore it is our objective to stake the claim for Doctors before anyone else gets to it. Plus it may also be delicate if we start to have success that others notice. I can definitely see other advisors being jealous of our referral source and making complaints if things really start to roll.
There are also internal issues with setting up the team. Carol, Scott, and I are still feeling each other out and deciding who will perform which roles. Right now we have decided that Carol will handle customer service, Scott will handle the investment portfolio, and I will handle the financial planning. We are not combining our existing books yet, because I want have a trial relationship before we get "married" into an official team. So for now we will set up a joint number and put all the new doctor clients into it. If things go great, then we'll talk about combining books.
As for the Strategic Alliance program with Estate Planning Attorneys, things are still slowly progressing. I have a second meeting with Phoebe, an attorney in the East Valley who may have potential next week. I also received a referral from T.J. who I also have a 3rd meeting with next week. Mark, a member at the country club, came up to me last week and said T.J. told him that he should talk to me about rolling over an old 401k. I gave him my card and I hope to hear from him soon.
I have fallen a little behind on the Attorney program due to all the new team activities, but I see myself picking it up again this week.
In other big news, my manager, his assistant, and the last 3 compliance managers I had, were fired two weeks ago. Nobody knows why, but the best guess is that a disgruntled client sued the firm and during the lawsuit something probably came out that showed a lack of supervision. Personally, I thought my manager was on his last legs anyway because our office production had been dismal last year. I felt bad for the others that were let go, because for the most part I thought they did a pretty good job. None of this affects me personally now, but it may in the future depending on who is the new manager for our office. We could probably use someone who is more of a ball buster, but that usually has not been the style of the last six managers I have worked for.
Hopefully my business will heat up along with temperatures this summer.
Sunday, June 6, 2010
Thursday, April 29, 2010
TJ Interview, Cooking for Clients, & Business Update
Today I had lunch with TJ who is a lawyer for a small tax and estate planning firm downtown. His Dad is a very established attorney at the firm, so we have that in common in that I worked with my Dad for many years.
During our first meeting we established that 50% of TJ’s business in estate planning comes from litigation in which beneficiaries are suing to get more money, or trustees are defending themselves from beneficiaries. The other 50% is straight estate planning for wealthy individuals. He joined his Father’s firm in 2006 so he could concentrate more on estate planning, so he is still building up his book of business.
This was my second meeting with TJ. I had met him before since he is also a member at my country club and I believe we have played golf together at least twice. He is very personable and seems very honest and open.
We started the conversation asking about the high cost of acquiring new clients. His firm does not advertise, but they do send out a newsletter and also mailings to current and former clients. TJ also mentioned that his father, Jim was appointed to the American College of Trust and Estate Council (ACTEC). Apparently this is a prestigious designation and Jim has been receiving some nice clients from this affiliation.
I then moved on to asking him about the “fact finder” that he uses to list all of his clients assets. TJ does use a questionnaire. The process usually starts when the new client calls in to set an appointment. TJ sends out the form and asks the client to fill it out and send it back to him before their first meeting. He said that they almost never get it back to him before the meeting. Usually they have some of it filled out and they bring it with them to the first meeting. Occasionally they haven’t even touched it before he meets with them. Once they finally meet, TJ goes over the list with them and fills in the blanks and uses it to get a good idea of their net worth and which items will need to be transferred into a Trust. This definitely looks like an area where I may be able to streamline things for him.
I brought up the issue of recurring revenue. He does send out an anniversary letter encouraging them to review their document and make sure they are happy with their beneficiaries and successor trustees. Having an annual “fee” worries him due to the “reasonableness” standards and that a lot of his clients would feel like they were being nickeled and dimed.
When I brought up the issue of the time and effort required to identify assets and transfer them to the appropriate entity, he said, “that is my biggest issue.” He sends them home with detailed instructions on how to do it for themselves, but they often fall short of getting it done and they do not want to pay for TJ to do it for them. TJ does the transfer of real estate as part of his fee, but he believes that his clients should be able to do the rest for themselves. He sends out a check up letter 6-9 months later to make sure they have taken care of everything. I think this could be a good service to provide for him.
Maybe he could say something like, “I know that transferring your assets into the name of the trust can seem a bit confusing and daunting. I have a trusted contact, Larry at Merrill Lynch, who is willing to help you with this for free. If you’re not comfortable working with Larry, you can always pay my hourly rate to do it for you, it’s up to you.” I will definitely bring up this idea with him at the next meeting.
When it comes to advanced planning proposals, his firm has used Vizio, Excel, and PowerPoint for their presentations. TJ admits that he has not done many proposals with sophisticated planning techniques, but he is comfortable using those programs to illustrate their benefits.
I also asked him for his honest opinion about my Trust Department. He has not heard anything specific good or bad about us. He did say he has some reservations about working with a National Trust company due to client service issues. Our trust officers are in Dallas or New Jersey. He would rather have someone local that his clients can talk to face to face. I did mention that there are ways I work with our Trust department where I am the main point of contact and I relay information to our Trust Department.
I briefly went through some of the common client concerns to see if there was anything that came up. When I asked if any of his clients ask him whether or not they should sell their business, he told me about a gentleman named Ryan at a company called CFG Business Solutions. Apparently they specialize in Business Succession Planning with insurance. He encouraged me to call Ryan at CFG because they may be a good contact for me.
TJ did mention that he is getting a lot of benefit out of our meetings because he is getting comfortable with me, which will eventually make me referable. I like where this one is heading.
As for the progress of my business, things are still slow. My Production goal for the year was $400,000. Last year I did $311,000 so it was an ambitious goal. But so far through 4 months I have only done $92,000 which annualizes at $282,000.
My assets under management started the year at $64.5 MM and I am currently at $65.8 MM. All of the gains in assets are due to market appreciation as according to my computer system, my Net New Money is -$863,000.
The good news is that I have increased my fee based assets from $12.3 MM to $14.6 MM and I don’t think this includes another $1 MM that is being set up currently.
I had vastly underestimated how much time it would take to set up the Attorney Strategic Alliances. The best case scenario in my mind when I started was that I would start to see some referrals in March. Now I realize that in order to really get an attorney on board with the whole process it will take 3-4 months at a minimum. I don’t think that is a bad thing, but like everything in life, I want it all and I want it now! I definitely believe I am on the right track and I do feel better about myself this year than last year. I have a vision that I am moving towards and that gives me a sense of satisfaction.
On another marketing front, I held my first client appreciation event of the year. I put together a cooking class at a local gourmet store. I had three of my clients there with my spouses and Ron the estate planning attorney with his wife in attendance.
It was Southwestern night so we made chicken enchiladas, stuffed poblano peppers with shrimp, apple bread with cinnamon butter, southwestern rice, and Mexican brownies. The first half hour had the teacher explaining the recipes to all of us and giving us some tips on how to make things easier on ourselves in the kitchen. For instance, did you know that the substance in poblano and jalapeno peppers that make it hot, is a chemical that can burn your skin? You should always wear gloves when handling peppers because if you get that chemical on your skin, it does not just wash off. It will stay with you for a while.
After our instructions, all of the couples volunteered to make a specific dish and we went into the kitchen to start preparing the food. All of my group did pretty well, although my client, Geoff, did have small accident when he nicked his finger with a sharp knife.
Once everything was prepared and cooking, there was some free time to explore the store and socialize with the other couples. Each dish takes a different amount of time, so it would have been hard to address everyone at the same time. Bryan from Lord Abbett Mutual funds was my sponsor and he had to leave early to help his 8 month pregnant wife at home, so I did not really feel the need to make a speech to everyone before dinner.
Once everything was ready to eat, we all sat down back in our chairs and enjoyed a delicious meal that was paired with a couple of really good wines. During the meal, I made a small speech where I thanked everyone for coming. I made sure to announce what all my clients did for a living in case someone else there needed their services. I also told them that I had two goals for this year. “ Have more fun with my clients and clone my best clients. Now that you have been to this event, if you have a friend that you would like to introduce me to, please let me know and I will be happy to have you and your friends back for another class later in the year.” Shelly, the wife of one of my clients, set me up nicely and asked ,”What exactly is your ideal client like?” I gave my client appropriate answer and so hopefully I have planted the referral seed in my clients mind.
Ron, the estate planning attorney, really loved the event and was thinking of ways that he could hold a similar event for some of his friends or clients. I will definitely follow up with him on possibly doing that event together.
During our first meeting we established that 50% of TJ’s business in estate planning comes from litigation in which beneficiaries are suing to get more money, or trustees are defending themselves from beneficiaries. The other 50% is straight estate planning for wealthy individuals. He joined his Father’s firm in 2006 so he could concentrate more on estate planning, so he is still building up his book of business.
This was my second meeting with TJ. I had met him before since he is also a member at my country club and I believe we have played golf together at least twice. He is very personable and seems very honest and open.
We started the conversation asking about the high cost of acquiring new clients. His firm does not advertise, but they do send out a newsletter and also mailings to current and former clients. TJ also mentioned that his father, Jim was appointed to the American College of Trust and Estate Council (ACTEC). Apparently this is a prestigious designation and Jim has been receiving some nice clients from this affiliation.
I then moved on to asking him about the “fact finder” that he uses to list all of his clients assets. TJ does use a questionnaire. The process usually starts when the new client calls in to set an appointment. TJ sends out the form and asks the client to fill it out and send it back to him before their first meeting. He said that they almost never get it back to him before the meeting. Usually they have some of it filled out and they bring it with them to the first meeting. Occasionally they haven’t even touched it before he meets with them. Once they finally meet, TJ goes over the list with them and fills in the blanks and uses it to get a good idea of their net worth and which items will need to be transferred into a Trust. This definitely looks like an area where I may be able to streamline things for him.
I brought up the issue of recurring revenue. He does send out an anniversary letter encouraging them to review their document and make sure they are happy with their beneficiaries and successor trustees. Having an annual “fee” worries him due to the “reasonableness” standards and that a lot of his clients would feel like they were being nickeled and dimed.
When I brought up the issue of the time and effort required to identify assets and transfer them to the appropriate entity, he said, “that is my biggest issue.” He sends them home with detailed instructions on how to do it for themselves, but they often fall short of getting it done and they do not want to pay for TJ to do it for them. TJ does the transfer of real estate as part of his fee, but he believes that his clients should be able to do the rest for themselves. He sends out a check up letter 6-9 months later to make sure they have taken care of everything. I think this could be a good service to provide for him.
Maybe he could say something like, “I know that transferring your assets into the name of the trust can seem a bit confusing and daunting. I have a trusted contact, Larry at Merrill Lynch, who is willing to help you with this for free. If you’re not comfortable working with Larry, you can always pay my hourly rate to do it for you, it’s up to you.” I will definitely bring up this idea with him at the next meeting.
When it comes to advanced planning proposals, his firm has used Vizio, Excel, and PowerPoint for their presentations. TJ admits that he has not done many proposals with sophisticated planning techniques, but he is comfortable using those programs to illustrate their benefits.
I also asked him for his honest opinion about my Trust Department. He has not heard anything specific good or bad about us. He did say he has some reservations about working with a National Trust company due to client service issues. Our trust officers are in Dallas or New Jersey. He would rather have someone local that his clients can talk to face to face. I did mention that there are ways I work with our Trust department where I am the main point of contact and I relay information to our Trust Department.
I briefly went through some of the common client concerns to see if there was anything that came up. When I asked if any of his clients ask him whether or not they should sell their business, he told me about a gentleman named Ryan at a company called CFG Business Solutions. Apparently they specialize in Business Succession Planning with insurance. He encouraged me to call Ryan at CFG because they may be a good contact for me.
TJ did mention that he is getting a lot of benefit out of our meetings because he is getting comfortable with me, which will eventually make me referable. I like where this one is heading.
As for the progress of my business, things are still slow. My Production goal for the year was $400,000. Last year I did $311,000 so it was an ambitious goal. But so far through 4 months I have only done $92,000 which annualizes at $282,000.
My assets under management started the year at $64.5 MM and I am currently at $65.8 MM. All of the gains in assets are due to market appreciation as according to my computer system, my Net New Money is -$863,000.
The good news is that I have increased my fee based assets from $12.3 MM to $14.6 MM and I don’t think this includes another $1 MM that is being set up currently.
I had vastly underestimated how much time it would take to set up the Attorney Strategic Alliances. The best case scenario in my mind when I started was that I would start to see some referrals in March. Now I realize that in order to really get an attorney on board with the whole process it will take 3-4 months at a minimum. I don’t think that is a bad thing, but like everything in life, I want it all and I want it now! I definitely believe I am on the right track and I do feel better about myself this year than last year. I have a vision that I am moving towards and that gives me a sense of satisfaction.
On another marketing front, I held my first client appreciation event of the year. I put together a cooking class at a local gourmet store. I had three of my clients there with my spouses and Ron the estate planning attorney with his wife in attendance.
It was Southwestern night so we made chicken enchiladas, stuffed poblano peppers with shrimp, apple bread with cinnamon butter, southwestern rice, and Mexican brownies. The first half hour had the teacher explaining the recipes to all of us and giving us some tips on how to make things easier on ourselves in the kitchen. For instance, did you know that the substance in poblano and jalapeno peppers that make it hot, is a chemical that can burn your skin? You should always wear gloves when handling peppers because if you get that chemical on your skin, it does not just wash off. It will stay with you for a while.
After our instructions, all of the couples volunteered to make a specific dish and we went into the kitchen to start preparing the food. All of my group did pretty well, although my client, Geoff, did have small accident when he nicked his finger with a sharp knife.
Once everything was prepared and cooking, there was some free time to explore the store and socialize with the other couples. Each dish takes a different amount of time, so it would have been hard to address everyone at the same time. Bryan from Lord Abbett Mutual funds was my sponsor and he had to leave early to help his 8 month pregnant wife at home, so I did not really feel the need to make a speech to everyone before dinner.
Once everything was ready to eat, we all sat down back in our chairs and enjoyed a delicious meal that was paired with a couple of really good wines. During the meal, I made a small speech where I thanked everyone for coming. I made sure to announce what all my clients did for a living in case someone else there needed their services. I also told them that I had two goals for this year. “ Have more fun with my clients and clone my best clients. Now that you have been to this event, if you have a friend that you would like to introduce me to, please let me know and I will be happy to have you and your friends back for another class later in the year.” Shelly, the wife of one of my clients, set me up nicely and asked ,”What exactly is your ideal client like?” I gave my client appropriate answer and so hopefully I have planted the referral seed in my clients mind.
Ron, the estate planning attorney, really loved the event and was thinking of ways that he could hold a similar event for some of his friends or clients. I will definitely follow up with him on possibly doing that event together.
Saturday, April 3, 2010
Meeting #2 with Christine
Christine and I met in her office yesterday. Chris is a really good estate planning attorney for someone who has assets of up to $4-$5 Million. After that, she seems uncomfortable with any of the advanced planning options such as Family Limited Partnerships or Charitable Remainder Trusts. In fact, most of the time she refers those types of cases out to other attorneys. Because she keeps her practice so simple, there may not be a lot of opportunity to add value to her current clients.
However, last year she entered into an agreement with a retiring estate planning attorney in her office space. Bob retired and entrusted Chris with managing all of his previous clients’ files. Bob sent out a letter to these clients announcing his retirement and telling them to call Chris with any issues in the future. Bob will receive a percentage of any fees generated on these clients for the next couple of years. Chris estimates that there may be over 2000 files and that she has worked on about 40 cases so far since Bob has sent out the first letter.
This could be a great opportunity for Chris and myself to make a lot of money. Chris mentioned that Bob’s clients were similar to hers in that the estates were not too complicated or in the very high net worth area. That’s probably ok for me since my ideal client is between 500k and 3 Million. Chris also mentioned that Bob seemed a little bored in retirement and had contacted Chris about sending out another letter.
When we discussed these clients I felt that Chris realizes she should do something to reach out to them and take advantage of the opportunity, but she has not really come up with a good idea yet. I think she has been procrastinating and that if I were to come up with an idea that excited her, she would definitely pursue it.
Here is a brainstorm of some of the things I may bring up to her in the next meeting:
1. Since Bob is “bored” could he help us organize these files in a digital format so we can pick and choose who to contact? He has financial incentive for Chris to work with these clients.
2. A lunch seminar where we give an update on the latest changes in estate planning laws and how they may affect your investments. I can even bring in a ML Trust guy to add value
3. Inviting a select few to my client appreciation dinner parties
4. Offer a onetime review option for $500? Which would include scenario analysis for a financial plan.
As for the list of challenges in Estate Planning that I went over with Chris, there were a couple of other issues where she mentioned some struggles in the past. The first one was “Time and effort required to identify assets and transfer them to appropriate entity”. Chris gives out a checklist after the trust is written with instructions on how to make the required transfers and re-title their accounts. Sometimes clients will pay her $250 an hour to do it herself. Chris would be willing to do a follow up letter to check up on her clients to make sure it’s done, however she is concerned that she needs to “end” the engagement in order for her malpractice insurance to apply. In other words, there has to be a beginning and an end to the work, otherwise her insurance rates may go higher since the clients would then be on a “retainer”. I am a little confused by what she said, but I think we could find a way to make it work.
She has also seen some widowed clients that are concerned that they will outlive their money. There are a lot of rules that the surviving spouse must live up to because she becomes a trustee of the surviving trusts. There are fiduciary responsibilities and when the heirs are step children, sometimes the opportunity is ripe for lawsuits if they think the surviving spouse is spending their inheritance. I did not follow up with any questions on this, as I am unsure on how I can insert my services into this situation. I know I can help these clients, but I don’t know how to bring up the right questions to get the attorney to come up with a way that I can come in and see them. I think I need Steve’s help on this one.
Hopefully I can keep Chris moving through the process and figure out a way to reach out to her old/new clients.
However, last year she entered into an agreement with a retiring estate planning attorney in her office space. Bob retired and entrusted Chris with managing all of his previous clients’ files. Bob sent out a letter to these clients announcing his retirement and telling them to call Chris with any issues in the future. Bob will receive a percentage of any fees generated on these clients for the next couple of years. Chris estimates that there may be over 2000 files and that she has worked on about 40 cases so far since Bob has sent out the first letter.
This could be a great opportunity for Chris and myself to make a lot of money. Chris mentioned that Bob’s clients were similar to hers in that the estates were not too complicated or in the very high net worth area. That’s probably ok for me since my ideal client is between 500k and 3 Million. Chris also mentioned that Bob seemed a little bored in retirement and had contacted Chris about sending out another letter.
When we discussed these clients I felt that Chris realizes she should do something to reach out to them and take advantage of the opportunity, but she has not really come up with a good idea yet. I think she has been procrastinating and that if I were to come up with an idea that excited her, she would definitely pursue it.
Here is a brainstorm of some of the things I may bring up to her in the next meeting:
1. Since Bob is “bored” could he help us organize these files in a digital format so we can pick and choose who to contact? He has financial incentive for Chris to work with these clients.
2. A lunch seminar where we give an update on the latest changes in estate planning laws and how they may affect your investments. I can even bring in a ML Trust guy to add value
3. Inviting a select few to my client appreciation dinner parties
4. Offer a onetime review option for $500? Which would include scenario analysis for a financial plan.
As for the list of challenges in Estate Planning that I went over with Chris, there were a couple of other issues where she mentioned some struggles in the past. The first one was “Time and effort required to identify assets and transfer them to appropriate entity”. Chris gives out a checklist after the trust is written with instructions on how to make the required transfers and re-title their accounts. Sometimes clients will pay her $250 an hour to do it herself. Chris would be willing to do a follow up letter to check up on her clients to make sure it’s done, however she is concerned that she needs to “end” the engagement in order for her malpractice insurance to apply. In other words, there has to be a beginning and an end to the work, otherwise her insurance rates may go higher since the clients would then be on a “retainer”. I am a little confused by what she said, but I think we could find a way to make it work.
She has also seen some widowed clients that are concerned that they will outlive their money. There are a lot of rules that the surviving spouse must live up to because she becomes a trustee of the surviving trusts. There are fiduciary responsibilities and when the heirs are step children, sometimes the opportunity is ripe for lawsuits if they think the surviving spouse is spending their inheritance. I did not follow up with any questions on this, as I am unsure on how I can insert my services into this situation. I know I can help these clients, but I don’t know how to bring up the right questions to get the attorney to come up with a way that I can come in and see them. I think I need Steve’s help on this one.
Hopefully I can keep Chris moving through the process and figure out a way to reach out to her old/new clients.
Friday, March 12, 2010
Meeting #3 Strategic Alliance and General Business Update
I had my third meeting with Ron L. in my office on Thursday. Ron is my most promising candidate to become a strategic alliance so far and I was excited to see how the meeting would turn out.
The meeting did not go as well as I had hoped. First of all, Ron was 20 minutes late. Apparently he left his cell phone in the office and had a previous meeting run long. Then I made the mistake of introducing my manager, Ray to him before we got down to business.
Ray is a good guy and is knowlegeable about many subjects. The problem is that he tends to ramble on when engaged in a conversation. I was hoping for a quick 5 minutes and instead it turned into 20. Ron did comment that it was a nice touch for me to introduce him, but it left us much less time to accomplish the objectives of the meeting.
Once we got to my office we reviewed the Strategic Alliance Discussion Points. Ron agreed with analysis on which were the most important goals for him to reach. I also reviewed the details of his practice with him to confirm that I have been listening. The big finale is when we begin to brainstorm about finding ways we can work together to increase both of our incomes.
I went through the first two ideas which included becoming a gatekeeper for his clients. When a new client is referred to him, they can meet with me first where I will prepare a client balance sheet and help them outline their goals. Once this is finished, I can hand them over to Ron. Ron will save time by not having to make his initial consultation free, thereby increasing his billable hours. I will get the benefit of meeting new people with money in a friendly environment.
Ron is excited about this idea and it is definitely the one I will lead with in the 4th meeting.
The final snag in the meeting came when he looked at his watch and realized he was going to be late for his next appointment. We still had 3-4 different ideas to discuss. Ron said it would be ok to call him and discuss it over the phone the next day. I don't think this will have the same impact. However, I think I can schedule the 4th meeting and lead with the gatekeeper idea and have him agree to a trial run.
Next time I will let my manager know ahead of time that he can only talk to us for 5 minutes before I need to leave.
As for the status of the rest of my business, there are good things and bad things.
The good is that I have been very motivated so far this year. I have finally got in the habit of keeping track of weekly goals and making a to-do list every day. This has increased my focus and really makes me feel as if I have purpose in my day to day activities.
I have managed to solidify most of my Dad's relationships and even convinced some of them to move into separately managed accounts. I am disappointed that a couple of them are leaving. I really feel like they could have been saved if my Dad had let me start managing them sooner. I have had a couple of his clients already praise me for the amount of attention I am giving them and how they were close to leaving because my Dad had stopped calling them.
As for the bad things, it's mainly that my production is lagging slightly behind last years. Last year was not good and I am trying to move up from 300k to 400k in production. I am falling behind my goal. I have come to the stark realization that it can take 3-4 months to establish a strategic alliance with a good estate planning attorney. I am guessing that it will probably take an additional few months for a steady flow of new clients to start as well. This means I really need to focus on setting more appointments with different attorneys so I can stuff the pipeline. This also means that I may not have a noticeable jump in performance until the second half of the year.
In the mean time, I am beginning to schedule a series of client appreciation events/seminars and hopefully that may bring in some additional referrals.
The meeting did not go as well as I had hoped. First of all, Ron was 20 minutes late. Apparently he left his cell phone in the office and had a previous meeting run long. Then I made the mistake of introducing my manager, Ray to him before we got down to business.
Ray is a good guy and is knowlegeable about many subjects. The problem is that he tends to ramble on when engaged in a conversation. I was hoping for a quick 5 minutes and instead it turned into 20. Ron did comment that it was a nice touch for me to introduce him, but it left us much less time to accomplish the objectives of the meeting.
Once we got to my office we reviewed the Strategic Alliance Discussion Points. Ron agreed with analysis on which were the most important goals for him to reach. I also reviewed the details of his practice with him to confirm that I have been listening. The big finale is when we begin to brainstorm about finding ways we can work together to increase both of our incomes.
I went through the first two ideas which included becoming a gatekeeper for his clients. When a new client is referred to him, they can meet with me first where I will prepare a client balance sheet and help them outline their goals. Once this is finished, I can hand them over to Ron. Ron will save time by not having to make his initial consultation free, thereby increasing his billable hours. I will get the benefit of meeting new people with money in a friendly environment.
Ron is excited about this idea and it is definitely the one I will lead with in the 4th meeting.
The final snag in the meeting came when he looked at his watch and realized he was going to be late for his next appointment. We still had 3-4 different ideas to discuss. Ron said it would be ok to call him and discuss it over the phone the next day. I don't think this will have the same impact. However, I think I can schedule the 4th meeting and lead with the gatekeeper idea and have him agree to a trial run.
Next time I will let my manager know ahead of time that he can only talk to us for 5 minutes before I need to leave.
As for the status of the rest of my business, there are good things and bad things.
The good is that I have been very motivated so far this year. I have finally got in the habit of keeping track of weekly goals and making a to-do list every day. This has increased my focus and really makes me feel as if I have purpose in my day to day activities.
I have managed to solidify most of my Dad's relationships and even convinced some of them to move into separately managed accounts. I am disappointed that a couple of them are leaving. I really feel like they could have been saved if my Dad had let me start managing them sooner. I have had a couple of his clients already praise me for the amount of attention I am giving them and how they were close to leaving because my Dad had stopped calling them.
As for the bad things, it's mainly that my production is lagging slightly behind last years. Last year was not good and I am trying to move up from 300k to 400k in production. I am falling behind my goal. I have come to the stark realization that it can take 3-4 months to establish a strategic alliance with a good estate planning attorney. I am guessing that it will probably take an additional few months for a steady flow of new clients to start as well. This means I really need to focus on setting more appointments with different attorneys so I can stuff the pipeline. This also means that I may not have a noticeable jump in performance until the second half of the year.
In the mean time, I am beginning to schedule a series of client appreciation events/seminars and hopefully that may bring in some additional referrals.
Monday, February 15, 2010
Strategic Alliance Meeting #2 with Ron L.
I had the second of four meetings with Ron L. yesterday in his office in Sun City. I brought with me a list of 10 Estate Planning Industry Issues that I wanted to get Ron’s feed back on. I was hoping to elicit his opinion and experiences on each of these issues to look for ways that I may be able to complement his practice.
Number 2 on my list was “Wealthy clients are often disorganized and have difficulty completing the fact finder that lists their assets and titling.” Even though Ron does not use a hard copy “fact finder”, he does spend the time in his initial meeting asking the client questions to fill in this important information. Number 4 on my list was “Unproductive time spent selling prospects who don’t become clients”. Ron mentioned that sometimes he runs into problems with clients where he does not have enough time in the initial meeting to get through all of the assets and the client has some resistance in paying for additional time. He also has a program where he offers a “document review” at $150/hour which is much lower than his $350/hour normal rate. Sometimes he struggles with clients who want him to review their trust at $150 for an hour, when it will take much longer to review and offer guidance.
I asked him if it would be helpful to have a summary of all the assets along with the main issues they want to discuss, before they came in to see him. Ron exclaimed that this summary would be very helpful and that maybe he would even offer a discount to clients that I bring him with this leg work already done.
Issue number 3 on the list is “no recurring revenue”. I asked him if he has any program in place to reach out to past clients. He has often thought about doing something but has never put a formal program in place. He does encourage his clients to check in every 5 years or whenever they have a major life event. In my mind I am envisioning working on a list of his best past clients and starting a review program where they can come in for a “check up” for a set fee, and as part of the check up, I can perform a scenario analysis or gather the relevant asset information before they come in to see him. I will need to give this more thought.
Number 7 was “Challenge recommending advanced planning options without a strategic alliance to provide required financial analysis and products”. I asked him to show me how he presents an Irrevocable Life Insurance Trust to his clients. He uses a note pad to sketch out some of the details along with a copy of an old article that explains how the name “Crummey” trust came into existence. Ron told me that he does not have any software that can sketch out What If? Analysis. I definitely think it would be helpful for Ron and his clients if I can present our proprietary Interactive Financial Plan and show them with nice color graphs how much money they can preserve in their estate with a well crafted Insurance Trust.
Our meeting was cut a little short, because his next appointment showed up a little early. I did not get to ask him how or if he does any due diligence on the insurance policies that get put in place. The next seminar for the Central Arizona Estate Planning Council in March is addressing this very subject, so this may be something else we can discuss.
I will contact Steve Moeller with the following questions:
1. Do I show the Common Client Issues sheet to Ron during the meeting or is that something I am supposed to keep in my mind while I ask him the questions from the Estate Planning Issues sheet?
2. I would like to exampleas and/or language to refer to when crafting the right questions to ask in this 2nd meeting.
Plus I am realizing that this process will take 3 months minimum to implement with each attorney. I need to make a push to start the process with some other attorneys now if I want to have 4 good alliances established by the end of the year.
Number 2 on my list was “Wealthy clients are often disorganized and have difficulty completing the fact finder that lists their assets and titling.” Even though Ron does not use a hard copy “fact finder”, he does spend the time in his initial meeting asking the client questions to fill in this important information. Number 4 on my list was “Unproductive time spent selling prospects who don’t become clients”. Ron mentioned that sometimes he runs into problems with clients where he does not have enough time in the initial meeting to get through all of the assets and the client has some resistance in paying for additional time. He also has a program where he offers a “document review” at $150/hour which is much lower than his $350/hour normal rate. Sometimes he struggles with clients who want him to review their trust at $150 for an hour, when it will take much longer to review and offer guidance.
I asked him if it would be helpful to have a summary of all the assets along with the main issues they want to discuss, before they came in to see him. Ron exclaimed that this summary would be very helpful and that maybe he would even offer a discount to clients that I bring him with this leg work already done.
Issue number 3 on the list is “no recurring revenue”. I asked him if he has any program in place to reach out to past clients. He has often thought about doing something but has never put a formal program in place. He does encourage his clients to check in every 5 years or whenever they have a major life event. In my mind I am envisioning working on a list of his best past clients and starting a review program where they can come in for a “check up” for a set fee, and as part of the check up, I can perform a scenario analysis or gather the relevant asset information before they come in to see him. I will need to give this more thought.
Number 7 was “Challenge recommending advanced planning options without a strategic alliance to provide required financial analysis and products”. I asked him to show me how he presents an Irrevocable Life Insurance Trust to his clients. He uses a note pad to sketch out some of the details along with a copy of an old article that explains how the name “Crummey” trust came into existence. Ron told me that he does not have any software that can sketch out What If? Analysis. I definitely think it would be helpful for Ron and his clients if I can present our proprietary Interactive Financial Plan and show them with nice color graphs how much money they can preserve in their estate with a well crafted Insurance Trust.
Our meeting was cut a little short, because his next appointment showed up a little early. I did not get to ask him how or if he does any due diligence on the insurance policies that get put in place. The next seminar for the Central Arizona Estate Planning Council in March is addressing this very subject, so this may be something else we can discuss.
I will contact Steve Moeller with the following questions:
1. Do I show the Common Client Issues sheet to Ron during the meeting or is that something I am supposed to keep in my mind while I ask him the questions from the Estate Planning Issues sheet?
2. I would like to exampleas and/or language to refer to when crafting the right questions to ask in this 2nd meeting.
Plus I am realizing that this process will take 3 months minimum to implement with each attorney. I need to make a push to start the process with some other attorneys now if I want to have 4 good alliances established by the end of the year.
Friday, February 5, 2010
Strategic Alliance Meeting with John L.
This is my second go around with an initial strategic alliance meeting. This time it is with John L. at RCA law firm. This happens to be the same law firm that my wife works at so it was a pretty easy meeting to set.
John has some history with one of my larger clients and according to my Dad, had suggested they do something different with their trust management then what my Dad had suggested. That was enough for my Dad to write him off. I had also heard from our Trust specialist that he had a good relationship with one of the advisors in our Sun City office. With the past experience in the back of my mind, I did not have as high of expectations for this meeting as I did with Ron L. last time.
We met for breakfast at Paradise Bakery. John was really friendly and we got a little side tracked at first talking about RCA law firm and the direction they are heading. My wife has been real concerned about the bad economy's effect on the future profitability or RCA law firm and John was picking my brain for information on my point of view.
Eventually we moved the conversation to investigating the possibility of a strategic alliance. First of all, I have to hand it to Steve Moeller, his ideas on sending out the confirmation letter and giving the attorney the list of questions really sets the tone. Both of the lawyers I have me with seemed very eager to impress me and try to find a way to do business. I have not felt at all like I was the one under pressure to sell my firm.
John L. is 66 years old. He started his career at RCA in 1970, but he left after 25 years to form a boutique firm in Sun City and Scottsdale. His boutique firm had 2 other younger partners and when the lease was coming up for renewal, he did not feel comfortable signing another long term lease with his partners. He was bringing in most of the business and if something would happen to him, he did not want to be tied in to them for a long stretch of time. So he made some calls and RCA had just lost their top producing estate planning attorney and he found he could slide right back in. In addition, RCA has a Denver office, and John L. has home in Colorado and does some work there as well so it was a nice fit.
RCA has 3 other attorneys in the Estate Planning practice. John uses one paralegal as well. John spends his office hours in Sun City, Scottsdale, and Denver. The majority of his clients have net worths of $2-$5 Million with some outliers in the hundreds of millions. He said he does not have a specific client niche like doctors or business owners, his clients come from all walks of life.
He does not have a formal plan for acquiring new clients. 70% of his business is referrals or repeat business from his current clients. The rest comes from referrals from other professionals. He does not do a lot of insurance business. Not because he doesn’t believe in it, but he says some of the referrals he gets from insurance professionals are not doing what is right for the client.
He has done a lot of work with charitable planning and trusts. He was a director for the Arizona Community Foundation from 1988-2000. ACF has an alliance with Merrill Lynch and I have a couple of clients that have charitable trusts with them already.
He did not have a clear answer on his ideal client profile. He said he seems to receive a lot of clients that are on their 2nd or 3rd marriage and he has to fix or undo an ineffective estate plan. He also has done quite a bit of work on large retirement accounts and cleaning up beneficiary designations.
I asked him about his initial meeting with clients. He said he does not use a formal questionnaire, but he does ask them a lot of questions and writes down what he needs. The initial meeting is free if the client decides to go somewhere else. If they decide to use John, then the cost of the first meeting is rolled into the total cost. After he writes an initial draft, he makes sure to go over the paperwork with the client face to face. He does not believe in sending out the documents to the client to read since that just causes panic and strife.
I asked him to give me what his frustrations are with his practice. Again he did not have a clear answer and basically said that everything is great.
In review, I did not uncover any glaring problems in his practice that I can immediately help him with. My gut was telling me that he will not end up being one of my strategic alliance partners. He is a very well qualified attorney with tons of experience and lots of high net worth clients. I would trust him to work on my client’s estate plan, but I don’t know if I trust him to make my client feel good about the whole process by being friendly and extremely service oriented.
John has some history with one of my larger clients and according to my Dad, had suggested they do something different with their trust management then what my Dad had suggested. That was enough for my Dad to write him off. I had also heard from our Trust specialist that he had a good relationship with one of the advisors in our Sun City office. With the past experience in the back of my mind, I did not have as high of expectations for this meeting as I did with Ron L. last time.
We met for breakfast at Paradise Bakery. John was really friendly and we got a little side tracked at first talking about RCA law firm and the direction they are heading. My wife has been real concerned about the bad economy's effect on the future profitability or RCA law firm and John was picking my brain for information on my point of view.
Eventually we moved the conversation to investigating the possibility of a strategic alliance. First of all, I have to hand it to Steve Moeller, his ideas on sending out the confirmation letter and giving the attorney the list of questions really sets the tone. Both of the lawyers I have me with seemed very eager to impress me and try to find a way to do business. I have not felt at all like I was the one under pressure to sell my firm.
John L. is 66 years old. He started his career at RCA in 1970, but he left after 25 years to form a boutique firm in Sun City and Scottsdale. His boutique firm had 2 other younger partners and when the lease was coming up for renewal, he did not feel comfortable signing another long term lease with his partners. He was bringing in most of the business and if something would happen to him, he did not want to be tied in to them for a long stretch of time. So he made some calls and RCA had just lost their top producing estate planning attorney and he found he could slide right back in. In addition, RCA has a Denver office, and John L. has home in Colorado and does some work there as well so it was a nice fit.
RCA has 3 other attorneys in the Estate Planning practice. John uses one paralegal as well. John spends his office hours in Sun City, Scottsdale, and Denver. The majority of his clients have net worths of $2-$5 Million with some outliers in the hundreds of millions. He said he does not have a specific client niche like doctors or business owners, his clients come from all walks of life.
He does not have a formal plan for acquiring new clients. 70% of his business is referrals or repeat business from his current clients. The rest comes from referrals from other professionals. He does not do a lot of insurance business. Not because he doesn’t believe in it, but he says some of the referrals he gets from insurance professionals are not doing what is right for the client.
He has done a lot of work with charitable planning and trusts. He was a director for the Arizona Community Foundation from 1988-2000. ACF has an alliance with Merrill Lynch and I have a couple of clients that have charitable trusts with them already.
He did not have a clear answer on his ideal client profile. He said he seems to receive a lot of clients that are on their 2nd or 3rd marriage and he has to fix or undo an ineffective estate plan. He also has done quite a bit of work on large retirement accounts and cleaning up beneficiary designations.
I asked him about his initial meeting with clients. He said he does not use a formal questionnaire, but he does ask them a lot of questions and writes down what he needs. The initial meeting is free if the client decides to go somewhere else. If they decide to use John, then the cost of the first meeting is rolled into the total cost. After he writes an initial draft, he makes sure to go over the paperwork with the client face to face. He does not believe in sending out the documents to the client to read since that just causes panic and strife.
I asked him to give me what his frustrations are with his practice. Again he did not have a clear answer and basically said that everything is great.
In review, I did not uncover any glaring problems in his practice that I can immediately help him with. My gut was telling me that he will not end up being one of my strategic alliance partners. He is a very well qualified attorney with tons of experience and lots of high net worth clients. I would trust him to work on my client’s estate plan, but I don’t know if I trust him to make my client feel good about the whole process by being friendly and extremely service oriented.
Saturday, January 23, 2010
First Strategic Alliance Meeting
I had my first meeting with an estate planning attorney using the Strategic Alliance system created by Steve Moeller. The attorney’s name is Ron L. and he is based in Sun City. He has done some work for a few of my clients and knew my Dad pretty well. His office is literally across the street from the Merrill Lynch office that my Dad was the manager of for many years. I went into this meeting expecting it to be pretty easy since Ron already knew me on a personal level. I was right.
The purpose of the first meeting is to see if you would like to work with him as an alliance partner in the future. You also want to see if he works with clients that are similar to your ideal clients and that he is open to the idea of working with you.
Here is what I found out about Ron L.
Ron’s business breaks down to 75% estate planning and trusts and 25% general law practice helping business owners set up LLC’s, Corporations, and agreements. He has practiced law for over 20 years. He went to college at the University of Wyoming (which is my wife’s alma mater) and Law School at Arizona State.
In his Sun City office he has an office manager, receptionist, and a legal secretary. He also keeps office hours in Scottsdale. At that office he uses the staff at his office complex.
His practice for estate planning is pretty broad in that he will do simple wills for small clients to advanced estate planning strategies for multi millionaires. Most of his clients have net assets in the $1MM to $3MM range. The only business that he refers out to another attorney is anyone interested in a “Miller Trust” that is used to qualify for Long Term Care under the ALTCS program. He used to do a lot of Form 706 work (Estate Tax Returns) but that has slowed down last few years as there has been a steady decrease in the unified credit over the last few years.
He estimated that he has over 800 clients and is looking for more. His ideal client is about to retire and needs a will and a trust and possibly some life insurance. He likes them a little younger so he has a chance to work with them a few times over the years as their situation changes. He gave me an interesting answer when I asked him about his business goals. He said he has never set goals because he always works hard and he doesn’t need to write down a specific number. He believes that with hard work, he will do the best he can and whatever happens he will be happy with it.
The main challenges in his practice are paralegals who practice law when they are not allowed to do the work. He also sees some of the online sites like “Legal Zoom” as competition. He has a hard time with clients who are very busy. They tend to lack focus. He can get them through the basic estate plan or trust but when it comes to doing advanced planning, they seem to lose patience or focus and do not follow through. He has also found it hard to get through some of the complicated or technical issues in estate planning with clients. Ron would call this “getting them to the next level” where he feels he can really add value to their situation. Often he will advise them to use Life Insurance and sometimes the insurance agent or financial planner he refers them to, does not do a good enough job of convincing the client that it is the right thing to do. Ron does not have an insurance license and does not believe it is ethical for an attorney to recommend it and get paid for it.
Most of his marketing is done through informal networking. He gets alot of his probate work through Title officers at banks who are working with clients that are trying to sell Mom or Dad’s home and suddenly find out they need to put the home through probate before they can sell it. He is a member of the Central Arizona Estate Planning Council and he has done some seminars for the State Bar of Arizona. For the most part he feels as if he does not do a lot of marketing. He depends on doing a good job for his clients and utilizing their good word of mouth.
One of the ways he stands out from most Estate Planning Attorneys is that he always tries to go over the documents with the client face to face. Most attorneys will mail out the documents and encourage their client to read them and get back to them with questions. Ron feels this is a deterrent for many clients who are intimidated by the documents or the process.
Ron said he would like to work with me and he is willing to take the next step and set up a second meeting.
The purpose of the first meeting is to see if you would like to work with him as an alliance partner in the future. You also want to see if he works with clients that are similar to your ideal clients and that he is open to the idea of working with you.
Here is what I found out about Ron L.
Ron’s business breaks down to 75% estate planning and trusts and 25% general law practice helping business owners set up LLC’s, Corporations, and agreements. He has practiced law for over 20 years. He went to college at the University of Wyoming (which is my wife’s alma mater) and Law School at Arizona State.
In his Sun City office he has an office manager, receptionist, and a legal secretary. He also keeps office hours in Scottsdale. At that office he uses the staff at his office complex.
His practice for estate planning is pretty broad in that he will do simple wills for small clients to advanced estate planning strategies for multi millionaires. Most of his clients have net assets in the $1MM to $3MM range. The only business that he refers out to another attorney is anyone interested in a “Miller Trust” that is used to qualify for Long Term Care under the ALTCS program. He used to do a lot of Form 706 work (Estate Tax Returns) but that has slowed down last few years as there has been a steady decrease in the unified credit over the last few years.
He estimated that he has over 800 clients and is looking for more. His ideal client is about to retire and needs a will and a trust and possibly some life insurance. He likes them a little younger so he has a chance to work with them a few times over the years as their situation changes. He gave me an interesting answer when I asked him about his business goals. He said he has never set goals because he always works hard and he doesn’t need to write down a specific number. He believes that with hard work, he will do the best he can and whatever happens he will be happy with it.
The main challenges in his practice are paralegals who practice law when they are not allowed to do the work. He also sees some of the online sites like “Legal Zoom” as competition. He has a hard time with clients who are very busy. They tend to lack focus. He can get them through the basic estate plan or trust but when it comes to doing advanced planning, they seem to lose patience or focus and do not follow through. He has also found it hard to get through some of the complicated or technical issues in estate planning with clients. Ron would call this “getting them to the next level” where he feels he can really add value to their situation. Often he will advise them to use Life Insurance and sometimes the insurance agent or financial planner he refers them to, does not do a good enough job of convincing the client that it is the right thing to do. Ron does not have an insurance license and does not believe it is ethical for an attorney to recommend it and get paid for it.
Most of his marketing is done through informal networking. He gets alot of his probate work through Title officers at banks who are working with clients that are trying to sell Mom or Dad’s home and suddenly find out they need to put the home through probate before they can sell it. He is a member of the Central Arizona Estate Planning Council and he has done some seminars for the State Bar of Arizona. For the most part he feels as if he does not do a lot of marketing. He depends on doing a good job for his clients and utilizing their good word of mouth.
One of the ways he stands out from most Estate Planning Attorneys is that he always tries to go over the documents with the client face to face. Most attorneys will mail out the documents and encourage their client to read them and get back to them with questions. Ron feels this is a deterrent for many clients who are intimidated by the documents or the process.
Ron said he would like to work with me and he is willing to take the next step and set up a second meeting.
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