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.