HomeFinancial AdvisorManaging Fast And Slow Growth Of A Planning-Centric Firm

Managing Fast And Slow Growth Of A Planning-Centric Firm


Executive Summary

Welcome back to the 291st episode of the Financial Advisor Success Podcast!

My guest on today’s podcast is Amy Irvine. Amy is the owner of Rooted Planning Group, an independent RIA based in Corning, New York that oversees $67 million in assets under management for 175 client households.

What’s unique about Amy, though, is how she managed the complexities of starting her own RIA focused on Gen X women, and then dealt with unexpected growing pains as her business development worked ‘too well’ and the firm rapidly expanded from nearly 30 clients to over 100 in under 18 months… and then she had to figure out how to service all of her new clients at the same time she was hiring and training team members to help reduce that client workload.

In this episode, we talk in-depth about how after working for years in the financial industry, Amy realized there was a missed opportunity in working with career-driven Gen X women like her and decided to focus on serving that type of clientele she knew so well, how the initial fear of launching a firm on her own initially led Amy to partner with another advisor and try to capitalize on the opportunity to convert his practice from its commission-based roots into a fee-only firm… only to quickly realize they did not share the same vision and that she would be better off as a solopreneur instead, and how Amy’s unique model of charging subscription fees with no asset minimum for Gen X women revealed such an untapped market opportunity in her local area that as soon as she started volunteering for local organizations and providing financial education for non-profits in her community and communicating what she did and who she served, Amy began to spur a generous amount of referrals that led to a rapid growth.

We also talk about how the tragedy of 9/11 (coupled with Amy’s personal loss of friends and colleagues) and seeing how underfunded life or disability insurance can seriously impact people’s lives inspired Amy to return to college and get her undergraduate degree just so she could gain her CFP marks and become a financial planner, how even though Amy was grateful for the success of her firm early on, she struggled with the rapid growth as it created pressure to quickly hire employees (and find the time to train them!), and how after seeing her staff reach stages of burnout while dealing with acquiring another advisor’s book of business during the early months of the pandemic, Amy intentionally stopped taking on new clients for 3 months and hired a coach to prioritize the mental health of her staff over the economic growth of her firm.

And be certain to listen to the end, where Amy shares how she wishes she had more confidence in herself at the beginning (and listened to recommendations from colleagues when launching her firm) to grow her firm slowly and charge more upfront for her services, why Amy believes in the value of starting one’s advisory career in an admin or operations role (especially for women interested in becoming financial advisors) as there are more opportunities to attain knowledge and the problem-solving skills that craft a good financial planner, and how Amy has navigated her own shift from the work she enjoyed doing directly with clients, to a role where she is more focused on guiding the strategies her financial planners will implement with their clients so that she can have an even greater, longer-lasting impact.

So, whether you’re interested in learning about why Amy chose to focus her firm on career-driven Gen X women and charges subscription fees without an asset minimum, how niching into an underserved clientele propelled the growth of Amy’s firm and strained her and her firm’s resources, or why Amy feels she is finally in a place where she can delegate responsibilities which allows her more time to develop focused strategies that will further the success of her firm, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Amy Irvine.

Michael Kitces

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Full Transcript:

Michael: Welcome, Amy Irvine to the “Financial Advisor Success Podcast.”

Amy: Well, thank you for having me. Greatly appreciate it.

Michael: I’m really looking forward to the discussion today and talking about just the dynamics of growth as we grow our advisory firms. You had many years of experience in the industry before launching your firm and then launched, had this really explosive growth when you got going. Then I think had to slow down the growth a little bit because it was sort of too much, too fast. Have now expanded your team, built more foundation, or getting ready to pick up the growth rate again. And so, I find this a fascinating dynamic of sort of the ways as advisory firms we can grow, we hit capacity and limits. You have to change systems or add tech or just flat out hire people and figure out how to build around that and then you get to a point, “Well, I can build around it. Okay. I’m ready for the next growth phase.” And then we go and grow and break a whole bunch of new things in the process. So, I’m just looking forward to the discussion around how you’ve managed this growth path for yourself in this fast growth, slow growth, fast growth, slow growth dynamic.

Amy’s Journey Into Financial Planning [04:47]

Amy: Yeah. When I first launched…originally, I spun off in 2015 and partnered up with a gentleman down in Florida. And the goal of that particular spinoff was to help him transition from a commission-driven practice to a fee-only practice. I understood the impact that that was going to have. He didn’t quite understand the impact that that was going to have and it was very quickly after, I would say probably a few months we decided that I would spin off yet again and do the financial planning and he would maybe refer clients to us or he would go back into the more product-driven world and I would do the fee-only financial planning associated with any clients that actually wanted a financial plan. And so, that launched in 2016. And I was very fortunate because I was very afraid to do this. I was about 44, 45 years old at the time and was very concerned about am I too old to do this, is this the right time, is this the right economy? I had been in the profession since 1994 in some way, shape, or form, but it’s still scary going into the world, or at least it was for me as a solopreneur. It’s one of the reasons that in 2015 I actually did it as a partnership because I was more concerned about, “Well, what if something happens to me?” I don’t have a backup. But I was very fortunate after I launched on the independent side and individually because when people heard that I had gone into business for myself and that my model was a little bit different than the typical model and the type of client that I wanted to work with was very similar to me, women in their mid-40s, early 50s, career-driven, X Gen, kind of what I call the forgotten generation a little bit.

Michael: I know the feeling as a fellow Gen Xer. Yeah. We just, like the whole world just went from, “Well, baby boomers are retiring so what’s your millennial strategy?” It’s like, “We’re still here. There’s still room.”

Amy: Yeah. Exactly. That’s why I call us the forgotten generation because everybody talks about the baby boomers and everybody talks about the millennials, but they don’t talk about the Gen X generation and they definitely weren’t focused on…at least not in the areas that I was doing business, they weren’t focused on it. And I have a lot of friends that really did want financial planning advice, but a lot of their funds were…their monetary funds were locked up in their company 401K or some kind of savings plans. And so, any time that they would reach out for assistance in financial planning, they were told they didn’t have enough assets or they didn’t…they basically were turned away. And so, when word got out that that was the kind of practice that I was launching, in about 18 months or less, I had gone from 30-some clients to 100 clients.

Michael: Ooh!

Amy: And I know! When I look back at that period of time now, some of them were ongoing. They were project clients and stuff like that. But when people ask me, “How did you do that,” I honestly think that there was…I don’t know. I really…there were a lot of really crazy days. There were some…

Michael: Because when you’re an entrepreneur and getting going and just the revenue is coming in and you’re so terrified that it’s going to fail that you’d say yes to any revenue, you just deal with it when the revenue comes in.

Amy: Yeah. That’s exactly…

Michael: And at some point later, you go like, “What was I thinking?”

Amy: I’ve said that many…even now. What was I thinking? So, it was a crazy time. And I wasn’t prepared for that. I wasn’t prepared for that kind of growth. In my mind, I was prepared for a long time to grow the business. My husband and I had kind of projected that if we could grow one client a month or two clients a month and we had this whole plan like, “What if it doesn’t happen?” And one of my very, very near friends, she and I sat down during this whole process, and I was telling her how worried I was about it and she said, “Well, what’s the worst that can happen?” And I said, “Oh, my God. I’ll have to go get a job.” She said, “That’s the worst that’s going to happen?” I said, “Yeah. I’ll have to go work for a company again.” And she said, “Well, if that’s the worst that’s going to happen, Amy, I think you’ve got a good backup. What’s your timeline on this?” And so, as I talked to her about it, the sort of fear faded a little bit although I will still say that it was still there throughout that first 12 to 18 months like, “They’re going to find me out, aren’t they? They’re going to stop coming to me. They’re going to…the business isn’t going to keep up like this.” So, I still had a lot of major concerns and then realized that I cannot keep up at this pace because I waited so long to hire, by the time I actually did bring somebody on board, it was so hard to train them at the same time that I was trying to provide client service support to them. And I was really fortunate because my very first hire was a dear friend of mine that…I don’t know if a lot of people know this about me, but I actually went back to college when I was around 30 to get my bachelor’s degree in financial planning. I had worked in the profession for about 10 years already and I decided to go back to get all of the requirements to sit for the CFP exam. And so, I was going to college.

Michael: Specifically, the motivation for getting the bachelor’s done was that you also wanted to be able to add the CFP marks. You had to have a bachelor’s degree to do it.

Amy: Yep. So, the program that I went through, it was actually in my alma mater was just launching the program for the CFP program. So, Alfred State College was launching that program right as I was actually investigating going through the coursework anyway. So, I’m like, “Well, I might as well go back. I can get another degree and this one would be specifically in financial planning. It’s going to take me the time to do the coursework.” And I had most…I had the accounting credits and all of that, so it was just a matter of going through about a year and a half of coursework to get that degree on top of what I had already done in my experience. And it was really unique experience for me because I was going into the classroom with some background knowledge and the students that were attending the classes for the first time were learning all of this. So, I would be talking with the professors about different aspects of the profession and I won’t say bickering, but I would certainly challenge the reality of it. And one of the students that was there, her name was Kate Welker and Kate is on our team and she was our very first hire. And as serendipity would have it, I was…had been talking to my husband about two weeks before that about reaching out to her because I was just…I was truly at my wit’s end. When you talk about the whole iceberg theory and you say everybody looks at it from the top and says, “Oh, my gosh. Look how much she’s grown and look at all this amazing growth that she’s had.” The big part of the iceberg.

Michael: Yes. If you’ve actually lived super-fast growth, it’s actually not nearly as cool in practice as it looks like from the outside.

Amy: It is not. And I was…a lot of people say to me that I’m like a duck and the water sort of looks like it’s gracefully rolling off my back. But under the surface, my feet were pedaling like crazy. The motion that was there was manic because it was so much. And I was really starting to get, I would say strung out, for lack of a better word. So, Kate officially joined in February, Becky in April. And then we hired a few other people. So, we went from Amy being all there by herself to having five team members by the end of 2018. And that was…again, when you talk about growth, it was great, but it was horrible at the same time. And we learned some things throughout that process significantly, I think. I learned about my training capabilities and I really don’t have the ability to train more than one person at any given time. So, we’ve never made that mistake again where we hire multiple people in any given timeframe. Also learned about not doing that when you’re at a point where you’re trying to build the platform and fully fund it at the same time because you’re…I was trying to pay all the salaries and have the growth that was necessary to pay the salaries. If I could do all that over again, I probably would’ve banked a chunk of money and not had to worry about that. Almost like when you’re thinking about taking a leave of absence or anything like that, you want to just bank a bunch of money and not have to worry about cash flow.

Michael: So, I’m fascinated by this journey. You’ve got so many really interesting inflection points there from the initial launch, breaking out on your own, fast client ramp up, team hiring, fast team hiring ramp up. So, let me…I actually want to go back to the beginning of that for a moment because you had mentioned this started with…I was going to partner with a gentleman who had a commission-based firm, and I was going to build out fees and financial planning and help him turn from a commission-based firm to a fee-based firm. I would just love to hear more of what was the vision when you were going into this and then what changed that so quickly it turned out this was not going to be the path after all. Where did reality part ways from the vision?

Amy: Yeah. I think the vision started probably many years ago. My career in financial planning is…it’s what I would call a yellow brick road in a sense because it started out…I started out in the fiduciary world working in a trust department. So, that was my experience. And as that morphed from working in a trust department…and you get all of the aspects of financial planning when you work in a trust department, but this was back in 1994 when trusts were very different and financial planning was very different. And that moved me into the world of working with another trust company that had an area that focused on retirement services, so retirement planning services, but it was for companies and doing 401K administration, defined benefit work. We’d go out and do open enrolment meetings for a lot of these 401K plans. And it was during that period of time probably more than anything that I started to…people would see me two or three times. I’d go out when I’d do these open enrolment meetings and afterwards, they’d pull me aside and they’d say, “I now understand this mutual fund thing and within my retirement account, but what should I be doing for my kids’ education or what should I be doing for life insurance or what should I be doing for what…” You name it, various, right?

Michael: Right.

Amy: And a lot of those people were younger people. And they were trying to find the right direction, but they just didn’t know who to go to. And again, I… this was all during the late 1900s…1900s? 1990s, geez. Not that old. 1990s. And the 9/11 attacks affected me pretty emotionally because I was working in the profession at that time. The trust company that I worked for worked with people that were in the World Trade Center and I knew people that were killed in that. And it just…it totally changed my focus on a lot of different ways that I looked at helping people in the financial services profession. So, that’s what then triggered me to go back to college to get a specific degree in financial planning because we saw the impact of not having the right amount of disability insurance and life insurance, and not understanding what to do in periods of time like tragedy. So, not to be a Debbie Downer on the whole thing, but that is really during my period of time when I knew that I needed to figure out a way to work with people that were not able to find financial planning advice. So, after I graduated again from college, I went to work for a credit union. And the idea behind that credit union was we always serve our member first, we want financial planning to be the core of it, we’re not a product company. They did have custody with a large broker-dealer and it did become a bit more salesy than I wanted it to be and they also had me take on some management responsibilities that I really wasn’t interested in doing at the time.

So, I hopped back into the fee-only world or fiduciary world than an RIA space. And I did a stint of about five years working for a large RIA and it was during that period of time that I could understand the compliance needed, the different business models that were out there and I happened to catch, lucky me, I happened to catch an interview with Carolyn McClanahan. And I heard how she had developed her RIA and she was really just getting it started at that time. And I loved the design that she had. I loved that it was a flat fee model, I loved that it was…it took into consideration all of the various aspects of financial planning that she had a particular group of people that she really loved working with and wanted to grow that focus in working with them. So, the brain started working and I did approach the RIA that I worked for and asked if there was any way that they would consider having a subset where I could work with women particularly and families and men that were my age that were in my circumstances that had my challenges that really did have a barrier to all the hopes and dreams that they wanted financially, but it just…the wealth wasn’t there necessarily and we had to figure out the math behind how to help them achieve the goals that they had.

Michael: So, I’m taking it that’s because the firm otherwise had worked with more affluent folks at higher minimums, so your…the network of people you were moving in that you wanted to serve was not otherwise a clientele that would fit the firm.

Amy: Correct. So, I kept going back to that period of time where I’m like, “Wow, financial planning can be a big impact on people’s lives or their survivors’ lives. How do I make sure that I work with people that I can…that I understand, that I understand their challenges?” So, I kept going back to that. I asked if we could create the subset and then I made the mistake. I tell my husband this all the time. I made the mistake of saying to him, “Well, let’s just assume that money wasn’t a barrier for us. What would you change in your life?” And he said, “Well, I wouldn’t be where it’s cold as often in the winter.”

Michael: Okay.

Amy: And I said, “All right, then. We’re going to figure that little barrier out.” Because I’ve never been somebody who’s enjoyed winter.

Michael: So, where were you that was so cold?

Amy: Well, so in the summer and in this, I would say fall, we’re in upstate New York in the Finger Lakes area of upstate New York. So, that’s where we were. And it is brutal winters up here, in my opinion. So, he made that comment and I said, “Well, what if we could create a practice that allowed me to work in New York in the summer and fall and in Florida in the winter and early spring? What if we could do that? Would you consider relocating for part of the year?” And we just started looking. We started looking for opportunities that would allow us to do that and for me to be able to focus on working with that group of people that I wanted to work with. And so, we put a bunch of feelers out and that started the trend.

Michael: So, I love that framing that at the end of the day it was literally going through more of a financial planning process for yourself with your spouse to say, “What are we actually earning all this money for and doing to create the clarity of? Oh, I think I actually need to potentially work somewhere else and do something different so that we can live the, well, the weather lifestyle we want as well as the serving the clients that I’m really more interested in serving than who my firm happens to serve right now.”

Amy: Yeah, we cut out every extra thing to really bank a good chunk of money. We really started putting that sort of plan together I would say in 2014. Maybe even late 2013.

Why Amy Decided To Launch Her Own Firm [22:42]

Michael: I would say…so literally cutting back some household expenses to build up savings for a potential launch. So, yeah. So, you were already starting to envision at this point the answer is not going to be finding another firm to join that’s more accommodating of the clients I want to serve, you are already building up the vision of, “I think I’m going to have to just do my own thing.”

Amy: Yeah, yeah. I did look around. I did look for organizations that wanted the same or had the same vision that I had in my mind, but there just wasn’t any. Not at that point in time. Not that I could find anyway. So, and this was, of course, before the explosion of XY Planning Network where there was any sort of organization out there that focused on that kind of…

Michael: Right, 2014, XYPN had just barely launched and wasn’t really out there yet. So, there just weren’t really many options for hanging your own shingle to do this with people who are Gen X.

Amy: And so many people told me that that wouldn’t work, that that model wouldn’t work, that there wouldn’t be…people wouldn’t pay for financial planning. They would only pay for investment management. I’m like, “Well, people are asking me for it and they’re offering to pay me. So, at least some people are willing to do it.”

Michael: Yeah. That was pretty much our experience in the early days, XYPN as well. The whole industry said, “Well, it’s not possible to serve young people profitably because they don’t have a large enough portfolio.” And we were like, “Well, what if you just bill them for the advice?” And they were like, “No. You can’t do that.” And I’m like, “I’m pretty sure some of them are going to pay. They’re kind of asking.”

Amy: And that’s what we found. And so, when…the idea was that we would…and for years and years and years, we would always vacation two weeks down in Cape Canaveral, Florida. We loved that area. It was…we had friends down there. It was sort of part of our tradition to go down in usually February timeframe just to get away for a few weeks. My husband would drag me back kicking and screaming usually. But it was that area that I just started hunting around. And again, serendipity, right? I had a headhunter call me and ask…I had put my…again, put some feelers out. A headhunter called me and asked if I’d be willing to interview for this firm.

So, I’m like, “Sure. I’d be very interested in meeting with them.” So, I went down. I was on vacation. This firm was in Merritt Island, Florida, real close to Cape Canaveral. I went down. But he was a commission-driven firm. And he at the time was really looking at taking his practice to a… from a commission-based practice into a financial…fee-only financial planning practice. The reason that I think…twofold why I think it didn’t last very long. One is that that transition is really quite hard. It is a very hard transition and I don’t think I clearly explained to him what it would be like when you just…when things just stop coming in. You’ve got to stop that flow to a certain extent and start the other flow. And as you know, the other flow comes in much slower than any kind of product sale flow comes in. So, when you’re getting commissions from annuities and some of the other mutual fund products that are out there, C-shares, those kinds of things, when you stop that and you have to start that transition, it is extremely painful, and you have to be really prepared for that.

Michael: Yeah. Even just in an investment account context, you go from a client brings in $100,000 into an A-share mutual fund, you may get 4% plus commissions. It’s $4,000 in your bank account in a few weeks. You put the $100,000 into a client into an advisory account, three months from now, you get 250 bucks because that’s your first quarterly billing on a 1% fee. Yeah. If you’re used to, I get a $4,000 check for every $100,000 client and you turn it into 250 bucks next quarter, if you are not prepared for that transition, it is a really abrupt revenue transition.

Amy: And that’s what happened. So, I had actually brought about 30 clients with me to this arrangement, to this partnership. And as we moved forward, I could see what was going on. I could see the pain. I could see the challenge that was happening. And so, we were pretty upfront and honest with each other and said, “What if I did this over here? What if I did the financial planning as a separate entity and you continue to serve clients in a way that…just has you be paid differently? Separate, but allows for that. What if we did that?” That would remove the pain from him and still allow me to go in the direction that I wanted. And I also think having that little bit of space where I kind of got the first taste of entrepreneurship in a way and realized that it wasn’t as scary as I thought it was going to be, that kind of gave me a little bit of courage to do it on my own.

Michael: So, I guess I’m still just wondering what…where did this dream for him to convert it to fee-only come from that…he was so all in he hired a headhunter to get you to Florida to do it. And then when it actually started doing, he was like, “No way. I don’t actually like this.” I just…how did that much of a gap happen in the first place?

Amy: I think it was what was being said in the industry at the time. So, when you jump from that broker-dealer world into the RIA space, you really have a lot more control over the direction of your business. And I think a lot of it came from that. There are a ton of limitations in place when you’re working in a broker-dealer space. And certainly, we all have regulations that we want and need to follow. But I think that the FINRA environment and that control is much more heavy-handed than if you’re considering an RIA and you have either the state or the SEC regulations that you need to follow. And I think it was that allure that was driving that decision.

Michael: So, he had made a transition into the RIA channel and had all this freedom where he could levelize this compensation and go fee-only and the whole industry was talking about it. So, he said, “Cool, this sounds great.” Until it began it was like, “Oh, wait, maybe it’s not so great.”

Amy: Yeah. And just even…the best thing about an RIA that you own is that you have all the flexibility in the world around software decisions and the models that you want to choose. And it can be what you want it to be. You can do what you want to do from that perspective. But when you make the jump from the broker-dealer world into that RIA space, that can also be the downside. I was told what I had to use before. I was told that this was the particular CRM system I needed to use or the portfolio management system I needed to use or even the lineup of funds that I was limited to where it can also become a little bit of…what is that? Paralysis analysis?

Michael: Yeah, yeah. I joke sometimes. One of the best things about the independent RIA model is that you get total flexibility to make decisions. And one of the worst things about the independent RIA model is that you are now the only one obligated to make all the decisions.

Amy: Yep.

Michael: There’s no one else dictating it to you. You really have to pick every single thing.

Amy: And that’s really where…I think the dream was that “Hey, I get to pick some of this stuff.” And then the reality of it was like, “Oh, my gosh. I have to…” Even the marketing side of it, you would submit something in the broker-dealer world for approval and they would redline it and you’d make those changes and okay, you’re good to go. Where in the RIA space, it’s like, “Okay. Did I get everything I should get? Do I…am I really covering all the disclosure language that I’m supposed to cover?” So, I think that that transition and having to learn all of that…where I was very fortunate was I did work in a compliance role. And for five years, that was my job. So, that was…I was fortunate to have a lot of that background and knowledge and bring that with me. But when you’re transitioning, I think that’s one of the challenges. And I think it’s one of the scary things too. That’s what has made XYPN. So, I guess viable for a lot of people because that’s part of the help, that can help them transition from that space.

Michael: So, share with us a little bit more just…you had mentioned briefly earlier that part of the dynamic of…why even go into this situation in the first place as opposed to just hanging your shingle once you were leaving the prior firm was…you had kind of said there was this getting a taste of entrepreneurship and also it was scary to be a solopreneur out of the gate. It was at least easier to start in a partnership realm even though it wasn’t that long afterwards until you ended out in a solo practice. Share with us a little bit more just where the challenges were in thinking about, I guess, hanging your own shingle or what was leading you to this incrementally getting there.

Amy: Well, remember I said that we were going to transition between living in Florida half the year and New York half the year. So, maybe one of the biggest concerns was, “Okay. I actually did that.” We actually did decide at the same time to make that change where I was going to be in Florida about five, almost six months and in New York the rest of the time. So, not only was I opening up my own business, I was also living in two places and trying to grow the business at the same time which again I was very fortunate. It seemed to all work out, but the challenge was trying to figure out do I have an office, do I not have an office. And that doesn’t seem like a big challenge, but it really is. Do I have a space that I’m…do I need that for credibility? And that doesn’t seem like a big decision. One of the biggest challenges I had was the name. That was probably the…it seems silly to me when I say it right now, but coming up with the name for the company, I don’t know how many reiterations I went through to come up with the name. And I ended up on Irvine Wealth Planning Strategies because I thought, “Okay. The people in New York are going to know.” They’re going to see the name Amy Irvine. I’ve been practicing for 20 some years. They’re going to see that and they’re going to say, “Oh, what is she doing? Let me investigate a little bit more.” Fast-forward 2018 timeframe, well, then it became like, “Well, do we really want it to be Irvine? Is there something else because now it’s this whole team?”

Michael: I’d say because you were adding team members?

Amy: Yeah. Yeah. So that was actually…from the beginning in 2016, the strategy behind it was, “Okay. That’s a name that people in Corning, New York or that area are going to recognize. And by the way, I did have a non-solicit agreement, so I couldn’t go after clients that I previously worked with. So, I thought, “Well, if I put my name in it and they see it and I’m not violating my non-solicit, I’m just putting it out there that this company exists.” That was a big challenge. Definitely the process of registration I won’t say it was a challenge, but it was that waiting process. I was fortunate because I… Florida does allow you to…I could be dual registered.

So, although I was…our name registered for a bit in Florida, my primary registration was going to be in New York. So, that whole registration process. And then picking all the software that I wanted to continue using and getting that set up and telling clients who had moved from my prior RIA to the new partnership RIA to the third company within a year going to them and saying, “Well, there’s this small, little change that we’re making.” And I’m really minimizing this when I talk about it at this point in time. That right there kept me up at night. I lost so many hours of sleep over that.

Michael: Because you were afraid that clients weren’t going to follow you for yet another leap, yet another jump?

Amy: Yeah. Yeah. It was scary.

Michael: And did they?

Amy: They did. They were wonderful. I have very…I’m so appreciative of all those folks that went on that journey with me. All of them said, “Amy, we’re working with you, whatever you do. We don’t care what the name of the company is as long as we’re with you.” So, I was very, very, very fortunate during that period of time. And then once the Band-Aid is ripped off and you just start telling everybody and when the first couple of people respond in a pretty positive way, you’re like, “Okay. I can do this.” So, it wasn’t as big of a deal as I thought it was going to be, but that was my biggest stressor. That was probably the most top-of-the-line thing that I was concerned about with clients.

Michael: And out of curiosity, did you end up getting an office, or did you not use one? What was the conclusion?

Amy: Yeah. I actually did in Corning. And I still have it. I did end up getting a space in Corning that I rent. It’s a place that I go three days a week when I’m in New York and then the team can use it, the Corning team can use it when they need it. It’s not staffed all the time, but there is somebody there usually on Monday and Wednesday during the winter and then during the summer months, I am there Tuesday, Wednesday, and Thursday. So we’re just on the street from Corning Incorporated, from their headquarters. And so, there was folks that would just want to walk down the street and meet with us. This was, of course, pre-COVID. So, we did end up renting some space.

A lot of our clients even in that Corning area post-COVID have elected to continue meeting with us virtually post-COVID just because it’s like any little town or any little city. Parking is never a fun thing when you’re right on the main street. So, now that they got a taste of how easy it is to do Zoom meetings, they’re like, “Yeah. We’ll just…we’ll call you from the office.” But it’s good to get out of my own element too.

How Amy Spurred Rapid Growth For Her Firm By Serving Gen X Women [37:47]

Michael: Yeah. So, you hang the proverbial shingle, get the office space. Standing up on your own, you had 30-something clients as you were getting going. And 18 months later, there’s 100. So, talk to us more about just where did all these clients come from. That’s just a monstrous number of clients to go through in that time period. And you’re talking about basically a client a week, four clients a month. A client a week on an ongoing basis. So, where were they coming from? What did you do to put the word out that unleashed the flood?

Amy: Well, I have a very incredible network. So, this is where volunteering in your community can sometimes be extremely helpful. So, I had…I was on the board for an organization called Fund for Woman at the time and…

Michael: What was it called?

Amy: Fund for Women of the Southern Tier. And the goal of the organization is to provide scholarships for women that are either going back to college or for STEM-oriented programs or for organizations that support STEM-oriented programs for women. So, I was on the board at that point in time. They all knew what was going on. My existing group of clients knew what was going on. They were phenomenal referring machines, I say. They referred a lot of clients to me. Word got out in the community that this was what I was trying to do and that it was a different type of model. And the phone just…I guess you want to say our emails just started to come in and people…we had a website out there.

We started doing some…I would say more interaction also with Cornell Cooperative Extension. I’ve done a lot of financial education over the years with them. And so, I sort of ramped that up to try to get the word out that I was in town and I was offering these services. So, it was really a variety of different things. And I tried everything that everybody was saying to try. So, I did the blogs, I launched the podcast, “Wine and Dine.” I did all of those things that people said, “You should be doing these things.” So, I’m like, “Okay. I’ll try doing these things.” I don’t know if one thing worked, I just…

Michael: I was going to say was there a particular thing that was working more or anything looking back that was just a total dud? Could’ve just saved myself a lot of energy not having even opened that blog.

Amy: Yeah. The blogs are a long game thing, right? I get people that come to me now that say, “Oh, I’ve read this blog from 2019 that…of something that I was interested in.” So, the blogs were the long game. We still do that. We still do on a weekly basis…we publish…we don’t call it a blog, we call it asking for a friend. So, we still publish that.

Michael: With all those questions, you get Amy just…question for you, asking for a friend.

Amy: Yep, yep. That’s what we call it is asking for a friend. And a lot of times, they actually do come from clients. A lot of the questions are like, “Hey, I have a friend that was wondering about this.” So, that’s where a lot of the questions actually come from. So, we still do that. I still have the podcast, and that’s morphed over time. It used to be that I would interview a lot of people from outside the firm and that it was different people in the industry and sometimes it was just different topics that I thought people might be interested in. And I still do that from time to time, but now it’s changed, and it’s morphed into…we rotate among the team. So, each week I interview somebody on the team about a particular topic and each month we sort of have a theme that we talk about.

We’re super fortunate to have the different aspects of life going on in our firm at the same time. So, you’ve got me who is that X Gen focused professional woman. I work with also a lot of attorneys, so I’ve kind of got that focus. And just turned the magic age of 50 this year. So, I can play into that and talk about that and people can relate to that. And then we have Carrie on our team, Carrie Bean who is…her kids are…one’s in high school, one’s in college. She’s got the competing goal of her busy career, her son plays baseball a ton, her daughter is very actively involved, and then from there…and so there’s all those challenges that come with another group of clients in their 40s. And then you’ve got Kate on our team. And she’s in her late 30s. Her kids are in middle school. And there’s all the issues of maybe paying off some student loans or getting to that point, possibly promotions and maybe changing houses and the business of having kids in middle school.

And then Ann on our team. She’s in her early 30s, she’s got two young children. They’re three and six. So, she’s got those challenges. And all that surrounds that age group and that level of mental challenge. And then Becky on our team who is the youngest, she’s in her 20s. They’re starting a family, they got married, they bought a house. So, we’ve got a gamut of different women on our team that are at various life stages. So, we’re really very fortunate in that we can now address all of that in the podcast from those different angles. And again, looking back, all of the things that I did when I first started the firm and all the…I just…I say that I just threw a bunch of spitballs at the ceiling and I just saw what stuck. And I think all of it was helpful, but I really truly believe that in hindsight, it was the focus on the clients themselves because the referrals were what was driving most of it. That’s where things came in.

Michael: When I’m struck in this context that…so I don’t know how big is Corning? Just population-wise?

Amy: It’s a small city. Probably 12,000, 13,000. Pretty small.

Michael: So, I would presume as well then, that part of this helps to drive from this intersection of being able to develop referrals because you’ve built this presence and relationship in the community and the fact that you’re coming to market with this unique thing, this unique model because you’re out there charging planning fees and not requiring portfolios in an environment where…I don’t know. Was there any other advisor in town doing that or offering that or you…?

Amy: I think maybe Paul Sydlansky was starting around the same time.

Michael: Okay.

Amy: So, maybe Paul and I were the only two.

Michael: So, the two of you are carving up 12,000 people plus others in the area because I’m going to guess there weren’t two more one town over either.

Amy: No.

Why Rooted Planning Intentionally Onboards Clients Over A Longer Period Of Time [45:05]

Michael: So, the differentiation of bringing something different plus the relationship depth of being known in your space from having been so involved in the community creates a powerful word of mouth effect when you put the two together. So, help us understand then what was the…what was this unique model that you were launching with? What exactly did you launch with? What were you charging and what did you do for what you were charging?

Amy: Do I have to admit that?

Michael: Oh, so it was that good at the beginning, huh?

Amy: Yeah. It was that good. Okay. So, this is where…again, we talk about things that we wish we had listened to more people on, right? I had this thought of, “Well, isn’t $100 a month sufficient?” Learned no to that. I think that’s part of it, the growth that you go through. I didn’t even think people would pay that. I was…I didn’t have the confidence that people would pay that. Now look back on that and now we’re charging $500 a month. So, it’s a big change in where the firm was at the time and where we are now. But it was this…the idea of that we would…we wanted to work with people. We wanted to onboard them in the first year over a longer period of time so that they would have the ability to really learn about it and digest what we were talking to them about. And we still do onboard them over a long period of time. That model hasn’t changed, just the amount of money that we charge has changed. Because when we really dig deep down into how much time we’re spending with each client in that first year, it’s pretty significant. So, $10 an hour was not sufficient in our model.

Michael: So, talk to us a little bit more about what that service model is, I guess, then or still if…it sounds like you’re still doing a version of it as well so…

Amy: Yeah. The service model itself has stayed the same.

Michael: Yeah. So, what is this first year, I guess, experience of various meetings that you do stretched out over time. How does this work if I’m becoming a client of the firm?

Amy: So, the first…when somebody chooses to hire us, the first thing that we do with them is have…we have a meeting that gets them organized. That’s the very first meeting that we have with them. We introduce eMoney to them, we introduce AdvicePay to them, we introduce all of the different pieces of software that they will interact with us on. So, it’s not…

Michael: So, this is the first meeting after they’ve said, “Yes, Amy, I’m coming on board. So, we did some prospecting things, we’ve all agreed to come on board. I’ll sign whatever I’m going to sign to say I’m going to become a client.” So, the first meeting now is getting them organized. So, introducing eMoney, introducing AdvicePay. What does that mean? You put it up on a screen or turn on a screen share, like let me demo walkthrough with you of the actual software?

Amy: Yeah. We do both, actually. So, we put it up on the screen, but then we invite them into the software. So, then we have them go through making sure that they can get their passwords set up and their username, their password. And let me take a step back and one thing that has changed is that when we hired back in 2018, one of the goals that I had at that point in time was, as I said to you, one of my fears was if something happened to me, what happens to the client? They can go get another financial planner, but they’re starting all over when that has to happen. So, one of my goals early on was to have two people always working with clients. We don’t call them a lead planner and a co-planner or a paraplanner, there truly are two planners that are working with every client. But we do have some difference in roles. So, when somebody comes on board, it’s generally not me, for example, or Kate that does the onboarding call, it might be Ann or Becky that do the onboarding call. So, the onboarding call is exactly what I was just saying. It’s getting them familiar with AdvicePay, making sure that they got the notification to actually sign the document because sometimes that stuff gets stuck in spam, or there’s some sort of challenge that happens when they’re trying to set that up. We don’t want that very first engagement to be frustrating. We want to be there holding their hand when they first come into the relationship.

Michael: Well, I’m just struck by this. I feel like a lot of firms…to the extent they’re plugging in the tools like eMoney, it’s, “Okay. You sign on as a client. So, we’re going to send you a login, and please log in and start linking up your accounts then we’ll talk in the first meeting about your financial situation and start gathering data.” So, I’m just struck that you’re pausing or slowing that down and literally having a first meeting of, “Let’s just walk through your first eMoney login together and your first AdvicePay login together.” And that’s a meeting unto itself.

Amy: Yep. So, walking through some of those nuances and then showing them how to connect the accounts as well. That’s part of the process.

Michael: And so, you’re doing all of this with a screen share, and I guess even…

Amy: And having them logged in side by side. So, we try to have them do it on dual screens or something where they have their actual account that they’re logged into on one screen and then we’re sharing our screen on another one so that they can visualize what’s going on. And then if they run into any troubles, they can share their screen with us and we’ll help them through that process.

So, that’s the first meeting. And then the second meeting is what we call our financial audit. And the financial audit really…when a client uploads all of the documentation, the way that they know that we’ve looked at it is then we move it into the proper folder within eMoney. So, let’s say it’s your investment statement, your 401K statement, or something. We would look at that document, make sure that everything is transitioning correctly, and throw it into your investment folder within eMoney.

Michael: So, when you get going and showing them the vault and where and how to upload the files, it’s not and like, “Here’s all the subdirectories. Put your investment files here and put your insurance documents here and put your estate documents here.” You’re giving them one main master folder and just telling them, “Just dump everything here. We’ll sort out where it goes.” Because in the process, that’s also how you make sure you’ve literally reviewed each of the documents as you file them.

Amy: Correct.

Michael: Okay.

Amy: And our audit process, we’re looking at those documents. Do they have a Roth 401K portion? Where is their new money going? Where is their old money going? Do they have a rollover source? Do they have an after-tax source? Where is their money within that 401K plan? Just as an example. So, that’s…it’s going down through and making observations. Not recommendations, just pulling facts. Pulling all the facts out of the various things of their financial life as it is right now. So, if they made absolutely no changes, this is the way it is right now.

Using Financial Audits To Determine Priorities, Show Value, and Set Agendas [52:39]

Michael: So, what do you do by the time you get to the second meeting?

Amy: So, the second meeting, we actually go through that document with them. We educate them about what they have. So, we go through our audit with them. It’s usually about an… that meeting is usually about an hour and a half meeting in total because we are going line by line. This is what you do or don’t have. If you don’t have any kind of disability insurance, we notice that you don’t have any disability insurance. That’s an area that we want to explore.

Michael: And so, in this context, it’s not like, “We noticed you don’t have any disability insurance and we recommend disability insurance,” because recommendations come later. It’s, “We noticed you don’t have any disability insurance. Can you confirm that’s correct?”

Amy: Correct.

Michael: And like, “Okay. FYI, we’re probably going to talk about this more later.”

Amy: Exactly. We see that as a risk in your plan. So, that’s the financial audit. And a lot of times things come out of that financial audit. We also try to set priorities during those conversations. So, if somebody says to us, as we’re talking through different things, we try to sort of put it in the same context that I mentioned that I asked my husband earlier, “Does any of this keep you up at night more than anything else? And if money wasn’t a barrier, what would you change in this? What is bothering you the most?”

And then we build out the agenda for the next meetings based on what is it that…why did you hire us? Probably number one. And what is the largest concern to you? If debt is an issue to you, then we’re going to address that. We’re going to focus on that at the next meeting and we’re going to try to come up with a plan for you to get debt to a place where you can see your actions are making an impact, a positive impact in your life. If it’s your kids’ education, then we’re going to focus on the fact that, “Okay. I heard that you said your kids’ education is a big concern to you.” We need to focus on what are some of the tools that we can pull together. And by the way, if kids’ education is a big concern to you and you don’t have any life insurance and you don’t have any disability insurance, that’s a problem.

So, we build off from that. If there’s nothing pressing, if there isn’t anything that anybody says is more important than anything else, they just want a really good…be in a really good place, then we will typically do the third meeting. It’ll typically be around the life disability and care insurance or protection aspect of people’s lives because it’s our belief that you can build a great plan. You can build a great 401K plan, a great brokerage account, a great investment account. But if you don’t protect that with the right amount of insurance, then it really was for nothing. So, we dig into those aspects of things and we also look at home and auto and umbrella. Now, we are not pretending to be experts in that particular arena, but there are certain things that will stand out to us.

Michael: So, I’m struck from this, from just the process sense or the financial audit meeting. You capture all these observations by going through the documents that were uploaded after the first meeting. Here’s things that we’re seeing, let’s just make sure this information’s right and accurate and that we’re understanding your situation. And then the second meeting is culminating around these questions of what’s keeping you up at night, what are you concerned about, what would you be working towards if money wasn’t a concern, and trying to unearth whatever thing is priority for them. And the third meeting then just starts diving into the planning process at that priority. So, you’re not necessarily doing like, “Okay. Let’s go create the comprehensive financial plan.” You’re going I guess more modularly into whatever direction they’ve steered you from the question at the end of the second meeting.

Amy: And educating them along the way. So, that’s why we take so long because it’s not just about the plan part of it, it’s not just about that we think you need this. We provide them with a lot of education along the way. So we’re big at using fpPathfinder. So, we love the tools that are in there because we can show the…the visual side of it is we can show people that like, “Look, this is a path that you might want to follow.” It’s easy. The charts are easy to talk through with clients.

Michael: So, you use fpPathfinder flowcharts and checklists just to talk through educational concepts that you’re trying to guide them through with?

Amy: Right. So, if we tell you that you need disability insurance, why do you need disability insurance? People have the mental conception of it, but they don’t necessarily recognize always the true risk associated with it. So, when we take the time to educate them along the way, that’s why it takes them long in that first year. That’s why we do it over a longer period of time is because we want them to feel like they understand the multiple options that they have and they can choose to not do what we recommend. As long as they know what the consequences are, we’re fine with that. But we want to make sure they understand the consequences if they choose not to follow the recommendations or if they choose to follow the recommendations. There’s consequences in both situations. We really try to make sure people walk away educated.

Michael: And out of curiosity, just you’ve talked a lot about making sure you focus in on areas like life and disability and long-term care insurance but had framed initially the whole path to here was going towards a fee-only firm. So, are you still operating fee-only or are you implementing the insurance or…how are you…

Amy: Oh, Yeah. Yeah.Yeah. No, we work with…yeah, we…

Michael: How are you doing this if you’re fee-only?

Amy: Yeah, no. We aren’t. We aren’t actually selling the products, we’re just making the recommendations on it. So, we work with great providers like LLIS is one of the companies that we definitely refer a lot of clients to. Ryan Agency is another one that we refer clients to. There’s…RetireOne is another one that we will recommend if there’s a good need for it. So, there’s companies out there that we recommend. Or if somebody’s already working with a great insurance agency, we’ll refer them to them.

Michael: So, can you share just a little bit more? I think you mentioned a couple of providers in there like LLIS, Ryan Insurance, RetireOne. Who do you use for what? How are you choosing which and when you’re using the various providers?

Amy: A lot of times when it’s a more complex issue on the insurance side, we reach out to LLIS. They will work with us on strategy with a lot of those cases. If it’s…so, for example, if a client needs a life insurance policy with a long-term care right around it or we want them to have that. Then LLIS is a great company to really work with what the need is for that client and we can strategize. If it’s a term life insurance…they can do that too. But if it’s a term life insurance policy, we’re able to pull quotes really easy from the Ryan website. So, we’ll go to them for that sort of thing. And then RetireOne, we often will work with them if there is a need or a… if we see a need or we want legacy annuity to come into our view, then we’ll work with them on those.

Michael: And out of curiosity, just how do you think about the environment of…you’re doing this work for the client to help identify the insurance need and what they need and queue them up for implementation and send them out to someone else who’s then earning a commission on implementing the thing that you queued up and handed to them.

Amy: Well, having had my insurance license at one point in time in my career and having had to do the paperwork associated with it, I’m thrilled to have somebody else get paid for that work.

Michael: All right.

Amy: It’s a lot. And when you have to…and we work with clients in 26 different states. I would have no ability to keep all that straight.

Michael: Right.

Amy: So, whether I bring somebody in on the team and pay them to do that or whether I work with a partnership where they’re experts in that field, I think of it similar to the way that we’re not lawyers either. I can look at an estate plan and say, “Gee, I don’t know. I think you really ought to maybe chat with one of the attorneys here on the list of recommended attorneys that we work with because I’m not sure this is what you really…based on the things that you’ve told me, what…I don’t think your plan is going to go the way you want it to in the shape that it’s in right now.” So, I really look at insurance the same way that I look at doing legal work. There’s people that are experts at it and that’s not us.

Keeping Clients Goals On Track Utilizing A Priority List And Annual Checklist [1:01:56]

Michael: So now keep us moving forward on the meeting flow. So, first meeting is this let’s get them organized, the second is the financial audit. By the third meeting, you’re diving into a particular topic or area of concern for them. So, what happens with subsequent meetings from here?

Amy: So, again, we kind of put that priority list together. When we’re working with clients, we’ll say, “Okay. This month we’re going to be talking about this topic, this month we’re going to be talking about this topic.” And we just build the topics. We actually give them a calendar. We have a data file that we provide them with a calendar of what order we’re going to be building things in. Often, it’s one of the last things that we actually work with people on in most cases unless they’re very close to retirement is their whole retirement projection and investment analysis work because now we know what the goals are and we know what we’re supposed to be investing the money for or that…what their ideal retirement does look like at that stage of the game.

So, that’s generally the end meeting, if you want to call it that, or the last meeting, almost the last meeting. And then at the very, very, very end, we do a checklist or a checkup. So, it’s a summary of all the things that we’ve gone through throughout the course of the year, checking off the boxes. Have we addressed this, have we addressed this, have we addressed this? So, it’s kind of going back to the beginning in a way and putting together a summary and also listing out this is what you decided to implement, this is what you didn’t decide to implement, and this is what you put on hold for a future period of time to investigate. So, it’s really kind of giving them a summary of all the action steps they took throughout the course of the year and what we need to still continue to work on in the future, which most people do have future items that they need to continue working on.

And then it goes into monitoring stage. At that point in time, we’re checking in three or four times a year. Like recently, as an example, because of everything that’s been going on in the market, we’ve been sending out emails to our clients just reminding them of what their probability of success is and their plans themselves, touching base with them to see if they have any concerns that we haven’t addressed either through videos that we’ve sent out or asking for friends that we’ve sent out. If there’s anything that they have questions or concerns about that we haven’t been on top of and if they want to meet with us, certainly, we’ll get something on the calendar. But in the onboarding process during that first year, it comes full circle and we provide them with that checklist. And we actually do an annual checklist for all of our clients.

Michael: So, how does that work? What’s the annual checklist?

Amy: Well, if that goes…we look at their goals and make sure that they’re achieving that. But then we also look to make sure have we looked at their health insurance as an example, have we looked at if they’re still working? Even though open enrolment only comes once a year, we want to make sure that they’re looking at all of the options that they have available within their plan. So, have we looked at that? We also encourage them to go out and look for lost and unclaimed funds. That’s one of the items that’s on our checklist. Or to make sure that they haven’t missed out on any tax loss harvesting. So, at the end of the…towards the end of the year, we kind of dig into some of that and we’ll make sure that we touch base with that on their checklist. We also look at tax opportunities as a general rule or make sure that they’re not under-withholding. Those are just some of the highlights on the checklist.

Michael: And where did this come from? Is this a thing you built over time of we have a list and every time we discover a new thing with a new client, we add it to the master list and it just grows over time?

Amy: Pretty much. I think that’s how it was accomplished, I think. This is one of those things that morphed. So, when we were growing so rapidly, one of my big concerns was we’re going to miss something. You can’t grow at this pace and keep it all straight. So, we’re going to miss something. So, if I have this annual checklist that I’m going to go through with clients, at least I know even if it’s not till the end of the year like November, December timeframe, at least I know that I’ve gone through all of these items with clients. I don’t want to miss an R&D and I don’t want to miss a gifting opportunity and all of those sort of things were really, really super important and I wanted to make sure that we didn’t overlook anything. So, it just was almost like a mind dump. And also, because I was the one that…it was in my head and I was trying to get it out to make sure that it was out there for everybody else on the team to also see and be able to help go down through every client that we have and make sure that we actually did do what we…what they’ve hired us to do, basically.

Michael: And out of curiosity, would you be willing to share a version of the checklist for listeners?

Amy: Oh, sure. Yeah, yeah. No problem.

Michael: Awesome. Awesome. So, for those who are listening, this is episode 291. So, if you just go to kitces.com/291, we’ll have a link to Amy’s annual client checklist in the show notes for you. Thank you, Amy. Appreciate that.

Amy: Yeah, no, anything I can do to help the profession.

Michael: So, take me back a moment. Sort of the end of the planning process, the initial planning process before you go to the monitoring stage. I was struck that…well make sure I heard this correctly, that the retirement projections part tends to be one of the last parts of what you do in the planning process. So, why does that come towards the end?

Amy: So if we’re thinking about leading up to that, right? When you get into that retirement planning process, we have to know the tax side of things. We have to understand not only what it looks like now but what it could look like in the future. We have to know what your estate plan is so that when we’re making the proper recommendations for retirement planning, we’re taking that into consideration. We need to know what your family dynamics are. So, again, when we’re making those recommendations. Because I don’t know all that stuff, I can make recommendations on retirement. But they would not be what you want them to be. So, I haven’t gathered all of that stuff leading up to what you want retirement to look like and what you want your life to look like in retirement and preretirement as well. So, if travel, as an example, is really important to you and your family, I need to know that and if that is the priority over retiring at 55 just as an example. Well, you can do all this amazing travel and it just means that you have to retire at 60. Are you cool with that?

Michael: Right.

Amy: So, knowing all that other stuff up front is what will drive that retirement plan ultimately.

Michael: And so, relative to a lot of other advisory firms, I would imagine you lived a version of this in the past as well. A lot of advisory firms do the retirement planning projections in part earlier in the process because that’s often what drives to an investment policy statement or some kind of investment model, asset allocation recommendation. So, I guess I’m just wondering does that mean much of the investment process just in general comes later for you? Do you split that apart? Is it a moot point because you’re primarily a retainer…multi subscription planning model, so you’re just not as focused on the investment portfolio because…

Amy: Oh, no. We’re very…we do asset management. We just include it as a part of the retainer model. But it’s…that is goal-based. So, that comes along with the goal that we’re talking about. So, if you have a two-year-old, then we’re talking about saving for their education. I’ll talk about the investments that go along with that particular goal at that time. And if you want to buy a house and… a vacation house as an example, then we need to start talking about, “Well, how do you save for that, and what’s your timeframe on that?” And that’s another full goal and another investment account. So, we feel like the investments are the tool that get you to your goals. So, we separate out those investments with whatever the goal is.

Michael: And so, then retirement may just come later because you’re trying to cover the other ones. It doesn’t actually matter from a business model perspective how quickly you get there. If the client’s concerned about it, then they’ll express that and this could come all the way up to meeting three because you prioritize whatever the client says they’re concerned about. But if they weren’t concerned about it in the first place, you don’t have to pull it up any sooner than it naturally flows, I guess.

Amy: Correct. Yeah. If somebody comes to us and they’re five months away from retirement, that’s going to be their goal. That’s going to be their focus.

Michael: So, what…just in this process through the first year, what does this add up to in terms of meetings? Are you literally ending out with monthly meetings just to go through all this stuff for a monthly subscription fee?

Amy: In some cases, we are. Depending on the complexity of the situation, it does end up being eight to 12 meetings a year with a lot of those clients. It’s around 30 to 42 hours a year is what we calculate our client spends with us in the first year.

Michael: Okay. But the time…between your time and staff time for producing planning materials along with it?

Amy: Correct. Yeah. Yeah.

How Rooted Planning Structures Fees And Where It Stands Today [1:11:35]

Michael: Okay. So, now talk to us a little bit more about where the fee model is today. Where has it gone to? Because it sounds like it has evolved and iterated a bit.

Amy: Quite a bit, yeah. So, I mentioned that clients pay a minimum of $500 a month. Some pay more than that. Again, depending on the complexity. So, we do…the minimum fee in the first year is $6,000. That does include the investment management side of things. So, we are a flat fee firm. It’s all-inclusive. And when we’re doing the prospecting call, we’re trying to get a feel for how complex the relationship is going to be and then we provide the clients with a quote.

Michael: And just what determines complexity? In your world, what does complexity mean? What lifts the fee for complexity?

Amy: Well, certainly, if they have multiple accounts and multiple locations, there’s a level of complexity. So executive compensation plans always add a bit of complexity. The more income they have, the more complex it usually is because we’re looking at tax strategy, so that adds some complexity to it. If they’re a blended family, that often adds some complexities to the relationship. If they have competing goals that are going to be a challenge to fund, that adds some complexity. If they have a small business, that adds complexity.

Michael: And is there a formula to this? Executive compensation plans add $1,200, blended family adds $700. Is it formulaic like that or just these are factors that you consider and then ultimately, you’re just, as the owner, making the call in the moment of, “I think this is where the fee needs to be for this client based on the complexity I’m hearing?”

Amy: Yeah. So, when we send out the proposal, we actually list out how many hours we think it’s going to take. And again, that’s…it’s based on the conversation that we have with them. Some of it is from experience and knowing how long something like that is going to take in general. But we actually list out the number of hours that we believe that the work that we’re going to be spending on their relationship both internally and externally with them. So, I would say it’s kind of a blended model.

Michael: And does that mean you’re ultimately shooting for a certain amount of dollars per hour? We’ve determined your planning situation is especially complex. It’s going to be almost 50 hours for us in the first year. Therefore, your fee is this many dollars higher to cover the hours that it takes.

Amy: Yeah. We don’t want to go below $200 an hour. That’s been…the area that we live in in the Finger Lakes area, that is a viable business strategy. Everybody gets paid well and…

Michael: Meaning the math does work for you. Two hundred dollars an hour in your area.

Amy: Yeah. I do encourage other planners to look at the area that they live in and be…don’t listen to our fee based on where we are because if I was in California or New York City, it would definitely be a lot more than that.

Michael: Okay. Okay. And so that just kind of becomes the proxy of, “Okay. For every 10 hours of additional work we’re estimating, that fee’s got to be $2,000 higher to make the math work.” So, is that ongoing as well or do you have a first-year fee and then an ongoing client fee when you don’t necessarily have as much of the upfront planning education process?

Amy: Correct. So, getting into the second year, we may or may not reduce the fee and sometimes we increase the fee. So, depending on what’s going on in the client’s life, sometimes we’ll come back to them and say, “Well, you have all of this happening in 2022 or 2023. You’re going to require a whole lot more of our time, so the monthly fee is going to increase.” Or it could be the opposite. It could be, “We’ve really got a good plan in place. Now it’s in monitoring. You’re not going to need us as much, we just need to make sure we’re touching base. There’s no major changes.” So, the fee actually goes down.

Michael: So, I understand the dynamic of, “Hey, you’ve got a lot of stuff coming down the pike. You’re going to leave your firm, cash out your options, and make this big life transition. We know we’re going to be spending a bunch of time, so we’re increasing the fee this coming year in recognition of that.” So, I get that end. What happens when they didn’t…you didn’t know it was going to be a tough year, right? They thought they were going to be at the company for four more years and then it turns out six months in there’s a big corporate downsizing and now you’re doing all the stuff that if you’d known it was going to be the year of that, you probably would’ve charged more. You didn’t know that. It turns out to be the case. Do you go back and change the fee? Is there a billing…

Amy: We do. We would…yeah, we would…because we bill monthly for most of those. And if we saw that there was going to be a major change in that, we would have them sign a new advisory agreement understanding that that’s…and that’s part of the education that we give clients when we’re talking to them about how they pay us is that based on what we believe is going to happen next year, this is what your fee is going to be. If something changes, the fee could change. So, there is some education on that route.

Michael: And so, you will change the fee mid-year if it turns out that stuff’s going on with them. And is that a lump at the time or is it still like, “Hey, your life just got a lot more complex, we’re going to be a bunch more work. Your $600 a month fee is going to go to $800 a month for the next period of time until we’re through this.”

Amy: Yes. It would be that. And it would usually get us through that next review period or something.

Michael: Okay.

Amy: It doesn’t happen that often, but when it does…and they are very…our clients are very good about it. They know that…they’ll often call and say, “I’ve got all of this that’s going to be coming up. I know that’s going to change our fee.” But, well, let’s…

Michael: But I need the help so…and your advice is valuable, so let’s go.

Amy: So, they understand that and I think they really appreciate the fact that that’s what…that we’re flexible like that, that they know if…we’ll back it off if we…if they don’t need us as much and we’ll increase it if they need us more. It’s that service model that…I’ll pay for the retainer knowing that you’re looking over things and monitoring things behind the scenes. But if I need you a lot, I’m also willing to pay more if I need it.

Michael: And so, what does this add up to today in terms of just the size and reach of the firm? I don’t know if you measure by assets or management or number of retainer clients or aggregate revenue. But what’s the firm grown to at this point for you?

Amy: So, we have 175 clients at this point in time for all of us to work with. They’re broken down into different teams. Different clients work with different teams. So, those are our ongoing clients. And then we do have project clients that we’ll take on here and there. Myself, I’ll do some divorce work occasionally. Kate might do some business strategy work for businesses from time to time. But the ongoing clients are about 175 clients.

Michael: Okay. And they may be anywhere from $500 a month to higher for the complex ones to, I’m going to guess, to lower for some of the early legacy ones that got in earlier…

Amy: Yeah, there’s…so yeah, yeah, yeah.

Michael: …or did you go back to early clients back when the $100 a month sounded compelling and repriced them now that the business has grown and changed?

Amy: A great question. We picked a great year to do all that. We have some clients that are still legacy clients that we’ve been working with this year to get slowly upgraded into our model. One of the things that we did, though, was we went back to the drawing board and said, “There are some clients that really don’t utilize us a lot.” They maybe meet with us once a year. They call us when they need us, but as far as the amount of hours that they need, it’s not that great. So, what can we offer to those clients that are legacy clients that are nowhere near the kind of fee that we’re talking about at this stage of the game?

So, we went through all of our clients earlier this year and separated out and met with some clients to say, “What would you like for services? Because here’s what’s happened, and we don’t want to…” I have enormous appreciation for those clients that helped me get this business started and I want to make sure that they’re taken care of because they took care of me when I did that, when I started.

Michael: But it also needs to be a viable business.

Amy: That’s correct. You’re absolutely right. So, we went back through and said, “What service model would you like?” And allowed them to actually pick which model they wanted to be on. So, there are some clients that are definitely not at that $500 a month level, for sure.

The Surprises Amy Encountered On Her Journey [1:20:41]

Michael: So, what surprised you the most about building an advisory business?

Amy: Oh, that comes every day, Michael. It still surprises me. I think one of the things that I’ve discovered about myself is that I actually like running the business. I love the “CEO” role. As the firm has developed, I really enjoyed that piece of it and I really, really love educating the team about all the various aspects that I do have knowledge and experience in. I’ve gotten to the stage in my career where I’m like, “Wow. I guess I know a little bit about a lot.” And I might not know everything, but I know where to go to get the answer a lot of times. And that’s something I’ve really enjoyed getting to do more of in running the firm itself. I love working with clients. I love helping them. But by working with the planners, that gets to even more clients. So, I think that has surprised me. Especially because at the beginning of this conversation, I said to you it scared me to start this firm. Now I’m terrified that I would ever have to go to work for another company. I think I’m unemployable at this point in time.

Michael: I’m familiar with the feeling. I’m fairly unemployable now as well.

Amy: I just can’t imagine that environment.

The Low Point Amy Experienced On Her Journey [1:22:13]

Michael: So, what was the low point for you on this journey?

Amy: There’s been probably a couple of times where I’ve felt there’s been some low points. And I really felt at the time that I… where the partnership didn’t succeed, that was probably the absolute lowest point because I had left the security of a larger RIA, took the dive into the deep end trying to help somebody else transition their business. And when I realized that wasn’t going to be successful, that was…I would say that was a pretty, pretty good low point. I would also say that in 2020, during that period of time we had already agreed to acquire another book of business prior to the pandemic. And that transition took an awful toll on the team, I would say, because it was…

Michael: The pandemic transition or the acquiring the book transition?

Amy: Well, I think both. Doing the transition of acquiring that firm and the pandemic itself took a…it was just a big emotional toll altogether because we were transitioning over 30 clients in June of 2020 and… or July of 2020. And everybody was trying to work from home and they had kids and it was just…the burnout got to be pretty serious. And from a person who wants to make sure that her team is in good mental condition just as much as the clients are in a good mental condition, it was heads-down constantly working. I sort of lost sight of that a little bit. And when my head came out of the sand a little bit or sort of took a look from the clouds down, I really noticed how burnt out the team was. And I happened to have a guest, Kate Lee was her name, on the podcast at that time that was talking about burnout because I was noticing it and I was trying to get education and so I had her on as a guest and she said to me, “Burnout doesn’t come from the person, it comes from the top down.” And that was such an eye-opening low point moment because…

Michael: It’s a nice way of saying, “Just to be clear, the burnout is not your employees’ fault, it’s your fault, Amy.”

Amy: Exactly. Yeah. And so, it was a really low…it was a big low point for me because it was like, “All right. I’m causing this. And I need to change.” And it was very…it’s was just very emotional for me. That was a… I had to stop. It took me pulling the troops together and saying, “Okay. I heard this. I need you to be honest with me. Is this how you’re feeling?” And when your team can be honest with you like that and says, “Yeah. That’s how I’m feeling,” at the same time it’s like, “Crap. I wish I had seen this before.” It was…everybody was feeling the way they were. So, we did take some time to sort of scale back and pause.

Michael: I was going to say so what did you do at that point?

Amy: Well, things like that to me are like, “Okay. We’re going to stop for a… let’s just stop. Let’s stop taking on clients right now. Let’s pause for a few seconds. Let’s take a step back. Let’s schedule some team training sessions.” We brought in a coach that I was working with. She did several sessions with us both through surveys, through team meetings, through brainstorming. And always being the one that wants to solve problems, I had to keep my mouth shut during a lot of those and really listen and really allow the team to share how they were feeling and share some solutions that they…ideas that they had. And we did tweak some ways that we were doing some things with both client service and internally and tried to build some better balance.

Michael: So, you literally just said no new clients for a while and just…

Amy: It was probably about three months. Yeah.

Michael: So, how do you get comfortable with that?

Amy: Oh, that wasn’t a comfortable spot at all.

Michael: I’ve got a great idea. It’s a pandemic and everyone’s concerned about the business. Let’s stop taking new clients for a while.

Amy: We continued to talk with prospects through that process, but it wasn’t…we weren’t bringing new clients on. We were finishing out some projects that we had. We were finishing out…we used to have a service model called Nourish and Nourish was an abbreviated version of our…it was more of a…it was kind of a project, but it was abbreviated and it was only five months and we were trying to cram everything into five months of meeting with people and still do all of the onboarding clients that…or all the ongoing clients that we worked with. So, we actually eliminated that particular service model. Just got rid of it altogether because a lot of clients were going…a lot of new clients were going in that direction instead of committing to working with us long-term. And so, we just eliminated it and said, “Okay. We have to be okay with the fact that we probably aren’t going to achieve our goals for the year, but our mental health is much more important than economic health right now.”

The Advice Amy Would Give Her Former Self [1:27:44]

Michael: So, what do you know now you wish you could go back and tell you from 10 years ago as you were just starting to think about this path and transition?

Amy: Yeah. There are so many things. I’m trying to think of probably some of the top things. I think I really would’ve…I didn’t have the confidence starting out. So, some of those…the fees that we were charging at the very beginning, I definitely would’ve listened to more people about it’s okay to grow slow and charge more upfront. That would be the number one thing that I think I would definitely change. I would…

Michael: Meaning I wish I charged more and just said, “Okay. Maybe I’m going to get half the clients charging double the fee, but you know what? Half the clients, double the fee would actually be better since it’s the same revenue and there’s just fewer people to work with.”

Amy: So, having that confidence to do that. I wish I had had that now. If I knew what it was going to look like right now, then I would have had that confidence back then, but I didn’t have it. So, I think honestly, probably would have had…I had a fairly good chunk of money set aside for personal and business expenses, but I probably wouldn’t have felt the need to grow as much as that if I had even more. So, I think that would be something that I would recommend to people when they’re first thinking about doing this. Just have two or three years’ worth of living expenses.

Michael: I was going to say just how much had you put aside relative to living expenses? You had six months or a year or…

Amy: No, it was closer to two.

Michael: Okay.

Amy: Two years. So, it was…

Michael: And in retrospect, you wish you had three?

Amy: Well, I think it would have just given me more leeway. I just wouldn’t have felt like I had to grow that much. I would have said…I probably would have…you know what? Maybe the answer to that question is listen more. Truly listen and follow some of the recommendations that were being given. And I think there’s so much more out there now. There’s so many more resources that people can go to when they’re building these models now. I was in a foreign land at the time that I did all this. There wasn’t…not a lot of people were doing this and I’m thrilled to see that so many more people are now. It’s just so exciting to me to see that people are coming into financial planning and doing it on a service-based model. And it’s growing. It’s really…and people are asking those questions when they’re coming to us for prospect calls. They’re asking that question, which is just very, very exciting to me. And I also probably wouldn’t have been as tech-heavy initially. There is so many pieces of software that I initially thought the company had to have when I first launched the firm that have gone by the wayside or have changed since then that I just…

Michael: What would you…just what did you buy that you wish you hadn’t bought? What did you buy that you realized you didn’t need?

Amy: Yeah. So Morningstar. I bought the full advisor workstation of Morningstar and paid big bucks for that. And I used a financial planning software that was okay. It wasn’t bad, but I ended up regretting not having the type of software that I really…that could allow me to dig in the way I wanted to dig in. So, if I could do it all over again since my firm is planning first and that’s what we lead with, why wouldn’t…this is just me asking the question. “Why wouldn’t I have spent the money on planning software and then built the portfolio stuff that I needed?” There’s little things like that that I would have…looking back on it now would have reversed.

The Advice Amy Would Give To Women Interested In Becoming Financial Planners [1:31:38]

Michael: So, I was struck just earlier as you were talking about your team that…I think your whole team of advisors are women.

Amy: Yeah.

Michael: So, I’m wondering as well…obviously, as we know, the overall for the industry, we have quite a dearth of women. So, what advice would you give to women looking at becoming a planner or going down this industry path?

Amy: Well, I think it’s becoming more of a woman-focused…more women are starting to focus on becoming financial planners because the look of financial planning is changing. So one of the things I hear sometimes young women say is, “Well, I wasn’t good at math.” And this profession is so much more about relationships and listening skills and caring about things that are going on in people’s lives. Yes, there’s math involved. I’m not saying there isn’t, but it’s really about problem-solving. And I don’t know too many moms that aren’t all about problem-solving. Not saying dads aren’t too, but I know a lot of moms that are juggling a lot of different things and they’re always problem-solving about different things. And I think that makes them uniquely special to be good financial planners.

And I also think if you’re interested in this profession and you want to learn more about it, there are a lot more of us out there that can give you direction that you might want to go and get some experience. I think that there’s a lot more opportunities out there now. There’s scholarships available for you to pursue this profession that weren’t available. And I think there’s a lot of paths that you can follow. One of the things that I think is great about our team is that we all at some point in time in our profession, we started out as admins. Every single one of us on our team started out…except Carrie, started out as an admin in this profession at some point in time in our career and we worked our way up.

So, we know…when we’re talking to clients, we know what is doable and what isn’t. And as you come up through that way, I think that’s a great place to come up through and be protectively learning the profession. And I use that word, protectively learning because I hear that as another concern like, “I don’t know…I feel like I know about our household, but I don’t feel like I understand enough to give advice.” And if you come into the profession in an operations or admin role and then you become a paraplanner, you, by osmosis, learn a lot of that stuff. And then you slowly start to present it and share ideas and look for solutions yourself. That’s the great crafting of a good financial planner, in my opinion. And so, looking for those kinds of opportunities to come into the profession in that way is also a great way to start exploring that.

What Success Means To Amy [1:34:35]

Michael: So, as we wrap up, this is a podcast about success and one of the themes that always comes up is just the word success means very different things to different people. Sometimes it changes for us as we go through stages of life. So, as somebody who’s built what anyone objectively would call a very successful business, how do you define success for yourself at this point?

Amy: I laugh at that question because sometimes in any given day, success might mean I made my bed that morning.

Michael: Yeah.

Amy: But on a more global basis, for me, success means never having to go back to work for another corporation and it means building a good firm where…professional success means having to build a good firm where the team feels like they are supported and they can give good client service. And the clients feel like they have a partnership in their financial life that they can turn to and that we can do it and live the life that we want to live as much as we’re trying to get our clients to live the life that they want to live. So, for me, continuing to spend half the year in Florida and half the year in New York is an annual success that I celebrate because I didn’t want to wait until I retire to live that kind of life. I want to be able to continue doing that for as long as my brain will let me do it and as long as the team wants me to continue to be part of it as they start to take over the firm themselves. But I think success is that idea of finding moments of balance as much as I can and making sure that they also have good moments of balance in their life.

Michael: I love it. I love it. Thank you so much for joining us on the “Financial Advisor Success Podcast”.

Amy: Well, thank you for having me.

Michael: Thank you.

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