The three questions you must answer for prospective clients (and the two questions to answer to keep them as clients)

The three questions you must answer for prospective clients (and the two questions to answer to keep them as clients)

Many will argue that “sales is sales.” I’ll contend that the financial services industry has two paths that professionals can take when approaching new client acquisition (sales): the transaction-based sales path or the consultative sales path.

In a transactional sales model, the value is found within the product and price is often the focus. The consultative approach to sales puts the value emphasis on the planning services offered, with the product and price being secondary.

The transactional relies more on emotion and solving “a problem.” In the financial services world, it tends to be very short sighted and singularly focused. People who do business with these types of financial services providers tend to be customers, not clients.

The consultative approach tends to have a much longer sales cycle, puts a heavier focus on a the relationship, and results in a relationship that is more aptly categorized as a client.

Prospective clients who follow an advisor-driven consultative approach to sales have three primary questions they want answered from an advisor:

  1. Do I like this person? It sounds simple, but a prospective client needs to like you if they plan to do business with you from a consultative standpoint. A transaction customer puts far less importance on the answer to this question. Think about it like this… when I go to buy a new stove or pair of jeans, I don’t really care that much about whether I like the salesperson. Don’t get me wrong, it helps… but it’s not the basis for my decision
  2. Do I trust this person? Trust is at the core of any relationship, especially when it has to do with money. There are plenty of things you can do to earn one’s trust. Third party validation and credibility are one. Quality time is another. Study after study suggests that you need to spend a certain number of hours with somebody before you can trust them. Translation: the one or two call close just ain’t gonna get it done.
  3. Do I think they can get me to the bright, sunny future that I hope for? This is far more important than you may realize. This is where honesty is important. You can tell them that it can happen, but if you aren’t being honest with them, they won’t remain a client for long (keep reading to find out way. Show them how to help them reach their future goals… but don’t start doing this until questions number one and two have been answered yes.


Once they’ve become a client… they need you to continually answer two questions:

  1. Am I still OK? 
  2. Is my bright, sunny future still in tact?

Those two questions have plenty of overlap, but those need to be the focus of every review you have with your clients if you want them to remain clients. I’ve oversimplified things a bit, but if you can put your focus on being able to continually answer these questions for prospective clients and existing clients, you’ll be in a much better spot to continue to build a referral culture within your practice. At the end of the day, a clearly defined sales process can be one of the most important marketing tools you possess.


The post The three questions you must answer for prospective clients (and the two questions to answer to keep them as clients) appeared first on 16 Ways from Sunday.

Five Steps Top Advisors Take When Evaluating New Technology

The following blog post is from an article I recently had published on


One size does not fit all.

In our world of increasing automation, having the right tools can streamline your practice, increase productivity and enhance the services you provide your clients. However, investing in new technology can be a big decision. With so many options, choosing what’s best for your firm can be challenging. Following these five steps when evaluating new technology will ensure your firm has all the information it needs to make the right choice.

Focus on the future

Many firms make the mistake of only considering their current needs, rather than anticipating how their practice may change over the next 5-10 years. Think about where you would like your firm to be 10 years from now and what technology you will need to get there.

When conducting a cost-benefit analysis, evaluate economic and lifestyle impact over at least a three-year period. Many benefits will not be apparent until the solution has been in place for months or even years. In addition to cost savings, financial advisors should also factor in improvements in efficiency. Could this technology free up your time to do more productive things in your practice? Would it eliminate the need for a future hire?

Consider value

The best solution is one that fits your unique needs. While most applications can be customized, those customizations cost time and money. Each added feature should be evaluated based on its ROI and value to your firm. Solutions designed specifically for the financial services industry are often quicker and less costly to deploy because their features are created to be a better fit for any financial firm’s requirements.

Look for a scalable solution that meets your needs today as well as grow as your business grows. A 2017 report from the McKinsey Global Institute found that automating transaction workflows has the potential to increase the scalability of these processes by 80 percent. By automating routine tasks, technology solutions enable financial advisors to be more productive and can help firms better manage their personnel costs.

Ensure integrations

When evaluating new technology, consider its APIs and ability to connect with your existing platforms and any future ones you may need. The average financial advisor wears many hats in addition to their role as client advisor; acting as a business manager, marketer and administrator, among others. Integrating various applications for an advisor will make it easier to juggle these various roles. While the majority of financial advisors purchase technology solutions as a bundle, additional integrations are often beneficial.

Integration is especially critical for compliance software. As requirements become increasingly complex, smaller firms and independent RIAs often struggle to keep up. Experts recommend that advisors use similar technology to monitor their own practices and trading activity.

Financial advisors can also streamline their business processing activities by establishing an integrated forms solution. A good e-processing platform provides a consistent portal for completing paperwork and simplifies the process for onboarding new clients by automating the completion of many forms. Integrating client data across platforms and digitizing signatures can reduce the hassle and frustration of un-indexed paperwork. Look for firms that are developing solutions that deliver a true A-to-Z offering across multiple business lines.

Consider which integrations are most important to your business. Technology should make your life easier and minimize time normally spent on data entry and other tedious tasks so you can spend that time serving your clients and building your business.

Contemplate implementation

While purchasing a solution that can be integrated well into your business model should save you from hassle, it is also important to understand the details of how the product will be deployed and have a proposed timeline for implementation. Ask about the solution’s ease of launch and which features will be readily available when the solution goes live. For more complicated applications, it may make sense to go live with a basic solution and implement customizations in phases.

The solution you choose should be intuitive and user-friendly. If a platform is difficult to apply, your firm may struggle with adoption rates. The provider should conduct user acceptance testing (UAT) with your team before deploying the solution.

Confirm ongoing support

Financial advisors should discuss what support the vendor or provider will offer after implementation. It is important to understand how bug fixes, updates and other issues will be addressed and whether there will be any costs associated with these support services. Top providers will want to ensure their tool continues to meet your needs.

When it comes to technology solutions, one size does not fit all. Taking an analytical approach to the evaluation process will help your firm avoid costly mistakes while adopting technology that makes your advisors more efficient and effective.

Are you an Entrepreneur (or are you Self-Employed)?

Target Readers:

  1. Those trying to determine how they want their business to grow.
  2. Those who are not sure if they are an “income earner” or a “business builder.”
  3. Those who have hired staff and/or need to hire staff.

Talking Points:

  1. Most do not understand the difference between self-employed and entrepreneur.
  2. Do you want to build a great career?  Or a sustainable business?  Or both?
  3. Consider the lifestyle you desire before building your business model.

Here’s the Skinny,

Most of the world does not understand the difference between being self-employed and being an entrepreneur.

The vast majority of small businesses are comprised of self-employed individuals as opposed to entrepreneurs.  Yet, in error, many self-employed folks will refer to themselves as being entrepreneurs when they are not.

What’s the difference?  Well, let’s start with the definitions from

Self-Employed  [self-em-ploid]

Earning one’s living directly from one’s own profession or business, as a freelance writer or artist, rather than as an employee earning salary or commission from another.

Entrepreneur  [ahn-truh-pruh-nur]

A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

As you can see, there is a distinct difference.

This month, USA Financial celebrates its 30th year anniversary and I’m blessed to have shared in the growth over all 30 years (except for the first 2-3 months anyway).  When I reflect back over those three decades, hindsight 20/20, for the first 2 years of USA Financial’s existence, we ran solo and were undoubtedly self-employed.  For the next 8 years we were a more sophisticated version of self-employed, as we had support staff, but we were not much different than a business manager who has gained success and respect enough to be assigned subordinate staff and/or personal assistants by their employer/boss.

It wasn’t until ten years into the life cycle of USA Financial that I can confidently reflect back and realize we transitioned from being self-employed to being entrepreneurs.  In fact, our turning point was a one-two punch beginning in 1998, when we…

  1. officially killed our business structure that emulated the financial services “external wholesaler” model and then;
  2. launched USA Financial Securities, our broker dealer.

Together, this combination of change required we reconstruct an entirely new business model (and strategy) that took two full years for us to completely re-tool, re-educate and re-deploy.  By year 2000, USA Financial was unrecognizable from its former self.

That was our watershed moment in time.  From 1998 to 2000 we transformed ourselves from being self-employed to being entrepreneurs…  And we’ve been growing ever since.

Someone who is self-employed is simply their own boss, working “in” the business.  Whereas an entrepreneur is building a sustainable business model that is not solely dependent upon them for the entity’s ongoing success – and therefore – they tend to spend more time working “on” the business (versus “in” the business).

In our case, the visual transition from self-employed to entrepreneur was dramatic.  Notice the permanent and dramatic change in our revenue growth line in 2001 vs. previous years.  Prior to 2001, we had minimal incremental increases as we worked hard and performed better at our jobs.  But in 2001, we started running an entrepreneurial organization.  And for us, that was the ticket.

Please understand, that being self-employed is a perfect choice and solution for many business owners.  Not everyone desires to grow an organization and take on the entrepreneurial status.  The key is knowing which you desire to be, considering exactly how you desire to intertwine your work life and personal lifestyle so that they successfully co-exist, then structuring your business model and staff accordingly.

That’s the Skinny, 

Important Hiring Perspective(s) as You Grow

Target Readers:

  • Those building their business via staff and hiring.
  • Those struggling to find good candidates. 
  • Those with a poor track record in successful hiring.

Talking Points:

  • How to weed out bad candidates quickly.
  • Understanding what instincts are needed for a candidate.
  • Finding candidates with the right mindset. 

Secure and respected and engaged and risky

Some people want their workplace to be like an artist’s studio. A lab. A dance with the possible. Engaging. Thrilling. The chance to take flight, to be engaged, to risk defeat and to find a new solution to an important problem. 

And some people want a job that’s secure, where they are respected by those around them.

The essential lesson: These are not necessarily different people, but they are very different attitudes. 

It’s a choice, a choice made once a lifetime, or every year, or perhaps day by day…

When you sit with an employee who seeks security and talk to them about “failing fast,” and “understanding the guardrails,” and “speaking up,” it’s not likely to resonate. 

It’s worth finding the right state of mind for the job that needs to be done.

Here’s the Skinny,

An interesting perspective below (from Seth Godin) to keep in mind when managing & hiring…  Not anything we “don’t already know”, but it isn’t always the first thing that may jump-to-mind when dealing with your teams.

Nugget 1: At USA Financial we use a tool called Kolbe in our hiring practice. Kolbe helps identify a person’s “modus operandi” or creative instincts. In my experience, the high Quick Starts (strong with originality, risk-taking, and uncertainty) are usually in the “thrilling group” as described by Seth above, while high Follow Through (provides structure, order, focus, and continuity) tend to be in the “job security group” – high Fact Finder (enjoys complexity and providing the perspective of experience) and high Implementer (provides durability and a sense of the tangible) seem to be about 50/50 in either camp. I’ve found this tool to be very effective at helping us determine if a candidate is a good fit for a particular role.

Nugget 2: At my last Strategic Coach 10x meeting, my friend Dan Sullivan emphasized the importance of the following interview question (especially for weeding out the “wrong kind” of millennial attitude – although its equally important for any potential hire)…  The question is:

“If you are hired by INSERT FIRM NAME HERE, what do you feel you will be entitled to?”

  • Hint:     The correct answer is NOTHING, or a derivative what they will bring to your organization.  Such as, “an opportunity to contribute to the team”, or “the chance to apply my skill set”.  Not any answer along the lines of benefits, tenure, vacation days, or any other unionized or entitlement type response.  I know this is a question the USA Financial team has been using for a while now, but it was a great reminder for me to hear it again from a third-party source.

Nugget 3: God has hardwired each of us differently, and that is highly beneficial to you as an entrepreneur.  The mistake many make is hiring “someone just like them,” where what they most likely need is someone entirely different than them…  Someone who would absolutely love to do the work that you have no interest in doing… The key is to build your team/staff like a snugly fit puzzle.  That is where the magic can be found.

That’s the Skinny, 

The 4-Corners of the DOL Fiduciary Rule as things stand TODAY!

Target Readers:

  • Those confused by the DOL Fiduciary Rule and current news.
  • Those in denial and/or not adhering to the current rule status.
  • Those who have received erroneous info from IMOs/FMOs.

Talking Points:

  • Like it or not the DOL rule is already in effect.
  • Advisors are at risk if they are not adhering to the rule.
  • Annuity companies are auditing for PTE 84-24 as of January 2018.
  • The ground has begun shifting again under the DOL rule.

Here’s the Skinny:

As promised, here is my high-level synopsis of what I have been calling “the 4-Corners of DOL status:”

1)  JUNE 2017:  DOL Fiduciary Rule Transitional Relief (currently in effect thru July 1, 2019):

  • Advisors to retirement investors, on all qualified monies and related advice, will be treated as fiduciaries and have an obligation to give advice that adheres to “impartial conduct standards” beginning on June 9, 2017. These fiduciary standards require advisors to adhere to a “best interest standard” when making investment recommendations, charge and/or receive no more than reasonable compensation for their services, refrain from making misleading statements and manage any conflicts.
  • The Best Interest Contract Exemption (BICE) applies only to hierarchies involving a Financial Institution (FI), which the DOL recognizes as a BD, RIA, bank or insurance company. FI’s and their advisors must adhere to that stated above, however, all other remaining conditions are delayed until July 1, 2019, such as requirements to make specific written disclosures and representations of fiduciary compliance in communications with investors (meaning written disclosure and client signature is not required under BICE).
  • The amendments to the Prohibited Transaction Exemption 84-24 (PTE 84-24), which applies only to agents/advisors (not including FIs), relating to insurance and annuities is delayed until July 1, 2019, other than that listed above which is applicable on June 9, 2017. Under the transitional PTE 84-24, the agents/advisors must disclose conflicts of interest plus the sales commission, expressed as a percentage of gross annual premium payments for the first year and for each of the succeeding renewal years, that will be paid to the agent in connection with the purchase of the product. Documentation must be provided to and signed by the client and retained by the agent/advisor for 6 years (meaning written disclosure and client signature is required). NOTE: Many insurance companies announced that they would begin random auditing for PTE 84-24 documentation starting in January 2018.

(for further info and complete footnotes visit

Here is a DOL compliance flowchart schematic that may help you visualize the flow and structure that is mandated by the DOL Transitional Relief period under the DOL Fiduciary Rule.

2)  FEBRUARY 2018:  Massachusetts charges Scottrade with the first known enforcement action under the DOL Fiduciary Rule.

“Massachusetts charged Scottrade with dishonest and unethical conduct and failure to supervise, in what is the first known enforcement action under the Department of Labor’s revised fiduciary rule.”

Essentially this was the result of their running two sales contests between June and September 2017.

“The Massachusetts complaint asserts that the Scottrade sales contests encouraged their brokers to put their own interests — winning $285,000 in cash prizes for attaining new assets — ahead of their clients’ interests in building their nest eggs. The complaint seeks an order forcing Scottrade to cease and desist, as well as censuring the firm, requiring it to disgorge ill-gotten profits and imposing a fine.”

DOL officials had previously stated they would not pursue claims against “fiduciaries working diligently and in good faith to comply.”

One would assume, among other allegations, that Massachusetts does not believe that Scottrade was “working diligently and in good faith to comply.”

Massachusetts Secretary of the Commonwealth, William Galvin, further stated, “If the Department of Labor will not enforce its own laws and rules, then the states must do what they can to protect retirees from firms who believe they can play with peoples’ life savings by conducting sophomoric (sales) contests.”[5]

Other States are expected to follow the Massachusetts lead.[6]

Many believe that any (and all) sales contests or sales incentives create a conflict of interest and negate a firm’s ability to comply with the best-interest standard.  The Director of Investor Protection at the Consumer Federation of America said the case “perfectly illustrates the kind of practices that go on behind the scenes at firms that claim to be complying with a best-interest standard.”

(for further info and complete footnotes visit

3)  MARCH 2018:  The 10th District Court of Appeals upheld the DOL Fiduciary Rule.

It was “argued that the DOL rule treated fixed indexed annuities arbitrarily by forcing the products under the best-interest contract exemption, a provision of the regulation that allows brokers to earn variable compensation as long as they sign a legally binding contract to act in the best interests of their clients.”

Currently, Fixed indexed annuities “operate under the same exemption of federal retirement law as fixed annuities. But the DOL put them under the so-called BICE due to their complexity and the potential conflicts of interest associated with their sales.” 

It was also argued that the “DOL violated rule-making procedures and didn’t do a proper economic impact analysis in promulgating the fiduciary rule.”

“The 10th Circuit judges held that DOL followed appropriate administrative procedure, was fair in its treatment of fixed indexed annuities and that it conducted an appropriate economic analysis.”

(for further info and complete footnotes visit

4)  MARCH 2018:  The Fifth Circuit Court of Appeals determined the DOL exceeded its statutory authority under ERISA.

The Fifth Circuit Court of Appeals “Held that the agency exceeded its statutory authority under retirement law – the Employee Retirement Income Security Act.

The judges criticized a key provision of the rule, the best-interest-contract exemption. The BICE allows brokers to receive variable compensation for investment products they recommend, creating a potential conflict, as long as they sign a legally binding agreement to act in a client’s best interests.

‘The BICE supplants former exemptions with a web of duties and legal vulnerabilities,” the majority opinion states. “Expanding the scope of DOL regulation in vast and novel ways is valid only if it is authorized by ERISA Titles I and II.’”

(for further info and complete footnotes visit

What do I think?

My opinion is that the DOL Fiduciary Rule was poorly written, riddled with confusing and fuzzy explanations, entirely underestimated the complexity and economics of the challenge, and shirked regulatory enforcement responsibilities by defaulting to a free-for-all litigious structure.

On the other hand, I believe the industry needs to create a level-playing filed across all licensure so that a customer/investor can understand and expect to experience a professional standard-of-care that does not allow for outlandish claims and sales practices from certain segments of the marketplace as determined by licensure or lack thereof.

Currently, given the existing landscape, I would surmise the odds are in favor of the DOL Fiduciary Rule ultimately being eliminated and/or replaced by a more appropriate ruling from the SEC.  But then again, no one has a crystal ball.

And in the meantime, the DOL Fiduciary Rule Transitional Relief (as described in #1 above) is in force and continues to be the current standard .  As I’ve warned before, advisors must adhere to the DOL rule accordingly (regardless of any ill-conceived advice they may have received elsewhere).

That’s the Skinny,


What do your clients say about you when you aren’t listening?

Interesting question, right?  Imagine if I randomly sampled twenty of your clients and put them in a room together with one goal, to talk about you!  You couldn’t be there with them – rather, you would be viewing these conversations behind a pane of glass.  How would that make you feel?  I’ve asked financial advisors this question before and heard all of the responses you can imagine: anxious, eager, confident, excited, etc…  What is your answer?

Believe it or not, your best clients aren’t working with you because of the funds they are invested in, the amount their money has grown, or the products they own. They are your clients because they like and trust you.  They like and trust you as an advisor AND a person.  They appreciate the detailed care you have given them in assembling their financial affairs, but they also appreciate that you have shown that you genuinely care about them.  They are happy that you have gotten to know them and their family.  They are thrilled to be partnered with you, and most of your best clients view YOU as the Chief Financial Officer of their family affairs.  Sounds great right?

Now if those feelings and emotions describe your best clients, say the top 20%, what do the rest of them think, let alone say about you?  What are they going to say about you to others?  In this business, we are challenged every day with going above and beyond the financial plans we assemble, to create a client “experience.”  What are you doing to create that first class client experience in your day-to-day interactions with your trusted clients?

Do they receive unexpected and delightful gifts from you?  Are their names on a screen welcoming them to your office?  Do they get preferred parking?  Do you remember where they are vacationing next and have a bottle of wine sent to the room?  Do you work alongside them at their favorite charities?  Whatever it is that you do, this is a good time to audit that “experience.”  Now don’t get me wrong, you cannot provide the same level of service or experience to all clients… but take a look at that “top 20%” and “next 30%” (top 50% total) of revenue generating clients.  Work with your team to break down what it’s like to walk in the shoes of a client for a year.  Write down every communication, e-mail, text, phone call, meeting, event, etc.  Find out where the gaps are and identify if your best clients are getting all they should be from your relationship.  I promise you they are talking about it either way!

DOL Fiduciary Rule – Violation Charges – Proof the DOL Rule is “Live”

Here’s the Skinny,

As recently stated in the news, “Massachusetts charged Scottrade with dishonest and unethical conduct and failure to supervise, in what is the first known enforcement action under the Department of Labor’s revised fiduciary rule.”[1]

Essentially this was the result of their running two sales contests between June and September 2017.[2]

“The Massachusetts complaint asserts that the Scottrade sales contests encouraged their brokers to put their own interests — winning $285,000 in cash prizes for attaining new assets — ahead of their clients’ interests in building their nest eggs. The complaint seeks an order forcing Scottrade to cease and desist, as well as censuring the firm, requiring it to disgorge ill-gotten profits and imposing a fine.”[3]

DOL officials had previously stated they would not pursue claims against “fiduciaries working diligently and in good faith to comply.”[4]

One would assume, among other allegations, that Massachusetts does not believe that Scottrade was “working diligently and in good faith to comply.”

Massachusetts Secretary of the Commonwealth, William Galvin, further stated, “If the Department of Labor will not enforce its own laws and rules, then the states must do what they can to protect retirees from firms who believe they can play with peoples’ life savings by conducting sophomoric (sales) contests.”[5]

Other States are expected to follow the Massachusetts lead.[6]

Many believe that any (and all) sales contests or sales incentives create a conflict of interest and negate a firm’s ability to comply with the best-interest standard.  The Director of Investor Protection and the Consumer Federation of America said the case “perfectly illustrates the kind of practices that go on behind the scenes at firms that claim to be complying with a best-interest standard.”[7]

No doubt this is a shock to many advisors and institutions, as I’m sure Scottrade was not alone in running sales contests in 2017-18.  Unfortunately, many professionals have been under the false belief that the DOL Fiduciary Rule was delayed in its entirety, rather than only partially, as is the case.

For more information click & refer to these previous Advisor Skinny posts…

That’s the Skinny,

    1. February 15, 2018, Financial Planning, “Scottrade charged with fiduciary violations in rebuke to Trump administration.”
    2. February 15, 2018, Investment News, “Galvin charges Scottrade with DOL fiduciary rule violations.”
    3. February 15, 2018, Investment News, “Galvin charges Scottrade with DOL fiduciary rule violations.”
    4. February 15, 2018, Financial Planning, “Scottrade charged with fiduciary violations in rebuke to Trump administration.”
    5. February 15, 2018, Financial Planning, “Scottrade charged with fiduciary violations in rebuke to Trump administration.”
    6. February 21, 2018, Investment News, “Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients.”
    7. February 15, 2018, Investment News, “Galvin charges Scottrade with DOL fiduciary rule violations.”

Everyone on Staff is in Sales (whether they realize it or not)

Here’s the Skinny,

I’ve been saying for years, “anything you ever do to earn income requires selling.”

There are obvious direct sales roles, but even the “best” of those have been re-positioned as “consultative selling” by today’s standards.  Financial advisors may now be the best example of the consultative (and fiduciary) approach to building business (aka, selling), with attorneys, accountants and consultants in that same category.

Beyond that, no matter what the role someone plays on staff, sales skills are “still” required – even if you don’t think of them that way.  Imagine a receptionist (the voice of your company), or customer service rep (CSR) dealing with both happy and disgruntled customers.  Every situation you can imagine requires some sales skills:

  1. Helping a customer make a decision or choice of any kind.
  2. Handling a difficult conversation and/or delivering bad news.
  3. Getting along with co-workers.
  4. Solving problems and creating solutions of any kind.
  5. Project management and/or new initiatives.
  6. Thinking creatively.
  7. Interviewing for a job.

Simply put, revenue dries up and the world stops spinning without sales.  My dad used to always say to me, “nothing happens until someone sells something.”  But the trick is, people don’t actually want to be “sold.” However, they love to “buy” and they very much appreciate sincere assistance and trusted guidance in every situation along the way.

Quote - Jay Abraham

My point for sharing this today is simply that I read the blog re-posted below from Seth Godin (best-selling business author) and felt it was one of the better ones I’ve seen that describes the subtleties and broad scope for all that includes sales…

Enjoy & and may I suggest, contemplate:

“I’m not selling anything” (from Seth Godin)

Of course you are. You’re selling connection or forward motion. You’re selling a new way of thinking, a better place to work, a chance to make a difference. Or perhaps you’re selling possibility, generosity or sheer hard work.

It might be that the selling you’re doing costs time and effort, not money, but if you’re trying to make change happen, then you’re selling something.

If you’re not trying to make things better, why are you here?

So sure, you’re selling something.

Perhaps it would be more accurate to say, “I’m not selling something too aggressively, invading your space, stealing your attention and pushing you to do something that doesn’t match your goals.”

That’s probably true. At least I hope it is.

(But if you are any good at all, you are always selling something, especially through infectious enthusiasm for what you do.)

That’s the Skinny,

Creating the Most Value in Your Practice

Here’s the Skinny…

The first quarter of any given year is probably the time that most financial advisors visit strategic planning topics  – such as , “How do I get the most value out of my business and/or create the most value in my business?”

Historically, I’ve consulted many advisors regarding the flip-flopped order for the “Top 4 Targets” regarding positioning your practice for clients vs. positioning your practice for market valuation.

Interestingly, I believe the Top 4 Targets are identical in both scenarios (or from both viewpoints – customer vs. buyer), however the order is changed.  


The reality is that systems, sustainability, and profits can be hard to assess separately as they can be so intertwined in their functionality.  The main point is that clients are specifically looking for your expertise, while potential buyers know that you will be exiting the business (at some point after they buy it from you) so they are much more concerned with the repeat-ability and duplication of your systems, sustainability and profits.

For a 5-minute deep-dive discussion on how to structure your practice for success, watch Positioning for Clients vs. Positioning for Market Valuation

One of the strongest contributors to systems, sustainability and profits is the overall percentage of recurring revenue from AUM that you receive within your practice (in comparison to non-recurring revenue from commissions).  In fact, the Succession Resource Group has published a 15-page report titled, “Your Guide to Increase the Value of Your Business”.  Specifically, when it comes to revenue they state…

“The recurring revenue currently receiving the largest premiums (from business buyers) are 3rd-party managed assets due to their recurring nature and ability to scale…” 

They go on to publish a chart that illustrates the Industry Average Valuation for Transactional Revenue (i.e., commissions) is a factor 1.0 X Revenue.  Whereas, the Industry Average Valuation for Recurring Revenue (i.e., AUM fee revenue) is a factor of 2.60 X Revenue.

Source:  Succession Resource Group

Obviously, that represents a 160% “premium or advantage” for AUM recurring revenue over commission non-recurring revenue.  And they also argue that 3rd-party AUM is valued higher than other form of AUM.


Well, think about it as if you are a buyer and then it makes perfect sense…

If you are buying a practice chock-full of 3rd-Party AUM, you can hit the ground running, not miss a beat, and have potentially endless scalability.  You can continue with the systems that are already in place to gather assets with no worries about having to “climb inside the brain” of a self-managing advisor.

On the other hand, if the selling advisor is self-managing the money, how exactly is the buyer to duplicate that thought process and execution once the seller leaves?  And furthermore, how are they to gain scalability whereas the more assets they gather, the more workload, complexity and liability they create for themselves as the money management component escalates, and by default puts strain on the ability to gather new assets?

Additionally, the “business risk” associated with those assets skyrockets in a self-managing practice.  Meaning, if the customer is unhappy with the money management performance, they have no choice but to leave the practice.  Whereas, an advisor “managing the relationships” rather than “managing the money,” can easily pivot to another money manager that more closely aligns with the investor’s needs or desires.

Simply put, buyers are not looking to purchase a job…  They are looking to purchase a business!

Utilization of 3rd -party money managers enhances your practice in ways that commission and self-managed models cannot.

That’s the Skinny,

Moonshots in Business: Your Tool for 10X Growth!

Here’s the Skinny,

Business adopted the “moonshot concept” from President John F. Kennedy, after the speech he delivered before a joint session of Congress on May 25, 1961, where he stated, “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”[1]

On July 20, 1969, Neil Armstrong and Buzz Aldrin became the first men to walk on the moon.[2]

Thus, the “moonshot” was born.

Some have incorrectly categorized business oriented moonshots as being outlandish ideas that have little or no founding in reality, but this is not the case. President Kennedy didn’t make this challenge on a whim.  The idea was researched, feasibility assessments were made, and then an educated challenge was proposed.  There was no guarantee of success, but that does not mean that the idea was something he snatched from an old episode of Flash Gordon.  (Too young to recognize that reference?  Google it and you’ll understand.)

What many forget is that earlier in that very same speech, President Kennedy stated, “With the advice of the Vice President, who is Chairman of the National Space Council, we have examined where we are strong and where we are not, where we may succeed and where we may not. Now it is time to take longer strides – time for a great new American enterprise – time for this nation to take a clearly leading role in space achievement, which in many ways may hold the key to our future on earth.”[3]

What defines a moonshot in business?

While there is no official formal business description, I define a moonshot as…

  • Undertaking an initiative so unique that it could/would change the trajectory of your business;
  • Attacking problems/challenges so magnificent in size and scope that it both scares and excites you;
  • Requiring radical thinking to fuel giant leaps forward (10x growth vs. 10% growth).

The Harvard Business Review describes a good moonshot as having three key ingredients:[4]

  1. It inspires (it’s not a routine goal like trying to increase sales by 13%).
  2. It is credible (as I mention above, it is not ridiculous, but is founded in reality).
  3. It is imaginative (it’s not the next logical step, but is a meaningful leap).

I contend that most great businesses are riddled with moonshots even if they have gone unrecognized by outsiders.

In fact, I think that in certain world-class companies, moonshots become commonplace (or even expected) as they are embedded into the normal culture of the company.  In our case (USA Financial), I would describe our moonshots as being key “turning points” or “giant leaps forward” that pinpoint our past and shape our future.  Essentially, they become the major milestones in our historical corporate timeline.  Here’s a look back over our 30-year history as example:

  • 1988 Distribution – We launched the firm as an Independent Insurance & Annuity Distributor before any such niche existed.
  • 1992 Practice Management – First developed entrepreneurial training and educational systems to advance advisors’ practices including industry qualified continued education credits.
  • 1995 OSJ – Upon recognizing 96 of our top 100 relationships were with securities reps, we became the largest Office of Supervisory Jurisdiction with two consecutive broker dealers inside of 36 months.
  • 1998 Broker Dealer – We executed our 5 year “OSJ to BD strategic growth conversion plan” two years ahead of schedule.
  • 2001 Fill the Room – Pioneered a marketing service model to fill client events nationally on behalf of local advisors, growing into numerous turnkey “Plug-n-Run” multi-media offerings.
  • 2001 Registered Investment Advisor (RIA) – Predicting the trend toward assets under management, we structured a corporate RIA in support of advisors converting their practice to this “new” model.
  • 2002 UIT – Began investment product research & development applying risk management models to the structural chassis of Unit Investment Trusts (UIT) as we designed product for two different administrators.
  • 2007 Money Management – Our investment product “development” led to our becoming an investment product “manufacturer” via our patented formulaic trending approach to risk & money management.
  • 2008 Tech Company – Crafted our first piece of proprietary financial industry technology, launching and converting our overall cultural mindset to our being “a technology company in the financial services space.”
  • 2012 Syndicated Radio – Subsequent to a previous multi-year local radio show, we restructured and relaunched as a nationally syndicated radio show promoting the consumer value of local independent advisor representation.
  • 2016 TAMP – Designed a highly flexible and benefit-rich turnkey asset management program and platform to streamline and simplify account custody and management for both advisors and investors.

That looks like a lot of success – and it is…  But keep in mind, moonshots, by definition, may include equally explosive failures.  And this is crucial to your understanding moonshots.  A moonshot failure may be even more important than success!  Therefore, it must be okay to fail (as long as proper strategy and effort was applied) as today’s failure often leads to tomorrow’s breakthrough and/or strategic byproduct.  It can truly be said that failure leads to the next-bigger-better moonshot.

For example, two failures directly led to two of our absolutely greatest moonshot successes:

  1. Between 1992 and 2001 we were coaching and mentoring financial advisors all across the country on how to run large, extreme, PR oriented prospecting events.  However, few advisors had expertise or resources to execute the concept from A-Z on their own, so we were being run ragged making appearances all across the continental U.S. in support of advisors nationwide.  We were failing and sinking fast.  Finally, we recognized the need to reboot our entire way of thinking.  After a complete scraping and retooling, we introduced the Fill-the-Room System, which has arguably placed more investor clientele in front of qualified advisors since year 2001 than any other program in the industry (25,000 RSVPs last year alone).
  2. From 2011 through 2013 we undertook a complete corporate re-branding for all of our subsidiaries.  The concept was strategically sound and well-meaning as we tried to separate our investor-oriented branding from our advisor-oriented branding.  Specifically, we were trying to further support our advisors in a rapidly escalating online and social media world.  The whole thing blew up in our face.  We lost traction in the industry.  We created mass confusion.  People literally thought we went out of business.  It was disastrous.  We pulled the plug, stole a page form the historic “New Coke vs. Classic Coke debacle” and did a 180 degree re-branding back to a singular and cohesive USA Financial brand across all subsidiaries while making fun of ourselves at every chance along the way.  We even created a comical video positioning ourselves as the butt of the joke.  It spread like wildfire, worked brilliantly, helped set the stage for our syndicated radio show – and laid the groundwork for our current marketplace positioning that has proven crucial for our TAMP launch in 2016.

Every time I speak with entrepreneurs about failed moonshots, it seems they always point to the power of what was learned, along with phoenix-like stories of how even greater success has risen from the ashes within subsequent moonshots.

Moonshots may be one of your most powerful tools in business.  Who’d have known?

That’s the Skinny,

  1. May 24, 2004, under NASA History, “Excerpt from the ‘Special Message to Congress on Urgent National Needs'”
  3. May 24, 2004, under NASA History, “Excerpt from the ‘Special Message to Congress on Urgent National Needs'”
  4. May 14, 2013, Harvard Business Review, “What a Good Moonshot is Really For”