Latest / Only Fee-Only / #132 - Advice Only: A Platform for Planners Who Want to Just Plan with Steven Fox, CFP®, EA

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#132 - Advice Only: A Platform for Planners Who Want to Just Plan with Steven Fox, CFP®, EA · Only Fee-Only

• 0:05
  Speaker 1: What's up everybody.
• 0:05
  Speaker 1: Welcome back to the Only Fee Only podcast.
• 0:08
  Speaker 1: Appreciate you being here and, for all of you longtime listeners, appreciate you guys' continued support.
• 0:14
  Speaker 1: In this episode we talked to Stephen Fox, who is the founder of Advice Only, which is a support platform to help financial planners give advice not sales pitches and it was really cool to get to talk to him to learn how he's doing this.
• 0:30
  Speaker 1: You know, the conversation that we had was not everybody wants to be a business owner, but they want to do good financial planning and what's a good way to do that?
• 0:41
  Speaker 1: Create an opportunity.
• 0:42
  Speaker 1: So that's exactly what Steven has done.
• 0:45
  Speaker 1: They don't have to worry about you know as much of the compliance stuff or handling that stuff, I guess at least right, you always have to worry about compliance, but you don't have to worry about doing all the admin level or the top business owner stuff.
• 0:58
  Speaker 1: That is the day-to-day that can really be a drag on some people.
• 1:03
  Speaker 1: So this is a really cool conversation.
• 1:05
  Speaker 1: For anybody that's thinking about getting into advice-only planning, I think it's well worth checking out.
• 1:12
  Speaker 1: Steven's an awesome person.
• 1:13
  Speaker 1: I've had the opportunity to know him for several years now.
• 1:16
  Speaker 1: So, without further ado, sit back, relax and enjoy this episode of the Only Fee, only Podcast with Steven Fox episode of the Only Fee Only podcast with Stephen Fox.
• 1:32
  Speaker 2: How's it going everyone?
• 1:33
  Speaker 2: Welcome to another episode of the Only Fee Only podcast.
• 1:34
  Speaker 2: I'm Peter Travelo.
• 1:35
  Speaker 2: I'm here with my co-host, brock Buckles, and today we are so excited to have Stephen Fox on representing the Advice Only Network and truly a movement that we see in the community of advice only getting out there and having more advisors implement the structure and helping more clients.
• 1:51
  Speaker 2: So, stephen, welcome to the show.
• 1:54
  Speaker 3: Thanks for having me.
• 1:54
  Speaker 3: Guys Glad to be here.
• 1:56
  Speaker 2: Yes, you bet.
• 1:56
  Speaker 2: So we know who you are.
• 1:57
  Speaker 2: We know what your past is too, before what you currently do.
• 2:00
  Speaker 2: But for those who are currently listening, you want to give a quick background of your financial services history and maybe even a little bit about your military experience before too.
• 2:10
  Speaker 3: Yeah, so a quick overview.
• 2:11
  Speaker 3: We can dive deeper into whatever you guys want to know, but for now my main focus is I'm the founder of Advice Only, which is a support platform and a corporate RA for advisors who provide financial planning without investment management or any type of product sales, so it's kind of a subset of fee only.
• 2:26
  Speaker 3: I also have a small tax prep firm and do some consulting for a couple of fintech firms.
• 2:30
  Speaker 3: So a pretty broad range of interests.
• 2:32
  Speaker 3: I was a career changer in this field so, as you mentioned, I was in the Marines before for about eight and a half years and then went to school and right out of school started another firm called NextGen Financial Planning, a flat fee REA, working with younger clients.
• 2:44
  Speaker 3: Another firm called NextGen Financial Planning, a flat fee REA, working with younger clients.
• 2:47
  Speaker 3: Started that by myself, completely clueless at first, but figured out a couple of things over time, ended up growing the team a little bit and sold to employees last fall, so I could start advice only now.
• 2:55
  Speaker 1: That's awesome, man.
• 2:55
  Speaker 1: So tell us about what was it like getting out of the Marine Corps and doing your first few things and eventually wanting to get into the fee-only space.
• 3:06
  Speaker 3: Yeah, it's a tough transition to make, getting out of the military.
• 3:08
  Speaker 3: A lot of people have trouble with that and figuring out what they want to do.
• 3:11
  Speaker 3: When I got out, I had no idea what I wanted to be when I grew up.
• 3:14
  Speaker 3: I'm still not sure some days, but I thought I'd start by going to college.
• 3:18
  Speaker 3: So my last duty station was at a base called Camp Pendleton, which is just north of San Diego.
• 3:22
  Speaker 3: By then I knew that I loved being in the San Diego area.
• 3:24
  Speaker 3: I'd met my wife and knew that I didn't want to have to leave her, and there were a lot of other veterans at San Diego State and it was always a goal of mine to go to college, just because nobody else in my family had before, and so I thought San Diego State could be a good choice, because it's here where I want to stay and there's a big veteran population there, and thankfully I had the GI Bill helping me out.
• 3:41
  Speaker 3: So that was a pretty easy decision.
• 3:42
  Speaker 3: And I thought I'd start with a degree in finance, just because I'd always been interested in reading on my own about personal finance and economics and other related issues, and so I figured if that's something I enjoy learning about, then maybe it would be a good career field for me and I didn't really put any much more thought than that into it at first.
• 3:59
  Speaker 3: Luckily, while I was there, I was in a meeting for a student group called Finance Investment Society and was there, I was in a meeting for a student group called Finance Investment Society and they would bring in guest speakers that work in all different areas of finance.
• 4:08
  Speaker 3: This guy came in to talk to us about the work that he did as a financial planner work with individuals doing personal financial planning and before he came to talk to us I didn't even realize that this career field existed.
• 4:17
  Speaker 3: That was a thing you could do.
• 4:18
  Speaker 3: I thought I would just end up as like a fund analyst or corporate finance or something like that, but hearing him talk about the work that he did with real people, helping them with their lives and personal planning, they just immediately appealed to me.
• 4:29
  Speaker 3: I just thought that sounded so much more rewarding and I was just really lucky already being at San Diego State and so pretty early in the program.
• 4:35
  Speaker 3: They have a financial planning program that's been there for decades.
• 4:40
  Speaker 3: It was actually one of the first financial planning programs to be formed, back in the late 70s I think, and so I was able to switch over to that, took the CFP exam right out of undergrad, started my firm as soon as I graduated.
• 4:52
  Speaker 1: Very cool man.
• 4:53
  Speaker 1: So, like when you were getting into the firm.
• 4:57
  Speaker 1: Right, you graduated getting into the firm.
• 4:59
  Speaker 1: Obviously, this kind of leads us into advice, only eventually talking about that and kind of what you saw as things that advisors needed.
• 5:08
  Speaker 1: But what was it like getting that up and running?
• 5:10
  Speaker 1: I mean, how did you feel going from, obviously from an educational standpoint, from being in a great program understanding finance, but then actually becoming a business owner, like what were some of those kind of hard things that you had to learn early on in the business owner?
• 5:25
  Speaker 3: What were some of those kind of hard things that you had to learn early on in the business?
• 5:28
  Speaker 3: Yeah, I knew that I wanted to start my own firm from the start rather than working somewhere else, even though that was likely to be the harder path.
• 5:34
  Speaker 3: And there were a whole lot of reasons for that.
• 5:35
  Speaker 3: One was just that I wanted to work with a different type of client than I would have the opportunity to at most firms.
• 5:40
  Speaker 3: I knew that I wouldn't really feel as fulfilled.
• 5:43
  Speaker 3: I wasn't really interested in working with people that already had a whole lot of money or that were retirement age.
• 5:49
  Speaker 3: Just because I didn't have a whole lot in common with them, I didn't feel like I could understand them very well.
• 5:53
  Speaker 3: I didn't want to serve the same people that everybody else was serving when the industry is set up, so that there are huge groups of other people who could really benefit from good financial planning help but don't really have access to it for a wide range of reasons that I'm sure you guys understand pretty well.
• 6:06
  Speaker 3: So I'd also always been interested in doing my own business stuff, like even as a kid.
• 6:12
  Speaker 3: My whole life there've been dozens examples of me doing random little side projects or small businesses, and so I already knew that I had that in me and I figured, if I'm probably going to end up starting my own firm at some point anyway, why not just do that from the start instead of spending five or 10 years working somewhere else first?
• 6:28
  Speaker 3: I was also probably influenced by I saw a lot of folks who were about my age but hadn't been in the military first, and so they had just more career experience than me.
• 6:37
  Speaker 3: And they kept running into issues where they were working at local RIAs and were promised that you're going to be my succession plan, you're taking over the firm when I retire in X number of years.
• 6:45
  Speaker 3: And then they work there, they build up a bunch of clients and, sure enough, nothing ever actually gets written down on paper.
• 6:51
  Speaker 3: No transition happens, they get frustrated, it's a tough spot to be in and they end up leaving and going somewhere else or starting their own firm.
• 6:57
  Speaker 3: And I figured why not just kind of skip that middle step?
• 7:01
  Speaker 3: This seems to be a recurring problem with the way this industry is set up, and even if it's hard the first few years, then that's been a path for me over the long run and then as far as like the biggest challenges in the early years.
• 7:13
  Speaker 3: It was everything.
• 7:13
  Speaker 3: I was a complete train wreck.
• 7:14
  Speaker 3: I mean, I had zero experience starting a firm right out of college, so nobody should expect that to go well.
• 7:18
  Speaker 3: Of the biggest things that I expected to be hard were everything on the compliance side and learning to get clients.
• 7:29
  Speaker 3: I think are what I expected the biggest challenges to be, and both of those were hard but manageable.
• 7:34
  Speaker 3: Figured it out over time.
• 7:35
  Speaker 3: It wasn't that big a deal, just took a lot of time and some practice and learning.
• 7:39
  Speaker 3: Talking to other people, I was fortunate to come across a lot of other really generous, helpful, thoughtful financial planners in town who helped out on those kinds of things and others.
• 7:46
  Speaker 3: But what was really the hardest part for me in the early years and beyond was just trying to figure out what I should be working on at any given time, like having so many competing priorities of I can do this, this, this and this and this and knowing how to organize my time, being willing to let go of lower priorities in favor of something that was more important and that's something I've gotten a little better at over time but has been a big challenge for a long time.
• 8:10
  Speaker 2: And I wasn't expecting that to be it.
• 8:12
  Speaker 2: So when you say let go of lower priorities, where do they go?
• 8:16
  Speaker 2: Is it just in a filing cabinet?
• 8:18
  Speaker 2: Did you have to hire staff?
• 8:19
  Speaker 2: You know, like how did you prioritize and start to systematize your day Like?
• 8:24
  Speaker 3: how did you prioritize and start to systematize your day?
• 8:27
  Speaker 3: Yeah, it could be anything.
• 8:29
  Speaker 3: So I think anybody who starts their own business often that's the type of person who just has lots of ideas of, hey, wouldn't it be cool if we could do this added service, or wouldn't it be cool if we could do this marketing initiative, or if I could go to this event or add this software tool?
• 8:42
  Speaker 3: You just get a whole bunch of ideas and a whole bunch of things that seem worth doing and probably are worth doing, but, like anybody, I only have so many hours in a day and it's absolutely impossible to do all of them, and so you just have to be willing to let go of those things that are not as important, that aren't going to move the needle as much in the direction that you want to go, and I think that lesson is really helpful now, just even.
• 9:04
  Speaker 3: I think that lesson is really helpful now, just even though I've had to learn it over and over.
• 9:06
  Speaker 3: I'm starting to get that through my thick skull finally that if you can't do everything, then you just have to focus on the things that you know are most impactful no-transcript.
• 9:44
  Speaker 1: What was that like?
• 9:45
  Speaker 1: Because a lot of advisors wonder about exiting or, you know, selling their firms like and share as much as you want to or you're comfortable with.
• 9:52
  Speaker 1: But what was that kind of like?
• 9:54
  Speaker 1: How did you meet the people that you eventually sold it to?
• 9:56
  Speaker 1: And then what was the process of kind of on agreeing on you know numbers to sell it more, cause I know a lot of planners have those thoughts and are thinking about what is that going to be like for me one day.
• 10:06
  Speaker 1: What was your experience like with that?
• 10:09
  Speaker 3: Yeah, uh, that's a big topic, um, a lot of things to cover and think about there.
• 10:13
  Speaker 3: But, uh, I mean, I gave like an hour long presentation on this at a small conference a little while ago and I only got in like 5% of it, but it was.
• 10:20
  Speaker 3: It was an internal sale to employees.
• 10:21
  Speaker 3: So that made my specific situation far simpler than a lot of these transitions go, because you don't have to worry about staff turnover, you don't have to worry about an external party doing due diligence.
• 10:32
  Speaker 3: There's already a lot of trust between the parties.
• 10:34
  Speaker 3: So it's far simpler than a lot of these situations are.
• 10:37
  Speaker 3: So we had that going for us.
• 10:44
  Speaker 3: I guess the reason maybe, to start with, the reason why I knew I wanted to sell in the first place is I just felt like I was kind of getting bored and being dead weight in my own firm that I had created, starting out being in this dual path of learning how to be a financial planner and how to run a financial planning firm.
• 10:58
  Speaker 3: It's very busy.
• 11:00
  Speaker 3: Roles Like those are two completely different areas of responsibility, different things that you need to know how to do and take care of all the time, and I knew that I would have that situation going in when I started it but needed the first few years of running the firm to figure out which side I wanted to focus on, eventually decided I'd rather focus on the business side of things and transition clients I'd been working with to other members of the team and eventually got to a point where I had no direct client responsibilities anymore.
• 11:26
  Speaker 3: And so because we also had really good systems tech in place far from perfect, but a lot better than a lot of firms out there I was pretty proud of how we set all that up.
• 11:36
  Speaker 3: That meant that eventually there just wasn't a whole lot for me to do If I didn't have any direct client responsibilities and I was only spending I don't know maybe 10 hours a week of actual work doing anything related to marketing, compliance and other stuff that's not client facing.
• 11:48
  Speaker 3: There just wasn't a whole lot for me to do, and I didn't want to wait around again for another year or two for the firm to double in size and me to for there to be enough workload where we would need somebody in a full-time role.
• 11:59
  Speaker 3: That's not working with clients.
• 12:01
  Speaker 3: So between that and wanting to start advice only and I also thought it was just really cool to have the firm go to the people who helped me build it in the first place, that they could be owners of this firm that they helped to build.
• 12:12
  Speaker 3: I loved the idea of that, and so I just brought it up to them and said hey guys, this is what I'm thinking about doing.
• 12:17
  Speaker 3: I gave them a few different options, one of which was I just sell them the firm, and they decided, yeah, we'll do it.
• 12:25
  Speaker 3: And so we did.
• 12:25
  Speaker 3: Uh, we, over a couple months, we drafted the agreements.
• 12:28
  Speaker 3: Uh, we ended up doing a hundred percent seller financing with a promissory note, so they're just paying me off over time for it.
• 12:34
  Speaker 3: Uh, agreed on valuation and a whole bunch of different terms.
• 12:38
  Speaker 3: We made a long list of admin stuff that needed to be done, everything from like setting up a new EIN to I don't know new CRD number and insurance policies and dropping my tech licenses, and there's this whole bunch of stuff that had to be done, and we had a list of probably 50 or so different things we came up with and covered most of it, but there were more surprises we're still dealing with.
• 13:01
  Speaker 3: A few things pop up here and there that we hadn't figured out, like closing down the 401k plan still isn't quite finished yet.
• 13:05
  Speaker 3: A whole bunch of random things come up when you're going through those transitions, but we just figured it out one step at a time and it was really helpful that we just had a whole lot of trust with each other from the beginning.
• 13:14
  Speaker 3: They took some risks on me and I took some risks on that and I think everybody's happy we've done so.
• 13:54
  Speaker 2: Very nice.
• 13:54
  Speaker 2: So let's segue into advice.
• 13:56
  Speaker 2: Only you know where did the idea originate from.
• 14:00
  Speaker 2: How long has it kind of taken, from the napkin, you know, writing ideas down on a scrap piece of paper, to actually, you know, turning it into a living, breathing business.
• 14:12
  Speaker 3: So I guess the biggest reason I wanted to start this is running my own firm for a while and, being an XYPN and around other folks, I kept running into people who started their own firm not because they wanted to be a business owner, but because they wanted to work with clients in a way that they felt good about, with a service model and business model that they felt good about, and a lot of times, starting your own firm is the only way to do that, and that's especially true for people who want to operate on an advice only model, meaning you're not doing investment management, you're not selling out of products, you just do financial planning.
• 14:43
  Speaker 3: It's pretty hard to do that at most firms, and so a lot of people start their own and you run into this issue that I've heard a lot of people describe as accidental, unhappy business owners, where you start your own firm and all of a sudden you have to deal with a whole bunch of stuff that has nothing to do with why we became financial planners and the skills that you need to be a good financial planner, from compliance and marketing stuff and putting together a tech stack and recruiting and training employees.
• 15:07
  Speaker 3: There's just a whole bunch of stuff that goes along with it, and all those things take budget and time and skills that not everybody wants to invest, and a lot of folks get two, three, four years into running their firm and find they're dealing with a whole bunch more of that stuff than they expected to or wanted to, and it doesn't seem like it should have to be that way.
• 15:24
  Speaker 3: And so I just looked around and saw that happening over and over, of people shutting down their firms a couple of years in for that reason or merging with others.
• 15:32
  Speaker 3: And it's not a new idea to have a corporate RA.
• 15:34
  Speaker 3: I mean, there are tons of firms out there that have models like this, including some really big companies, lpl and others.
• 15:39
  Speaker 3: Right, the only thing that's new here is that we're doing a corporate RA model for advice-only people, so that's the only thing that I've changed really at all.
• 15:47
  Speaker 3: And then the other thing that's not entirely unique we're not the only one, but it's a bit unusual is that we just charge advisors a flat rate that they pay per year instead of a percent of their revenue.
• 15:55
  Speaker 3: We operate on a similar model to what they do with their clients, and so we just give them all the support that they need to be able to focus on clients doing compliance stuff and putting together a tech stack and a whole bunch of third party partnerships that provide benefits to them and a community that we've built, and it's a lot easier to operate on that kind of model than to have to start your own RA from scratch.
• 16:18
  Speaker 3: So that's the idea Just let them focus on being good financial planners.
• 16:21
  Speaker 1: Yeah, absolutely, and that's so true.
• 16:23
  Speaker 1: Man, like a lot of people and I've had the conversations, I've talked to people that were, you know, own the business and they decided to go be somewhere else for all the reasons that you're talking about and I think it's OK to say not everybody wants to own the business, not everybody wants to take care of all of the kind of headachy stuff in the, you know, insurance and like the stuff that you have to worry about when you're the one that owns it.
• 16:47
  Speaker 1: Right, when you were figuring out how you wanted to piece this together and what you were going to use, is it going to be a platform to where, like, everybody gets the same tech stack or people can kind of piece it together, Like, how are you managing how people actually do the day-to-day?
• 17:05
  Speaker 3: Yeah.
• 17:05
  Speaker 3: So I try to think about member benefits in terms of if it's an area that everybody is going to have a need in, then that should be provided as a core member benefit, right?
• 17:15
  Speaker 3: So if it's something that only some people are going to want or need, but not everybody, then we're probably not going to have that as a core member benefit, because then we have to have a higher price and everybody feels like they're paying for stuff that they're not using.
• 17:25
  Speaker 3: So it's sort of a blend of like everything included model versus modular.
• 17:29
  Speaker 3: We're somewhere in the middle there, and so some categories that are provided because everybody's going to need it are financial planning software and our CRM and a password manager and Calendly and everything compliance, since we're the REA, a lot of those types of things.
• 17:45
  Speaker 3: And then some examples of things that are not included but we try and get third party partners are going to be like consulting services, sales marketing coaches or some other planning softwares, stuff like that that some people are going to want but not everybody.
• 18:02
  Speaker 2: So how are?
• 18:02
  Speaker 3: you Because it has to be so, yeah.
• 18:05
  Speaker 2: So how are you marketing advice?
• 18:08
  Speaker 2: Only you know how are you attracting new conversations and, hopefully, new members.
• 18:13
  Speaker 3: I'm not much really yet.
• 18:14
  Speaker 3: So our registration was approved in February and we immediately signed up five advisors and all of those people came from just friends of friends.
• 18:26
  Speaker 3: I thought that it would probably be somebody that I know that would be among the first people to sign up, but I didn't know any of these folks beforehand.
• 18:32
  Speaker 3: They were all just friends of friends.
• 18:33
  Speaker 3: People talk about it because what we're doing is kind of weird.
• 18:35
  Speaker 3: I mean, a lot of people will talk about what we're doing just because it's unusual and everyone seems to either love it or hate it immediately, which is probably a good sign as a business, yeah, that everyone loves you or hates you.
• 18:47
  Speaker 3: But people talk about it.
• 18:48
  Speaker 3: And so I just started by spending a few months of talking to people and saying this is what I'm thinking about doing.
• 18:54
  Speaker 3: What do you think we should be including or not including here?
• 18:57
  Speaker 3: What should this look like?
• 18:58
  Speaker 3: Getting feedback from people as I was figuring out how to put it together and I probably had I don't know 150, 200 of those conversations over a few months, and from that people were just talking about it and scheduled meetings with me and I found five advisors who were great fits and then we decided to stop taking on anybody new, because the I want to make sure everything's kind of running smoothly operationally before we just pile on a whole bunch of people and compound problems, make them worse.
• 19:25
  Speaker 3: And so, after we onboarded, those five spent the last couple of months as they've onboarded and started working with clients, figure out all these random little issues that pop up, like this tech tool isn't sending the right data field to this one, and we've got to fix this billing thing, and we're still working on our website and a whole bunch of other stuff like that I want to get in place before we take more people on.
• 19:44
  Speaker 3: I don't want to make promises that we can't keep to our advisor members or to their clients, and so we're almost done with all that stuff.
• 19:50
  Speaker 3: Now we're about ready to start taking on more people.
• 19:52
  Speaker 3: I've got something like 25 people advisors who are interested in signing up but weren't ready yet for various reasons, or I didn't want to take on more people yet, so I'm going to start there and then just do everything else I can to help get the word out.
• 20:06
  Speaker 3: But no real marketing program yet.
• 20:08
  Speaker 3: So far, it's just word of mouth.
• 20:13
  Speaker 1: If I know anything about you, man, people are going to come once the floodgates open.
• 20:16
  Speaker 1: Yeah, I know, when you were telling me about it, I was like this is a brilliant idea.
• 20:19
  Speaker 1: Now, when it comes to being able to join, right, like because, obviously so, advice only is kind of network.
• 20:26
  Speaker 1: Are people going to have DBAs or is it going to be like everybody's going to be advice only, like that's going to kind of be like what's that going to look like?
• 20:34
  Speaker 3: It's their choice.
• 20:34
  Speaker 3: So once we've had a sign up, so far there's a mix of using the advice only brand name or using their own no-transcript.
• 20:56
  Speaker 3: I think those would be the main reasons why somebody chooses to set up their own, but we are going to be investing heavily in the advice-only brand name among consumers as well.
• 21:04
  Speaker 3: Even if we're not taking up a percent of revenue, I think we certainly do have a role to play in helping them get new business, and I'm going to do everything I can to try and drive consumer traffic to the financial advisor section of our website.
• 21:15
  Speaker 1: Yeah, and is there going to be like a tryout per se, or is it like how are you?
• 21:18
  Speaker 1: Because obviously you want people, if they're going to be representing your brand right, they also need to be good advisors.
• 21:26
  Speaker 1: Is it going to be kind of like, hey, if you're just getting into financial planning, this is great, we have a good feeling about you.
• 21:32
  Speaker 1: Or is it?
• 21:32
  Speaker 1: We want to see you have a couple of years in business, because obviously you kind of jumped right into it.
• 21:37
  Speaker 1: So I'm sure that you have a place in your heart for people that just want to get going and don't want to have to jump through all those hoops.
• 21:44
  Speaker 1: But like, how are you going to go about?
• 21:47
  Speaker 1: you know, either selecting or accepting people who want to be a part of advice.
• 21:51
  Speaker 1: I think that's important.
• 21:52
  Speaker 3: We're also the RIA, which means I'm on the hook as the chief compliance officer for any knuckleheads not taking proper care of clients, so that's it's especially important with a model like this.
• 22:02
  Speaker 3: Compared to other groups that help you, help support you in starting your own firm, like your XYPN or something If they're not the RIA, there's a lot lower risk and a lot lower need to pay attention to something like that.
• 22:13
  Speaker 3: But yeah, that is critically important and also because we lose credibility if people aren't doing good work right.
• 22:20
  Speaker 3: We hurt our reputation.
• 22:21
  Speaker 3: So the main things I'm looking for are I want to make sure somebody has a high probability of being able to succeed on a platform like this, and the best way to know that somebody is going to be able to is if they've demonstrated that they can somewhere else already.
• 22:32
  Speaker 3: So I don't think this model is likely to be a good fit for somebody who doesn't already have at least a couple of years of experience if they're right out of college or something Because even if they only have to get clients and take care of those clients and everything else is more or less taken care of for them, they still have to be able to get clients and do good work for those clients Right, and so we would take on somebody who's a career changer.
• 22:55
  Speaker 3: One of our first five is a career changer.
• 22:57
  Speaker 3: Didn't have a lot of experience, and the reason I decided to take him on is because he's somebody who was clearly putting in a whole lot of work and taking this seriously.
• 23:05
  Speaker 3: He was a retired military officer who's done the CFP coursework and he's done the externship program.
• 23:12
  Speaker 3: He's talked to tons of other firms, he's gone to conferences and he seems like he really actually does know his stuff and is taking this seriously.
• 23:17
  Speaker 3: I have no doubt he's going to be able to succeed on a platform like this, and the other ones that we've taken on already had at least a couple of years of experience, or one of them much more than that.
• 23:25
  Speaker 3: So that's the biggest thing is I want to make sure they're going to be able to succeed here.
• 23:28
  Speaker 3: And, yeah, we're looking for like a clean regulatory history and it's just an interview of how confident am I that they're in this for the right reasons, that they want to take good care of their clients, that they're going to be a good member of our community and supporting each other, because that's an important part of what we're doing as well, and is this somebody that I want to spend time with, that I enjoy being around and I know that's not like a clear black and white thing, it's sort of subjective, but that's one thing I love about working in this area of the industry is pretty much anybody who chooses to operate on a device only model.
• 24:01
  Speaker 3: For the most part, these tend to be folks that they really love what they do and have hearts of gold and want to take good care of people and are great to be around.
• 24:07
  Speaker 2: Yeah, awesome.
• 24:09
  Speaker 2: Any great points Before you came on here, stephen, any golden nuggets you wanted to share or something you wanted to make sure to get out there for the listeners?
• 24:19
  Speaker 3: Maybe one other thing comes to mind we haven't talked about yet, which is just kind of the case for operating on an advice-only model in the first place, whether at our firm or anywhere.
• 24:24
  Speaker 3: I mean there are lots of advice-only model in the first place, whether at our firm or anywhere.
• 24:28
  Speaker 3: I mean there are lots of advice-only firms out there now and I hope there become many, many more.
• 24:31
  Speaker 3: It's changing pretty quick but it's still a tiny subset of the industry so far.
• 24:38
  Speaker 3: But a lot of the conversation around advice-only so far has been around the ethics of it and arguing about whether is this actually the right fit for clients or not.
• 24:45
  Speaker 3: Is this the right thing to do?
• 24:46
  Speaker 3: And I think that that argument is sort of more or less settled now.
• 24:50
  Speaker 3: A lot of people who take a close look at it and really consider it come to the conclusion that even if it's not perfect, it is a great model and there are a lot of strong arguments for it, ethically Right.
• 24:58
  Speaker 3: What doesn't get enough attention that I want to help change the discussion over time is the business case for it, and I think there is a really strong business case to make for operating on an advice only model.
• 25:06
  Speaker 3: So a few examples would be.
• 25:10
  Speaker 3: I mean for one.
• 25:11
  Speaker 3: There's enormous consumer demand If we're not all competing for the same 2% of wealthy clients out there and we have a model that can serve 99% of people in one capacity or another.
• 25:21
  Speaker 3: There's just enormous consumer demand for this and consumers immediately understand.
• 25:25
  Speaker 3: When you explain what advice-only means you just do financial planning as advisors, you have a hard time convincing of the feasibility of it and there are a lot of them who, when they hear discussions about this, they'll say, yeah, you're probably right that that's a great model for consumers, but there's no way it's feasible.
• 25:39
  Speaker 3: And you have fun, go trying to save the world.
• 25:42
  Speaker 3: And they kind of pat you on the head and say, while you're doing that, I'm going to go actually make money.
• 25:45
  Speaker 3: But it's really doesn't have to be that way.
• 25:47
  Speaker 3: So if you have a huge consumer demand.
• 25:49
  Speaker 3: It's so much easier to get clients.
• 25:50
  Speaker 3: Lower client acquisition costs.
• 25:51
  Speaker 3: You get this immediate revenue collection from the day you do the work whenever you charge them right, instead of having to collect quarterly fees long into the future.
• 25:59
  Speaker 3: Financial planning itself as a service can be a major profit source and not just a loss leader for gathering AUM.
• 26:05
  Speaker 3: You get much lower operational complexity.
• 26:07
  Speaker 3: The second you add investment management.
• 26:09
  Speaker 3: All of a sudden you have much higher operational complexity and tech costs and everything more support staff than if you're doing only planning.
• 26:15
  Speaker 3: There's just so many other advantages simpler compliance and I'm hoping that if we're able to succeed with this platform, other people will see that and copy us and a lot more people will operate on advice-only models.
• 26:29
  Speaker 1: Yeah, I love it, man, and it really is one of those things to where it's like there's people that do good work or good people in every type of model, but at the end of the day, it really is pretty clean cut.
• 26:38
  Speaker 1: When you do advice only, it's like here's how much it costs, here's what you get, and the advisors that are advice only.
• 26:45
  Speaker 1: They all believe that and are very, very have a lot of conviction in the fact that they love Advice Only.
• 26:51
  Speaker 1: That's fantastic, man.
• 26:55
  Speaker 1: I really believe you guys are doing something special.
• 26:56
  Speaker 1: It's going to be an amazing thing For all the people who want to follow along with your journey and what you're doing.
• 27:03
  Speaker 1: Where can they?
• 27:04
  Speaker 2: do that man.
• 27:06
  Speaker 3: Best places would be to learn more about what we're doing at adviceonlycom, or just connect with me on LinkedIn.
• 27:13
  Speaker 2: Perfect Steven, thank you so much for your time today.
• 27:16
  Speaker 3: Thanks guys.
• 27:17
  Speaker 2: Thanks, man.