Participants:
Steve Wershing
Julie Littlechild
Penny Phillips
Julie Littlechild: Steve Wershing: Penny Phillips: Julie Littlechild: Penny Phillips: Steve Wershing: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Steve Wershing: Penny Phillips: Steve Wershing: Penny Phillips: Steve Wershing: Penny Phillips: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Steve Wershing: Penny Phillips: Penny Phillips: Julie Littlechild: Julie Littlechild: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Steve Wershing: Penny Phillips: Penny Phillips: Steve Wershing: Penny Phillips: Julie Littlechild: Penny Phillips: Steve Wershing: Penny Phillips: Penny Phillips: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Penny Phillips: Julie Littlechild: Steve Wershing: Penny Phillips: Julie Littlechild: Steve Wershing: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Penny Phillips: Julie Littlechild: Steve Wershing: Julie Littlechild: Penny Phillips: Julie Littlechild: Steve Wershing: Penny Phillips: Penny Phillips: Penny Phillips: Julie Littlechild: Penny Phillips: Julie Littlechild: Steve Wershing: Penny Phillips: Steve Wershing:
Welcome to Becoming Referable, the podcast that helps you become the kind of advisor people can’t help talking about. I’m Julie Littlechild and today, Steve and I offer up a twofer. You see, we’re talking to Penny Phillips and in addition to hearing her insights on what it takes to run a successful business, we’ll hear about her journey, one that took her from a corporate role to starting a successful coaching business and now to her current role as president and co-founder at Journey Strategic Wealth. Penny will share some perspectives on how advisors need to adapt their businesses in a new environment, but points out that this evolution was always needed. She digs deep on the skills that advisors may need to develop going forward in order to compete. She provides some incredibly interesting and important, I think, insights on the idea of self-coaching, highlighting the idea that success isn’t only about the tactics that we employ in the business, but the approach that we take and the rules that we play each and every day. With that, let’s get straight to the conversation with Penny. So Penny, welcome to the Becoming Referable podcast.
Welcome, Penny.
Thank you for having me. Good to be here.
Yeah, absolutely. I’ve had the pleasure of hearing you speak a couple of times and I’ve often seen some of your posts and great content, so I’m excited to have you on today. I want to talk about your work, but I was really struck when we were chatting before having you on by some of the transformation you’ve gone through in your own professional life. Since I like a good journey story, I thought it might be interesting to start there and just tell us the kinds of things you’re working on and how that’s evolved.
Sure, and if you use the word journey, you probably know my new company that I just co-founded is called Journey Strategic Wealth and it fits in perfectly. So I just-
That’s the journey we wanted to know about. Right. Exactly.
There we go. So I just launched with three other partners, a registered investment advisor. We’re a national firm, but based on the East Coast in New Jersey, although I sometimes say just New York City Tri-state area, but it is New Jersey. I say launching that business, we just launched it in January, but it really feels like what the past 12, 13 years have led to for me. So Julie, I shared with you my entire career has been spent in, to some extent, financial advisor, coaching and consulting with a focus on practice management. I started my career at New York Life, the insurance company, and my first foray into practice management was working on an initiative at the time for their corporate RIA to help successful transactional insurance agents transition to become financial advisors and wealth managers and it was a fascinating experience.
I grew really interested, not just in how advisors build businesses, but the mental shifts and transitions that they go through as they evolve in their careers. So I knew that I was going to spend my career in that line of work and after jumping around a bit, I launched my own coaching and consulting company called Thrivos, which is still around. We have wonderful coaches coaching there, but there was a moment last year when I really felt like there was bigger impact I could have on the industry. After coaching advisors for the past five years, about where they’re at and transitioning and what the next phase of the life cycle is for them, I said, “Gosh, if I’m coaching them to go independent, maybe I’ll just build an RIA that’s built for a specific type of advisor,” which I’m sure we’ll talk about. So, I did that and so that’s where I’m at right now, a lot going on, but exciting, fun work.
Well, why don’t you tell us, you said a specific type of advisor. Can you talk about who you work with?
Yeah, my experience, I’ve spent a lot of time in the independent space and, specifically, the insurance broker dealer space and I’ve always said this. I think the insurance BD advisor that a woman or man who grew up in that type of culture and has made that transition successfully to be a wealth manager, is the dark horse of the industry. I find that in the RIA and indie space and M & A space, people don’t really talk about that advisor, but it’s that advisor that I’m interested in, extremely strong relationship management skills; they were raised in a culture where they had to sell a product that nobody wants, like life insurance and it’s [inaudible 00:04:57] what he wants it.
So, they just have this raw ability to connect with people and couple that with technical competency in planning and investments and wealth management, for me, I’m very interested in that type of advisor. What I was noticing the past couple years is some of them had simply grown out of the broker dealer they were with and were looking to go independent. They would always say to me, “You know what, Penny? I can get a 92% payout at so-and-so firm,” and they ended up making that transition, but then realized a 92% payout doesn’t mean anything when you have to run a business, right?
Your real net payout is 40% after you make payroll and set up tech and et cetera. So, I found that this idea of, “We’re going to go independent and be really successful and make a lot of money,” there was a disappointment factor because what the adviser was actually looking for was not big, higher payout; it was specific support around practice management and being a business owner and I found that there wasn’t a firm out there that was really built to solve that problem. Every RIA firm says, “We do practice management,” but there isn’t a firm that’s actually built a practice management coaching experience into the fabric of the RIA and that’s what we built with Journey. So advisors join us and we, essentially, allow them to outsource all of practice management and operations to us.
Right. Interesting model. I’m sure whether it’s through the coaching clients that your team is working with or whether it’s through the advisors you’re working with now, the last year has been a real kick in the pants and an interesting learning experience. When we were talking, you said, Everything’s changed and nothing’s changed to some extent.” What do you mean by that when you’re looking at the world through the advisor’s lens right now?
Sometimes I say things, Julie, and I’m like, “I could quote that and make that [crosstalk 00:07:08] It was in response to, and I’m sure you folks did as well, everyone was obsessed last year with talking about you. Everything’s changed in the business and the new normal and all these quotes that I’m sick of, candidly. When you really look at the statistics and you look at what advisors have been doing and how they’ve been growing and thriving, nothing’s actually changed, meaning the best in the business who have the ability to quickly evolve and shift and adapt no matter what’s going on, did that and were successful last year, meaning they brought in assets, they maintained all their client relationships. They came out unscathed, really, from the pandemic, but once we have difficulty changing and evolving, had difficulty last year and either saw the business flatline or have realized, “Hey, maybe it’s time for me to hang it up.” So everything we’ve known, all the trends that have existed the last 10 years, perhaps they were exacerbated last year, but nothing really surprising happened, from my perspective.
So it’s not so much about the change, but it’s about your adaptability and about what you do with change. Is that right?
Yeah. As coaches and consultants, we say this all the time, right? There are highly coachable advisors and business owners and entrepreneurs and usually, those are the folks that you find at the top of the ranking lists. When we talk about the best in the business, there is something that is common about those advisors and it is the fact that they have the ability to reinvent themselves and to react very quickly to change factors that exist, not just at their firms, but in the industry and society. So, we saw that on a greater scale, I think, last year with advisors and their relationship with clients.
For advisors who struggle with that, what are some of the things, you think, that get in the way of them being able to do that?
A loaded question. A big one.
Well, that’s what we specialize here.
Yes.
… question, what gets in the way? There’s a lot of things. Something that was unique about Thrivos when I launched it, we combined practice management consulting with behavioral coaching because you can teach concepts to advisors and you’ve probably done thousands of presentations over the course of your careers, but most advisors will go back and do the same thing over and over because it’s comfortable for them and it’s what they’ve been taught. So, part of it is recognizing the need to evolve and shift, not just behaviors and actions, but belief systems. In other words, if you’re an advisor who says, I said it before to you guys, “I’m not tech savvy. I’m never going to be able to adapt to this Zoom thing.”
Your behaviors and your actions are going to be viewed through that lens. So part of changing is getting rid of old belief systems and structures and then, the second thing I would say is being willing to redefine success. This is something I think advisers will understand uniquely. When you start as a sales professional, you feel that excitement and what is actually dopamine surging when you make a sale, so advisors have always acquainted success with that concept. We need to get advisors feeling excited and fulfilled by other things, seeing team members succeed, stepping into the role of CEO. So there are tiny little nuances, but it’s focusing on that type of work that really helps people evolve more.
Are there tell-tale signs almost of advisors who are stuck? How do we know when we’re there and we need an intervention, so to speak, a coaching intervention?
Yeah, that’s a good question because sometimes you don’t know what you don’t know and the irony of self-awareness when you really think about it is, but if you’re not self-aware, how could you know that you’re not, self-aware thing. So, as what we look for is we’re intently focused on language. A lot of times advisors will talk about feeling as if they’ve plateaued. You’ll ask them questions about the value proposition and the vision of the business, and I hate those questions because we ask them so often I get tired of asking them. But when the advisor really struggles to articulate that, when we find that they’re not relentlessly prospecting anymore, meaning talking about their business, seeming exciting about their business, that’s an indicator that something is off. Usually, it’s that they’ve hit a place where they don’t know what their next pivot or evolution should look like, so it really is all in the language.
If an advisor, if they feel like they don’t know what to do next or they feel a little bit lost or they feel stuck, is there a question that you can share with the listeners that they might ask themselves that would help clue them in that they can get help on something or that they can start thinking in a different direction?
Yeah. In my experiences, the advisors who are articulating those types of things, “I feel stuck. There are so many decisions I could make. I’m not sure. Should I leave my firms? Should I acquire a … ” When they’re asking all these questions, usually a couple of things. Number one, I ask them to, first of all, take an audit of the business. Most advisors have challenges that they end up throwing human capital at as a solution. So their instinct is, “I’m feeling at capacity. I don’t know what to do. I need to hire somebody.” So, I asked them to take an audit of the actual business. What are their profit margins looking like? How are they charging for their services? Because in many cases, there were some fundamental things that we need to work on before we get to the bigger stuff, meaning they haven’t systematized, they haven’t segmented properly, et cetera.
The next big question I asked them to think about is, do I want lifestyle practice or enterprise and have I even really explored what each of those means? Because in many cases, advisors have FOMO about what’s happening in the industry. Somebody left their firm, a private equity firm invested in them and now they’re making billions of dollars. I asked the advisor, “What is it that you actually want? What role do you actually want to play in the future company and then let’s work backwards,” because in many cases, the advisor is fine just where they’re at. We just need to tweak a couple of things in the actual structure of the business. So look at the fundamentals of the business before you make a decision about anything and then ask yourself, “Am I going down the lifestyle practice route?” Which is just fine by the way, or, “Do I want to build enterprise?”
Hi, it’s Julie here and I hope you don’t mind me interrupting just for a moment. At Absolute Engagement, our focus is on helping you to use input from your clients, to evolve your experience, uncover unmet needs and increase referrals. I wanted to let you know about a new resource that’s built on the idea that we don’t know what we don’t know. That is, it’s a helpful self-assessment for you and your team to determine if there are any gaps in your understanding of client needs. Just go to evolveyourclientexperience.com and you can download it directly from there. I’ll also make sure we add that to the show notes.
We’ve been talking a lot about getting stuck because I think it’s something we can all relate to whether it’s in our day or our week or our business. But when you think about the advisors you see who are making real progress and reinventing themselves and adapting, what are some of the characteristics there? What do you see as some of the big things that advisors need to be doing?
It’s a good question and interestingly, it doesn’t have anything to do with demographics. We know the demographics of the industry, but what I mean by that is the answer isn’t, “Well, all young advisors are more adaptable.” That’s not the case. What I’ve noticed about the advisors who are having success, a couple things, they, very, very strong. Why? So they can always check back in with their core mission and purpose really, and their purpose and place in this business, incredibly clear. The second thing is that, and some of them either have gone through coaching or coach themselves enough to do this and some are just natural at it. They have the ability to go into every day without a preconceived notion about what success is going to look like today versus yesterday.
So for example, I hear from advisors all the time, “I’m still trying to get a following on LinkedIn and I’m posting every day motivational quotes and I haven’t seen any pickup from that on social media.” The advisor who’s making progress is asking themselves, “Is my ideal client even on LinkedIn? Is LinkedIn the best place for me to really be expressing myself? Maybe I should try recording a quick video and texting it out and seeing how people react.” So they’re constantly asking themselves open-ended coaching questions, even without training, to be able to make decisions about what’s working and what’s not working. If you can tackle that, you will have no problem progressing in this business.
So they’re doing experiments constantly, it sounds like, which I think people find daunting and it sounds tiring, but I guess if you have that mindset of, like you say, “This is just how my day goes. I try new stuff.” Does that make it easier somehow?
Yes, and the other piece of it is being comfortable being uncomfortable for extended periods of time. I just recorded, actually, a video two days ago, talking about the power of working both on and in the business every single day, because advisors often say, “Well, I want to get to a place in time when I’m just working on the business so I can think about what to do next.” The truth is, you’re never going to get that time. So, you have to teach yourself to constantly experiment throughout the day, focus on what you do well, but be willing to be vulnerable enough to tell your clients, “Folks, we’ve learned a lot in the past year. We’re trying to keep up to speed on marketing and technology and how to communicate with you, so we’re going to start sending out a monthly video to you,” being vulnerable enough to share with clients, “Hey, we’re trying something new,” that makes it easy for you to experiment on an ongoing basis.
So you had just mentioned a couple of questions that those advisors who have that capacity of questioning themselves and doing a little self- coaching, which I think is a fascinating idea, ask themselves and there was another coach that I’ve been listening to who suggested having a short list of questions that you would, that you would choose one and ask yourself that same question first thing in the morning for a week or some extended period of time because every time you ask it, something new comes up. Do you have any thoughts about some sample questions that advisors might ask themselves as they start their day that might help kick them into that kind of a orientation?
That’s such a great question and I talk a lot about relentless prospecting, the idea that, “How can I spend the majority of this day being an ambassador to my own brand?” When I coach advisors on questioning, I always coach them to ask what or how questions, because those are coaching questions. They are forward-looking and they propel us to solve our own problems. Same when you’re coaching somebody, you ask them what or how questions. So the first question I asked them to think about is, “What questions are my clients asking themselves on a daily basis?” That’s a really important question and as somebody who’s run a coaching business where my clients were advisors, I had to ask myself that question every day, because I put out a ton of content on a daily basis for advisors.
“What questions are my advisor clients likely asking themselves today?” So, that’s how I start my day personally with other questions, especially as you think about tackling strategic conversations, meetings, difficult conversations with clients, what is it that the other person wants to achieve in this conversation or meeting or whatever, what is their objective? Then, what is my objective? So gaining clarity around what you’re trying to achieve on any given day and what the client or your team member is trying to achieve is a really helpful way to not just organize your day, but steer the way in which you move through your calendar on a daily basis.
Something I love about what you just said was asking what the client wants to accomplish in their day. I can envision, also, even just breaking that down, every advisor who gets ready for a client review meeting or client presentation asks, “What do I want to accomplish in this meeting?” It might be really interesting to ask, “What does the client want to accomplish in this meeting? When the client comes in so that we can do a review meeting, what do they want to accomplish?” That could be really interesting to ask.
What a powerful question. Steve, I tell advisors, on their internal calendar, to put that question there. So that’s the first question. “What is the other party’s objective in the conversation?” Then the second question is, “How can I ensure that I spend 80% of the time listening, especially if it’s an initial conversation?” What we’re actually doing here is hewing our minds to think differently because the sales person, you tend to be in defensive listener or an aggressive listener, right? You want to get to your objective. When we do that, we actually train or self-coach ourselves to go into the meeting with a completely different mindset, so really, really helpful and simple tactic, I would say, for advisors to use.
You’ve talked a bit about the need for more EQ training. Is that what you’d put in that bucket?
That’s exactly what I’m getting at. I used to do a series about EQ and I would joke that the typical advisor, when I would start talking about EQ, I’m not asking you to cry with your clients; I’m asking you to…
At least until the market goes down.
Right, until everybody’s buying GameStop and not sticking to the plan, but it is raising the level of awareness of what somebody else needs from you and a great way to practice EQ skills, by the way. First of all, understand your communication and listening style. I go through this exercise of mindfulness, like if you tend to cut people off on and flip them off on the highway, if that’s your style, you’re likely an aggressive listener. So recognizing our listening hindrances is really, really important, but the other piece of that is practicing those skills at home and with people you feel comfortable with.
A great way to practice EQ is two things: if you’re in a conversation with your spouse, notice, just simply notice, if they are complaining to you, do you tune them out or are you intently listening? Are you the type to just say, “Yep. Yeah, I got it?” Or, are you actually listening to what they’re saying? The second thing is, how can I be helpful to you as you express what you’re expressing to me? Practicing those skills with kids, spouse, it may sound a little bit weird, raises your EQ and you can start to use those tactics professionally as well.
Okay, I’m feeling bad about myself now after that, so I…
Well, and speaking as the only-
My husband thanks you for that.
Speaking as the only husband on this call, I can also add the advice, don’t offer a solution too fast. As Penny, you said, “Listen to what they’re looking for,” which might be for affirmation as opposed to advice.
Again, I’ll add to that, Steven. It was such a great point. Imagine now, putting your spouse or partner or client in a position to say to you, “What I need from you is just listening and validation of what I’m saying,” and then giving them that, oh my God, you just created rapport and deep trust with literally one sentence. Powerful.
I love a good question, and I think there’s just such power in this skillset because I also have to believe that even if we ask clients what they want and what they want to accomplish and all of those things that we think are the right questions, sometimes they can’t articulate that, right? That’s the nuance of being able to help someone actually label and articulate how they’re feeling is a completely different skillset, but such an important one. Maybe we’re seeing it even more now, because we’ve got all these new emotions we have to label all of a sudden.
Well, Penny, I’d love to hear your thoughts about this. Julie had such an important point that you can’t just necessarily ask your client what you can do for them that you’re not doing now because they don’t know what’s possible, especially if they have you in a particular pigeonhole, if they think of you as the insurance person or the investment person. So Penny, what kinds of things could an advisor ask a client that would help them express what kinds of things the advisor could do without directly asking, since the client probably couldn’t answer that question?
Wow. That’s a really big question and there’s multiple, I think, facets to that. The first, to close the loop on the feelings, after hearing this for me, you will start to catch yourself more and more. Advisors feel like they’re being open-ended when they ask questions, but if you ask a client, this is an exaggerated example, but if you say, “Wouldn’t you feel safer if you had a product that protected you, god forbid.
Leading the witness, we call that.
Right. Exactly. Anybody that thinks that’s an open-ended question needs your coaching.
We often fill in the gaps. We say, “That must’ve made you feel awful.” Let’s not assume they felt awful. We need to give space and time for that language to develop for people who maybe aren’t natural sharers. We can’t assume that clients or feelers or thinkers, because we really don’t know, so giving them as much open space to express themselves is really important. The other thing I say to advisors, and I was talking about this a lot last year, first of all, it’s always critically important to remind clients of what you do. Every other service provider in every other industry reminds the consumer on a daily basis, what they do well. Netflix, with all the ads we get and we’re constantly being reminded of what these service providers are doing for us. But when you talk to advisors, they feel embarrassed sometimes to share accomplishments that they’ve had with clients, with the client.
So what I share with advisors, and this is especially true now, getting through and out of a pandemic, I say to the client, “I realized how critically important it is to explain to you the difference between wealth management and planning, which is what we do, and what other advice providers in the industry do.” We’re not saying that any ones are wrong or right, but articulating the difference to a client of wealth management and planning versus investment management, simple asset allocation that they could get for 10 basis points at betterment or insurance planning, really important. The other thing I would say is actually list that out. What does wealth management mean? It means investment management and risk management, emotion management, budgeting, cash, all of the things and document your client’s successes. At the end of every year, you should present them with your 2020 wins. “We rebalanced your accounts. We kept you invested during a tumultuous time,” et cetera, et cetera, et cetera. So you’re solidifying value proposition and also hewing clients into ways in which you can help them that they may not have thought of.
Well, it’s obviously a great connection into the referral conversations because you’re certainly giving them some of that language. On that topic, what have you seen, what are you seeing in terms of advisers who are, perhaps, more successful in generating referrals? Have you seen any particular best practices or trends in that area?
It’s ironic because whenever you talk to an advisor who’s really successful in this business, they’ll always say the majority of the business comes from referrals, but most of the time the advisors will say, “Well, we don’t even ask for that. They just come to us.” I’m notoriously not a fan of the traditional referral language and we get paid one of three ways, that’s craziness. But I think what we’re alluding to here is that the best in the business don’t actually have to say those words, “Would you mind introducing me to your neighbor?” Because they’ve created a referable experience, to our point earlier.
They are constantly focused on creating an experience the client is going to share with a friend and I’ll give an example. I was just talking to an advisor before and she was sharing about the sale of a business for one of her clients. I said, “That’s so incredible. You should celebrate that.” She goes, “Oh, I do. I would organize a congratulations party at the best steakhouse in town and I would pick up the tab for the client and his or her spouse and kids.” Now with the pandemic, she’ll send food from the best restaurant with a bottle of champagne. It seems so obvious and trivial, but so many advisors don’t do this stuff and that’s what creates the referable experiences. It’s not performance on a portfolio.
So we talked about-
Interesting.
… mindset. We’ve talked about a different type of conversation. You touched on the need to work on the business, so many different things that we tried to cover today. But if you were to try to bring it down to a couple of things, maybe, that advisors could be doing differently or questions that they could ask themselves, what do you want them to take away from this and maybe get started on a different path?
So I’ll say three things, and I didn’t prepare this before, so I may end up regretting the three things.
This is the ad limb portion.
We’ll fix it and post [crosstalk 00:32:35] That’s right.
Three things I’d say. So, number one, there’s arguably never been a better time than now to audit where you’re at in the life cycle of the business. I say that because we just came off of a year that even if you’ve been in the business for 40 years, you’ve never experienced something quite like this, so never been a better time than right now to say, “What is the strategic direction I am taking?” The answer could be, “I’m not sure,” but auditing the practice and your role in the practice. You have to do that thinking before getting through 2021. So, and that goes back to that question of, “Do I want lifestyle practice, which means I’m really the revenue generator or do I want enterprise where I’m relying on others to generate revenue?”
So, get comfortable with exploring that question. The second thing is, watch the YouTube clip from the company nerd wallet. It’s a commercial that they put out that was very successful in terms of marketing called Questions. It’s a 30-second clip, just type in NerdWallet questions and it is literally a voiceover of somebody just asking questions in the voice of the consumer. So they’re targeting millennials and the questions are, “Can I afford to add avocado to my toast?” “Should I put off paying rents? Should I be [inaudible 00:34:04] ?” But we laugh, but these are questions that millennial entrepreneurs had last year. We say millennials like they’re 18 years old, millennials are 35. they’re still on Snapchat all day, but they’re in their mid-30s, so it’s really millennials and Gen Z.
So my point is, the second major thing is get comfortable with the questions your consumer is asking him or herself every day. You have to know those questions. Those questions form the basis of your marketing, your value add, your client events. Everything can be derived and built from understanding those questions. That’s the second thing. The third thing I would say is you’re never going to find time to work on the business for extended periods of time, so bake in strategic thinking time into every single day. You can time block it. You can spend time before the day gets started simply thinking about the business and about the state of the practice, but you have to bake that time into your tactical day-to-day.
Yeah, absolutely. Well, thank you so much and just a one quick question to wrap up. For anyone who’s just interested in connecting with you and your work, where’s the best place to find you?
I am very active on social media. I’m on Twitter @thrivosllc.com. I’m on LinkedIn, Penny Phillips, and you can really reach out to me anywhere that. The company website for the Journey is journeysw.com and I’m always around and always open to talking to advisors.
That’s wonderful. Well, thank you so much for your time today. It’s been great talking.
Thank you, Penny.
Thank you guys so much. Appreciate it.
Hey, folks, Steve again. Thanks for joining us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really helps. You can get all the links, show notes and other tidbits from these episodes at becomingreferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs and other resources. So until next time, so long.