Shedding Old Belief Systems and Structures in Order to Grow with Penny Phillips [Ep77]



Welcome to episode 77 of The Innovating Advice Show.


I’m joined by Penny Phillips, President and co-Founder of the newly launched Journey Strategic Wealth.

Penny has spent years supporting financial firms and advisors as they embrace change and discover new ways to thrive.

In this episode, Penny and I discuss old belief systems and structures - many of which we don’t realize we’re holding on to - and how to shed them in order to grow your business.

Penny talks about the importance of understanding client psychographics - and what that means - how to lead with curious questions and not make assumptions, how to handle challenging compliance situations and, as the person that introduced me to BombBomb video email which I love, we of course talk about advisors leveraging video in their business.



Resources


Guest Bio


Penny Phillips has spent most of her career coaching and consulting financial advisors, business owners and wealth management institutions. She is a founding member of Journey Strategic Wealth and as President of the firm’s corporate operations, is responsible for ensuring that all team members have the resources and tools they need to powerfully serve clients.

Prior to founding Journey, Penny ran a consulting firm called Thrivos Consulting, and prior to that worked in various leadership positions across the financial services industry. She has authored multiple practice management training programs focused on helping financial advisors prepare for the next generation of wealth holder. On a personal note, Penny was born in raised in NYC. She is of Greek descent, speaks fluent Greek and often jokes that her only hobby is spending time with her family.



Timestamps


00:05 - Introducing Penny Phillips

01:47 - Everything has changed and nothing has changed

02:24 - The most common old belief system people are holding onto

03:58 - How to know when to hire

05:15 - The most common underlying challenge: Not taking time to institutionalize investment management

06:55 - Scale and customization in the advisor world

09:45 - What are psychographics?

10:40 - How to understand your client's psychographics

12:32 - Don’t assume what your client thinks

14:43 - Keeping up with the news

18:57 - Don’t underestimate the power of community

19:37 - Going through compliance and being authentic

23:15 - BombBomb’s video email and being able to evolve

25:04 - Old belief: People need to work in the office

26:37 - The difficulty of connecting with your clients via video and how to get better at it

31:12 - Launching Journey Strategic Wealth: Why it's the best of both worlds for advisors

37:34 - Some final thoughts: What hasn’t change



Transcript


Kate: Welcome. Thank you for joining us. I am here with the one and only Penny Phillips. I am so excited to have you here. Thanks for being on the show.


Penny: Thank you for having me. Good to see you.


Kate: Yeah, you too. And we've got so much to talk about and  as we were prepping for this, we were looking at all these different options. And I just want to start by saying, you said something in one of our chats a few months ago that has resonated. And I have repeated many times around how everything has changed and nothing has changed during the pandemic. And so keeping that in mind, throughout our discussion, we're going to be looking at a lot of the old belief systems that people continue to hold on to. And this is across everyone in the profession, because you work with RIAs and B-Ds and you see all sides of it. So thinking about growing the profession, and everyone wants to grow their business or should want to grow their business. So how do you shed those old belief systems and processes. So I want to start by asking, what would you say is the most common old belief system that people are holding onto right now.


Penny: Oh my gosh. There are so many. And I just have to say that after I said that to you, that everything has changed yet nothing has changed. I've been saying it over and over. So that's my go-to line when talking about how 2020 impacted the advisory business. And I'm sure we'll get to that, but belief systems, I use the term belief systems and structures a lot and, and folks sometimes don't really understand exactly what I'm saying. And so if you think to yourself as an advisor or leader, things like I'm not a good people manager, that's probably the number one thing I hear. I'm not good at managing people. I didn't get in the business to manage people.   I'm good at talking and working with clients. That's an old belief system and structure that needs to be shed.


Penny: Belief systems like, working from home doesn't work. We need to physically be together. If we want to really have synergy. And if XYZ team member works from home, they're not going to be working. They're going to be  watching TV. Belief system crusher.


Penny: And so what happens is  we tell ourselves as leaders and advisors these things and they sort of stick, and we can only look through that specific lens, that old belief system lens. And it's a hindrance, it's a hindrance to growth and it's a hindrance to evolving as a leader.


Kate: Yeah. So I want to take a moment on both of those, because I've had a number of conversations over the last couple of weeks or months with people looking at their growth systems going forward. And a number of businesses are like, okay, we need to hire people, but I'm not sure they're actually clear who they need to hire. And one of the things I know you talk about is, make sure that you're actually dealing with the underlying challenges, because if you have challenges now, just bringing on more warm bodies is not actually going to solve those challenges. So how do you help people think through, okay, when do you actually need to hire and how do you know that you're in the right spot for that.


Penny: So true. And you just hit on another belief system. And this is sort of an old school way of thinking that we could throw human capital at every problem, and it will be solved. Meaning every time we feel a pain point in the organization, let's bring on somebody to support the admin. And let's bring on a junior advisor. And what I share with advisors is if you haven't institutionalized every aspect of the business, hiring another person will be a temporary fix, but won't fix the fundamental challenges of the business. And in many cases, those challenges have to do with operational efficiency, not having systems. I would say the most common, underlying challenge that doesn't get solved for, at least that I've seen in the independent advisor world is the fact that advisors haven't taken time to institutionalize investment management, meaning they're creating new portfolios and, and investment management processes with every new client coming on board. It becomes really hard to scale and build a business if that hasn't been solved for no matter how many people you hire.


Kate: Yeah. So is that one of the things you would say, I mean, in terms of what does it mean to be institutionalized and have your systems and processes be institutionalized? What's that look like?


Penny: Yeah. I ask advisors to imagine if they and their team were to have to step out of the business for an extended period of time. And we were to bring in replacements, remember the movie, the replacements, and we were to bring in new teams to come in -  would they be able to engage with clients end to end the way the business traditionally has? Meaning, would they be able to generate leads exactly the same way. Would they be able to process new business, approach clients, deliver service, the exact same way it's always been done. And so when you think about systemization, it really is that, it's repeatable processes and systems that guarantee that the business is sustainable, no matter what.


Kate: Yeah, so Sara just brought up a good point that I'll share here, which is exactly what I was thinking in terms of, many financial advisors feel that they lose that custom service that their clients value or that they think their clients value if they institutionalize that business. And that's, I mean, my thing has always been, I love the operation side. I'm, that's what I'm big on. That's what I do consulting on. I just love getting those systems and processes in place. And what I always emphasize is that we're looking to do it in a way that actually adds human touch, not takes it away. So it seems to me that's one of those big belief systems as people think it has to be me, and it has to be, the founder. And if you let go of that, that somehow everything is going to fall apart. It's a, I guess it's an ego thing.


Penny: Well, it's such a good point. And I think maybe a more powerful word for us moving forward instead of  institutionalization is scale and customization, which is really what we're trying to accomplish.  Think of what Netflix has done or Amazon so successfully this idea that we can scale service. So be able to deliver it to tons of different people, but still feel like the experience is customized. How does that translate in the advisor world? Well, all of the things that technology can do for us, that's where we scale. So we leverage technology, especially portfolio management and reporting systems to the best of their ability. We leveraged technology to create repeatable systems around holding onboarding client meetings rather than review meetings. And the customization comes in with people, the way in which we actually, the questions that we ask when we're engaging in discovery with clients.


Penny: I use this example all the time: technology, service, fees. Those are no longer differentiators in our business. The only true differentiator is your ability to understand the psychographics of the client. So if you're saying that your value proposition as an advisory firm is that you listen intently to clients -


Kate: I'd hope so.


Penny: Yeah, but some people say, we're great listeners. Like that's our value proposition, but the way in which you customize that is give a disc assessment or   a communication assessment to every top client that you bring on board to show them and prove to them that you're wanting to understand how they best communicate. So that's a way to customize your value proposition and we can scale it because it's really easy to give people a disc assessment. You send a link. So  that's just one example of, of what scaling customization actually means.


Kate: Yeah. So pausing for a second. What does psychographic mean?


Penny: I use this term so much and it's sort of stuck in my head now, but we, as an industry have traditionally talked about client demographics,  like the ideal client profile exercise, where we ask age, industry that they're in, family structure. Consumer psychographics is deeper than that - when  I say consumer, I mean client - make decisions? Are they a pessimist or optimist? Are they driven by fear or by, motivation and hope?  What sources do they get their information from?


Penny: What goes into making a buying decision before they actually, pull the trigger to buy a good or service? That's psychographics. And it's really, really critically important that we understand those.


Kate: Would you get that from a disc assessment though? How would you go about making sure that you understand your client's psychographics?


Penny: It's  a great question. I often tell advisors to, I think this is one of the best commercials that's been out there in our world, the financial services world. It's, NerdWallet's commercial called Questions and you could look it up on YouTube. It's 30 seconds. And it's basically their ideal client who is a millennial. Let's just call it millennial entrepreneur, asking questions throughout the day to themselves and their spouses and partners. And I tell advisors go through that same exercise with your team about your clients. What questions does the client ask him or herself throughout the day from the moment he or she wakes up to the moment he or she goes to sleep and those words - 


Kate: There are hundreds or thousands of those in a day, aren't there? Like we don't even realize how many questions and decisions that we make in a day from what are we going to wear to where's our toothbrushes, what do we have for breakfast?


Penny: But it's things like, can I get a workout in at my local yoga studio before I start my day, I start my day at 10:00 AM, because - not me yesterday at 6:00 AM - but 10:00 AM because I'm an entrepreneur. So understanding the way in which they actually live their lives and make decisions, really important. You can also get a lot of this information from social media. You can get a lot of this information from understanding what content people consume and how they consume it. and you can also ask clients directly. I am a big proponent of speaking directly to the client and asking them questions that you want answers to.


Kate: Well, one of the big things is to not assume what the client thinks and to, I always think about it, we watch too many legal shows, but not leading the witness in our questions. So you had a great video, and by the way, if anybody is not subscribed to your weekly newsletter and your videos and connected to you on social media, strongly recommend that, I love your weekly videos. And they've inspired me to do more of my own videos, but there's so much value in them. And a couple of weeks ago, you talked about the whole GameStop, Reddit wall, street bets thing, and you even talked about, Hey, don't assume that your clients are like, Oh, I'm invested for the long-term. It's all good. If we make that assumption, that's missing a huge opportunity there.


Penny: Yeah. And I think what we have to understand, and there's two sides of that. There is a reason why every big company in the world right now uses analytics and data to make decisions about the consumer. So there's some things that we can assume based on demographic data, right Like we can assume gen Z'rs are mostly on Snapchat and whatever it is, but you're right. In that our perspective, our opinions in the world can change on a day-to-day basis based on information that comes out based on media, based on, what we're consuming and reading on social media. And so there's a fine line between assuming things about the client and also being genuinely curious about what they're thinking and that video. I talked a lot about the use of, first of all, not assuming anything and if clients aren't talking to you about financial services and things going on right now in our world, don't assume they're not talking to anybody because they're talking to somebody, but I stress the importance of, of really leading with curiosity and being able to ask those what or how questions to open up an honest dialogue with a client or prospect.


Kate: But what about how tough it is to just keep up with everything going on? And it was actually, my brother alerted me to all of the wall street bet stuff like a week before it made it into the news. And he kept telling me about it and asking me, and I was looking on social media. I was like, I'm not seeing anything anywhere talking about this. And I was scouring everything. And I was like, I don't think this is a thing. And every single morning, it's like, you wouldn't believe what's happening. This is crazy. And I was like, I'm not a practitioner anymore. And I kept saying, I was like, thank goodness, because it was like, then I would have to understand exactly how all this works. What's going on, on top of everything else going on in our lives, still being a pandemic, people that have kids, it's a lot to keep up with.


Penny: It's almost an impossible amount to keep up with. And it's funny you say that Kate, because I heard about what was going on through my boyfriend, who's an avid Reddit user and reader, and does little investing stuff. And so it's just, it's interesting because for me, that's not somebody who's in our business and I'm getting calls from my parents, my boyfriend. And so it's like, wow, as professionals in this business, and I'm not an advisor, but the advisors at our company or who we coach my message is you don't have to be an expert in Tesla's valuation or Bitcoin to be able to have a perspective and opinion. And that perspective and opinion can be, look, here's the way we approach wealth management. And I'm going to continue to get up to speed on whether there are new opportunities that I can open up for you in, in financial services. But that could be what you say, but you have to say something and you have to appear if you work in the know. And the consumer simply won't  settle for anything less than that.


Kate: And like you just said, even if you say I'm looking into this, right, you don't have to have all the answers. If you just let people know, Hey, we see what's going on, we're following this, we're tracking it. we'll keep you posted. You don't have to have all the answers. And that's something that a lot of us really struggle with.


Penny: And I think it's one, you touched on it earlier with adviser egos. And I don't say that in a negative way. I think if you're a solopreneur advisor in this business, and you've bootstrapped and built from the ground up over the past, however long you need an ego to be able to do that. And so the problem now is though advisors have to quell that enough to be able to really listen intently to clients. And if you think about the way the industry worked 30, 40 years ago, I use this example all the time. When EF Hutton speaks people listen, that was the marketing message of  big firms. Like when the firm speaks that people listen, it's the reverse now, when the client or consumer speaks, we listen as professionals. And so that's going to take a lot of mindset shifting  and belief systems shifting in order for advisors to know that there are some young investors who are as knowledgeable about the markets as they are.


Kate: Yeah. So how do you, and I wanna acknowledge  Matt's comment here. Cause that was great. His take on Reddit and game stop was to not worry, it's a lot of smoke and social media, but it's just reassuring the clients. And it did it, it came in like  a bat out of hell and it was everywhere. And I honestly haven't watched CNBC in years and I will admit, I was sitting down with my husband and brother watching CNBC for hours one day. And I was like, I was completely captivated. I was like, is this going to change the financial markets Is this going to change everything What does this do for investing And I was like, everything is now changed, but going back, everything and nothing has changed.


Penny: Well, what changes, a  lot of people lost money and you're right Matthew in that the advisors who gave that message, they turned out to be right. It's don't  feel the FOMO and don't get caught up in it. And the advisors were exactly right. However, we can't underestimate in today's day and age, the power of community and feeling like you're part of something. And for me, that was the underlying learning from GameStop. It wasn't the fact that, if you look at the charts of what happened to GameStop's price, it was crazy. or the fact that, a hedge fund lost a lot of money. It was that, that the ability to mobilize, to influence on social media and feel like you're part of something greater than yourself, sticking it to the man or, whatever it is. It's a really powerful force and we have to take that into account.


Kate: So this was all on social media, on, from, people that were unregulated. And there were a lot of advisors that were like, I'm hamstrung. Everything has to go through compliance. If I'm going to put out a video, the script has to go through compliance and you talk about this a lot. You're like, you need a plan B. If you've got compliance that takes longer than 24 hours to review something. So what, what can advisors do about that to make sure they can respond in a way that's authentic. And that, that to me is always the big thing is don't just have corporate speak come out. That is not actually doing clients any favors.


Penny: You and I are kindred spirits because I say that all the time, I'm like, first of all, you've never met the CEO of the broker dealer you're with, let alone your clients. So that isn't a powerful message, but this is problematic because, well compliance isn't on this live stream right now. But what I'd say is I truly don't understand why institutions aren't investing more in updating their compliance departments in the sense of, using AI and technology in a greater way, staffing up. I always hear that compliance is short-staffed. And I've been hearing that, from over 10 years ago. So that piece, I don't understand.


Penny: My message to advisors is two things. If   this truly isn't a tremendous pain point for you, then you don't have to look to leave your firm.


Penny: Like if it's not a tremendous pain point for you, then you have to get in the habit of finding a way to systematically reach out to clients at minimum once a month. And then, as major things happen, meaning you have to pick up the phone and call them if you're not able to get a message out to them.


Penny: For the advisors who are dealing with this on an ongoing basis. My honest answer is that you may need to look for another firm or platform that enables you to disseminate messages quickly. The thing I hear from a lot of advisors is 'our clients are older. We work with retirees. They're not on social media.


Kate: They are.


Penny: And yes, they are. They're on Facebook, arguing with people probably. But, you have to have that plan with your team. Okay. We know compliance is strict in our firm, but what we need to be able to react as things happen, how are we going to do that? And maybe every person has 50 clients that they are responsible for that they pick up the phone and call when something like this happens. but there's no easy answer and I don't want to be too negative in the industry.


Kate: Yeah, no, absolutely. But it is one of those things to think about. And to just remember that people do want to hear from you, and in terms of AI compliance, is there a tool that you've seen that you like that helps with that? Or it's something that needs to be developed if there are any tech developers out there listening?


Penny: Firms have to be using this, but for me that the pushback has always been about video and video was like, Oh my God, videos, like, we can't do that. And it's like, okay, transcribe the video and then allow it to run through some sort of app that scans for bad phrases. And  like, I dunno, so many incredible advancements have taken place in FinTech. And I don't see that translating  too much, although there are exceptions, but in the BD world. And so it's frustrating for advisors for sure.


Kate: Well, and it was actually from you that I learned about the tool called BombBomb, which is super weird name, but it's great because it does that like animated, first three seconds of a video. And so you put it in that fabulous Wednesday weekly newsletter you do. And so I asked you, I was like, what are you using And it's fantastic because I now send tons of video messages from my email. And so it's right inside Gmail. And you can just, instead of responding by text, because I overthink my text versus I'll just hit a message. If I mess up, I still hit send and people like that personal stuff. And I've been talking with people and they're like, Oh, well compliance. Won't let me do that. And I was like, it's the exact same thing as leaving a voicemail. It's literally exactly the same. If you call a client, you don't have to get compliance to approve in advance of what you're going to say on a voicemail.


Penny: It's so true. But  what's so funny about BombBomb was,  and I say this to everybody I said it to you, launching my first business, the consulting business, that was a huge driver of the brand and new business the first year I launched because there weren't a whole lot of consultants and coaches using that type of a service to just reach out to people and leaders in the industry. But the thing with advisors and with firms is it will take them years to adopt something I'm already moving on from BombBomb and looking for other ways to like, you have to be that willing to evolve. And what I say is when I talk about being able to change and evolve, advisers have to go into each day, having no preconceived notions about what is going to work today, because it worked yesterday. That's the mindset you have to have now as, as an entrepreneur in any industry, but especially in ours.


Kate: So that brings us back to, you mentioned early in the beginning, one of those old belief systems around needing people that work in the office, and that's another conversation I've been fascinated by over the last like six months. So we're already six months into the pandemic and talking with people about, Hey, do you need to hire And so many people are like, yes, but they have to be in the office. Cause that's how we're going to build culture. And it's so funny to me because I've been starting a few businesses over the last, since the pandemic started with people around the world that I have never met in person. And we built this incredible rapport to the point where we're like, yeah, we trust each other enough to start businesses together. Like, it's so funny to me that we're still, after all this time, thinking that people have to be there in the office.


Penny: I've thought about that a lot. And having just launched a new business, all virtual, I mean, we've done it virtually. We haven't all seen each other because of the pandemic, obviously proof that you could do it, which, I already knew. But when you really uncover that old belief system, I think the honest answer is that advisors aren't used to communicating via video. And it really is that simple. I think it's generational to some extent, I FaceTime everybody instead of calling them. My dad doesn't even own a cell phone, so the differences and he's an outlier, but, but I think the way we build rapport with, with our virtual businesses and teams that we run is because we are still basically in person, but we're just over video. And, and I, I think I underestimated how difficult it is for people who who've never been really vocal on social media or comfortable recording videos, how difficult it is for them to be their true self and build rapport and connect with people via video. It's not, not that easy for people who aren't used to it.


Kate: No, it's not. And that's exactly why, Adam in the UK, one of the things we started is a video creation masterclass because we realized that we had ideas for what we're going to do. And we started running these 30 day video challenges around the world and we're like, Oh, because we're so comfortable doing it. And I've, I've been doing video for 20 some odd years. Like it's just, always been so natural way back with a little, Mac eyesight cameras that came in a little tube, but I loved that, but we realized, yeah, it's not something that comes natural. And certainly in financial services, that's not something that's taught anywhere. It's not a skill that most people have. And so realizing whether it's just, how do you present on video, even if you're in a live meeting, how do you talk to clients.


Kate: How do you build that rapport virtually. How do you make sure that people can see and hear you, well enough that it's not super distracting the whole time. And that's something that has been needed for a long time and is going to continue to be needed. But it'll be interesting to see if that helps people evolve as they do learn more of those skills and get more comfortable and like absolutely anything it takes practice. If it's not something that comes natural, it's the same as learning a new hobby or sport or learning to cook or  anything new.


Penny: Yeah. A hundred percent. And you're a lot better at it than I am. I have been doing videos, for, probably the past three or four years. And it takes practice to be able to think on your feet, which essentially is, and it's no different than being in person with somebody, but it is like you, you feel this added layer of pressure to know what to say and not, not sound silly. And what I say to advisors is that, and this is an old belief system that they have to shed the idea of not scripting something, like I never script anything. And I've done that intention to teach myself how to think on the fly. And it's been the greatest skill that I've acquired in this business. What I say to advisors is you, you are proficient at that. You have, especially my guys who either started as brokers or started as insurance agents, your, one of your greatest skills is the ability to sell something to somebody that they don't really want at a time that they don't know they want it. It's no different when you were communicating like this or speaking on a live panel, or I tell advisors, just record yourself for two minutes, practice answering a question via recording. Don't want back and sends it out. It's no different than what they do every day, but it feels different. And that's the hangup I think.


Kate: Yeah, it does. And the one thing I'll add to that is I always recommend people actually go outside because having some fresh air and a change of scenery, because if you're at your desk in your office setting, then your head tends to be in that professional overthinking mode. Versus if you go outside then like your whole mindset changes and it just helps you relax and you're not overthinking it as much.


Penny: That's such a good point. I never thought of that. I also think, say even with like the two minute videos, that advisers do, don't script them instead on like even a sticky note or literally in your notes on your computer, just put a couple of words to remind you of what you want to talk through and, and use that as a way to wean yourself off of ever needing notes and being able to just do you know what we're doing right now


Kate: Well, yeah. And if you can say in the beginning, cause it's great. If you say, Hey, here are three points on, how you should deal with your required minimum distributions and then that'll also be in your brain. So they know they're expecting three things. And then as long as you've got those three points right in front of you, then that also just helps you walk through that. So you're not overthinking things as much as well.


Penny: Exactly. I know it's a skill and, and it's difficult to get started, but once you do, it becomes really natural. So, don't, don't overthink it advisers.


Kate: And one step in front of the other, no matter what you're doing, if it's going to start a podcast, start video, social media, just do one thing. Don't worry about the 10th thing is just do the very next thing. And speaking of doing big next things, I want to make sure we touch on your big, new venture Journey Strategic Wealth. So talk us through why you created that because that's the biggest piece of it is the why.


Penny: Yeah. And you're one of the few that knew, so just launched an RIA [Registered Investment Advisor] firm, with three partners, two of them are advisors, amazing guys been in the business a long time. The thinking, and I had had this thought consulting independent advisors for years, that there wasn't an RIA that was specifically designed for advisors who wanted to be independent, but didn't actually want to do the operational work that comes along with running a business. And now there were a lot of firms that say they do that. There are a lot of firms that say we offer practice management and, yada yada, but for us building out an actual business model where we essentially take over  practice management support for advisors,  that was something that I've always been interested in  seeing if we can make work.


Penny: And we did. So, advisor joins us, they are independent, they own their business, but they essentially outsource everything to us. Hiring team members, payroll, operations, billing, technology,  marketing. And for me, it's the best of both worlds for advisors. It's the ability to spend 80% or more of their time just working with clients and being independent and owning their business, but also having a team that's actively doing the things that they don't want to do. And I keep going back to hiring team members in payroll because the HR stuff tends to be the advisor's biggest pain point.


Kate: Everybody's biggest pain point.


Penny: Exactly, and so  we launched with just over $2 billion in assets, and we have a couple of tuck-in teams that we're going to be looking to add all across the country. And for me, this is a way to say to the industry, the RIA space, technology is no longer a differentiator. I said this before, services are no longer a differentiator. Like if you're an RIA, you have access to sort of  the best in breed of everything. The differentiator for us is culture. Building a business that is, intentionally built for the advisor who  wants to partner with people. And if you've ever had a practice management coach, all the things they help you with, actually have them step in and help you make decisions about the business. And candidly, we're excited to launch a business that's run by a female and a that's rare in our industry still, unfortunately.


Kate: It is and that's a big piece of it and super important. So congratulations on the fantastic launch and $2 billion in assets is incredible. And so are you guys going to just keep looking for people that want to join? So could it be like solo practitioners that are like, Oh, the business is running me and you guys say that, 'You want to run a business, not have the business run you' and say, all right, this is something I want to join.


Penny: Yeah, exactly. Solopreneur advisors who have books of business, wealth management oriented practices, where they're doing investments and insurance and planning, and then larger teams that have simply  gotten to a place where they say, you know what I don't know if we can gain any more scaling capacity. We'd love to be free of our B-D [Broker-Dealer] and be independent, but not have to teach ourselves how to actually run a business in the RIA space, because it is a lot of work. I will say that.


Kate: It is a lot of work. And you and I talked about this a few months ago, but that's something that has just fascinated me for years and years and having done it myself, I just genuinely don't actually believe that all these people that have their own businesses truly deep down want to have their own businesses. And when I talk to people, I'm like, Hey, what is it that you like about having your own business and it's like, Oh, I want the flexibility. And to be able to do things my way. And I was like, but do you really enjoy the actual business stuff and the fact that it's hard to hire and you have to do all the compliance stuff. And they're like, no, that drains me. I just want to do the things I love, but it's been fascinating after all these years that there are still so few options that provide that. And so we do still see so many people starting their own business. Cause they're like, I don't see the right fit out there.


Penny: Or they chase payout and they go to a firm because the firm is offering them, a 92% payout or whatever it is. And that's what I'm trying to change. The framing of that in this industry. if you're offering 92% payout to an advisor and they're leaving a captive structure, they're excited about that. But the reality is the real net payouts on an independent advisor business is between 35 and 45%, because you still have to run a business and pay staff and pay vendors and technology is not cheap. And so let's just - I want to live in a world where we're not red, shiny objects to the advisor. And instead having a real conversation about, what are your actual pain points? And let's build a structure that solves for all of them. And that's what we've done.


Kate: That's fantastic. I'm super excited to see how it continues to grow and build and help solve a lot of those problems. And I love that that's what you're about. And you're just so open about all of it. And you're like, look, these are the challenges. Let's actually do something about it. Cause you can talk about it and do videos about it, but you were like, Nope, I've seen it long enough. Let's actually create a solution here.


Penny: Well, I give credit to my partners, to  industry veterans who, the thing I love most about them. And I give credit to the tremendous book of business they've built, our anchor firm. they understand what got them here won't  get them there. And I have a tremendous amount of respect for them for saying,  there may be a different way to build this and let's bring in talent from all walks of life, all backgrounds, all ages, all demographics, and let's build something that's different. And so I thank them for that. And it's been really cool.


Kate: Awesome. Well, Penny, this has been great. I know we could talk for the rest of the day, but  we'll wrap it up here. Any final thoughts on how everything has changed and nothing has changed?


Penny: Just, the thing I'll say is when I say nothing has changed, it's because the best in the business continue to get better. And it's because they have the ability to evolve and change on a daily basis and try new things. And most importantly, define success for themselves, not define success based on what their firm wants them to do or what the industry says. And I encourage advisors to think more like that.


Kate: I love that. And for so many people, it was one of the best years they ever had the people that had those agile businesses and were leveraging technology. And were able to just keep going through the pandemic. I've talked to so many advisors that are like, we're getting more clients than we can handle. And then advisors that didn't adopt technology. They're like we're struggling to even operate.


Penny: That's right. That's true. Yeah. It was great to see you.


Kate: Yes, wonderful, thank you so much, Penny.


Penny: Thank you.

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