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Building a Financial Services Business
183 Plays2 years ago
In this revealing episode, we offer an inside look at how financial practices are built, how advisors get started, and the challenges they face within the industry. Their personal experiences and decisions highlight the importance of aligning business models with core values, prioritizing client relationships over profits.
The conversation covers a range of topics, from the typical pathways for new financial advisors joining larger broker-dealer firms to the differences between commission-based and trail-based revenue models. The hosts don't shy away from discussing the sometimes harsh realities of starting out in the industry and the ethical dilemmas they faced early in their careers. We passionately believe in a client-centered approach and stress the benefits of building a practice on residual income over upfront commissions.
- Phillip provides insights into how large firms structure their training and revenue models, often aligning advisors' interests with making immediate sales rather than fostering long-term client relationships.
- Arron's experiences underscore the importance of finding a firm that supports its advisors' growth without compromising client service.
- The duo emphasizes the significance of having a fee-based model that allows for transparent, unbiased advice and planning.
- Phillip and Arron share their commitment to continuous improvement, with a focus on serving clients and enhancing their offerings year after year.
- The hosts candidly reveal uncommon business practices they uphold, such as not having non-compete agreements to foster a supportive and mutually beneficial work environment.
Key Takeaways:
- Financial advisors often start their careers with larger firms, facing the challenge of selling products for immediate commissions versus building trail-based residual income.
- It's essential for financial advisors to align their payment structure with their service values, maintaining client relationships as a priority over quick profits.
- A fee-based model assists advisors in providing unbiased plans without the pressure of immediately managing assets.
- Advisors' continuous growth and improvement are critical factors in providing the best possible service to clients -- this is the unwavering mission of the podcast hosts at Uncommon Wealth Partners.
- Ethical business practices, like forgoing non-compete clauses, serve to establish long-lasting trust and collaboration within the framework of the firm.
Notable Quotes:
- "I'm never going to lose a friend over this." - Phillip discussing the ethical implications of sales tactics in the industry.
- "If I am, please fire me because that means I didn't get better." - Arron stressing the need for continuous improvement as advisors.
- "It's bananas... why is that? It's because there's a thing called compounding interest that works really well." - Phillip explaining the power of compound growth in their business.
Resources:
- Uncommon Wealth Partners website: Uncommon Wealth Partner
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Transcript
Introduction to Uncommon Wealth Podcast
00:00:00
Speaker
Everyone dreams of living an uncommon life and the best asset you have to achieve your dreams is you. Welcome to the Uncommon Wealth Podcast. We're going to introduce you the people who are living uncommonly. We're also going to give you some tools and strategies for building wealth and for pursuing an uncommon path that is uniquely right for you.
00:00:25
Speaker
Hello and welcome everybody to another episode of the Uncommon Wealth Podcast. I'm your host, Phillip Ramsey. And I'm Aaron Kramer. Thanks for tuning in. We're two financial advisors that are quirky and uncommon. I don't know what else to say. But today, we are going to talk about this whole financial services industry.
00:00:44
Speaker
Holy cow. We're going to pull the veil off of it, how we build a practice, how other people build practices. This might give you a little insight about how we think just inside our head. We hope this is beneficial. Maybe it's just going to just be kind of informative, but it'll be good for Aaron and I. That's kind of what we do this podcast for anyway. Sorry to be selfish about it, but that's where we're at. So I think it's going to be good.
Insights into Financial Services Industry
00:01:08
Speaker
People just understand like when you're selecting advisor,
00:01:11
Speaker
Yeah, I think that's valid too. So maybe this could be more beneficial than I thought it could be, but I thought it would just be kind of fun to be able to just process through how companies start in financial services, maybe even how agents or advisors start in this business. And I think one of my points that I hope is communicated here is it's not easy. This is not an easy industry to get into and stay in for a couple of reasons why we're going to talk about.
00:01:40
Speaker
Okay, so let's talk about it. There are two ways. Let's just talk about how you get into the industry at first, right? So normally, people are like, hey, I want to be in financial services. And they normally kind of shack up with a bigger company. They're called broker dealers. They're called captive agents. Let's talk about Northwest Mutual, Mass Mutual, New York Life, Principle, Raymond James.
00:02:05
Speaker
Now i don't know and i can't speak for all financial services but what i will say is the way that i got into it was principal financial group i'll just say it by name and they wanted me get my life insurance my health insurance my sixty three in my sixty six.
00:02:24
Speaker
So those were the tests that they wanted me to get license for here's why i think they wanted me to get this because there's other licenses that you can get and take that lets you have access to a little bit more things to provide for your clients.
00:02:40
Speaker
but principles big model in that time was life insurance like they really like to life insurance or heavy on life insurance and mutual funds and those all those kind of like licenses they're asking me to get allowed me to go get those things.
00:02:55
Speaker
Now, they said, hey, we're going to give you four months of a draw, meaning they'll pay us pay me money every month. It was four thousand dollars. I'll be super transparent here every month for me to then go kind of train and then talk to my family and friends.
Challenges with Product-Based Approach
00:03:13
Speaker
In that time, what I found was, one, I was told that I can make $100,000 in this industry very quickly within a very short amount of time, within at least 12 months. And what I found was I believe that you could do that.
00:03:29
Speaker
But in my conscious, I didn't feel like if I wanted that money, I could sell the things that were the best for our client, for my client, for the people I was sitting in front of. It was very product based. It was very, hey, here's life insurance. Here's a variable universal life, VUL.
00:03:49
Speaker
Here's all this stuff that I don't know. I don't know if that was really helpful or beneficial to the client. It was like, it's kind of plug and play. Like, hey, you have a client, this is what they need. Make sure you get them to be emotionally connected and then make them cry because their husband, you killed them off. Do they have enough life insurance? Like, oh my goodness. And another thing that they were really trying to train me to do was, hey, how much of disposable income do you have every month?
00:04:17
Speaker
Because that's the kind of planning that we're gonna use okay so if you're saving five hundred dollars we're gonna take five hundred dollars and then we're gonna make sure that you're gonna be in a better place when you retire.
00:04:32
Speaker
I just didn't like how they were trying to use my family and friends to get in front of them to make them cry. I was like, I don't wanna talk to myself, let alone my family and friends. This isn't good. And so immediately I was like, this, something isn't right here.
00:04:49
Speaker
um at least the way that they did like for my conscious now this might work for other people it just doesn't work for me and it didn't work for you erin so let's talk about how you got in the industry just the overarching like your career path go for it yeah i got brought in so my uncle i told my uncle i wanted to be in the business and i love him he i respect him and i would love to have a practice like his
00:05:12
Speaker
Practice like him, you know, like um, but I didn't go with him. He's all the way out and Cedar Rapids I had to go interview around and like you it was like you can make $100,000 in the first Year or two years and then are guaranteed five years and it's like, oh my gosh. Wow. Okay. Mm-hmm went through a couple people Found the guy that I wanted to I thought it was good for me at the time and
00:05:42
Speaker
Yeah, same deal. You ask them how much money they have left over every month, and you split it up and you put the majority of it towards a life insurance policy, and then you put the rest of it to a Roth IRA or something, and you're on to the next person. You're not spending any time with people. You're just telling them what they want, and then you're like, you're dying them off.
00:06:07
Speaker
You start finding out real quick, like you're not having relationships with anybody.
Commission-Based vs. Trail-Based Models
00:06:10
Speaker
No, right, right. And one thing that I told myself early on in this industry is like, I'm never going to lose a friend over this, never lose a friend. And so that was probably why I was super reluctant to go into my family and friend's house and be like, okay, and I'm going to kill you off and sell you life insurance.
00:06:24
Speaker
that just wasn't my personality so the problem i think with that model is yeah there's sometimes people do need life insurance for the record but maybe not everybody that you go talk to and the reason why they push maybe not the reason that could be too harsh one of maybe the reasons why they push that you sell that is because you get an upfront commission.
00:06:47
Speaker
Therefore, you get more money upfront instead of a trail-based or a long residual trail that like a Roth IRA would do, right? So we can talk through that. So there are two things and two ways that financial advisors can get paid. They can get paid upfront, meaning they get a bigger amount of money early, but then they don't get any more for the rest of the time they're in that relationship.
00:07:15
Speaker
This is a very good product sale for people. Yeah. So to go into that, those for our listeners to understand this, like when you're, when you're an advisor, an agent is with a company, like a bigger company. Yep. The advisor really makes the majority of their commission and of that first year. Yes, that's right. And then like the payout, I mean, the, you know, the people ahead of them, they get their cut, the company gets their cut. Well, then beyond that.
00:07:39
Speaker
the advisor or the agent's not really making much more money, but who is making money? We all know insurance companies are rolling it in. So that hence they love you going to sell your term life insurance, your permanent life insurance policies, because the agent's done after the first year for the most part, and he's not surviving on anything off that ongoing, but the company is rolling it in. They love that that guy was a peon, sold the policy, they're cashing in on it. Go sell moon, right?
00:08:07
Speaker
So that's the reason why i think a lot of early on advisors that get caught up with like a more captive agent or dealing with these more big shops get caught up in more commission based. Information this first time commission although the power i think in this industry or i think almost all industries if you can get a residual or a trail.
00:08:32
Speaker
on monies that are in there and you get it over time that is the that is the power of financial services that is how you build a great practice is when yeah we're getting paid probably a little bit more than last year because the account grew now the amount that you get paid up front is dismal.
00:08:52
Speaker
compared to the commission. It's maybe like 10% or even less that you would get paid. And that's, I think, a big misconception of people like, hey, I'm going to give you, hey, I got a $25,000 account. We barely make any money, like maybe $12 a year. I'm not even sure. Just not that much money, although it will help anybody. We'll manage your money, no problem. But we mainly do it because we want to help, not because it's like, this is a cash cow for us.
00:09:19
Speaker
So that's now how businesses build companies. There's two ways you can build it with a trail based very slow at first, but as it kind of adds together and keeps going every year.
00:09:35
Speaker
that grows to something big. Then you have this other thing, it's like, hey, we just want the upfront commissions. We want to get as many people as we can. We want a tournament burden. We just want to sell them something and we hope they go away. It's kind of the way that I look at it because you don't get paid for anymore after you take this upfront commission. So when they come back and be like, I got a couple of questions, you're like, dang it, I'm not getting paid for that. Well, because you took it upfront,
00:09:58
Speaker
You didn't take that long-term trail. So if you know anything or you've listened to our show at all, you realize that Aaron and I value relationships. We value serving people.
00:10:09
Speaker
And so we have made a conscious decision to get paid for as long as the relationship is intact. And that means that we just focus on trails. We want a trail based business that is focusing on taking a small percentage of the accounts that we manage because we want to have a relationship with people
00:10:29
Speaker
from now until the relationship ends. And that's normally because the client's like, Hey, I got something happened or going somewhere else. It doesn't have much, but it does. And so that's the way that we want to have a business because it's way more in line with how we sell and how we think is we want relationships for as long as we can keep, we value that. Yeah. In this, in this line of work is we both saw it when we're coming up in the, you know, when we're, you,
00:10:55
Speaker
You got people that are money hungry and they love the chase to get that big commission, sell somebody on something. And they've, I think these people truly believe that they're doing the right thing. Cause if you can't, that's bad. You gotta be able to go to sleep at night. So they've tricked themselves. They put walls up to make sure that they do this. But the problem is like, I saw like, here I'm like acquiring all this knowledge to be of service to my clients. Cause I want to be a resource for them. That's what we're here for. Yeah, right.
00:11:24
Speaker
Then I have clients calling in asking questions and it's like, I'm getting like, I just feel so bad because I'm like, I can't sit here and talk to you for 30 minutes or an hour. Cause I gotta go get more people. Like, cause I gotta get another policy sold. I gotta go find a new client where on this side, when we are fee based, you know, it is harder to build. It's a lot slower, but that person is paying you on going and
00:11:50
Speaker
You get to actually slow down and have a relationship. That's right. Because they're going to they're going to continue to pay you and that's what you're there for. So it's like, oh, yeah, calling anytime, you know, and then it's not this whole like, oh, turn and burn. So I don't care if you're working with somebody and they're commission based or.
00:12:09
Speaker
whatever they say, I don't care how good the person is, I feel like, and I'll say this about Philip, Philip has this heart of gold, but if he has to feed his family, and he has nothing coming in next year, he can't talk to you, you guys are gonna go find new people. He can't help you. And it's so easy to get caught up in the commission world of getting paid up front. And what then you find is that you have to continue to go out and get new clients,
00:12:36
Speaker
And what ends up happening is you have a lot of clients at the end of the day.
00:12:40
Speaker
But none of them are really paying you anymore, because you've taken that commission up front. And so you have to keep, this is my analogy, you have to keep bringing in people into your pen. And you don't have any fence on that. And you kind of want them to go
Difficulties for New Advisors
00:12:58
Speaker
out. But that is totally unaligned with how we think. Because I want to keep having a relationship with people. And so I keep reaching out to people.
00:13:07
Speaker
Business wise, it's like it makes no sense. Like they're not paying you anything, but that's not their fault for our decisions that maybe we did in the past. No, we need to just build it in a different way. And so that's how we build it. But I do think that it poses a problem for any person that wants to come into this industry because the margins are so small.
00:13:30
Speaker
And expenses are pretty high. So if they want to really provide for their family, how does one do it? And so that's in lies the rub when somebody comes into the industry. So I know like other companies who are building a business like us, which is trail based, they'll just say, here's your salary. You don't have to do anything. Here's your salary. This is how you help the team. And then as you grow and get clients and that residual comes to your salary,
00:13:59
Speaker
Then you kind of switch over into like, okay, now you can get a percentage of the commission or the trails that you're getting. So, but the margins are so small. And so think about this from just any other business. Let's say you're a painter. I'm just making this up. The problem with painting is that you have to continue to go paint rooms.
00:14:22
Speaker
And hopefully by the time you're 10 years in the business, you've painted so many rooms that there's now they need and they had such a good relationship with you or had such a good experience with you. They need another room in their house painted. And that's the most residual that you can get is just good word of mouth. You had a great experience with them and they would always use you when they're ready to paint. That's really the only residual component of it.
00:14:45
Speaker
At the end of the day, you just gotta wake up in the morning and you gotta go paint more houses or go paint more rooms, which normally requires brand new clients coming in. Where with us, we can have the same 200 clients and doing it trail based, we don't have to get any more new clients, we can just serve these people as well as we can, because we know that they're paying our expenses. So we don't have to need to go out to go get new clients. Let's say they come in, we can totally serve them,
00:15:13
Speaker
But it's not something that's like drastic. We got to go get it. We got to go get it. We got to go get it. We got to go. Oh, stressful. And it gives me anxiety. So that's, I think, just a way to just peel back what in the world is financial services. How would you build a practice and how uncommon wealth.
00:15:31
Speaker
How what is your DNA? How are you trying to grow it? What have you done in the past? Like I'll say in the past, we have not done a good job of like, hey, it's very we need to be trail based oriented. I've always known that that's kind of my bend. But early on, I mean, this is 10 years ago.
00:15:48
Speaker
I just, you know, you have to get paid. How do you do that? I would still say I will sacrifice all day for myself in order for the clients to get the best service. That now is unified. Both Aaron and I are that way. And there is nothing that's gonna,
00:16:04
Speaker
change our mind that's why we're going to build on commonwealth from here on out and i'm so grateful that that's you know you're in line with that i think our whole team is in line with that but our clients are feeling that as well it's just man you guys serve well and that's what our job is right yeah we're going to do that a big difference you know it's funny as we're having this talking about this it hit me
00:16:26
Speaker
We get hit up so much for lead generation stuff. It's funny because when you don't need to go get more clients, you don't need to go sell another life insurance policy. You don't need to sell another annuity or something like that. The incomes there.
00:16:42
Speaker
Our conversations when we sit down are not like, okay, how are we gonna get more clients? It's a, Hey guys, we got our clients. What can we do to improve ourselves to better serve our clients? Cause like, I know this is your motto. This is my motto, but like, if you are a client of ours and listening,
00:16:59
Speaker
then this goes with you, but if you're picking an advisor, this is a good question to ask, but like, I tell everybody, like my clients, like, we should not be the same advisor I was last year. I should not be the same advisor I was five years ago. If I am, please fire me. Because that means I didn't get better, you know? Right, right. And when you're constantly trying to get new clients, it's hard to become better. You're just trying to go get a new client. Maybe you're being better at a salesman, but are you actually being better to serve your clients that you currently have?
00:17:29
Speaker
The model that is trail-based allows you to work on yourself to be able to serve the people inside your practice better. The commission-based upfront commission is only allowing you to be a better salesman.
00:17:43
Speaker
Yes, you need to continue to go get new clients because you're just painting rooms after rooms after rooms. There's no residual base to it. What I will say is when you do this right and you fast forward your practice five, seven, ten years, you have a practice that you would not believe the amount of growth that not only your clients are getting, but you and the business and then your
00:18:05
Speaker
employees, and you can serve other people more. It's just, it's bananas. Why is that? It's because there's a thing called compounding interest that works really well.
Conflicts of Interest in Advisor Training
00:18:16
Speaker
And so the same principles that we, I guess, instill and try to push into our clients are the same principles that we're building this practice with. Hey, you gotta live underneath your means. You have to be good stewards of what you have, and then you have to be excited about what you do every day. There you go.
00:18:34
Speaker
Which is, you know, when we're talking about this, it's so funny because I know this is a touchy subject if you're a financial advisor because, you know, you get into the business and you're like, Oh, gross. So these other companies, right? Like it's funny. These companies, big companies that bring on new advisors.
00:18:50
Speaker
They do this, they make you try to grow a practice the hardest way, by mission base, all that stuff. And it makes it sound like they don't want these big advisors that have built up this really nice book of reoccurring, but they love them. They'd love to take more of those on because then it's like, oh, look at what they're producing, they're so profitable. But you're not as profitable in the beginning just as it's a really hard way to grow. It's slower, it's harder, and so you're a lot less,
00:19:18
Speaker
Uh, profitable, but at the end, all they want to win at the end with you, but no, like they don't want to like take you on during the journey. It's great. You know, and this is something that I learned in pharmaceuticals. Remember my old life in pharmaceuticals. Oh yeah. Is that pharmaceutical companies were for profit company. They were teaching me in order to go talk to the doctor that was going to be beneficial for who?
00:19:45
Speaker
pharmaceutical company. Yeah, they were trying to get a return on Philip. And what I realized fairly quickly is like, even if the best thing for the patient was to eat healthy and exercise, that's not really what the pharmaceutical company that was training me really wanted. They wanted to be like, here's a magical pill. They wanted me to tell the doctor that tell all your patients, this is a magical pill.
00:20:11
Speaker
And so I don't feel like, I feel like financial services are fairly same. Like you're talking about big companies and they are for profit. Believe that. Oh yeah. And what they're teaching their advisors to do is to go make themselves more money.
00:20:26
Speaker
So you can't tell me that sometimes what they're asking you to do is for the best thing for the client. Maybe it magically is for some percentage of the population because it's a product, right? Like they see it fits some people. It doesn't fit everybody. And so these big companies are training advisors to go talk to their family and friends and try to get as many things done as possible.
00:20:50
Speaker
they don't really want you to be like, oh, well start a Roth IRA and help them put $6,000, $7,000 in every month or every year. They really kind of want you to sell a life insurance and, oh, Liz, it will incentivize you because we'll give you more commissions. And so there's a very thin line with a lot of these advisors just got trained from these big companies that are, and they really do feel like, oh, this is the best thing.
00:21:18
Speaker
But is it the best time to get trained by somebody who's going to be beneficially, you know, like if you sell what they want? Like, I don't know. Like, that's where I was like, there's got to be a better way. And that's like, you see, you, you figured because you're older, you've been in the business longer than I have. The bus is like a biggest.
00:21:36
Speaker
thing I thought was a big tell about your, you, when I was coming on town common. So, I mean, I was weathered, like, what was that? Oh, I was going on my 10th year. I've been here for, I'm on my second year, I think here, whatever. So I've been in the business for like seven years prior to coming over. And we were talking about payouts and stuff with my books and my book was going to come over and
00:22:01
Speaker
Well, and you gave me a very generous, you're like, no, I need you to be successful. And I was like, well, I know, but like, you need to make money too. Cause where I was coming before, it's all about the bottom line. Like I need to make money off of you. And you were like, no, no, no. Like, look, it doesn't do me any good if you fail. Yeah. Oh yeah. And so it's like, Oh, I was like, so I need you to be successful if you're going to be any help to me at all. It was like,
00:22:25
Speaker
Oh, wow. Okay. Which granted, that was easy. My book came over and paid for myself and it was a big blessing to my family and stuff.
00:22:35
Speaker
But these other big companies, they don't care about the advisor's success. They benefit no matter what. You go sell one policy, two policies, they benefit, advisor quits, they don't care if they're still happy. Now, if you're this, you know, Philip Ramsey rock star that has like amazing relationships with tons of people, they're like, cool, that's awesome too. But for these, but when like you're with a small company, like, you know, like uncommon wealth partners,
00:23:01
Speaker
There is no win unless you win. Unless the advisor wins. The advisor does not win, does not go out and serve people very well and keep people happy by serving them well. Because if they leave, uncommon calls.
00:23:16
Speaker
Yeah, it doesn't help. Like we have more clients that we have to go serve and we have one less person to go serve those clients. So as a company on Commonwealth, I would happily sacrifice the bottom line to be able to serve not only your family, yours specifically, but also other families to be able to kind of get them on this whole uncommon path. And then here's another thing too, that's super fascinating because what I got to principle
00:23:42
Speaker
This was their tagline. 50% of something is better than 100% of nothing. Yeah, that's right. 50% of something is better than 100% of nothing. And this is their tagline. Here's why. Because they were trying to tell me, hey, Phillip, you don't know anything about this industry. So what you should do is partner with a more senior advisor and have them come to all of your family and friends
00:24:08
Speaker
because they know how to sell better than you would ever do because you've just gotten into the industry, which is kind of true. I give it, I give it to them. So, so then they would have, let's say John, John comes to my, my in-laws and starts, you know, Oh, this is what you need. This would, Oh, we need life insurance, this, that, and so other. And then we get a big commission. Well, I get 50% of that. And John gets the other 50% because he helped me close the deal, right? Yeah. Okay.
00:24:35
Speaker
Here's the deal, though. That transaction only suffocates me at the end because John doesn't really teach me how to sell it or why we're selling it. He just sells it and says, oh, it's a great training for you. Only if I dissect the trains, the training and ask him a lot of questions, would I actually learn something because they don't really want me to learn much.
00:24:54
Speaker
They want me to take me to the next client and the next client. And then I'm getting trained, which maybe I am kind of, but John really doesn't have an incentive to train me too much because he's making way more of that policy than you are. He truly is. And here's another thing that this is the reason why that whole interaction doesn't work because John doesn't take me to his clients.
00:25:17
Speaker
John doesn't take me to his new opportunities no no he can do that on his own he doesn't need me why would he give me fifty percent his transactions no no no he'll just take fifty percent of your transactions and we'll call it training like that's an expensive training opportunity.
00:25:35
Speaker
And so to make it, yeah, for our listeners, this is how it gets even more expensive. Cause they know, let's say Phil, Phil gets 50% of the premium, but he has a payout and his payout is 50%. Well, that person taking him out, training him, yep. Gets a payout from his percentage. You know, so it's like,
00:25:51
Speaker
So really, Phillips only getting 50% of the 50% and then 25% is going to that trainer. So you're making even more. Right. Let me try to explain this. So let's just say Phillip sells a life insurance policy and the commission is $6,000.
00:26:07
Speaker
Well, there is a percentage that the house takes in order to train you, to have people do the paperwork, to have the office staff. So let's say we really only get 50% of that $6,000, okay? So now the agents are really only getting $3,000 and they cloud this with like, oh, here's all the different ways you get, it's just super complicated. And then John gets 50% of the 3000.
00:26:34
Speaker
So that's what you're saying just in a different way. So I really only got $1,500 and that's why you just need to keep going to talk to people, to people, to people, to people, to people, to people. And that inherently I think is the problem because principle was telling me what's going to be beneficial for them and trying to help me pay my bills.
Uncommon Wealth's Unique Business Model
00:26:54
Speaker
And it's just a conflict of interest, I think in a major way.
00:26:58
Speaker
Um, and I'm not saying that trail based, you can't have conflict interests either here that, but I think this gives you a good understanding of one why we've chosen to do like trail based residual things. And we don't love annuities, but annuities are a great way for people to get upfront commission. Even if we ever find an opportunity, you know, that once in a blue moon where an annuity works, we will pick the trail based. We want to have a small percentage.
00:27:27
Speaker
for as long as we have the relationship. That's how we're building uncommon wealth partners. And we hope that we blink and in 10 years, we don't even understand how big this thing got just because we did the right thing for our clients now, and we're gonna continue to do it in the future. It takes a very uncommon perspective. It takes a very unique person to build a practice that way. That's why I don't think there's a lot of people out there that do that, although they are getting
00:27:52
Speaker
bigger and bigger because they're starting to see just the power of it. Yeah, they're realizing. So that's why for listeners, if you're younger or if you're shopping for a financial advisor, a good, unique, uncommon question to ask the firm that you're at is like, what's the system of you bringing someone on? How much money do you make off that person in the first five years? Because that will show you, because the good firms are like fill up and stuff where they're
00:28:20
Speaker
they're going to over pour into somebody. They're probably not going to make much money on that person in the first five years. Cause it's like, I need that person to be successful. Right. You know, um, whereas like,
00:28:32
Speaker
Keep going. Go ahead. I was going to say like the other firms, they're going to try to squeeze everything they can out of that person because one, the fail rate in this industry is extremely high. It's in the 90% dial. Extremely high for reasons we've already stated. Yeah. So then like they got to make their money there. And then so they're already assuming you're going to fail and quit. So they got to make their return, their ROI on you in that first couple of years. Right. But like, whereas it's very uncommon and they're out there. We know them because you're attracted to this.
00:29:02
Speaker
I mean, we have to like brainstorm with other advisors. We don't know everything, but like they, it is, this is like, I don't, if you're not successful in five years, that's my fault or maybe it wasn't a good fit and that's fine. We'll cut ways, but like, I never want you to think that like we took money from you. That's true. Okay. Here's another thing too. Um,
00:29:20
Speaker
We've had to really dissect our, the way we get paid because there's sometimes where like some of these accounts that you have might be your only opportunity to pool money in order for you to chase something that you're excited about. Yeah.
00:29:34
Speaker
So we do do a financial planning fee, kind of an onboarding fee for people because we don't want to be those advisors who are like, well, what's in your wallet? How much do you have in your pay? Like how much can we manage all this stuff? Stop. Like we care about you. That being said, we are running a business. So what is the business model that is aligned with how we think we believe that a financial planning fee is a perfect tool for us to be able to be as, uh, what is it?
00:30:02
Speaker
neutral as possible when we give you advice. Hey, you can take all of your money to your brother-in-law to manage it. We're okay with that, right? Like we already got paid for our financial plan that we just gave you that you're excited about. Go take it to somewhere else at your roadmap to help you get there. That's fine. Although when we do it this way,
00:30:17
Speaker
A lot more people were like, well, now we want you to help us with, you know, manage our money, which obviously we get paid a small bit of time over every year. That's how we will structure it. But we'll walk through all of that with our clients beforehand. But that was the reason why we started with this financial planning model. A lot of people just say, we can't help you unless you have $250,000 that we can manage. And that didn't feel right for Aaron and I. Or what they'll do is like,
00:30:43
Speaker
They're like, oh, we don't charge for a financial plan. We'll just give you a financial plan. And that sounds great. But for the folks listening, there's a lot of time that goes into that.
00:30:54
Speaker
And so after they present you this nice financial plan, you're like, oh, that's amazing. Well, you know what? They're gonna try to get their return on that now. They're gonna push you. They're gonna be calling you, waiting for you to make a decision. Are you gonna, will you let me manage that account? Will you let me manage that account? Or it's like, buy this policy, buy this. It's like, we're, ours, like me and Phillip share this value. It's like, cause you know, maybe you don't like our plan that we put together, you know? And you get to the end of it and you're like, I don't think I'm a good fit. Well, you know, we can cut ties, we're good.
00:31:21
Speaker
Yeah. Or it's just like, there's a lot going on in your life at the moment. And so you can't implement anything in the plan. You really like the plan, but you know what? You're not going to hear us pounding down your door. We're good. I have a conversation with a gentleman this afternoon that we haven't talked for four years after we did the plan. Three years, I think.
00:31:38
Speaker
No, that's not true. Two years. Sorry. That went from four to two. I get it. And he come back like, okay, there's something that changed. I had the plan. Now we need to talk through it. Like, no problem. So that's the, like, I guess the fluidity that we try to think. There's another thing that came out of this that I feel like I want to talk about is so no one in our company has a non-compete.
00:32:02
Speaker
Nobody. Like, Aaron, you can leave whenever you want. And I tell them, like, if you do, I got a couple clients I want you to bring with you. Not because I don't love them, it's just because I want to be a great person to serve the clients. And I know there's kind of a number, a magical number that I can only serve. There's only so many times an hour of the day. I just know that we probably have an overabundance of clients. And I really care about each one of our clients. But the non-compete is very different and very uncommon in this industry.
00:32:32
Speaker
A lot of times like they'll say like, no, you need to sign here. We don't have that on Commonwealth partners at any moment. If Aaron's like, this isn't feeling, or I have a better opportunity.
00:32:43
Speaker
Aaron can go, he can go right away. Like, and even the clients that like maybe were brought to him by uncommon wealth partners, I hope that he continues to serve them. Take them as well because they're, they're used to you. They like you. Like my biggest focus in that reason for not having a non-compete is like, I want to serve Aaron and Aaron's family as best as I can.
00:33:05
Speaker
while he's here. And I want to create an environment that he's excited to be here, that he feels like he's a partner and he's really helping go to a direction of overall mission. And then if something ever changes, we can have a conversation. And that I think is something that I would love to hear and not a lot of people know that. So this is probably the first time some of our seven listeners can listen to that.
Choosing the Right Financial Advisor
00:33:27
Speaker
We don't have a non-compete and I love that. And I want to continue to grow a business in that manner where we're trying to serve
00:33:33
Speaker
not only the clients, but our people that are, are kind of advancing the mission of uncommon well partners. Yeah. I think that was amazing. Cause like, it's funny. I remember when we sat down and talked, cause like when we sat down and talked, the intention, like we've talked about this past podcast, but like it was not the intention to come over. I was just seeking some help and guidance because you were quirky and different and you had grown in your practice. And, uh, so anyways, I,
00:33:58
Speaker
when it came to the conversation about coming over when it came up and I was like, okay, but I hadn't looked at a couple other firms at the time, but all of them said like, they're going to take my book. Yeah. Oh yeah.
00:34:12
Speaker
So it's like, you know, my book gets absolved by the firm and they give me the salary or whatever, blah, blah, blah. I'm like, no, no, no, these are my clients. I'm like, well, yeah, but I mean, you still serve them, but they're ours. You know, like we're kind of purchasing them from you. It's like, no, no, no, no, no. Like this doesn't work out. My clients are coming with me. It's like, no, you can't do that. It's like, I don't, I don't, I don't like that. Like these are the people that have entrusted me and like I've been working with another mind.
00:34:38
Speaker
And I remember telling you that like this at the time because I'd gotten that answer so many times. Yeah. And you're like, no, of course they're yours. And then you did. You said like, I got a few more. I need to send with you too. And you're just like, okay. Like at the time he just, it's like a common, he get to know Philip. He's like, he's not lying.
00:34:54
Speaker
Like, yeah, it's like, no, your clients are your clients. And I'm like, Oh, wow. Cause that was a big deal breaker for me. Like, I was like, I'm not giving it as it should be, by the way. Yeah. Because never once, and this happened at principle for this exact specific thing. I left principle and they called every one of the clients that I got him into a product and we're like, Phillip went rogue. We want to be your new advisor. And all of the people that have a relationship with her, like, no, that's not what happened. Like.
00:35:20
Speaker
So it didn't go well for them and i just don't feel like that's gonna go well for anybody else like let's say arin goes i call his clients like hey we want to retain stop the madness like. How can we help you know like and that to me doesn't make the client feel like you're serving them when you're calling them saying that their advisor went rogue it's almost just pointing out the obvious that your unit for yourself.
00:35:43
Speaker
Um, so, okay. Yeah, that's so funny. I just, I think it's so funny that people call on that. Like real quick. It's like, cause it was like the, where was that before they were great, you know, but they didn't call my clients because it's kind of all those things. Like we're not calling it as clients because they like it or not getting out of the business. You know, it's going to be a waste of time. Yeah. It really was for them.
00:36:06
Speaker
Yeah. I don't know. So if you're picking up clients from somebody else leaving, you're picking up the ones that like either they didn't get along well or they're, you know, so it's just, it's interesting, but yeah. Yeah.
00:36:18
Speaker
So that's a little bit about the industry. It's kind of behind the veil, if you will. It's a little bit about our company, how we're building it. We hope that this gets you excited. We hope this kind of prompts some questions for you when you're looking for advisors or you have your current advisors. How do they build their business? How are they managing? What is their background? What is their behind the curtain kind of will? We're authentic enough to talk about it in the podcast.
00:36:40
Speaker
Oh, yeah. We hope this was encouraging for you. We hope this kind of helps you go down this uncommon path yourself. You've been listening to the Uncommon Wealth Podcast. I've been your host, Philip Ramsey. And I'm Aaron Kramer. Until next time, go be uncommon. Thanks for listening. That's all for this episode brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.