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Advisors as Financial Guides with Scott Frank

What describes your advisory approach? Maybe you see yourself as the “hero” who has the optimal financial solution for clients? Or maybe you take the approach of a “guide” by helping client’s align their finances with their life.

Reese Harper’s guest on this episode of the Elementality podcast is Scott Frank of Stone Steps Financial. Scott and Reese talk about how having clients first focus on what they want out of life creates an emotional connection that provides the motivation they need to follow through with your planning advice. Scott found himself at a crossroads early in his career when he began wondering why it was so difficult to get clients to follow through. Find out why Scott changed his approach and how it has paid off through continued growth.

Show Notes:

www.stonestepsfinancial.com

www.kinderinstitute.com

 

 


Podcast Transcript

Scott Frank:
The shift that happened for me though, was I went from thinking I was the hero, my job is to solve their problem. I’m here with this cape on, our firm is, and we come in, and we just save people. I realized that instead, I’m getting hired by the family to be their guide for this journey that they’re on.

Scott Frank:
At the end of the day, they have to know where they want to go. We have to know what resources and capabilities they have. Then we have to look at what’s the best thing we can do to make the best of this experience.

Abby Morton:
Welcome to Elementality. I’m Abby Morton, CFP and Producer of our podcast here at Elements. I love being a financial planner, but I know it’s a challenging profession as well. That’s why the number one goal of our show is to help you prosper as an adviser as you better connect with your clients. We know your time is very valuable. Plan on a good return when you spend it here with us.

Reese Harper:
Welcome to another episode of Elementality, everybody. I’m your host, Reese Harper. Excited to be here with a friend that is tuning in from sunny San Diego, Scott Frank. How you doing?

Scott Frank:
I’m good.

Reese Harper:
Are you in San Diego today?

Scott Frank:
I am.

Reese Harper:
Is it warm?

Scott Frank:
It’s 70 degrees.

Reese Harper:
Is it the perfect weather in the country?

Scott Frank:
It’s not today. It rained yesterday. We had a thunderstorm yesterday.

Reese Harper:
Okay.

Scott Frank:
Our three-year-old and nine-year-old didn’t know what to do with themselves.

Reese Harper:
Well, I lost a dear friend of mine, Sir Ryan Isaac, my podcast co-host at Dentist Advisers. I lost him to Southern California this week. He moved. He moved down to you and he will be there for the rest of his life now. The weather finally got him. His income got high enough to where he finally relocated and said, “I’m moving to where God created the perfect climate.”

Reese Harper:
We’re going to talk about a few different topics today. For those of you who don’t know Scott, we’re going to go ahead and let him introduce a little bit of his background, the type of planning that he does, a little bit about his practice. Then we’re going to get into a few concepts today that I think you’ll all appreciate. Scott, how about we start with just a little bit of background?

Scott Frank:
Yeah. I started out … I went to University of Colorado and got a degree in corporate finance. Luckily, I stumbled my way into a registered investment advisory firm right out of school, Fisher Investments. But the focus there was really just on managing money more so than doing comprehensive planning, which is what I wanted to do. I was able to move down to San Diego.

Scott Frank:
While I was down here, worked at a different firm, we worked for the millionaire next door, I would say, mostly the retiree. While I was there, I got my CFA and my CFP and built up on my technical skills. Then got to a point where I realized I wanted to do my own thing. I went and started my firm about six and a half years ago now.

Scott Frank:
What I’ll give you is the answer. My thought is when I started my own firm, I was like, “Oh, I have all of the skills and ability to tell someone what to do to solve their problems.” I’m all good now. I can go do this. I just started that way of people coming in and asking for help. Then I would literally just hand them the plan that they should go do based on the conversation we’ve had. But I ran into this little issue. They wouldn’t follow through very often.

Reese Harper:
Just a little issue.

Scott Frank:
Yeah. Just a little issue. I would think they were a bad client. There were some people who would follow through, obviously. There’s a cohort of people who just can take something and run with it. But most people weren’t fully following through with planning. I was just like, “Man, something’s missing. What’s missing?” Where I started looking more at the emotional side of the work we do, and the listening side of what we do has led me to life planning and the Kinder Institute.

Reese Harper:
Yeah.

Scott Frank:
Now, my firm is a firm where we have about 75 clients right now. We really focus on clients who have complexity. They’re usually about … I’m about 41. They’re about my age or a little older. They usually have stock comp, or they’re executives. We have a few small business owners as well. But we’re just dealing with a lot of complexity. But helping people focus on what they really want out of life before we look at what they should do with their money.

Reese Harper:
Tell me when you saw this concept of … I mean, I’m going to call it life planning. I mean, most of the audience is going to be familiar with that term. When I’m using it, I’m not using it in a really narrow way. I’m using it in a broad way around coaching and philosophy and non-technical stuff.

Reese Harper:
What made you pivot? Because as a CFA, CFP, I bet you went in … It sounds like to start your firm with a really strong technical background, when did you start to notice that it was bigger than the technical?

Scott Frank:
To me, it was the lack of follow through by a lot of clients on the work we need to do. It’s the thing that we talk about as advisers. Everyone knows they should get an estate plan. But that’s the last thing people want to go do. A lot of people we know they should get life insurance, but they drag their heels to go do it. A lot of people know they should save more, but they drag their heels to go do it.

Scott Frank:
It came back to looking at … To me, it kept coming back to this core issue of I know how to help them. I know what they should do, but I can’t get them to execute. Why is that? That’s what the driver was. Trying to understand what drives people. The shift that happened for me though was I went from thinking I was the hero. My job is to solve their problem. I’m here with this cape on, our firm is, and we come in, and we just save people.

Scott Frank:
I realized that instead, I’m getting hired by the family to be their guide for this journey that they’re on. At the end of the day, they have to know where they want to go. We have to know what resources and capabilities they have. Then we have to look at what’s the best thing we can do to make the best of this experience.

Reese Harper:
Let’s talk about this concept a little bit. Then I want to talk a little bit more about the planning process. But the philosophy of being someone’s guide versus I’ve heard you say the hero before. There’s the adviser who has the answers and shares them and it’s the hero in that context. Like, “Here’s everything you need to do.” Then you’re saying there’s another concept of the guide.

Reese Harper:
How did you arrive at feeling a guide was more important than the hero? What was the process for you even internalizing that?

Scott Frank:
Yeah. Well, the short answer is it comes back to follow through of the client. If anyone of you have kids, and you’ve ever tried to tell your child what to do, especially a toddler, they’re not on board with it. The chance of it that’s happening are really small. Thing is our human psychology, it works the same way for adults. We’re far more likely to step into things that matter to us than we are to go do something that someone else just tells us we should do, if we haven’t bought in.

Reese Harper:
Yeah.

Scott Frank:
The difference of being the hero and the guide to me is that the hero stands there and goes like, “I know how to make it so you can retire when you’re in 20 years from now, this is all you have to do.” But the part of me … What I realized was that I wasn’t necessarily taking the time to understand. Someone came in and told me they want to retire in 20 years.

Scott Frank:
They didn’t tell me what they want it to look like. They didn’t tell me what matters to them along the way. They didn’t tell me. Really the depth of what the texture of the life they want to lead now and in the future. Because once we understand that, we can understand the emotion under it.

Reese Harper:
Yeah.

Scott Frank:
A trainer that I worked with, Louis Vollebregt, he’ll say that emotion equals energy in motion. It’s very rare for us to move on someone telling us what to do or thinking what we should do. We have an intrinsic motivation to go do something. We are far more likely to go do it.

Reese Harper:
Let’s go back to a little bit and yours. I want to pick apart your story a little bit more. How did you bump into George Kinder? Had you already established your firm on your own when you bumped into him? Tell me a little bit about, did you find that that was … What about George’s philosophy was really resonant with you?

Scott Frank:
I had already established my own firm. I’ve been working with clients for about two years.

Reese Harper:
You probably had a few dozen clients or something already?

Scott Frank:
Yeah. Exactly. I think the key was I knew how to do great technical work, but I wanted to help deepen the relationship with clients. I wanted to make sure I truly understood what mattered to them as we’re doing planning work. Because the way that I view it, if we’re doing this work well with clients, we’re taking the time to really … It’s almost you’re at the optometrist, and you’re finding the lens through which you should look at all financial choices with the client.

Scott Frank:
Just because you’re some age demographic with some level of income, your story is probably … What matters to you is probably different than your friend at the same conference as you who has the same income and as the same demographic. There’s some generalities we can work on there. But more than likely what drives you as a human being and what a great life looks like to you is probably not going to be the exact same thing as your neighbor.

Reese Harper:
Yeah.

Scott Frank:
I stumbled upon the three questions first, which was Kinder’s three questions. I think you’ve had George on. He’s probably talked about those.

Reese Harper:
Yeah. A lot of people won’t remember them, though. What are they?

Scott Frank:
The first question is you wake up tomorrow morning, Reese, and you have more money in your bank account than you need. All of your needs are taken care of now, and in the future. Anything that you would think is like, “I have to have this taken care of in my life.” The question is, if that’s what you’ve got, and you sit and you feel that, what would you do? How would you live life?

Scott Frank:
Just describe a life that is fully enriched yours. The intent is it’s an expansive question. There’s nothing off the table here. If it really matters to you put it down on a piece of paper.

Reese Harper:
That’s the first question.

Scott Frank:
That’s the first question. What happens in the first question, and the reason that … this type of planning work, which is really active listening with empathy, right?

Reese Harper:
Yeah.

Scott Frank:
It’s that I as an adviser, the idea of being the guide versus the hero, I’m letting go of all my thoughts of how to solve this person’s problem on the frontend. Instead, I’m listening, so I can truly understand what matters to Reese. Because once I understand what matters to Reese, we can look at how we should use money as a tool to optimize your life, rather than me just fall into a stock plan that I’m going to use for everyone. Now you’re less likely to follow through because it’s not really resonating with who you are.

Reese Harper:
You saw a problem that you needed to solve, which is this getting clients to engage, I think, getting clients to care. That started you going down the exploration. You found that by at least leading with this bigger question, you’re able to get people to embrace this plan, or these set of tasks as a medium to get them to where they want to be, to live the type of life they’re describing?

Scott Frank:
Yeah. I mean, at the end of the day, the way I view it is, now, the way I used to think of it, which was very much it was finance is what we’re here to talk about, guys. Let’s come sit down and talk about your finances.

Reese Harper:
Yeah.

Scott Frank:
But what I’ve realized is that finance is just the supporting role in their life. Let’s treat it that way.

Reese Harper:
Yeah.

Scott Frank:
It’s still really important. I still have to have technical ability and skill to help them. But rather than focus on money the whole time, let’s focus on the life that they actually want. What are the next steps they can be taking to get that? The things that really, really matter to them, how can they have more of that in the present, rather than thinking they have to wait 20 plus years, until one day when they retire?

Scott Frank:
How do we get them to live a fuller life now? It’s really what it’s all about. Then once we understand what that looks like to them, then we still use planning. I mean, our job as a good planner, in my opinion, is to be a thinking partner with the client, and to be an advocate for them, but two versions of them, their present self and their future self.

Reese Harper:
The difference between those two is what?

Scott Frank:
The difference between those two, the present self and the future self?

Reese Harper:
Yeah.

Scott Frank:
They’re in conflict with one another all the time.

Reese Harper:
Yeah.

Scott Frank:
Depending upon how the person grew up, and how they think about life, you may have someone who wants to spend all their money now and says, “I’ll figure it out in the future.” Well, that’s a person whom you need to help them with their future self a bit more, right?

Reese Harper:
Yeah.

Scott Frank:
Or you may have someone who is just saving, saving, saving, and it’s detrimental to them in the life they have with their family right now, because they’re always worried so much about the future. They don’t live in the present at all.

Reese Harper:
Yeah.

Scott Frank:
It’s just helping them see how do you balance this out? What do we do here?

Reese Harper:
Do you actively think about the other two questions from Kinder, in your initial relationships? The first we talked about is you got plenty of money. Your needs are met. What do you do tomorrow? That’s your kickoff question. That’s the main philosophical open door for the client. Talk about the next two questions just real briefly. How do you address those in your practice?

Scott Frank:
Yeah. I’m going to give you one little caveat there. The three questions we have them come in to do so the … The teaching that we do at Kinder is the evoke process, exploration. We actually don’t introduce the questions yet. We just come in and say, “Why are you here? What brings you here today?” Then we allow the client to expand upon why they’re here. I think of that as if you came to me, I would imagine that you have 10 marbles in your pocket.

Reese Harper:
Yeah.

Scott Frank:
My goal is to give you the space to bring those things out.

Reese Harper:
When you ask that question, doesn’t that result in clients just being like throw a list of tactical stuff at you usually. Like, “I’m worried about this financial thing.” That’s usually what comes up in that instance, right?

Scott Frank:
It does on the frontend. Because they think they’re here to work with an adviser. They think like, “Well, my job is to give you tactical stuff to work on.”

Reese Harper:
To work on.

Scott Frank:
I happily accept those things. Absolutely, we have to make sure that’s built into your plan. But if we take a slightly bigger view on life and think this is … Our job here is to help you line up your money with your life, so that you can live a fulfilling life. Anything else?

Reese Harper:
Anything else is a great question. Is that one of the three? Or is that just a follow up that used all the time on every one of the questions?

Scott Frank:
It’s a good follow up to use all the time.

Reese Harper:
Is one of the questions, the evoke question of “Why are you here?” is that one of the main three?

Scott Frank:
No. No.

Reese Harper:
Okay.

Scott Frank:
When you think of Kinder’s three questions, it’s the first one, which is you have enough money that you don’t have to worry. It’s expansive.

Reese Harper:
Yeah.

Scott Frank:
The second question that we have them answer is, Reese, you go to your doctor, and your doctor tells you sadly that you have a terminal illness. It would be horrible if that happened. You’re going to have 5 to 10 years to live. You’re never going to feel sick for a day that remains. But you’ll have no notice at the final day.

Reese Harper:
Yeah.

Scott Frank:
We’re giving you a time constraint now. The question is, what would you do with the time you have remaining? How would you live your life? You don’t get to have unlimited funds here. You have the time, money, energy and talent that you possess in that chair right now. What really comes up for you? That’s the key. That’s the second question.

Reese Harper:
Okay. The third one?

Scott Frank:
The third one, I’m just going to punch you in the gut, Reese. I’m just going to … Sadly, the time is up. You don’t get to be here tomorrow. If that was given to you, it’s not about thinking about what would I do on my last day. It’s about really sitting with the feeling of “Wow. Time’s up.” Feeling that and then asking yourself, “What did I miss? Who did I not get to be? What did I not get to do?”

Reese Harper:
That hopefully, allows someone to see the identity that is important to them because so they don’t have regrets. They don’t have these end-of-life regrets that plague everyone around. I wasn’t myself. I never got to be who I wanted to be. I mean, that’s the number one regret of the dying usually. It’s like, “I never got to self-actualize,” in a sense.

Scott Frank:
Yes. Yes. Sometimes people hear that. They go, “Oh, I don’t have any regrets.” I honestly think like … To me, the question is not really about regrets of your past so far. If you have something that you regret that you’d like to clean up, sometimes you’ll see the reconnections with family members or things like that will come up.

Reese Harper:
Yeah.

Scott Frank:
To me, it’s all about untapped potential. We’re all put here and we’re all our own being. The question is, how can we help you step into the fullest version of you?

Reese Harper:
Yeah.

Scott Frank:
George will talk about his entrepreneurial spirit. I think sometimes you could interpret that incorrectly a little bit if you just think entrepreneur.

Reese Harper:
Yeah. Because it’s not just an entrepreneur that this applies to. Yeah.

Scott Frank:
For me, a perfect example, because she’s in my life is my wife. My wife’s dream is to be a stay-at-home mom and raise our boys. That’s what she does now. She’s getting to be the best version of who she wants to be. That’s really what this is all about is helping our clients be the best version of themselves.

Reese Harper:
Yeah.

Scott Frank:
Because if you’re living your best life, and you’re jumping out of bed in the morning to go do it, it has a ripple effect in your life. People feel that.

Reese Harper:
It seems that’s the progressive. Well, if we look at the first … Are all these questions happening for you in the … in my view of planning, we have a sales and then we’ve got discovery. In the sales process, you have to do a little bit of discovery, but some people do their whole discovery process in the sales process. They’re giving away all this value.

Reese Harper:
What you just went through is a therapy session and multiple therapy sessions that people are really going to value into some degree. Where do you place that in your relationship with a client? What’s the sequence in your planning process?

Scott Frank:
Two things. One, the exploration conversation of why are you here, bringing out all the marbles. What I was saying to you earlier on that was like, “If you start bringing your 10 things out, I’m not commenting on the third or fourth thing and asking for depth.” Because if I do, what that says to you is the first two or three things you talked to me about weren’t interesting to me and this one is.

Reese Harper:
I’m going to pick out one that’s interesting. Yeah.

Scott Frank:
Yeah. It just became my meeting. It’s not the client’s meeting anymore. But exploration is really about “Why are they here? What matters to them?” Big picture, I introduced the concept of the three questions and how we work with clients moving forward, and all the pricing stuff and how that works. That’s when they choose to join us and we do all the work from then on.

Reese Harper:
Okay.

Scott Frank:
The other component I want to give you is you mentioned therapy, and therapists are amazing, and they are professionals. I am not a therapist. I want to be very clear.

Reese Harper:
Yeah.

Scott Frank:
Therapists are really good in unpacking the past and issues of the past. Why is a belief or a conviction, what it is, and how do we come to terms with it? We don’t do that type of work with the way I’ve been trained. Instead, what we’re doing is we’re always helping clients look forward into what they want. Positive and negative emotions can both be helped, be utilized to help propel people into the life that they want.

Reese Harper:
Yeah. I mean, I did use that term loosely. But you’re just making a distinction between what you view … the role of a therapist is to help people to really unpack some of their mental patterns that cause them to hold on to certain beliefs that usually are rooted in some past experience. That’s caused a pattern to continue or a rut to stay in place.

Reese Harper:
Then you’re saying, “Look, if some aspect of therapy is forward-looking.” We are touching that part of it as advisers, right?

Scott Frank:
Yeah. But just the fact that therapy … I hold therapists in high regard. They are trained experts in what they do. I do not have that training. I just want to make sure there’s a clear distinction there.

Reese Harper:
As an adviser, though, don’t you think that exploration of the past though also least people’s financial profile, understanding their past financial history does help you see why I find a lot of value on an understanding their history with money and their family history. Not because I’m trying to determine the psychological ruts that they’re in, necessarily, but like the patterns of how they frame money, how they value money.

Reese Harper:
There’s a lot of research on that. Does Kinder’s process really dig into that? I mean, how do you incorporate the past self?

Scott Frank:
Kinder’s process doesn’t really incorporate the past self deeply. With the client, it doesn’t do that very deeply.

Reese Harper:
Yeah.

Scott Frank:
One of the things that we’ll do in the training as well, there’s a two-day training in which we look at the seven stages, the money maturity. One of the things that it dives deep into is for the childhood section of life is what he defined as innocence and pain. The idea being that many of the money messages we have for ourselves come from innocence.

Scott Frank:
A simple one I could give you would be money doesn’t grow on trees. Sometimes those innocent messages can lead to pain, can lead to maybe choices in the way that we choose to live. Not saying they always do, but they can. One of the things we look for as in advisers, you’ll listen for those innocent messages in clients. Does someone have a scarcity mindset? Do they have an abundance mindset? How did they get to where they are today?

Reese Harper:
Yeah.

Scott Frank:
I think you can do … It’s helpful to have that understanding with clients. I’m also reminded though of Carl Richards, he’ll have the “no blame, no shame” mentality. I think that’s really important if you’re ever going and chatting about someone’s past to really put on some white gloves and talk “no blame, no shame” because the past is the past. They can choose to have a better future instantaneously.

Abby Morton:
Something I often struggle with as an adviser is knowing if I’m doing enough. I tend to wonder do my clients think I’m worth what they are paying me? Or am I delivering enough value? Having used the Elements Financial Planning System for over two years now, this system provides me with the peace of mind we all need as advisers.

Abby Morton:
Your clients can receive professional, easy to comprehend scorecards focused on key indicators of their financial health. They can actually see how your advice is improving their life. With an occasional update from you, they’ll know you’re right there with them watching their progress. Come check out Elements at getelements.com/meet.

Reese Harper:
Yeah. I feel like there’s such a challenge right now that we’re facing in the industry, because there are all these functional jobs that have to be done, all of the Roth conversions, the savings, the account setup, the insurance policies, the estate planning. These are all practical things that if you don’t complete them, and you don’t spend time on them, you’re missing some pretty significant components of your financial life that could add value to your ability to be present and centered.

Reese Harper:
If you can get all this stuff done, it does augment some of your financials peace of mind and your ability to be present. For example, if you didn’t have any visibility into your personal financial statement at all, you didn’t know how much money you had, you didn’t know whether it was enough and you woke up the next morning and found out you had $200,000 in your checking account.

Reese Harper:
You just didn’t know that, because you were working, what you thought was paycheck to paycheck. That would cause someone to feel some measure of peace, some measure of breathing room, some measure of centeredness, because you just didn’t know what you had. I find that in that simple example, I can expand that to estate planning, and insurance coverage, and tax management, and benchmarking, and comparing data.

Reese Harper:
Really, the more confidence someone has that they’re doing well with what they’ve been given, it does help them feel some measure of peace. But at the same token, you can still go forever in your life with objectively good financial circumstances and still not feel great about life. You could have a great balance sheet. You can have great cash flow, and still not feel like you’re living your best version of yourself.

Reese Harper:
I feel that’s something that as an industry, we sometimes can perpetuate the problem by …

Scott Frank:
To me, this is the key. To be clear, all of the financial stuff really matters.

Reese Harper:
Yeah.

Scott Frank:
That’s why we all got into the business, was to help people make sure that they have resilience, and to help people make sure they can retire in the future. I think retiring could be a word we can change because I think a lot of us … traditional retirement that aren’t my grandfather had probably not going to be my life. But if we instead think like if I know that at your heart’s core who you are as a human being, your family is your core.

Scott Frank:
Getting an estate plan is really not that hard now. Because I can chat with you through the lens of why this matters to you and your family to make sure that they are okay has nothing to do with you. You’ll go act on it.

Reese Harper:
Yeah.

Scott Frank:
But the point that you’re making, saving to save, or we can easily get in the habit, especially when we look at … if our advisement comes through AUM or net worth, or something like that, the more people save, the more money we make. There’s this little tiny inherent conflict of interest there between living in the present and saving for the future.

Reese Harper:
Yeah.

Scott Frank:
But if we let people find the right balance for themselves, and give them permission to find that and extend them grace and helping them know that it’s okay to not know perfectly what you want. But let’s go make some little … as Carl Richards would say, some small bets on what you want the next version of life to look like, let’s go figure out what this is for you and help you find the right equilibrium.

Reese Harper:
Yeah.

Scott Frank:
Let’s not just look through the lens of dollars and cents. Let’s look through the context of time. Let’s look through the context of what drives you as a human being. Then let’s go build a cool financial plan for you.

Reese Harper:
If you look at where we spend our time, as advisers, I look at the little niches of value add that we tried to bring into our practice. Holistiplan is a great example of tax service where we’re now diving deep into catching every deduction or minimizing someone’s effective tax rate for a given year. Those things are really great because they help people accumulate more.

Reese Harper:
But we, as advisers, I think there’s a lot of ways that we can start to advance our service offering. As investment management continues to get pressure, there are a lot of ways to make people’s financial lives more fulfilling for them. Some of those things have to do with consumption as opposed to saving. I’ve found even in my local market here, almost all my clients because I tend to … I don’t have a huge eating out budget.

Reese Harper:
But I know all the places to go eat, or I know all the local camping areas, or I know the places you can go in Moab, or the places to go see in Park City. People want to enjoy their life, too. I get a lot of requests for that. Where do you go to get … I heard about this great little thing that you told me about once over lunch. How do we get reservations here? How many days do we have to plan to travel to the spot?

Reese Harper:
It just makes me wonder how much in the area of helping people spend their money in a responsible way. The opportunity is for advisers to expand their service in that realm. Because if you’re not the person, then who are they going to go to? Then they’re going to the realtor. They’re going to the travel agent. They’re going to spend money somehow.

Scott Frank:
Yeah.

Reese Harper:
You’re in a position to be able to appropriately collect information and cost and expense and see things that they might really value. Even if it was as simple as you have relationships with those types of people. I feel people are dying to know how to responsibly spend their money, how to responsibly spend it. They want permission from their financial adviser to have help being responsible as they spend their money.

Reese Harper:
Maybe you’ve got a client that wants to get off the grid and is really interested in trying to find the way to retrofit an airstream trailer so that he can go to the most remote spots. Maybe you have someone’s big into surfing like you and they really want to understand, “How do I get the best Nicaraguan vacation possible?” You might develop relationships all the time with TPAs and pensions and third party administrators. You go to lunch with accountants and attorneys.

Reese Harper:
But how often do you go to lunch with someone who has experience in Nicaragua for a client that really likes surfing? For me, the last couple years, I’ve really seen as the investment management fees continue to get pressure. I know this is a very extreme example. Everyone’s probably like, “Yeah, right. It’s not going to go there.” But there’s just so many things that have to do with financial health. One of them is helping people responsibly consume.

Scott Frank:
The idea of mindfulness around money is something that we work with our clients on all the time. I know that at Elements, you guys are building out your one of the scores that you guys are building out around Elements is just helping clients look at their income as a whole.

Reese Harper:
Yeah.

Scott Frank:
I’m looking, where’s the money going? Because there is a savings for the future self, and there is spending now to live life today. There are taxes and there are debt payments. Within the living life today, we actually spend a good amount of time with our clients looking mindfully. We utilize just first step cash management, if you’ve ever seen it. It’s made by Marty Kurtz out of … I think it’s … I’m blanking on the name of his firm right now.

Scott Frank:
But he built it a long time ago. The concept was rather simple. It’s, “Hey, money comes in every month. What do you have to just keep the lights on? What are the expenses that you can’t turn off? Do you own the right size house, basically?” It’s part of the question you’re answering there. Then what’s leftover? What do you need to live a great week of life in Utah? What do you want to be saving for? What are the dreams for your future?

Scott Frank:
Outside of, say, 401(k) savings are already happening and insurance … If you’re a W-2 employee. All that stuff’s already happening. Where does everything go, mindfully? Because if we can know ahead of time that like, “Oh.” We want to be taking … if a big part of who we are as a family is having global experiences with our kids while they’re growing up, well, we better be putting money aside for that to go take those trips.

Reese Harper:
Yeah.

Scott Frank:
That might delay our retirement by five years, because we may choose to go spend 15,000 a year while the kids are in their biggest growing years before college to have these experiences of family, because we’re never going to get that time back. But it really matters to us.

Reese Harper:
As advisers, we’ve never cultivated the part of ours, like brain that helps people spend responsibly and really dive into that area. I mean, not never. But most of us have spent time … The CFP curriculum doesn’t talk about that. It was built at a time where it’s coaching us on resource maximization.

Scott Frank:
One of the whole things, one of the things that Kinder will teach is the idea of letting our thoughts go, and letting our feelings be. Basically learning how to sit with a client, just to help understand where they coming from, what’s their driver, what’s their motivation. The whole intent is let’s get clear. I’m going to let go of my own, what my own version of a great life is. I just want to key in on what’s a great life look like to Reese?

Reese Harper:
I wake up. I look at my screen for my client. Because I got a hundred clients, I can’t possibly remember all the values and vision and goals that every client has.

Scott Frank:
Yeah.

Reese Harper:
What do you document for your client, the minimal viable mind map that you would have for each customer that you can reference? What is it like and what does it contain?

Scott Frank:
Yeah. Outside of the traditional financial planning?

Reese Harper:
Yeah.

Scott Frank:
At the top of it, it’s what are the core components for them to live a fulfilled life? What are the key statements for them? It could be …

Reese Harper:
Do you have to write those? After talking to them about them, you’re writing them out? Do you reflect those back to them and let them say, “Yeah, these are my …”

Scott Frank:
We do. But the way we do it with Kinder’s we actually through the vision meeting, where we go deep on the three questions, you came in with your answers three questions. We’re asking you to tell me more than. From there, we call it lighting the torch. We give you a vision of yourself in a short distance in the future looking back, and you’ve done the things that really matter to you in your life, and we’re just simply asking how would that feel.

Scott Frank:
If we’re doing it well, you’re saying that would be amazing. I need this [inaudible 00:35:57] yesterday. You’re ready to go. Let’s go. Let’s do this. From there, we have now the lens through which we make all your financial choices.

Reese Harper:
Give me example of a client’s sample of their … I’m hearing we have a vision. Then we have statements. Are those separate things, or these just statements?

Scott Frank:
To me, I don’t write down the exact vision for the client.

Reese Harper:
Okay. It’s more statements?

Scott Frank:
But I’ll take the component pieces that I know are in there that really matter to that client.

Reese Harper:
Then document them?

Scott Frank:
We document those.

Reese Harper:
Give me an example of what those might look like for a client. Give me three examples of statements that you can think of.

Scott Frank:
Well, I’ll just give you my own, because I don’t want to share client examples necessarily. But for myself, it’s building a thriving practice in which our clients are stepping into their fulfilled lives. I have great employees who are loving the work that they do. It allows me to have time with my family and my boys. It created financial freedom for us so my wife doesn’t have to work. That’s what I want.

Reese Harper:
No. Is there anything else? Or was that the first one?

Scott Frank:
That was the first one.

Reese Harper:
Okay.

Scott Frank:
… the second one now. The cool thing about doing this work is that what happens is you paint visions of people stepping into the life that they ultimately want. What happens is they start sending you pictures of them living that life.

Reese Harper:
Do you find that …

Scott Frank:
Because I can anonymize them?

Reese Harper:
Yeah. Yeah. Yeah.

Scott Frank:
I have clients who were in the military, and were always traveling, and never had their own home. What they wanted more than anything was to have their own home, to have their own traditions with their boys. Now they have their own home. This year, they will be housed, starting those traditions with their boys.

Reese Harper:
Mine is get rid of my home and all my stuff so I can have traditions with my boys. Because it’s a millstone around my neck property. Just kidding. It feels like that some days. You’re like, “That broke again? What is going on? We thought a house is supposed to be self-maintaining. We have landscaping now and we have to fix it. It’s flooding and that sprinkler broke. That’s why I was joking. I just want to go live in the mountains, in a tent.” Okay.

Scott Frank:
Homes are liabilities and [inaudible 00:38:32] assets, right?

Reese Harper:
Yeah. Everyone who doesn’t have a home has the dream of homeownership. Then once you have it, after about a decade, you’re like, “How do I get rid of this sucker so I can have my life back?”

Reese Harper:
In your case, your personal example was bringing in some career aspiration. That was something you probably saw in your late 30s. That was the focal point for you in your journey because you needed that foundation in order to move on to the next thing. Now there’s probably some element. I mean, I’ve experienced that to some degree as well. I imagine a lot of people have that career statement, that career definition.

Reese Harper:
I imagine, too, like in my experience, then there’s this self-actualization almost. There’s this existential component, too, that starts coming up later where it’s like, “Okay. I have now stability. But I want fulfillment. I want impact. I want legacy.” I don’t want to put words in your mouth. But I’m just imagining that’s my journey going from career …

Scott Frank:
If you get back to the core of the work that this does with active listening to people, at the core of what everyone really wants, if you boil it down to one word is freedom. The question is, “What type of freedom is it?” The normal, there’s no such thing as normal. The things that we commonly see, we see there’s freedoms around time. There’s freedom around relationship and deepening relationships.

Scott Frank:
There’s freedom around spirituality, if spirituality is a part of your life. There’s a freedom around creativity. It can often come up. Then another freedom can come up around place. If you live in the city, you may want a place in the country. If you live in the country, you may want a place in the city. But if there’s something around place, and there oftentimes there can come a peacefulness with place for a lot of people.

Reese Harper:
Yeah.

Scott Frank:
These are the common things that you see come up for people in life. When I say common, I don’t want to … The idea is that I’m not saying like, “Oh, here’s your five things to choose from, Reese. You tell me what you want. I want to know what drives you and what’s next for you? What do you need to be building toward?” Because once we know that, that’s what’s going to drive you to go do the things you need to do to get that.

Reese Harper:
Would you coach an adviser on how that statement needs to be written? Is it just like it’s not that important to get overly concrete with subject, verb, active voice, write this out a certain way? What’s the minimum level of coaching on this?

Scott Frank:
Actually, when we learn how to deliver, what we call, a torch statement, we actually start with a very specific language. I’m personally not a fan of writing it down, though. Because have you ever written something through text to someone and they may misinterpret it later?

Reese Harper:
Yeah. Yeah. Yeah.

Scott Frank:
You put your intent?

Reese Harper:
Yeah.

Scott Frank:
The whole point is when we’re giving something to someone, if you write something down, Reese, and you just say it back to me, you’ll think it. But if I say it back to you, your own words, you will feel it. What we’re looking for is I just want to know what gets you going, what’s going to have you on fire, what makes you want to step forward next. I don’t necessarily want to write out your torch statement word for word. But I want to have it noted what the main things are that are driving you.

Reese Harper:
Generally. In that way, you cannot be too concrete about it. But if you wrote it down concretely and reflected it back to somebody, they would probably correct you if it didn’t feel right to them.

Scott Frank:
They correct you all the time. Honestly, why we don’t even write it down … I personally don’t write it down anymore. I just simply say, “Is anything changed?” It’s like when we met, these are the key things that matters to you in your life.

Reese Harper:
Well, you might write down some general description, though, because you got to have something to reference. You’re just saying, “I’m not like trying to construct this into a personal mission statement,” not like that level of concreteness?

Scott Frank:
Well, I mean … How do I say it? You want to give people permission that it’s not … these are not the 10 commandments. This is not etched in stone. You’re allowed to change what this looks like to you in the future.

Reese Harper:
Yeah.

Scott Frank:
Who you are in your 20s and what you think is a great life in your 20s is probably different than who you are in your 30s, or your 40s, or your 50s, or your 60s. It’s going to change and that’s okay.

Reese Harper:
How often are you referencing that? Every meeting, you’re referencing and anchoring to that again, or just once a year? How often are you bringing this up again?

Scott Frank:
When we do our annual reviews, we come back to … This is the main driver for each, because for a couple your idea of an ideal life and your spouse’s idea of an ideal life are probably different.

Reese Harper:
Yeah.

Scott Frank:
That’s okay. But you want to come back to like, these are the main drivers for you as a family, is anything changed?

Reese Harper:
Yeah.

Scott Frank:
You want individual time for each of them to say if anything’s changed, or if it’s the same. Yeah. These are the things I’ve stepped into to make that come to life in my life.

Reese Harper:
Yeah.

Scott Frank:
Oh, here’s a challenge. It’s coming up for us in the next year to help us get this done. Finances are related to it. Let’s talk about it.

Reese Harper:
Well, Scott, this has been great, man. You keep diving deep into this stuff. I mean, you always seem to have great conversations and unpack a lot of things, at least, that I find really interesting. Thanks so much for taking all the time today. What parting words do you like to leave with the advisers?

Scott Frank:
I think my parting word would be that I personally believe that this is the future of advice. The reason I believe that is because we are having amazing programs come along, hopefully Elements is wildly successful. We start to have real data around planning. But then it’s always about the story for the client between the meetings.

Reese Harper:
Yeah.

Scott Frank:
What’s driving them and what’s happening with the data? The data should be reflective of the life that they ultimately want to be stepping into. Not just some numbers that I told them they should go hit.

Reese Harper:
Well, that’s beautiful, Scott. Thanks so much for taking the time. We’ve got a great practice that I think balances this life planning with practical and technical expertise. I do think that’s the future of the industry. Luckily, we got a lot of listeners that are on the cutting edge of that. It’s exciting to watch. Thanks so much for taking your time and we look forward to catching up with again soon.

Scott Frank:
Thanks for having me.

Abby Morton:
Next time on Elementality.

Reese Harper:
See, just giving things away in advance, you lose all your leverage, all your leverage is gone. I’d like to use the upfront process to collect information, ask tons of questions. Make sure they understand my process. Make sure they understand how I’m going to deliver advice. But I’m not going to give them advice until they hire me because that’s my living.

Abby Morton:
You can learn more about the Elements Financial Planning System at getelements.com/meet and schedule a time to speak with one of our friendly financial planning experts. Elementality’s executive creators are Reese Harper and Chad Jardine. Elementality is produced by Abby Morton and directed by Jordan Haynes. Have a good one.

 

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