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The ‘Painless’ First Meeting Theory

What if you could eliminate most of the difficulties that come with that initial plan—gathering documents, tax returns, insurance policies, past financials? How much of the client’s financial background would you need before you could begin delivering value?

On this Elementality podcast, Reese Harper and Matt Glazer discuss why friction comes from an overly burdensome initial plan and the fact that today’s clients don’t want to be overwhelmed with all of the details. Something has to change since rolling out a time-consuming plan can often discourage today’s prospects. And, if clients value your communication and insight the most, how can you start offering financial guidance earlier? On this show, Reese and Matt tackle whether it’s possible to start with advice and then keep course-correcting, making progress, and attacking the next issue.


Podcast Transcript

 

Reese Harper:
We have to start breaking down all the stuff that we’re doing into smaller steps. We’re doing so much for people that they don’t even see. And yet the part that they value, we’re not even getting around to half the time. What they value is the communication with the service provider and the insight you provide. They don’t always… They don’t value to the same degree, that… And you’re gonna do everything for me so I don’t have to lift a finger. Yes, they do value that. But if you were to say which one’s more important? They value the conversations.

Jordan Haines:
Welcome to Elementality. I’m Jordan Haines, Financial Planning Specialist at Elements. Each episode, Reese and Matt will discuss major challenges faced by financial advisors and the things they can do to navigate the complexities of delivering quality financial advice to clients. We hope you enjoy this episode.

Reese Harper:
Welcome to another episode of Elementality, everybody. Here with Matt from the trees, not the hills or the mountains, as he clarified in a recent episode. Matt Glazer from the great State of Pennsylvania. Matt, how are you doing today?

Matt Glazer:
That’s only gonna make sense if that other episode airs before this one. [chuckle]

Reese Harper:
There’s several episodes out there where people know that you were surprised by now a moose attack in the mountains, where…

Matt Glazer:
Which we’ve now clarified a group of them, which thankfully was a single moose. There’s a herd at a park or a murder of moose, [chuckle] so a herd of moose…

Reese Harper:
It sounds too expected now, I’m like, yeah, a herd makes sense. I guess we’re idiots. I wanted it to be a murder of moose though, ’cause it was just so appropriate on Halloween, and thinking about… I mean almost losing our Head of Product to the mountains.

Matt Glazer:
It really was the moose kind of had on its mind more specifically at that moment, and… [chuckle]

Reese Harper:
That’s funny.

Matt Glazer:
____ implies there was intent… Maybe there was intent, who knows?

Reese Harper:
Well, thanks for joining me on the show today. I want to turn the time over to you to introduce the topic, and this is where I get to be excited about something to chat about that I know will get me yelling.

Matt Glazer:
Yeah. This might be an inflammatory topic, and my…

Reese Harper:
Yes, yes, thank you.

Matt Glazer:
I don’t wanna say ethics, ’cause this is an unethical conversation, but it’s unconventional, I guess is a good word. Let’s just pretend we lived in this world for a minute. What if we lived in a world where the initial plan that we all do, and many of us actually charge for, what if we met clients where they were, and there was no initial plan, we just got going and got the information we needed to provide responsible fiduciary advice, and just start delivering value, not jam people through this process that starts with a mountain of data gathering, organization and ends with 30 pages of supporting documentation. Nothing that anyone wakes up in the morning and says, “I need a super detailed financial today.” What if there was no initial plan? Let’s just say that for a second, and I’m not advocating for or against this [0:03:50.3] ____, but we’ve…

Reese Harper:
Why not? That’s too… You need to feel free to advocate for your unethical self, you’re unethical. [chuckle]

Matt Glazer:
Well, you can see what I mean, it’s not like an unethical thing, ’cause we still have to adhere to…

Reese Harper:
I don’t know, it sounds pretty unethical to me, Matt. I don’t know.

Matt Glazer:
We still have to adhere to the process that we all put our hands in the air ’cause we’re bias as fiduciaries. And I’m not certainly advocating for that, but…

Reese Harper:
No. Stop right there. Where did that become like all of a sudden the best advisors are the ones that adhere to the process that they swore to by fiduciaries? Can we have everyone please define what they understand that even to be? Because every regulator is enforcing it differently, every broker-dealer has a different interpretation, every state securities regulator is inconsistently enforcing what they think it means to have a plan. Fee models are inconsistently enforced. I’m sorry, you go back far enough, and this whole “A plan” world originated at a time where that was a product.

Matt Glazer:
It was a really scope thing…

Reese Harper:
That people were actually buying… It was buying… They’re buying it.

Matt Glazer:
It was a really scope thing, and I think we’re all recognizing that it’s not like, yes, there’s scope to it, but it’s a much more fluid and ongoing thing now, it is a relationship that has advice that peaks and swells at times, and is like a trickle and dormant at other times. And how they acknowledge that that’s what it is, people come to us with a specific pain, there was a triggering moment in their life, or they have a specific problem they wanna address. How do we just meet them, answer that question, get that problem addressed, and just keep going from there. Keep course correcting, making progress, attacking the next question. And by the way, one of those things is getting clarity on the future and understanding if we’re going left, right, up or down and if that’s the right direction to go. But do we…

Reese Harper:
I remember being stressed out though, dude, about missing something that maybe was so critical. I remember feeling when I was first building out our service model at Dentist Advisors, I was like, There’s gotta be some things that are like non-negotiables right up front. If I don’t catch them, I’m threatening the livelihood of a client. And I still struggle with that at some degree. But I’m like, “Why don’t doctors have that kind of pain?” If you go to a primary care physician and they don’t catch something because they weren’t asked to do a full diagnosis or they tried to do a diagnosis but missed something, it’s not like every consumer expects every doctor to catch everything, it’s hard. It’s like hard to catch every little small thing that may or may not be going wrong. Now, you can catch the big stuff, like you have no life insurance, or your…

Matt Glazer:
There’s a difference between that stuff and optimizations, right? That you’re paying probably a percent too much on your mortgage, or something like that, and…

Reese Harper:
Well, I am not sure what… Those things aren’t sustainable value propositions. That’s the problem I have up front, if it’s like, Well, up front, there’s this huge thing, and then I go silent ’cause that huge thing was the expectation now, it’s just a hard expectation to maintain. Like, “Here’s the binder with the 50 pages and the 80-point checklist,” ’cause now I’m comprehensive, but maintaining that is impractical, overly expensive, it drains the client emotionally, it’s a time drain. I can’t tell you how many dentists I have picked up as customers because they wanted to just… At some point, they got tired of this significant investment. They were getting on airplanes to fly, they go take a day off time to do the plan and keep this plan going. And I just don’t think that’s how the modern consumer wants to interact with their finances. They’re like, that’s why they’re kind of sick of it, and they’re just like, “I don’t wanna do it.”

Reese Harper:
Easy to click a button on Lemonade and just buy the life insurance, and I could avoid the whole drama.” But now we have disintermediated advice across 30 platforms, and people have no way to consolidate that because the plan is so painful. This is where I wanted to go, man, is that the friction, the friction of what we present a customer with is what stops them from coming back to get advice. The pain, it’s so painful. And the more painful you make that up-front friction, the less likely they are to return to want to experience it. And so what they wanna feel is understood, valued, supported, and they wanna feel like they’re making progress. But I don’t think the consumer actually has an 80-point checklist of pain that they wanna get resolved right away. That is not why they’re engaging.

Matt Glazer:
What if your doctor was like that? Just like the person you just described? You felt understood, heard, valued, and that you were gonna be okay going to your doctor. Would you go to the doctor more if you had this phenomenal experience there?

Reese Harper:
Yeah, totally.

Matt Glazer:
That’d be interesting, right? [laughter]

Reese Harper:
But it’s really a negative interaction.

Matt Glazer:
Yeah, how do we make it less painful? And that’s where the question comes from?

Reese Harper:
Isn’t that why we don’t go? Isn’t that why we don’t go? Because we’re just like, “There’s gonna be so much pain. I know it’s bad news. I know it’s always bad news.” There’s never good news, where they’re like, “Hey… ” Why do people like therapy more, or coaching, or why do they like consultants, or coaches? Those generally have… And financial advisors have a more positive perception, I think, among clients, than sadly… They’re not always trusted as much as like a CPA, but the interaction with a CPA typically leaves the client feeling like there’s a big bill to pay, or some kind of… You generally don’t interact with your CPA when you’re wanting to be motivated, or when you wanna feel good about yourself. And so I think that the role that we play generally leans more towards self-actualization, affirming a client, helping them actually accept their condition and make next steps that leave them feeling good. That’s kind of the role that we’re trying to play, but the friction up front of engagement is where I feel like we’re off in the industry, because it…

Reese Harper:
And it starts from up-front planning fees. We’ve got… Dentist Advisors have tried to get our up-front friction down as low as possible, because it’s… That’s actually… They can hurt your conversion rate a ton, and it emphasizes the fact that this is gonna be painful, there’s gonna be a lot of work, and you’re probably not gonna like it. [chuckle] And no wonder it’s hard to get people to engage. It’s expensive, it’s time-consuming, you’re saying you’re gonna do it all, and then we wonder why 100 million Americans don’t even reach out. ‘Cause it’s like, “Dude, if it’s expensive, painful and hard, the only people that are gonna be able to do it are the very wealthy.” And if you’re not willing to just engage with less friction and help me make progress… And I don’t know if that’s just… That seems obvious to me, but I feel like regulators and the way we get paid, and the way the industry has evolved, it’s almost made us feel like we have this obligatory… Like you’re not a good… And the word comprehensive, that even makes it worse. The word comprehensive is like, “Now, you don’t miss anything, or you’re an idiot.” So you can’t just be like, “I’m just gonna listen and help someone make a couple of steps,” ’cause that’s not financial planning. So, what is it?

Matt Glazer:
Right. And the rub is… I think that the rub is then… Alright, so this process, this initial plan up-front is like this really specific thing that we can describe and sell to people, “Well, this is what you’re gonna get.” So if it’s not that, then how do we get really specific about the offering, about the service, about the product, so to speak, that they’re buying? And I think we still can, right?

Reese Harper:
Oh yeah.

Matt Glazer:
I think we still can make that super tangible without having to say, “We’re gonna spend two weeks doing data gathering, and organization of [0:12:34.7] ____, then I’m gonna go and do two weeks of some analysis, and I’m gonna make some observations, and I’m gonna get some more information from you and do some analysis, and we’re gonna meet, we’re gonna go over next steps and action items, and this whole process is gonna take us three weeks, four weeks, six weeks, whatever it is.” If we don’t do that, and describe it as that, then what are we describing? And I still think we can describe something that is like setting great expectations around something really specific. Maybe you can talk about how you’ve done, because you…

Reese Harper:
No, that’s a different topic for another day, man. We’re not gonna go into that today. But look, yes, there’s a different, better value proposition, there totally is, and it has more to do with meeting the ongoing, personalized, specific needs of the client that have to do with their progress, and… Why can’t you just do 15 things over a year and a half instead of doing 15 things upfront? Why are we forced to do all of them upfront? That’s kind of the point of today, is like you can still do all of this stuff, it’s just gonna come in a cadence that’s more appropriate for the client, and it’s going to allow the friction to be a little easier to engage, both from a fee perspective and just an emotional lift. That’s my point of view.

Matt Glazer:
So for the faithful who have stuck with us this far in this conversation, who have not tuned us out because we’ve turned their service models on their heads. For those people still with us here, how would you… Who are like, “Okay, I’m ready to give this some space to breathe in my service model, I’m ready to give this a try,” how would you suggest they go around starting to do that? What does that look like to you, if I’m saying…

Reese Harper:
At a minimal viable product level, it’s like, “How do we bring the cost down of the essentials?” And I would say that no implementation, in my view… You don’t have to implement anything on behalf of the client to fulfill an essential role as an advisor. You don’t have to do anything for them. Now, and that starts…

Matt Glazer:
Okay, I think a lot of people wanna do that, so let’s play in a world where we are implementing. That is part of our value prop, we have to…

Reese Harper:
No. Well, wait. No, no, no, no, no, no. So look, what I’m saying is, we have to have a personal financial statement for the customer, and we have to be able to make sure that that thing is accurate on the minimal viable timeframe. I don’t think annually is quite enough for us to feel like… That’s only like 20, 30, 40 interactions in a lifetime. So I like the quarterly interaction, that’s the cadence that I think makes sense, because during the calendar year, at least it gives you a few times to sort of intervene in a conversation.

Matt Glazer:
Now, someone might put everything under the sun. What level of specificity are you talking about?

Reese Harper:
If somebody… What?

Matt Glazer:
What level of specificity are you talking about in the personal financial statement? ‘Cause someone might say, “Alright, well, I need to get this laundry-list of detail for every one of these things on there.” Are you talking that detail, or are you talking…

Reese Harper:
I’m just talking… So let’s just… I’m just talking, balance, data, then a name and account type. So I’ve got an account type, I got a name, and I got a balance.

Matt Glazer:
And what does that give you?

Reese Harper:
Immediately, that gives me a lot of information to be able to provide advice. Like, I can provide a lot of advice with that level of detail. And it’s very low friction to get it. That’s like five minutes of client time upfront, in a very, very simple UI that they can do, and then… And you could do that through a number of platforms. And then it’s…

Matt Glazer:
And how confident are you in that advice?

Reese Harper:
Well, I’m not gonna get awfully granular until I decide if it’s awfully important to be granular based on where I feel like the client’s conversation goes. But like at a minimal level, what I’m saying is, all the implementation could be done by me saying what to do, and the client could go do everything. And I could interact with them pretty infrequently on a quarterly basis, and only have their balance sheet information in front of me.

Reese Harper:
I still feel like I can give really good advice in that interaction, I feel I could give great advice in that… Better advice than… If I take it the next step, which is like… But I also have to have precision and more level of detail and all documentation, and I’ve gotta have relationships with all their professional service providers, and I have to do the implementation. And… We have to start breaking down all this stuff that we’re doing into smaller steps. We’re doing so much for people that they don’t even see, and yet the part that they value, we’re not even getting around to half the time. What they value is the communication with the service provider and the insight you provide. They don’t always… They don’t value to the same degree, that… “And you’re gonna do everything for me, so I don’t have to lift a finger.”

Reese Harper:
I mean, yes, they do value that, but if you were to say, “Which one’s more important?” They value the conversations. And yet we’re kind of bundling all the service in like it’s just not even expensive for us to manage. And it is. It’s very expensive to be an excellent service provider, is a factor of how much wealth someone has to be able to pay for all that service. But man, to be able to provide people with advice, like tangible advice, in four hours a year of really great interactions because you have great data in front of you, and you don’t have to do anything but sit in front of that data and give the client advice and feedback, that’s still incredibly valuable and very premium. Like to get access to be able to…

Reese Harper:
Of the value stack, I’m just saying that part is always going to be the highest paid part, and who the person is that they get to talk to for that hour, that’s where the value will ultimately shake out. I mean that’s where some people are gonna be worth $10,000 an hour, and some people are gonna be worth $1,000, some people are gonna be worth 200 bucks, some people are worth 50 bucks, some people are worth nothing. You couldn’t give your time away… [chuckle] ‘Cause you’re just not that valuable, right? But if you’re placing your value proposition on all the other stuff, on all the implementation or the technical aspects of platform selection or security selection, eventually, that value proposition starts breaking down more, because there’s just gonna be a lot of commoditization on that part of the industry. I know that that’s kind of a very impractical thing for some firms, ’cause you’re working with customers who have the resources and wealth, that they want services. They don’t wanna lift a finger. But there are… I think there’s a lot of friction that keeps people from growing because their level of engagement is just so comprehensive and so deep, that the customer is just like, “No, I’m not that complicated. No, I don’t need that.”

Reese Harper:
And if you had another option of like, “Hey, I have this option where I can just serve as your coach and your counselor. You can bring questions to me, and I’ll set up this cadence with you.” I mean, it would be really nice ’cause a lot of advisors tell me that, “I just wish I could just talk to clients, I love talking to clients, I love interacting with clients.” But 70% of our business is baked around delivering services. Are you kidding me? Then, why don’t we just talk to clients? ‘Cause that’s what they want, and why don’t we have them do a little bit of their dirty work, because…

Matt Glazer:
Yeah, and I think that’s another topic, how do we actually get them involved so the cost comes down, that we can actually provide a service like that. We might have even talked about that before, but… Yeah. Great topic for a different day, but I think it’s a great insight. The personal financial statement is the core part of this service delivery model for breaking down the initial pain up-front.

Reese Harper:
Yeah, and getting the client involved in that to some degree, so they understand it at a baseline level where most of them don’t, it’s an important part of getting your business to scale. Anyway, love it, Matt. Thanks for taking the time today, and we will leave all these ramblings for another day. Thanks, guys, so much for tuning in. It’s always a pleasure to be able to record some content for you. Hopefully you enjoyed it, and we’d love your feedback, if you can kick us an email response to any of the episodes that go out, we’d love to hear your thoughts and get your feedback along the way. So, thanks so much, talk to you soon.

Jordan Haines:
Next time on Elementality.

David Dodd:
It’s interesting that this fuel for our life, the whole financial planning conversation is definitely moving in that direction. Overall, you can see it everywhere, on all the major podcasts that you listen to. It’s talking about values and bringing people back to what’s most important to them. You’ve got Kinder’s three questions. You’ve got all these resources and things that people are talking about values, but then they totally ignore it when it comes to the actual implementation of how you invest the money, and use the money.

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 Matt Glazer. Elementality is produced by Abby Mortin and directed by Jordan Haynes. Have a good one.

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