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The Twists and Turns of a Niche Market with Leah Coleman

As advisors look for the right niche marketing opportunity, they also want to know about the ups and downs they might expect before they change their firm’s focus. This small RIA owner had to reevaluate her firm’s model and take a step back to reset before finding success by focusing on a very specialized niche.

On this episode of Elementality, Reese welcomes Leah Coleman, owner of Orchard Financial Group, a small RIA firm in Austin, Texas. Learn from Leah’s experiences as she shares her story about the ups and downs her firm took before she found niche success. And if you’re worried about “imposter syndrome”, hear how Leah worked through similar worries and found her authentic voice.

Show Notes
www.orchardfinancial.com

 


Podcast Transcript

Leah Coleman:
You have to think about starting a company in your first year, you’re still trying to figure out who your company is, and what your brand is, and what your process is, and… I came from an old school world where we printed out the eMoney deliverable and gave it to a client in a conference room, and it was really thick and… And then we threw them in a portfolio and charged them AUM, right. [chuckle] So I’m just trying to figure out how was I going to modernize what I thought financial planning was.

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 advisor 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. Here in studio today, with big T editing behind the camera, I’ve invited a special guest in from Austin, Texas, flown her in. She has one of the most interesting niche markets in the US right now, a fast growing hot start-up. I love Austin. I wish I could move there sometimes, but they don’t have enough snow. I’d like to welcome to the program, Leah Coleman. Leah, thanks for joining us and welcome.

Leah Coleman:
Thank you, Reese, for having me. It’s been a great experience coming up here to the mountains. We get no snow in Austin.

Reese Harper:
You guys have a lot of good food and music.

Leah Coleman:
We do.

Reese Harper:
Which is, you gotta pick… You don’t get them all. [chuckle]

Leah Coleman:
I would rather be in short sleeves for 10 months of the year than be in the mountains.

Reese Harper:
It’s like… Austin is definitely one of the more interesting growth cities right now in the US, both for the tech market… It’s a pretty diverse place, especially in Texas. Talk to me just a little bit about, number one… Before I jump into that, actually, I wanted to ask you, have you ever listened to this podcast before or not?

Leah Coleman:
I have. Yeah.

Reese Harper:
Really?

Leah Coleman:
I’ve listened to most of the episodes.

Reese Harper:
Okay, good. Someone’s listening out there. So Leah has been… I’ve known you for maybe like a year or nine months, I don’t know. How long has it been?

Leah Coleman:
Yeah, probably a year, coming up this summer.

Reese Harper:
So a year ago when we met, I know you were starting to… You had a pretty clear defined target market, but it seems like it’s firmed up a bit, and I imagine before we met, it was also in development. So talk to me about how you… Number one, what is the market of clients that you serve, and then how did you get from starting to that market? What mistakes you might have made along the way? That’s the first part of the conversation I wanna have. So let’s start with the question, what is your current market? Who do you serve?

Leah Coleman:
Currently, we are serving LGBT families and couples with a focus on STEM workers. The majority of our families do have some form of equity compensation.

Reese Harper:
Okay. So if I were to say that as fast as possible, I could say LGBTQ families or couples. I noticed that it’s really hard to simplify that, couples or families. You probably don’t need to. You can probably cut that out. I don’t know.

Leah Coleman:
Oh, yeah. I was being a little nerdy.

Reese Harper:
Yeah, I’m just thinking about that. I’m an English person here, so I’m trying to figure it out in my head, do I need that part of it? But the STEM and tech component, why did you say STEM? I’m curious why that came up. Is that… Do you feel like that’s an important distinction in tech, or is that the same as saying tech.

Leah Coleman:
I think it is an important distinction. So to me, STEM also encompasses the scientists, right.

Reese Harper:
Almost like biotech that might not consider themselves tech.

Leah Coleman:
Yep, biotech, space. So we have a significant number of clients that are working for publicly traded companies that do satellite production.

Reese Harper:
Oh, really?

Leah Coleman:
They run satellites.

Reese Harper:
That’s cool.

Leah Coleman:
Yeah, and we have a little bit of an affinity towards astronauts. We don’t have any current astronaut clients, but I have some family members that have been working with NASA.

Reese Harper:
Oh, no way. Okay, like someone who doesn’t know a lot about this. Is that a thing in Texas that I should be aware of?

Leah Coleman:
In Houston, it is. Yeah.

Reese Harper:
Ah, Houston, we have a problem. That’s the point. Okay. I just know the movie so… So Texas has a connection to NASA. This is something I’m gonna take away for today’s conversation. [chuckle] So if there was a… To simplify the distinction down a bit, what would be… What do you find the common jobs are that are underlying this customer? What similarities have you seen that have shown up over time?

Leah Coleman:
Yeah. So these are typically high-earning households. A lot of the decisions are having to make are around cash flow, so making sure that their savings rates are where they need to be, and just planning for their equity compensation. So if it’s an RSU, that’s gonna be pretty simple, but there are a lot of other items that we need to consider in terms of their vesting schedules and their trading windows and things like that.

Reese Harper:
So what do you think they reach out to you for? If somebody wants to work with Leah, why… If they’re like, “I heard about you, I wanna work with you,” Why you? What do you think they would normally say?

Leah Coleman:
At the end of the day, they just want help. They want financial clarity. They wanna know what their next best step is.

Reese Harper:
‘Cause they’re stuck on some kind of thing.

Leah Coleman:
Yeah.

Reese Harper:
And…

Leah Coleman:
Money is coming in, it’s building up in the checking account, they don’t know what they’re supposed to do with it. They don’t come from money. You don’t learn about this in college.

Reese Harper:
How many years ago did you start the firm, as an independent advisor?

Leah Coleman:
We just celebrated our third anniversary.

Reese Harper:
Okay. Yeah, year three. That’s a big deal. So what was year one like compared to… What was year one like and your two like compared to where you’re at now in terms of finding this customer?

Leah Coleman:
Yeah, so when I launched, I thought that because I was in Austin, I would be working with people in the startup world, so it’s fully… Of startups.

Reese Harper:
Yeah, it’s a big startup market. Yeah.

Leah Coleman:
I thought this is a great idea. This is a great niche. And so, I really targeted going and talking to employers about providing financial planning for their employees. And I ended up being able to talk a few startups into providing financial planning services for their employees.

Reese Harper:
Nice.

Leah Coleman:
So in the first year we brought in about 30 clients in that way.

Reese Harper:
Were they software developers or C-suite executives or…

Leah Coleman:
It was a large variety of people in startups. So we were working with people in the marketing department, people in HR, computer engineers…

Reese Harper:
Did it lean…

Leah Coleman:
A variety of personalities.

Reese Harper:
Did it lean towards just the people that were a little bit higher income in the company, or was that people… Did you get rank and file too that were just basic questions that I’m… In my first job?

Leah Coleman:
Both.

Reese Harper:
Oh, okay.

Leah Coleman:
Yeah, it was a variety of different types of people. So people making $60,000 a year who just needed a few financial questions answered all the way up to the executive level.

Reese Harper:
That’s awesome. Okay. So I can see the problems that are starting to arise from that.

Leah Coleman:
It was a lot of work.

Reese Harper:
generated some revenue, maybe had some clients that you kept, I don’t know, but what did you learn from that experience? Why not have the brand today, we work with fast growth startups and all their employees? What did you learn?

Leah Coleman:
The first thing I learned is that if your employer is subsidizing financial planning, you have no skin in the game, and that you are… It’s really hard to get people to act on the recommendations that you give them. It was hard for me to have people complete any of the action items that I would give to them during financial planning. And I thought…

Reese Harper:
I’ve heard of that a lot from people who have been in that space too. Yeah.

Leah Coleman:
But one of the biggest challenges was just switching gears between the different levels of income and wealth with the clients. The way that you service a client making under 100,000 is very different than the way that you service a client making over 300,000.

Reese Harper:
Did you get the employer to have some skin in the game as an employer, like, “Hey, you’re gonna pay something to have me meet with your people?” Or was it…

Leah Coleman:
Absolutely.

Reese Harper:
Okay. How did you price that? I’m just curious. What was your original thought on that?

Leah Coleman:
So my initial pricing is… I hesitate to even say it.

Reese Harper:
You shouldn’t because there’s nothing embarrassing here to share. Was it hourly, was it fixed rate, was it…

Leah Coleman:
It was a fixed rate per month per employee that signed up.

Reese Harper:
Okay. So it was a PEPM model?

Leah Coleman:
Yeah.

Reese Harper:
Okay. So dude, that’s like with… If you would have had Elements at the time and employees could just self-direct, and if we would have had a web launched, which we still don’t have, but shout-out… At the point you guys listen to this, web will be out so you can go check it out. [chuckle]

Leah Coleman:
Yes. [chuckle]

Reese Harper:
But I think if there was technology better to serve that population, you can almost get away on a PEPM kinda model. But financial planning is tough to do on a low price point because there’s still a lot of questions for someone who makes 80,000. Sometimes their financial literacy is quite low, and you end up being a facilitator and educator, and it just is a… You care so much that you… You could spend hours with somebody and they value it, but they just wouldn’t pay for it necessarily, right?

Leah Coleman:
Right, absolutely. I’m in the business because I want to help people first and foremost.

Reese Harper:
That’s one of the biggest reasons for me that the origin of Elements, and you may not know this, but we were working with so many dentists that we had to say no to, ’cause we’d always work with the owners. And then you got these hygienists and we have these associate dentists, and no one has quite the income or the complexity to justify paying a fee of several thousand dollars a year. ‘Cause their… It’s like that’s 5% of their income maybe or something. And so, we were trying to figure out a way to have a less expensive way to engage people in a one-to-many environment so that we could go into an employer and say, “Okay, self on board. Put all your stuff in here. Watch this… I’m gonna do a class, and you can ask questions during that one hour. If you wanna ask questions outside of that hour, it’s $500. Or it’s… ” It’s an expensive session, but at least you can give them access to some training. But I’ve never had, and still don’t…

Reese Harper:
We’re hopefully going to have it in the future soon, but I’d never had a piece of technology that I could actually kinda facilitate that one-to-many experience. And I was doing it manually on spreadsheets, and I was using tools that were meant for a one-to-one, like eMoney or… And it was just expensive. So, what was your experience doing that for that part of the market? I’m really curious what your pain was ’cause that was one of… That’s what I learned.

Leah Coleman:
I wanna comment though on Elements.

Reese Harper:
Okay, cool.

Leah Coleman:
Because it sparked an idea. If I had Elements back then, what if you went in, do an hour talk, educate the employees on what the Elements are, have them put in their own information, you could almost do a speed dating session right after the education meeting, right?

Reese Harper:
Yeah.

Leah Coleman:
So the clients can just filter through whatever office you’re sitting in. Give them 10 minutes of your time, charge the company for an hour, you’ve hit all of their employees and they can ask… And really, what are you gonna focus on at that income level too, savings, right?

Reese Harper:
Yeah.

Leah Coleman:
Liquid term, probably.

Reese Harper:
Yeah. The macro cash flow and the… Any general balance sheet problems that might be there. And you can see that, you can identify them quickly, but it’s just like getting… We’re testing this right now with Keller Williams real estate, just in Texas, actually, they just finally gave me the go-ahead to start on a one-to-many real estate agent wellness program. And so, they went to each of their market centers and got… I told them I’d get only 50 people, ’cause I didn’t wanna have 500. There’s 5000 agents. So I just said we’ll take 50 and have them pay us a PEPM fee and then let’s test… What can we learn from it? It’s just a pilot, and I’m just gonna learn, for the first, time how I would do this. ‘Cause advisors are trying to figure this out too, and I wanna have the pain that they are going through. So I thought, “Okay, well… We had someone call in and say, “Can you run an employee wellness program for us?” ‘Cause they downloaded the app off of the App Store. My point in bringing that story up was, I think there’s this…

Reese Harper:
From a marketing perspective, right now, financial advisors have a really small top of funnel, where the only people that get in your funnel are the people that meet a certain income criteria or have lots of liquidity, and at a very specific point in time, you can get them. But what we really need is a larger funnel, a wider funnel, where we can engage in a less expensive way, like lots of people, and then in a one-on-one way, very few. So now you can have 80, 100 clients, but you might have a 1000 people that you’re constantly nurturing in this one-to-many world, so that you’re not struggling to put another 80 people in your business. ‘Cause it’s really hard if there’s a binary moment in time where someone either has the money or doesn’t, ’cause it’s really more fluid than that, and you wanna capture them wherever they’re at in their life but we just haven’t had an opportunity to do that. So that’s the origin of my experience in getting Elements off the ground, was that pain of employer and employee, and just people that didn’t have enough money and people that didn’t meet the criteria, but…

Reese Harper:
Thanks for letting me go on that little tangent, ’cause to me, that’s an important part of getting financial wellness into the broader market. ‘Cause people that have money are always gonna have access to advisors, but it’s how can we try to move the needle for people that are just slightly outside of what qualifies. Any thoughts on that? I’m just curious ’cause I must have been hard for you to just draw a line in the sand too though, right?

Leah Coleman:
It was really difficult trying to deliver the financial wellness at scale using traditional softwares like eMoney or RightCapital. It’s really hard to do it in a short amount of time. Everything that you’ve said, it sparks the thought in something that I’ve been thinking about lately, which is just about how I feel like businesses and employers are responsible for helping social change in the future, help raise up people who historically have not had access to financial wellness programs, and…

Reese Harper:
That’s awesome.

Leah Coleman:
By creating a program that can offer that, that scale, that’s really important because that is one… Money is one thing that… Everybody has it. People don’t have as much of it as other people, but I think it’s really important that the people that don’t have as much can still have access to financial education, understand their ratios, make smart money decisions.

Reese Harper:
Totally.

Leah Coleman:
And I think that employers need to step up and get behind both the emotional and financial wellness of their employees.

Reese Harper:
Well said. That’s awesome. It’s really great insight and wish we could distribute that out to a lot of employers. ‘Cause I feel like if we… I was writing about this recently where I was looking at the American Psychology Association’s historical charts of what they rank as the most… The greatest stress that people feel, and it was interesting, ’cause even… You’d expect money to be quite high on the list, and it’s always been one of the top two or three of America’s stressor, in the moment, the most… The deepest pain everyone feels is… Money is in the top three. But it’s normally the… It’s often the first thing people feel that’s the most stressful, but it depends on the demographic. If you’re a millennial versus a boomer, during COVID, when health-related concerns swept into the highest position for most demographics, especially boomers, and money took a second seat, it still stayed the number one stressor for millennials by a pretty decent margin.

Reese Harper:
So it’s interesting, it makes sense. But as an employer is trying to attract or help the next generation, this is their main stress. And they come to work feeling that stress and that pain, and they perform in their job sometimes below their level of capability because they’re just carrying this burden of like, “Oh my gosh, I could… I don’t have five grand in the bank,” or, “I don’t know if my income is actually gonna ever get me anywhere. I don’t know if this career is gonna lead me to a good place.” And so I think as an employer, it does help to have that connection a little bit more, and who knows, maybe in the STEM and tech space, me and you can keep collaborating, so we can get you an offering for… You’ll have a private wealth offering and then a one-to many. [chuckle]

Leah Coleman:
This is my favorite idea.

Reese Harper:
Yeah. Good, okay, good. I like it.

Reese Harper:
What happened to… To get to the place where you got going with the right customer, ’cause we didn’t have this type of tech, we didn’t have this option, Elements was not even in existence, and hopefully there’s other platforms that are gonna come up like this one too. But how did you move to get client and sort of pick and start narrowing your focus?

Leah Coleman:
I think what I realized when I was trying to do the one-to-many model is that I really enjoyed building relationships with individuals and couples, and it’s hard to do that at scale. And I was finding my most enjoyment with clients that I could spend time discovering what they really wanted to have in their ideal life, and then marrying their financial goals to that to help them achieve what they’re trying to get to. And from there, I realized I needed to make some type of pivot so that I could continue increasing revenue, have a profitable business, but work with the clients that I was really loving at the time. So I did make a hard decision to pivot away from working with the startups. And we probably reduced our clients down from 30 to five clients at some point in early year two of the business, which was really scary for a new business owner.

Reese Harper:
Yeah, totally. That’s a lot of clients to bring in in one year though, too. Thirty plus clients in a year is a lot of clients. Most firms average… I don’t know if people know this but… And I didn’t before I started interviewing small emerging RIAs, but it’s usually not more than 15 is the annual pace. So that was probably a lot of people to sort of get to know and really understand, but then also probably not all of them were really profitable, didn’t fit the mold, didn’t have an ongoing need, I’m guessing, but… Who were you left with? Who were the five or six that stuck around, or that you decided to keep?

Leah Coleman:
Yeah. So I did end up keeping two from my startup employees, and I had brought in a few others on the side that had already matched the niche that I’m working in today. And so with that, I started thinking, “I really love working with these people. Can this be a viable niche for my business?” And you have to think about starting a company in your first year, you’re still trying to figure out who your company is and what your brand is, and what your process is. And I came from an old school world where we printed out the eMoney deliverable and gave it to a client in a conference room, and it was really thick and… And then we threw them in a portfolio and charged them AUM, right? [chuckle] So just trying to figure out how was I going to modernize what I thought financial planning was.

Reese Harper:
By the way, that’s still about 85-90% of the industry still doing it that way. Shoutout to Leah for being… You act as if that’s very old school, and it’s actually current practice for most people so… But, anyway, back to your point. You were talking about the five or six, and then where it went from there.

Leah Coleman:
Yeah. So from there, I got involved in a few things locally just to start nurturing my niche in the local markets. We pivoted our website a little bit away from startups, and we’re currently in the middle of another pivot on our website. We have a new one coming out this year. And we updated a lot of our online presence to state like, “This is the niche that we’re working with,” and lead started coming in.

Reese Harper:
So when… Do you remember when you got your first lead or two from positioning? Do you remember that still?

Leah Coleman:
I do.

Reese Harper:
Was that surprising?

Leah Coleman:
It was.

Reese Harper:
So talk to me about what… Can you remember any specific story or moment when that happened?

Leah Coleman:
So I think one of the very first clients I brought in… I have my background in my office, and behind me, I have a huge rainbow on my wall. It’s a piece of art. And I remember the first clients, they popped into my virtual room, ’cause I’m a virtual firm, and the first thing they said was, “Is that rainbow for us?” And it was so great, and I got to share like, “Yes. This is here because you’re here and I wanna serve you, and… ”

Reese Harper:
That’s awesome.

Leah Coleman:
“I want everything about the firm to say that you’re welcome here.” And it was a really great experience. That was my very first experience with that.

Reese Harper:
Yeah, that’s… So did they have an idea through your copy though, too, that they would be so welcome? Were you explicitly calling out the LGBTQ market in your copy that they saw?

Leah Coleman:
It was called out a little softly at the beginning. It’s now very bold. If you go to our home page, it’s right there. It’s on the bottom of our homepage that we’re LGBT-friendly. So we’re certainly calling out that we’re a friendly place. And I am active in our Austin LGBT Chamber of Commerce. I’m the chair of a board that… Or a committee there.

Reese Harper:
One of the questions… I was talking to your husband actually before this, and you and me were just… And him were just chatting, and he brought up the point of, how can you market to an LGBTQ audience if you’re in a heterosexual marriage, and you’re not lesbian or you’re not gay? Is that authentic, or… And he was just struggling with that question. I have an answer to that, which I already gave him, and I’ll share that here in a second for the audience, but I wanna know what you… I didn’t get the sense that that was something that you actually struggled with as much as he did, ’cause he’s doing a lot of the marketing and positioning right now. And I can understand that. I’ve felt that exact question pop up in my mind as I pursued my own niche of dentists. But tell me about how you… Was that ever even a thought, and have you noticed that the community is really filtering it that way?

Leah Coleman:
So I think early on, I struggle with impostor syndrome just overall.

Reese Harper:
Yeah, we all do.

Leah Coleman:
Starting a firm, can I really do this? Am I really a good financial planner? And then moving into a niche that you’re not necessarily a part of for yourself, it was hard at first. But what I realized was that if I just showed up authentically as myself, it was fine. People want to work with me, and the closes are easy.

Reese Harper:
And probably, do you think it… Do you think for your particular niche that being a woman has been an advantage?

Leah Coleman:
I do, I do.

Reese Harper:
Yeah, I would have assumed so. It just feels to me like… I don’t know why that… Why my assumption would have been that that is the case, but tell me why you think that is the reality in your world.

Leah Coleman:
I have been told that. So prospects have come in and said, “I was scrolling through a list of fee-only advisors, and I picked you because of what you said in your profile and the fact that you are a woman.” And I just play to that because why not? I’m building a business, and I want it to be profitable. [chuckle]

Reese Harper:
Yeah, exactly. Yeah. For what it’s worth, I felt that same impostor syndrome myself, because I would go to these dental conferences and events, and I would literally… We’d have a booth up, and it’d be dentistadvisors.com, and they would come up to me and be like, “So are you a dentist?” And I would be like, “No.” [chuckle] And initially, when I first got asked that question, I was like, “Oh, my gosh, what have I done? I’m not a dentist. I can’t give financial advice to dentists.” [chuckle] And it took a couple of hours of thinking about how ludicrous that was, and I was like, “Well, why does that matter? Being a dentist has nothing to do with knowing about finances.” Learning about money is not the same as going to dental school. But it’s interesting in these niches, sometimes that’s a common pattern where you’ll see… You go to a dental conference and it’ll be… Here’s a booth, and it’ll be for dentists by dentists. It doesn’t matter what the product is.

Reese Harper:
I was telling you it could be a shoe cobbler, or it could be a electric chair massager, or dental supplies or dental hygiene kits or something. But it’ll say like, “It’s made by dentists for dentists.” And I think there’s a part… That’s one way to tackle marketing, but in my experience, I’ve found that whoever can be, like you said, the most authentic and show up with a really authentic voice, if you really know the customer and you can speak to their unique jobs they’re trying to accomplish both emotionally and the functional side, that filter is a pretty fragile filter. It’s not a very substantive one.

Abby Morton:
Do you ever get out of a client meeting and feel a little frustrated because you spent the whole time getting updated and more accurate data? Do you leave feeling like you want to have another meeting just to further develop your relationship with them? The Elements Financial Planning System assists you in taking care of all the functional jobs that need to be done in advance. And because the technology was created with the client in mind, they are more motivated to come prepared. That means you can spend additional time actually listening to what your client needs. To learn more, schedule a time to talk to us today by going to getelements.com/meet.

Reese Harper:
I can see a couple of social issues coming up in this niche, both not just calling out someone’s sexual orientation, but there’s also this patriarchy dimension. If they’re coming to you for… Because you’re a woman, I’m curious if they’re coming to you because you’re a woman first, and that’s the connection that they’re finding, or if they’re coming to you because you were LGBTQ-focused, and then a secondary filter was that you’re a woman. I know that’s probably a tough thing to answer and guess at at this point, but talk to me a little bit about that dynamic.

Leah Coleman:
I am also really curious about this, Reese.

Reese Harper:
Okay, interesting. [chuckle]

Leah Coleman:
And I just wonder if it’s both at the same time. I don’t know which one comes first. I think being a woman in this industry has its pluses.

Reese Harper:
Then those are…

Leah Coleman:
Hmm?

Reese Harper:
And those are…

Leah Coleman:
[chuckle] If you’re scrolling through a list of financial planners and there’s five women and 25 men, I am gonna stick out on my picture, right? I look different.

Reese Harper:
Yep. You can differentiate way quicker. You were going down a train of thought though before I interrupted you. I was saying like, “Hey… ” You’re like, “It has its pluses to be a woman in this industry,” and I was asking about that patriarchy element. But you might have been about to say that it has its disadvantages too or something. I don’t know.

Leah Coleman:
There aren’t many disadvantages, I wouldn’t say.

Reese Harper:
Cool.

Leah Coleman:
But I think… We’re online and you can find us. We are… We serve LGBT communities, and I think that that might be the number one thing. I think if you’re gonna filter for that, say on find an advisor type of thing, maybe that’s where you’re gonna go first, because I could be a female advisor that’s not acting as an ally.

Reese Harper:
Yeah. Yeah, I think that there’s a big theme… There is a… I have a friend that would probably have described herself very similarly to you, White, privileged Silicon Valley, just a successful, great life. It’s dedicated to the last three years or so to a podcast called Breaking Down Patriarchy. It’s a very… It’s a book club and trying to help empower some underprivileged communities, and particularly the theme of patriarchy just generally. It seems like in our industry, at least in financial services, that runs real deep. There just aren’t very many women who are starting firms, and there’s not a lot of female financial advisors. There’s not a lot of women in C-Suites. It’s challenging both from an employer’s perspective like mine, who’s trying to actively find diversity in your workforce, and it’s challenging to get the next generation of planners to find an interest in this industry because it is left-brained, it is linear, it’s analytical. There’s not as much art and creativity in the space. It tends to be… I find that there’s a ton of it, but me and you…

Leah Coleman:
I was gonna disagree with you. I think that it’s mostly art.

Reese Harper:
Yes.

Leah Coleman:
You have to have the technical expertise, you have to have the knowledge. It’s not that hard to learn it.

Reese Harper:
Yes. When you say that most people though think of this industry is a left brain thing.

Leah Coleman:
Yes.

Reese Harper:
Yeah, it just doesn’t… It doesn’t… I think just if you’re going through college and you’re interested in anything creative, or you’re thinking about relationships and counseling or coaching or psychology, financial planning doesn’t pop into your mind. There’s something about it that still lives in the accounting department, if that makes sense. So I think it makes it hard to attract women to the industry, but also it’s just not been a place where there have been many women in the past either. And so it’s a big challenge, but I think one that you can really differentiate in right now, and you’re probably just experiencing a lot of the benefits to that.

Leah Coleman:
Absolutely. And I think firms that are attempting to modernize, we need to do a better job at getting the word out to people in college. I started out in insurance, not unlike so many other people in this industry. We started out thinking that financial planning was selling insurance policies and that I needed to sell whole life.

Reese Harper:
Where did you start at?

Leah Coleman:
Northwestern Mutual.

Reese Harper:
Did you know that me and you started at the same place? I didn’t know that.

Leah Coleman:
I don’t remember if we’ve talked about that.

Reese Harper:
No way. That’s cool. Yeah.

Leah Coleman:
So we’ve all started at some point in insurance.

Reese Harper:
That’s interesting.

Leah Coleman:
And it’s the idea that you graduate college and you have to go out and sell to make money, or you can go into another field and graduate and make a really good living. So I think it’s just… People need to be more aware that there are opportunities out there. You can come be a financial planner and have a salaried position. You don’t necessarily need to be a rainmaker to get into the profession.

Reese Harper:
Okay, so last question for today would be, what do you see… What do you see your firm going? What do you envision three years from now, five years from now? Do you want to see this be… ‘Cause you’ve got a really healthy, successful boutique lifestyle practice now, mostly concentrated on you doing as the provider of all of the client relationships. Do you see past that, or do you like where it’s at and feel comfortable with it and want it to stay there? Talk to me about the tension of, “Do I grow? Do I stay myself and small?” I just wanna know what you felt and thought.

Leah Coleman:
Yeah. That’s certainly a transition that I’ve been going through probably the past six to 12 months where, what Stephanie Bogan likes to say, “You get past your rent and ramen stage.” So, “Oh, I have a firm. I’m generating revenue. I can pay my bills. What’s next?” The first year and a half, and for some firm runners, three years or onwards, it’s hard to see that next step when you’re still trying to build your initial client base. Now, that we’re past that, I’m envisioning bringing on another advisor. It’s really important that I continue to have my lifestyle practice for myself, because I feel strongly about spending summers with my daughter and my husband and being there when she’s not in school. So family values are very important to us, and I never want to just be consumed working in the firm. So growing but continuing to stay small. So maybe servicing 160 families.

Reese Harper:
Yeah, what is… I’m curious, what does being consumed by the firm look like in summer? Is it like, “I need to have no work? I don’t want to touch work?” Or is it like, “I wanna work two days a week or half days,” what does that look like?

Leah Coleman:
So we’re testing this out in May. Actually, we’re taking an extended trip to Costa Rica as a family, where we’re gonna work there and hang out, spend our free time swimming in the beach. But what summers look like?

Reese Harper:
That’s fun.

Leah Coleman:
Yeah, I think what summers might look like for us that are working 15-20 hours a week, having someone else that’s managing my email, we’ve implemented our client surge meetings, which means we do reviews twice a year in the Spring and the Fall with clients, which leaves the summer kind of that middle, right? We’ve just come off of our spring reviews. All the clients are taken care of. If things come up, we’re available on demand, because things do come up. “I’m considering switching jobs. We need to upgrade our house. A great one just went on the market in our ideal neighborhood,” or whatever it is that’s going on, we’re always gonna be there to service our clients.

Reese Harper:
I wanna know one mistake that you’ve made in building your firm that you would say, and then we’ll ask… Then we ask you to give a one… Ask another question after that. But what’s one mistake you’ve made looking back on, going “I would do this differently now.”

Leah Coleman:
There’s so many, I think.

Reese Harper:
That’s the beautiful part about it, so many to pick from. [chuckle]

Leah Coleman:
I think one mistake was comparing myself to firms that looked like me, that were three years older than me, and thinking… Judging myself for not getting there as fast as maybe I perceived other firm owners getting to success. I’m always comparing myself to other firm owners, and that’s just a fault of my own. And so I think just putting your head down, putting in the work. The clients will come if you’re doing the right work, and if you’re being your authentic self. And personally, I was about eight weeks pregnant when I quit my job to start the firm, I would not recommend women… Don’t start a firm when you’re pregnant. It’s really, really hard.

Reese Harper:
Oh, man, that’s crazy.

Leah Coleman:
And also, your deliverables are gonna go through a million iterations, so don’t feel bad about redoing…

Reese Harper:
What they look like?

Leah Coleman:
Yeah.

Reese Harper:
Yeah, I can relate to that. I’ve still kept a lot of my… Do you keep a lot of your old stuff, those memorabilia?

Leah Coleman:
I do. [chuckle]

Reese Harper:
Yeah. I look back at folders and binders I’ve still got. I’m like, “Man, that’s when we had the people on binder.” Remember in ’06, we gave binders out. Yeah, that was great. That’s awesome. Alright, then, best piece of advice you could give a firm owner that’s getting a practice off the ground. What’s the best piece of advice you can give?

0:39:19.9 LC:
Personally, have a long financial runway. Whatever money you think you need to have in the bank, especially if this is your sole income, double it. I would just… It relieves the pressure of having to bring income into the household, and it allows you to spend more time bringing in clients that meet your niche early on. So I think as an early firm owner, there’s a little bit of, “I should bring in every client that has a pulse and is willing to pay me,” but you can end up in a mess, right? If you’re accepting all sorts of clients, and then you’re in year five and you’re trying to niche but you have clients from all over. If you do have a longer runway and you already have a well-defined niche, it allows you to be a little bit more selective about the clients you bring in.

Reese Harper:
Alright, that was a blast. I learned a ton, and I’m really proud of all that you have done in the last few years. This is a… It’s a really cool success story to see you go from… In a very relatively short period of time to a really profitable and successful business, and one that’s adding a lot of value, not just selling product, and that’s a… In 40, 50 years from now, that might be a more common story, but right now that’s a pretty unique thing to take the risk to leave a more stable place where you’re getting paid better and go build this. So I’ll let you leave everybody with the last word and then we’ll wrap up. Any last thoughts you wanna leave, we’ll let you leave them.

Leah Coleman:
Thanks, Reese, and thanks for having me. I’ll just say, starting a firm is scary, but you can do it if you work hard, and you should do it, especially women.

Reese Harper:
Nice. Alright, everybody, hope you’re having a good one. Hope you learned a lot from this. I know I did, and we look forward to having you back again soon. Next time that you come, you’re gonna come in the summer and we’re taking a mountain biking run instead of being in the snow.

Leah Coleman:
That sounds great. I bought a jacket to come here.

Reese Harper:
Nice. First coat. Alright, well, thanks everybody. I’ll talk to you guys next week.

Abby Morton:
Next time on Elementality.

Reese Harper:
Your goal is to actually improve their financial behaviors, actually improve financial wellness, increase salience, which then has a domino effect into making good decisions, and you wanna actually be a financial advisor that increases your client’s net worth, increases their savings rate, decreases their effective tax rate. Those are all objective measures that I care about. Then the frequency of contact, how often you touch base with people has a direct impact on the salience of the client or the nature that they’re gonna be thinking about this. So for me, it was developing a series of questions, developing a series of calls to action or interaction for my client that just brought finances to the top of their mind. And I just think it’s as simple as that, man.

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 planing experts. Elementality’s executive creators are Reese Harper and Matt Glazer. Elementality is produced by Abby Morton and directed by Jordan Haines. Have a good one.

 

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