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What I’m going to do is share with you some new concepts, something that I personally work on with my coaching clients for many, many years, but really don’t talk about it here in a public forum.  

A lot of people, advisers look at me as a sort of the business plan guy, morning ritual guy, I’m the mindset guy (which I love), and those are things that absolutely have to be there as an advisor to really be successful. Along those lines, I have been around a lot of very, very successful advisers in my over 25-year career.  

What I do is, I teach and I learn. It’s truly a symbiotic type relationship. So, one of the things I truly believe in, and it’s very profitable to do is understand as an advisor, the principles of optimization and leverage.  

This not going to be a motivational chat today. This is going to be a dollar and cents chat which, if it motivates you, that’s very cool also. The principles of optimization and leverage basically means this. That in every practice, in every business, in every relationship, there are hidden opportunities, there are hidden points of leverage and let me explain.  

On the optimization side, if you look a client that you have, you have all of their money, is in an advisory, we have a net worth or financial plan, how we handle life insurance long term care, how we handle lending, tax and estate planning, I mean just think about some of the areas that you look at and can you have a column of all your clients on a spreadsheet and then across the top we have everything that we need to do right.  

Everything you could possible either provide yourself or orchestrate with another expert. So, the caveat most advisors have, is that, they think they have to know it all. Well, I don’t know much about long term care or lending. Fine. Go find somebody that does and partner with them.  

When I say “partner”, it might or might not be an economic relationship but the bottom line is, we are “quarterbacking” our client relationships. So, if we did that spreadsheet, and I say the “Okay”, so, how many of these situations can you definitively, not “I think so”, but you know as a statement of fact you’ve accomplished.  

So, client #1, do we all their money and is it in advisory, you absolutely know, you suspect or you don’t know? If you were to methodically build this out, you would find opportunities! Revenue opportunities, opportunities of a certain higher level, now it makes perfect sense. This is Business 101.  

What’s Business 101? Increase profits, increase gross revenue. Expansion. But in our industry, especially if you’ve been around for a while, how have most advisors been taught about expansion?  

Go get more clients.  No such thing as too many households, right? It’s simply not true anymore and I think, most of you know that. But I often run across situations where, I’ll be sitting with a potential new coaching client and I’ll say, ” Hey look, how optimized is your book?”.  

Do you have all your client’s money? Is it this or that? I’ll get these kinds of weird answers, but you really don’t know. And then the best part is, somebody will say, “Well no. I do. I know our clients really well, they’ve been with me for many, many years.  

I said, “You know because you’re assuming? Or you know as a statement of fact?”. And normally when I ask the question that way, it’s like, “Well, it’s a little less than when we updated their financial plan”. 

Either (A), they don’t have one or (B), it hasn’t been updated in years. “Where’s your current balance sheet/net worth statement?” “Oh…”, you know you get into those conversations. And I think a lot of these advisors look into these things as just “work”.  

Why do I want to have a net worth statement and a balance sheet for all my clients? One, it’s best practice. Two, you’ll make a lot of money. But if you’re busy chasing the next “shiny object”, it’s going to be a bit of a challenge.  

So, you’ll want to go do that. So, optimization primarily means, we look at the way it’s done. The way I teach it is, you take one relationship and ask, “What do we know about this person?”. “Do we have an updated financial plan, a net worth statement?”, “Do we know about their insurances? Do we know about their tax situation, who their attorney is?”  

If the answer is “No”, then you have a tremendous problem. I’ve been able to help clients increase their revenue by 50%. And not add 1 new household. In some cases, we do reduce the number of households because, we create an optimized business.  

What do you think about that? This will make you a lot of money depending on how you’re “consuming” this. Think about this.  

If you were to sit down for a day, or on a regular basis, again there’s a lot of different ways we can do this, and you just pull out each client methodically, and say “What DO I know as a statement of fact? What DON’T I know or I ASSUME?”, and you start looking at it and say “Wow! I do have some gaps here”.  

And for a lot of you, you’ll sit there and say, “Well, yeah. I did this person a financial plan 5 years ago. When this person came on, we did a financial plan, we validated it, we’ve done everything”, and I’d say, ” That’s great! Have you gotten back and double checked everything?”, “Well, no.”  

“Now why is that?”. Well, it’s because most advisors assume that if there is a change of status with their client, the client will say ” Hey! I’ve inherited money. I sold a piece of property, I won the lottery, whatever it is, and you will magically just get that information.  

It is not true and here’s why. One of my client’s has a very good friend of his who is also a client. So, my client was doing the review with him and I think probably a week before we had a call were I basically kind of berated him a little bit and stuck my thumb in his back probably pretty hard saying “No assumptions”.  

Assumptions in this industry cost you hundreds of thousands of dollars a year of any account. Forget the revenue side. Just income. No assumptions.  

So, he did this review with his client and he says, “I know you’re in my ear Joe” and goes, “Hey, is there anything else I need to be aware of? Are there any changes in your economic status?”, and we list, ” I’ve inherited money, sold any property, sold a business, we randomly talked about somethings that kind of get the mind going. And he says, “Yeah, well, in fact last year, my family had this piece of property, we sold it, I got some of the proceeds, and because we wanted to understand the tax scenario, we met with our accountant and he referred us to the guy down the hall and we put the money with him.”  

And could you imagine, here’s one of your best friends, you hunt things together, and the dude put his money with somebody else and you didn’t even know about it!  Well we fixed that obviously. 

I wish I could tell you that it’s rare in out space but actually, that is more common than you think. And for a lot of you/ most of you, you have similar scenarios but you’re sitting there, kind of chasing everything and not looking at the highest and best use of your time.  

One of the highest and best uses of your time is sitting down on a strategic day, which we will be working on the business and you’ll be pulling out client 1, client 2, client 3 and you’re going to ask the questions. And if you don’t have a definitive, with certainty, get on the witness stand swear an oath that I know this to be a fact answer, then you better go ahead and do a thorough review with no assumptions. That’s how we optimize.  

And as far as the other pieces go, you need to build your team. If you don’t have an expert team like insurance, long term care, or social security or anything else, then go find those experts and put them on your team and be the quarterback.  

And whether you have a revenue of scenario with them, a joint venture economically, that’s your business. I’m just saying that if you’re going to serve your clients, do it at the highest level. 

Optimization does a couple of things. One, it increases gross revenue. It blows the doors off the profits because you’re serving the clients the same way, but you got a revenue increase, that’s called secure profit. It locks out competitors.  

The more business we do, the deeper the relationship and the lesser the chance that they’re going to wander off somewhere else. There’s no need for them to go to a dinner workshop and learn about annuities or anything like that because we have it all handled “In-house”.   

In addition to that, we get an opportunity to build a deeper relationship with the other professionals, the CPA/tax repairer, their attorney, their property or casualty person, maybe their banker, you don’t know where these things are going. That’s the “leverage” part of optimization leverage.  

I can think any business and I like this as a challenge, don’t reach to me and say, “I’ll accept this!”. I may ask for some volunteers and I will do this totally contingent so don’t pay me anything.  

To increase your profits by 20, 30, 40, 50%, by running optimization. Now, you don’t need me to do this and I’m not volunteering in it right now, but that’s how strong I believe in this. Imagine sitting down, and there will some whose advisor will run great businesses (of whom I’ve worked a lot with) and I still find out hidden opportunities and a lot of times, on the leverage side.  

Remember rule number 1, “People’s economic lives are in a constant state of flux” and rule number 2,” Most will not tell you about it”. 

I don’t care how good a relationship you have. But if you’re working on the assumptive scenario, it’s costing you a lot of money. This is again, business 101.  

Improving your revenue, profit and being efficient and effective economically. Those are the things that I want you to think about for today. The last thing I’d want to say is, a lot of advisors have this “hang up” on centers of influence.  

CPAs, attorneys, property and casualty people, business coaches, business consultants, HR consultants depending on your marketplace, I can give you a plethora, sports agents, therapists, I can give you a whole literary of what a COI is, not just a CPA and attorney, and a lot of times, I think advisors get turned off is because it seems like a real pain in the tail.  

It’s just a giant numbers game and it’s all about the leverage. If I were to save you, in your book of business, if we were to have a census of all your clients, your CPA/tax repairers, attorneys, property/casualty agents, bankers, any of the professionals in their COI, if you’re a business owner, there’s going to be a lot of opportunity in there.  

If you were to sit down and list, you would probably have hundreds of opportunities to leverage and what would happen if you were to methodically, say, for the next two years, have 1-2 meetings every week with people on this list, reach out daily to 1 or 2 of them via email, invite them to connect to me via LinkedIn, all of these people.  

How much success do you really need? How many CPAs do you really need to drink your Kool-Aid for it to be meaningful? Think about that.  

This is what most advisors won’t go and do; they won’t go through the pain of rejection and failure to find the nuggets. I‘ve always found that if you meet 20 CPAs, you’ll find 1 or 2 that will be meaningful enough, that are in alignment enough, that have the right belief set where there’s really strong potential to do business together.  

But if your mindset is like “I’ve met with 3 CPAs and they were weird and just didn’t get it and didn’t want any conflicts, therefore, I go to a sample size of 3, CPAs don’t work.  

The only way I’ll accept that is if you’ve met with a hundred. If you say in your career, I’ve met with a hundred CPAs face to face, broke bread with them, chatted with them and I established no relationships, I want to hear from you.  

I want to interview you because that’ll be a first in my career. And I’ve yet to see that happen. Again, if we’re busy chasing everything, we get nothing and this is why, again if you think about it, that you when I look into building a business with an advisor, someone who’s been in the business for a bit, I’m going to look at 2 core elements. 

I’m going to look at it through optimization and leverage, as an area we’re going to really explore, and then we’re going to look at introductions and referrals from our clients as an area we would want to explore.  

These are high leverage, high-profit opportunities. You don’t need to go running around chasing everything else. If most of you will only get excellent in these two areas, you can increase your income by 30, 40, 50, 70 even 100% in the next 12-36 months.  

If you’re busy chasing everything and not become an expert in anything, you’ll make some money and it’ll feel uncomfortable because you’re all over the place. But, imagine if you got things tight. I’d just want you to think about that.  

Again, if I can help you in any way, shape or form, I’d like to do that. Keep me in mind, and thank you.