Daniel Evans & Jodie Stauffer - Beyond Commissions: The Rise of Advice-Only Planning

In this episode, Daniel Evans and Jodie Stauffer explore the world of advice-only financial planning in Canada. They discuss career transitions, compensation models, niche marketing, and the future of the industry, emphasizing the importance of relationship-building and authentic client service.

Transcript

SPEAKER_00 0:04

Welcome to Hey Money, Get a Life, the podcast where we tell money to take the back seat and stop trying to drive our lives off a cliff. Here we talk about money, stress, and anxiety, but not in a boring spreadsheet kind of way. So grab your coffee, your wine, or your weighted blanket, and let's laugh, learn, and maybe cry a little, but like the good kind. Because life's too short to let money call the shots.

SPEAKER_03 0:32

Hey everyone, welcome to Hey Money, get a Life. I'm your host, Jody Stoffer, and I am here with one of our returning guests, Daniel Evans, who is also a colleague of mine here at Money Coaches Canada. And Daniel's back to talk about something that we're both passionate about, um, which is we've talked a lot in other episodes, as well as I think when me and Daniel met previously, we kind of mentioned, you know, in Canada right now, there's very few uh advice-only planners. There's about 100 we guess that we know of, uh, where there's a hundred thousand plus of commissioned or salespeople. But we're gonna talk about today that we both think you can actually make a really good living doing this if if you're passionate about it and you know you want to do planning and you want to really make an impact and build relationships. So, Daniel, welcome. That's why you're here is to talk about that. How's your week been going?

SPEAKER_01 1:27

Good. Yeah, glad to be glad to be back. I mean, it it's it's really time's flying by. It's um yeah, I think it's been what five, six months, um, close to. Um, but um yeah, glad to glad to be back, glad to talk about this um this topic really of um uh you know, advice only planning.

SPEAKER_03 1:48

Yeah. Um, so when this, you know, uh you were speaking to somebody else, one of our other colleagues, and they said, Oh, you should we were talking with Daniel. And so you're you're kind of doing a year, and I know me and you have talked about this, but a year of kind of setting up for you know the opportunity to be very successful. But let's talk, let's step back a little bit. And the reason why both of us have experience in this world is because you came from investors group, right? Where you sold product, you had lots of clients, um, you you had success. Uh and you know, so tell us about that journey and your thought pattern of like moving from that type of role um to this type of role and kind of what you've seen the difference, and like just give us a little bit of that information, I think, to start with, so then we can jump into the rest of it so people understand that transition.

SPEAKER_01 2:36

But yeah, exactly that. My my background started uh in uh, as you mentioned, investors group. So essentially, you know, I get all my training there, got uh designations and whatnot. Um, and they ultimately have a compensation structure where you are paid for uh at the time at least, this was talking, you know, 10 10 years ago, um, you're paid upon products that you sell. So you were, you know, selling insurance products and um at the time investment products. You were selling um uh I think you were getting uh mortgages, kind of all of that sort of stuff, right? So so um typically there was the compensation structure, which we call commission-based, right? Where you're um uh earning a living based upon the products that you sell. And the products that you sell came after the plan that you would sort of be delivering for for clients, right? And so um, you know, that's really what I kind of knew at the time. I thought this was it. I thought this was, you know, how you made money as a uh as a financial planner, because I didn't know any better at the time, right? Um, and so again, um that was one way, and I think, you know, talking a little bit, uh the the the uh industry has sort of you know evolved, I think. I think there's less now uh commission-based uh advisors out there. I could be wrong, but I I my my gut's telling me that there's a there's less um commission-based and um there's more sort of what you call the um fee-only or assets under management uh compensation style, right?

SPEAKER_03 4:26

Um so just to explain that, um, that's basically it's kind of the same concept. You're still managing product, um, but you're not initially getting you're not getting your full pop for the initial sale, right? You're you're doing what's right for the client and then being compensated by the amount of money they have in their accounts as well as as it grows, that type of thing. Is that that's what you're talking, right? Yeah. Just for our listeners.

SPEAKER_01 4:53

Yeah. So so it's also important to, you know, first talk a little talk a bit about the licensing as well, right? So um with insurance, you have a different license. With investments, you have a different license. Um, and so uh typically the commission-based structure is is for those who are insurance licensed, right? So there's products called segregated funds, there's, you know, um uh term insurance, life insurance, critical illness, UL, U UL, yeah, universal life, uh, whole life, you name it. There's a whole you know, bunch of those. And so that's how they're compensated, is based upon sort of the amount or or or the um uh the premium amount, right? And so if we're talking about um uh the investment piece, um, I think there's less commission based on that nowadays, uh, and more if you're managing investments and you're licensed to to trade and authorize trades and all of that. Um it's typically under in you know, um uh the AUM it's called. So assets under management or assets under administration. And and typically what that looks like is um is you would uh be compensated as a percentage point or whatever the percentage is on the assets that you're managing inside of the RRSP, inside of the non-registered account, the corporate account, whatever it is that you're managing, right? And so um that fee typically goes, and you can think about it this way uh that fee could go just to investment management, right? So so it could just go to um the trades, the compliance, the administration of actually managing the investments. Um uh, but it could also be paid for planning and investment management, right? And so um it's important to figure out if you have an advice um or sorry, an assets under management style relationship with an advisor to figure out what that fee you're paying, what what is what you're supposed to be getting out of that relationship, right? Um my background again in um uh you we were we were compensated on those insurance products and whatnot, commission based. Um, and then for the assets under management style, we got a monthly amount um uh for for managing, you know, the kind of like a retainer, I guess you could think of it that way, right?

SPEAKER_03 7:24

Like to retain the client, to service them. Um you didn't use that word, but that's kind of the concept of what it was.

SPEAKER_01 7:30

That's totally right. Yeah. So, so um the you know, again, it was very uh uh what's the word I'm looking for? It's very uh influenced by markets, right? So when markets went up, your compensation went up and everything was great. And then when markets went down, you know, you kind of uh your you know, your your compensation went down, right? So it's really tied to the uh the performance. To the performance, essentially, right? Um and so yeah, so we have that assets under management style, and and um that's one. And you know, at my at the time I thought that was it. I thought that was, you know, what how how you know certified planners were uh certified financial planners were compensated, right? And it wasn't until I did some digging where I figured out, hey, you know what, people could actually pay you directly, um, out of pocket, pay you directly, and you could then give them, you know, the planning advice um where you're not influenced by the the investment piece, you're not influenced by the uh insurance amount, you're not influenced by any of that stuff, right? And so it wasn't until later, sort of in my career, when I I actually figured that out, right?

SPEAKER_03 8:47

What what year w was it that you started looking into like the advice-only model, like the what we do?

SPEAKER_01 8:54

Yeah, so so so it was uh around um what was it, 2017 or so. Okay, yeah.

SPEAKER_03 9:01

So because that's the same. I was around 2018. And um when I started looking into it, and both of us were in the industry, like I was in the industry for 25 years already. I didn't actually know this was a thing, right? I when I started looking at it and I was like, you know, okay, there's in the US, there's way more advice only, right? That's a much, but their regulation allows for a really big segregation, right? Like your fiduciary, all these things that in Canada we are kind of loosey-goosey about. Um so yeah, it's funny that we're kind of in that same time frame and that even us in the finance world, we didn't know about this. So it's easy to understand why clients are like, what do you mean we have to pay you? We never paid anybody for in the past, right? Yeah, yeah.

SPEAKER_01 9:44

That that and that was for me the biggest uh the biggest hurdle for me if I'm moving from that model from you know commission-based assets under management to advice only. The biggest hurdle was the asking clients to pay me directly because I just wasn't used to it. I wasn't used to, you know, you know, whatever, you know, whatever that amount is, right? So so um that was the biggest hurdle. That's something that I I think with experience have you know kind of gotten more comfortable with. Um and it's much like you know, you would pay your accountant or much like you would pay, you know, a lawyer, right? And and so it's um uh I'm sure, you know, accountants and lawyers are very comfortable in in in that arrangement. But obviously for for myself and um in my experience, that was the sort of the biggest um sort of hurdle that I had to overcome.

SPEAKER_03 10:41

Yeah. And I think we I agree with you. Our compensation is very similar to an accountant or or a lawyer or somebody who, you know, says, I'll do this for you and this is the price, right? Um, but the difference I think in where we, you know, where it's hard for people like clients, you know, sometimes even, but you know, the rest of the world is the lawyer, there's no other lawyers out there that are working on a different schedule, right? There might be a few that have a retainer type model where you're paying them monthly or whatever, but there's no other way to get a lawyer to work for you and feel like it's for free. And that's the real challenge with the industry right now is people aren't aware that they're actually paying their advisor or whoever's doing their planning for them, they're paying them out of their money. It's just not the money that is their paycheck, right? So that I agree with you. That's the challenge. And I think for me, when I moved over and you probably had the same thing. Oops, sorry. There's um there was this idea when you were in the AUM world, is almost anybody who, you know, wanted to work with you and had some money was your client, right? Like there was people who had 100,000 and a million, they both could afford to work with you because the fees were based on what they had. In our world, there are a lot of people who would love to have the type of services, but it just doesn't, the math isn't adding up for their wallets yet, right?

SPEAKER_01 12:04

Yeah. And and I do think uh, and I can talk a little bit more about this, but I do think that distance um is changing just with AI, with all of that. I think, you know, the information um that is available out there and and you know what it's able to do, I thought I think that's only gonna get better. And I do think it's gonna help a lot of people who, let's say, um can't afford or or you know, it's just too much of a cost, right? Uh to work um with uh an advice-only planner uh you know for that, right? So so um it's it gonna be interesting to see what you know the future looks like, how it evolves. Um but uh but yeah, so but uh going back to you know the compensation and the different models, I do think um we have, and I think it's by the end of this year, we have that client relationship model three coming out, or or total cost reporting, which uh by December 31st, 2026, um uh advisors, planners, managers of money are gonna now have to report the full cost, not only the investment costs that they're collecting, um, but they should be reporting the you know the planning cost uh along with the investment cost, right? So clients are gonna see in January 2027 um the full amount that they are paying for services. Now, if you're providing value and you've had those conversations with your clients, that should be no no problem, right?

SPEAKER_03 13:46

Shouldn't be a big deal, yeah. But there will be a lot of clients then, I think to your point, because this is like we disclose our fee, but everybody else, you know, they are saying, well, this, but the the nitty gritty of, well, this is how much I'm gonna make, like clients know how much we're gonna make. We're very clear about what they don't know how much their advisor is going to make, right? And this is something that you're very passionate about and you do you do the research because the types of clients you have, very investment heavy type of, you know, lots of them. So give us an idea of like you, I've heard you say this, and you're like, you know, we're charged, like if we're charging, you know, whatever our fees are, anywhere from five to ten thousand dollars in the first year for our actual plan. Um, what is an advisor making? Because like you're always like, they make so much money compared to us, but we do just as much, if not more, work, right?

SPEAKER_01 14:37

Well, the the advice only um what I have found is your your again, your value, you're getting compensated directly from the client. It's not coming from investments, it's not coming from um anything but their cash flow, the the cash that they have in in the bank account, right? So um your interest, your values are tied in completely, you know, with uh you know, with that client, right? Um so there's an also an important dis uh thing to to uh talk about here is we're doing the planning aspect of it, right? So so we're not doing the investment piece, um, which again, if we're uh looking at it as this whole other thing itself, I could argue that you know that's I think getting a little bit call it easier on on that, perhaps not for compliance and all of that sort of stuff, but as for you know asset allocation and and you know where to kind of hold your money and all that sort of stuff. Um, but um so so it's you know in a million dollar client um you know paying one percent, that's 10,000 per year, right?

SPEAKER_03 15:50

And that's every year. And as their portfolio grows, which hopefully if you were paying someone ten thousand dollars or paying a firm ten thousand dollars, hopefully your assets are growing every year. That 10,000 is not every year, it's 10, 5, 11, 12, whatever, right?

SPEAKER_01 16:06

Yeah. And so so that 10,000, if you think about it this way, and let's say that 1% is covering, you know, planning and investment management, right? Which, you know, it it's um likely more than 1% in in in my my experience. Um then typically, you know, half that would go to planning, half that would go to investments, right? And then that that so so the thing is, is that's gonna be charged every single year, right? Yeah. Whether you have a busy planning year or not, right? And as we know, life, you know, sometimes I'm working very closely with clients, uh, you know, having uh, you know, five, six, seven meetings a year. Sometimes not much is going on, right?

SPEAKER_03 16:50

Um and just so people understand that that means that one year you might pay 10,000 or 5,000, whatever the number is, whatever you're being quoted for the service. But the next year, if you're like kind of smooth sailing, you can keep us on board, but it's not costing you eat near that, right? Depends on what your needs are. But then maybe you need more. And so so it can ebb and flow, but it's totally based on your needs, not on the not on a basis of it's just the way it is, right?

SPEAKER_01 17:18

Exactly. And part of another thing we should talk about is part of the um uh you know FP Canada assumption guidelines is we have certain rates of return to use, right? And so, you know, it's a very simple equation. You have uh the stock returns and the bond returns and emerging markets and all of these sorts of things, and they make a total return. And so what you need to do then as planners, we need to deduct dollar for dollar, percent for percent, how much you're paying in investment and planning fees. It's coming right off the uh the total return in every client scenario, right? So if I'm comparing, let's say, a, you know, uh, and this is a also another important uh factor here, if I'm comparing two portfolios, one with a higher fee, one with a lower fee, well, on the linear assumption, the one with the lower fee is gonna look better, right? It's just part of the equation. Um, what isn't baked into that is the sort of the other part of it, the behavior part, right? So are you, is that advisor saving the client money from not accessing the investments? Are they so so there's this whole other piece of it, which um isn't a number. It's more of the time, energy, attention that you're essentially um uh, you know, um hopefully paying for with that particular advisor, right? Um so it's the delegation piece, right?

SPEAKER_03 18:49

So can I just interrupt you for a second, Daniel? Because I think it's really important because this is something that um I see like you said, we don't do the investments, but we do analyze, make asset allocation, like we do support them to go somewhere else, or lots of our clients self-manage. That's why they come to us, right? But uh the thing about the fees, we hear so much blanket information about like if you're paying 2%, you're paying too much fees, or if you're paying one and a half, you got to be paying, you know, ETFs 0.5 or whatever. And often when I'm looking at them, when I'm talking to a client, uh and even my own portfolio, because I used managed products, I don't care if you charge me 2% if you get me a 10% net. So if you're making 12% on my portfolio year over year, I actually don't think personally I could do my do 10% on my own. I wouldn't. So I think I'm not, and that's the th a lot of things that people are like, oh, my fees are too high. Are they? But based on performance, where there are some places that they're paying, they're charging, they're making five or six percent and charging two percent. Well, now it's really hurting, right? So I think that's another thing that we help our clients with is to understand is like, you know, I have people come to me and they say, Oh, everyone's telling me I'm paying too much. And I go, Yeah, but for the last five years, you made 16%. Like you're paying 2%, you still made 14. What did everybody else make? Because unless they made 14, I don't know if you're paying too much, right?

SPEAKER_01 20:09

It's totally, yeah, you're right. It's totally relative or relative, right? And um I think, you know, yeah, if you're charging that percentage point, it's gonna be, as we've just been talking about, tied to the performance of it, right? And so um, and this is a really good segue because that's how I felt when I was talking with clients in that model. I felt the conversations were all about the investments. It was all about the performance, it was all about the you know, the makeup. Well, this, you know, NVIDIA's doing this and that and whatever it is, right? When we all know no one has control over it and we're all trying to make sound, you know, reasoning for things that are not um that that that are unpredictable, right? So so we're trying to make sense of something that is not sensible, right? So exactly. Um that was one again, one of the reasons I I was looking elsewhere is because um there's a whole other side to money, which I don't know how many planners are exploring, right?

SPEAKER_03 21:16

And I think that we that we really dig into, like we I would say that probably, and I know we have different clients, but even a lot of your work is behavioral. A lot of my work, you know, and that's kind of my specialty is behavioral. So, you know, I often say to people when they come and they're asking and I they say, Well, I have a really good advisor. And I go, okay, well, if you have an advisor, to me, a really good advisor that you're paying commission, you probably don't need us is if they're actually managing, if they're looking at your cash flow, if they're actually looking at your estate, your taxes, and your investments, and they're putting a plan together, if they're doing all that for you, you should probably stay with them. Like if you're happy with the fees in the person, you may not need us. But there's a lot of people who don't get that. They're working with maybe the banks and you know. The people are not at the level of experience they're looking for. And or um there's lots of self-managed out there. And I think those are the ones that are like not everybody is our client, where the feeling in the um on the other model is almost everybody could be one of those clients, right?

SPEAKER_01 22:16

You you're right. You know, you know what what I do see is I do see um the valid like we we provide validation.

SPEAKER_03 22:24

So I think Well we have to, or else we can't keep our clients, right?

SPEAKER_01 22:27

Exactly. So I do see sometimes that people are in very good relationships. And I mention that. And I say, hey, you know, we go through our planning process. I say, look, you know, they're they're do there's nothing, the grass isn't greener on the other side, right? And they're look, and again, they're looking for that validation from someone who doesn't have skin in the game, right? I do see a lot of that. Uh, you know, people uh reaching out and um the money's, you know, what what's the sleep at night factor cost, right? So so that's where where, you know, again, we're able to kind of put our um unbiased, you know, hat on and and say, okay, well, here are the numbers, here's the performance, here's the fees you're paying. Are you, you know, that's cut and dry of what this is. Now let's talk about what you're getting out of that relationship. And if they can't pinpoint it, or if they don't know, or if they feel um inferior in those meetings, or if they feel like they can't speak up, or or if they like if they feel their their voice isn't being heard, that is where the conversation then leads to, well, you know, is there something better out there? Right. Yeah.

SPEAKER_03 23:36

Um and I think what you're like, what you're saying about like the conversation and you know, or uh the feeling and are you and some a lot of times what I find is clients come to me and they're like, I don't even understand. Like my advisors like talk in circles around me. And in the lat in the podcast that I did last week, Joanna's gonna be coming out. And she actually said when she, because she doesn't have a background here, when she went to FPAC, everybody was using all these acronyms and she had to be like Googling, what are you saying? What are you saying? And I think even like when I was a bank manager, I used to have to tell people, do not use the acronyms. Clients do not know, you know, what what CDIC is. They don't know, like you can't just spew out all these short terms and think, and often clients come and they're like, My client, my advise, here's an email my advisor sent me. And and I'm like, well, yeah, it's not complicated, but they used a whole bunch of acronyms. And so we don't we have to unwind that, right?

SPEAKER_01 24:29

We do get caught up sometimes because we live and breathe, you know, AUM and CRM and RRSP and all of these sorts of things, right? It's kind of like our language. So sometimes it's and yeah, you're right, it's important to um, you know, really speak to the audience, right? Um some people, you know, again, as I mentioned in the last podcast we did, I didn't hear first about RSPs until what, I was 20 years old or 21 or something like that. I didn't even know what that was, right? So I kind of have to sometimes bring myself back to that and say, yeah, this is typically, you know, the the the people, you know, uh, you know, kind of starting at that education level in Canadian finance, right?

SPEAKER_03 25:14

Right. Yeah, that's true. So, Daniel, when you so part of the reason we wanted to talk about this is because we'd love to see our side of the industry grow. I mean, we're not we're probably not gonna be 50-50. It'd be great 10 years from now, but I think we're a long way away from that. But part of what we're we're trying to talk about is like people, there's a lot of people out there, good, like good people, good advisors, good planners that are like, you know what, I just I really want to just talk about, you know, I want to dig in and, you know, build a relationship, but not just around the investments, right? So what are the barriers to people coming over? Because we we see, we've been trying to do this for years, even myself and my own firm trying to hire, and everyone's like, well, I can go sell product or go be on an AUM model and within a year I can make$150,000. They don't see that with us. So what do you think? Let's start with, what do you think the barriers are? Because you talked about there was a barrier coming in, and I know you had to book a business, so you actually got a bit of a runway. But when somebody's coming across, if they have the runway, that's great. You can talk about that. But if they don't, like what are the big barriers you think people and how how do we speak to that, but also support that as we grow the industry?

SPEAKER_01 26:30

The yeah, great question. The the the barriers, um, first I mentioned was is is the sticker shock, right? It's it's that. Um after that, it's for the advisor, it's just getting confidence in what it is you're offering and what you're doing and what your value proposition is. Sometimes that takes a lot of iterations. When I first started, um, coming from sort of, I'll call it the sales background. I mean, my whole thing um, you know, uh on on that piece was um really delivering as much value as I can to the people who are gonna be working with me. At that point, I had you know, nine years of experience doing plans and and all of that, right? But you kind of still felt like, you know, this is a whole new model, this is a whole new thing. So you're really trying to, well, at least for me, I was really trying to prove myself, right? Um and and ultimately, uh, you know, if I could go back and do it a bit differently, I don't know if I would because it wouldn't have led me to where I am now. But um, I was at that point trying to see who um I could add the most value for, right? So uh again, I was taking on a lot of uh new engagements, I was working with them, planning, going through the process. Um, and it was just a large variety of people who were, you know, some were looking for investments, some were looking for budgeting, some were looking for um, you know, you know, incorporation and what do I do and all of these sorts of things. So um it was really just for me about getting my feet wet in all of these different kind of scenarios, right? Um so from there, I mean, you know, I didn't and and really I didn't appreciate the the how little of of uh advice-only planners there are in Canada. I mean, you mentioned it. There's there's there's what a hundred thousand, you meant a hundred thousand.

SPEAKER_03 28:30

I think it's a hundred and sixteen thousand at the last report of like uh licensed advisors, we'll call them that do financial. And lots of them will be great financial planners and certified, and so not discounting that, but that's like there's a lot. There's maybe a hundred, like we think there's a hundred because people come and go, because it's tough. If you don't come to a firm, it's really tough, right?

SPEAKER_01 28:54

Yeah. So, so for me, yeah, so exactly there, there's a hundred, hundred and fifty advice only, so less than 0.5%, really. Yeah. Um and and so, you know, looking at that, for me and my experience, I was, you know, really just trying to gain experience in this model, right? And so I was taking on clients and and, you know, um, uh, you know, doing that and sort of evolving. And and really what I was evolving into was I was uh looking at a couple things. Who could I really add the most value for for what I'm charging? Um, and who do I, what types of people do I enjoy working with? Like those are the two that um, you know, when you're going into meetings, you you kind of want to look forward to meeting your planner, you know, you want or or or likewise you want to look forward to meeting your clients, right? And so um those two things really are um what what led me to dealing with um uh you know uh small businesses. There's a lot of complexities, there's a lot of unknowns, uh conversations with accountants and you know, kind of feeling like they're not quote unquote big enough or you know, one-on-one, but they're not small enough either.

SPEAKER_03 30:08

So there's uh around a whole bunch of parts of their business financials, right? Um, but they're not yet to your point, they're not big enough to have a CFO, but they're like on the cusp of needing way more help than they can just get from general information, right?

SPEAKER_01 30:24

Yeah, and and that that led me into uh the the who I'm serving now is uh these small businesses, typically family uh run, um, where one spouse is the you know the bookkeeper who you know shouldn't sign up, you know, she or he didn't really sign up for it, but but that's what they're they're doing. And then the one is just head down into the business, right? And yeah, you know, it's they look up, it's five years later, and it's um you know, what's kind of going on, right? So so basically what I'm getting at for the sort of the opportunity and advice only is there's a lot of sort of little markets that you could do really well in, right? Um this doesn't have to be, you know, helping a thousand people or two thousand people. Like I'm quite literally talking a hundred to a hundred and fifty people, right? That you know that you that you love working with, you know their situation, and just being the best in that area is really all you all you need. And quite frankly, you can change that group of hundred, 150. I'm kind of saying this to myself because um sometimes when I'm you know, um, I feel like I have to go and and stay with, you know, if you know, I'm kind of uh analytical background, so you kind of you know work um in uh in in steps, and this first step has to be right before you move on to the second step. Um but uh but for yeah, so so so whatever that niche call it is or that market is, um, it could be as small as a group of a hundred, hundred and fifty people, maybe people who work for the same company, people who work for the same um area that that you're living, or whatever that is, right? So, so um that is what I would say is the is the largest opportunity um in advice only is just really being that specialist in a particular area, right?

SPEAKER_03 32:34

And I think would it be fair to say um, because for me, I lucked out um when I started my own, when I started in the industry because I lucked out in the sense that I started my firm six months later, COVID hit full blown twice, like I started in 2019. Um, and so I actually had this my own runway of let me figure out. So I just started talking and I figured out my niche pretty fast. And is that one thing? Like I actually think anybody who knows their niche and is willing to actually truly market it will make a good living like we do doing this. But I think coming in and saying, and a lot of even our colleagues, I hear, well, I'm scared to niche because I don't want to turn people away. And coming from an industry where you never turned people away, which is the investment world, right? You everybody's kind of a potential client, saying, Well, I only work with these people feels really painful. And people are like, I can't do that. But that is going to be the difference of you coming in and being successful right out of the gates. I mean, we have lots of leads, but both of us have a very tight niche. And because of that niche, um, we have, you know, enough clients. But I always say to people, like, there's how many 30 something million, maybe even higher in Canada. And if we each only need a hundred clients, like that's really doable, especially if you have a niche. Like when I think about it, I'm like, I only need a hundred people like on my books to, you know, have a really so as people are coming in, I think that's really like if you're out there and you have like this niche there where you're like, oh, I wish all my clients were this. And it's unique because often everyone's like, I want to work with business owners or I want to work with females, or well, that's not a niche. That's just like a preference, right? We'll both say we have tight niches where, you know, and yeah, it's a little bit looser. Like, you know, I work with people who have emotional stress or have money stressed, right? And then I'm niche even further inside that. I think you're the same. You work with business owners, and then there's a little further niche. Um, I think the challenge is people come in and they think, well, I need a thousand clients and also I need to shotgun everybody and anybody. And to be fair, if you're not in your niche client, then your pitch isn't good. And people will say, no, you're too expensive. Like that was my experience. Until I hit my niche, people are like, whoa, you charge what? And they even still get that, but those aren't my clients, right?

SPEAKER_01 34:54

Yeah. And and I I think um so so specializing and going to not, you know, not all only who you can work with, but what you who you love working with, right? Um and then there's this piece of sort of pricing, right? That you're you know, gonna charge. And so um on that side, um, it's tough to kind of figure out what that pricing is because essentially the way I sort of rationalize it is um, and if you could you can think of anybody, anybody's really doing it in this way, is is we're all trading sort of time, if you will, for money, right? We're all trading it uh for in some way, shape, or form, right? Um, I like to expand that a bit further. Time, energy, and your attention, right? So so people pay someone like us, right? Advice only, to take our energy, our time, and our attention to completely immerse ourselves in their situation, right? That's really what they're they're essentially paying us, right? And so um as we talk about niches and whatnot, um, you know, and talking about the the the opportunity, um my time, energy, and attention, we need to start like as planners, we need to start valuing what those costs are, right? So um I only have a certain amount of attention that I can put into a client situation, you know, in any given day, right? And so you kind of have to understand what your limits are and then charge accordingly, right? So, so um uh, you know, you can't work with 150, or at least I can't work with 150 people to be completely valuable to them. Um my number typically is um on a sort of ongoing basis. I'm really looking maybe 50, 60, right? Uh uh of of really good, you know, uh uh clients that I completely know who can call me up, who can send me an email, and they'll get an answer really quickly because I know their situation. That's my capacity, right?

SPEAKER_03 37:08

Yeah. And mine's a little bit higher, but not much. I think probably and again, you know, we have some floating in and floating out. They're shorter, shorter term, they're hourly, whatever. But I actually think I agree with you. I think between 50 and 60 is actually going to be the work-life balance sweet spot, but only if you have your niche. And I wonder, and so this is where I think too, you know, we most of the people who are in the industry have many years of experience, like 25 plus. And, you know, we need to be fairly compensated for our experience, our time, our designations. But that's not to say that somebody new can't coming in. We like how many clients a week, a month do we turn away because they can't afford our, they can't afford our level of expertise and they don't frankly need it, but they need someone. So it'd be nice to see some younger people come in that we can mentor and we can support who'll still make a good living, but actually can take the client. Like there's lots of clients out there that, you know, need my help, but you know, my level of expertise is over what they're looking for. I wish I had someone on my team who I could say, you know what, I don't do that, but so-and-so does. And that's where we're like hoping this younger generation of not, you know, 25, I mean, 25 years experience. If you want to come over and you're passionate, great, that's awesome. But we need to try to like figure out how do we go, how do we get these young people that are starting in the industry to actually look at our side of the picture, right?

SPEAKER_01 38:33

And and I do think that starts uh, you know, with call it the associate. So you team up with a uh, you know, a planner, you kind of see how, you know, the the, you know, you kind of see how they're doing things, you get the experience, and it's really all about experience, right? So it's experience in your conversations, it's the experience with, you know, developing the plan. Uh, oh, you know, you see that uh there's this on the tax form, we should bring that. Like it's it's all that experience that um you really can't teach. You sort of have to do it. And so when I when I, you know, again, like I said, when I started with money coaches, I worked with everyone I could really just to gain that experience. And then I charged accordingly, right? So so there's gonna be advice-only planners who are doing that, right? Which is again, it worked. Um, and and so each engagement was a new training, right? For um, you know, for me. And so as I gained experience, the prices sort of, you know, kind of went up um uh from there, right? So so that was again my approach, but it could be completely different for you know for someone else. Now, if we're looking at the numbers, right? So imagine 50, 60 clients, right? Call it um, they're paying, you know, 300, you know, 400, 500, whatever it is per month. Uh, and we're talking like the the the you know uh completely immersed clients, right? Who needs um that that sort of level. Um and then you have you know, let's say new engagements coming in, right? So let's call it 20 to 40. Well, it it's not um uh you know as an advice only planner, I mean, you know, making 300 to 600,000 doesn't seem you know completely out of out of the mark, right? And yeah, and again, it it it's um but there's a couple you have to work, let's be fair. You have to work.

SPEAKER_03 40:32

That's a 40 hour 3740 plus on the 600 side, I think we're probably 50 hours. Well, but that's not to say that people aren't doing that in a team, right?

SPEAKER_01 40:41

Yeah, if you have a team, you have a lot of uh, you know, uh uh support in that to again maintain that value. Um but um the opportunity, you know, again just in this the opportunity's there. And the thing with the opportunity is the planner could make uh you know a good a good living, but the client as well is also um, you know, as regards to you know the planning their their life is also, you know, in my opinion, getting a really, really good um uh you know deal as it relates to the investment they put into this process, the investment they put into someone who can have those conversations that maybe are harder for other types, right? Yeah. Um and who can really, you know, again, you know, increase their sort of net worth just by the the uh guidance and the process and the knowledge that that we put forth and we work you know together to to maintain to make and maintain, right? Yeah. Um that's that's a big opportunity.

SPEAKER_03 41:49

Yeah, I agree with you. We talk a lot or I see a lot about like most people who come in, like, you know, coming out of university or coming into the industry, they feel like, oh, I'll go to investors group. And you know, we both started our careers at investors group, and I think they're it's a great training platform. I 100%, right? Um, but they come in and then they think, okay, well, I will um, you know, I'll do this and I'll get some experience. And then, and their um what's the number? Their turnover rate in that side of the business is huge as well. Lots of people go in, lots of people don't make any money, and then a short time later they go to the bank or they do something else. We have a bit of a turnover rate too, but I think it's because people come in with a misconception, right? Um, or they're, you know, you know, it's it's a little different. Uh I would, like I said, I would love to see somebody who said, you know, I know what my niche is and I really want to work it, then you would probably be really great at right out of the gates. But you got to know, you know, you gotta know the system or whatever. And um, so it'd be nice to see more people go, well, I'm not gonna go straight over there. I'm gonna come into this training ground and still make some decent money. I also think that on the advisor side, you know, everybody thinks that all advisors make one, two, three, four, five, or a million bucks. Like nobody's talking about the advisors that are slogging and making 50 grand a year. And there's lots of them. Like if we could if we pulled the stats on that, you would see that, you know, there's there are advisors making money, but there's lots of people in the industry who are your advisor and they're not making that kind of money. But the illusion is they all are. So that's where you go to get to make some great money and to, you know, whatever. Where are it might take you a year to really build your base, but after that, it's great money. And I would say, would you agree with this? The reward I get from working with my clients is tenfold than any other it doesn't matter. I'm, you know, if I made way more money in the past, which I haven't, but you know, if I did, um, I still like there is most days I was like, oh, I hate this, right?

SPEAKER_01 43:53

You're right, you're right. Yeah. You don't um uh you know, early in my career. It was sort of um uh I was a I was motivated by money, right, early on. And um ultimately you grow and things change and your perspective changes and all of that sort of stuff happens. And I mean now it's not I I can confidently say it's not about the money. It it is about the um again, the it's about the client and essentially their outcomes, right? Um because you know, at the end of the day, there is um just um basically taking someone through the process, um, watching them understand something that maybe wasn't understandable before, watching them um sort of I I guess um you kind of see that light bulb, that that sort of a little bit of energy in them. And the hope. They get they get some hope that things are gonna be okay. It's it's um it's really sort of satisfying, right? And and I um I love that part of it, right? Because their growth is completely tied to my sort of satisfaction and and what you know, I because I want to make sure they're getting what they you know paid for out of this, right? And not only is that going to be a financial benefit with knowledge and you know, kind of putting you back in the driver's seat, um, but I do think that there's this whole other piece of planning that is has yet to be explored, and that's the behavior, the emotional, the um uh, you know, the meaning, the purpose, the what am I doing, you know, working as long as I am and I don't have time for the kids, or I'm, you know, doing all of these sorts of things that really they're not, it's not a number, it's not a quantitative thing, right?

SPEAKER_03 46:00

Um, but and we show a lot of our clients that, right? So I a lot of the work I do is the client comes to me and they say, I gotta work till I'm 65, blah, blah, blah, blah. And I go, Well, no, I can show you a way. Like, what do you want to do instead? And I I always say to my clients, tell me your dream plan, and I'm gonna try to build it. I might not be able to, but that's how I'm going to try to build my plan. I'm gonna give you like the, you know, the easy scenario, but I'm gonna try to build in all your wishes into this to see if it's possible. And it's amazing that people go, wow, like you now I have choices. And that's when they're like, well, now that I have choices, show me 10 other things, right? And I'm like, okay, but but they don't they come in thinking they have no choices. And that's, I think, what where I think that's where we all thrive is let me show you that you can, to your point, you don't have to just slog along and hope for the best. And often, you know, I recently was working with a client who is like very knowledgeable in the financial world, very has a very high job, like a very powerful position in finance, not like a sale, not a salesperson, not what we do, but and you know, I was kind of thinking I might be a little bit intimidated, but I was talking to him the other day and because he had done his own plan and I was like, you know, telling him, you know, well, have you looked at this? Have you looked at RSP meltdown? Have you looked at your taxes? You're paying too much. And he literally was like, what? And I kind of the light bulb went on, and I'm like, it doesn't matter where you come from. The way I approach this is not standard, right? I'm not just looking at your investments, which is what he was looking at. I'm looking at how it all plays together. And I think that's powerful for us.

SPEAKER_01 47:35

Yeah, I I I think um and and how I've been able to really just have a different I because my perspective has grown for sure on how who I'm working with and and what I'm doing. And I was the numbers person. I was trying to find every bit of tax efficiencies and you know, um, you know, if there was 50 bucks, I would, you know, save it, right? And it would, you know, it's so so um, you know, there I I was kind of and I think really a lot of planners are driven by that sort of number side, right? Um the future I think we're going to, and this is another opportunity, I think, where it relates to advice only, is you can imagine, call it all of that number stuff is gonna be taken care of, I would imagine.

SPEAKER_02 48:27

Yeah.

SPEAKER_01 48:28

By some by AI or something like that. By AI, by something, right? So so are you know financial planners going to be out of a of a of a job? I I don't know, and I don't think so, because um, I don't think people are starving for information. I don't think, you know, having someone tell you what to do, call it AI, is gonna change anything for a lot of people because they have, you know, it may do it for some, which is which is which is fine. Um, but it's w with what we do in advice only and and you know, maybe some other planners out there as well, is our process. It's not the sort of what we give them, it's the process that we take clients through, the questions that we ask, the um the feelings that you get from that, the tangent over here, like it's the process, right? And it's the experience. And it's not the deliverable, if you will. Most people think it's the deliverable, but because but but it's really not. It's the um, hey, you know what, you can actually book that first class ticket. I know it sounds shocking, but you can actually do it. And I actually, you know what, right now, why don't we go ahead and book that, right? Exactly. It's the it's the um, you know what, you can take um, you know what, uh, you can take the the severance, you're completely fine. Um, this is what we're gonna do. And in fact, use it to start that project you always wanted to start. Or um take, you know, what whatever it is, right? It's the um it's the almost the permission that we're able to give clients to live the life that they expected but have yet to sort of live, right? It's that's right.

SPEAKER_03 50:19

And I I agree with you, yeah, that that's like financial planners are on the lists um of people that they say are the AI is going to replace some of that. And I think that what AI is going to replace are the people who um are maybe just only focusing on the investments, like retire pure retirement planning, and or those that haven't built the relationship and aren't thinking of this as a long-term relationship. I have no, I am not at all concerned that AI is going to, because right now I can tell you the stuff I do AI won't do. I work with AI all the time and I punch my own information in and I often have to correct it or I tell me like source that. Well, that's a UK source that doesn't, you know, so I even have to correct that. But I feel like no, because it's relationship that people come to me and stay to me, stay with me and same with you, like because we we know. And I think as the industry, as it changes, the people it's gonna, I think it's actually gonna make it harder to come into both industries, unless you have a bit of a runway, right? Because you're going to have to prove yourself. Because if you're just doing, like if AI can do what you're doing, you're gonna be out. I'm yeah, that I believe that. And they're again of that 116,000, there's definitely a portion of those that are very low-hanging fruit that AI could just be, you know. Um, so to your point, I think that's where the industry's going, is you're only gonna survive if you are building relationships, looking at behavior because people are so stressed out about their money and you're niching. And I think even in the AUM world, right? Though a lot of those, um, the successful people who are actually thriving in that world still have a niche. They still like like be and the niche may be like I work, I have a client and he referred me four friends. It's still kind of a niche, right?

SPEAKER_02 52:08

Yeah.

SPEAKER_03 52:09

Um but I but I agree, like everybody's like, oh, AI. And AI is gonna happen and it's gonna change a lot of things. But I think that it's not gonna change me or my business because the parts that AI can do, AI can do, but I that's not what I do, right?

SPEAKER_01 52:26

Uh and I don't know if this has something to do with it, but uh, we're so we're gonna be booking a trip to uh Mexico um uh next year. And we were looking at sort of resorts to stay at, so on YouTube, and so we were watching them, and um we came across uh one and we were watching it, and it was just all stock photos, and it was just this voice that kind of, you know, and I'm kind of thinking, I'm like, is this AI? And then right when they said um uh sevicha instead of ceviche, I was like, no, no, no, no, no, no. This is not what I'm I'm looking for grass foot feet on the ground. I'm looking for, you know, what does it actually, you know, uh look like? And that's when I went to the choppy video of I think it was, you know, Susan Travels or something like that. Yeah. And um, it was boots on the ground, it was, you know, it wasn't cut, it wasn't clean, you know, kind of polished and clean. Polished, yeah.

SPEAKER_03 53:24

It was like, oh, here's the cobblestone, there's a little break in it or whatever, right?

SPEAKER_01 53:28

Here's what it is. And so I just uh it brought my attention, like I shut off that AI one really f really fast. And I went to the boots on the ground one, the the one that was real. And so I do think um, I don't know if there's something there, but you know, is that you know, did I want the polished or did I want something that was experienced or something that was uh for me, I wanted you know, Susan's travels, right? But yeah, um I and I do it.

SPEAKER_03 53:55

And I think a lot of clients, yeah, because I hear a lot that like if you're gonna do social media, which I'm not a fan of, but I think there is some value in it. But if you're gonna do it, you have to be authentic. You have to show your bloopers, you have to show, you know, that you're actually a real live person and that, you know, you're not just this like perfectly primed and this is me, right? Um, people don't want to see that. They want to see the authentic. Um, I don't know if I mentioned this before, and I think I have, but um uh Taylor, my assistant, the most hits we ever got on anything we put out on social media is we're both in our work clothes and we were, and our um marketing guy was there and he was taking video or whatever, and she ran over and belly bumped me like like this. And I was like, whoa, and we both started giggling and he posted that. It got like so many hits, and everybody was like, This is awesome. If this is what my plan, and I think the caption was a day in the life as a financial planner or something. Oh and people like were commenting and saying, Well, if this is how energetic my planner and assistant are, or whatever, that's who I want to work with. And I was like, and I was embarrassed, I did not want that posted. Um, but I let it go out and I was like, wow, people really resonated with it, right?

SPEAKER_01 55:04

Real life and real people, right? That's the that's the uh again, if that if that is is any indication, um, I think the the the planners are here to stay, those that are authentic and those that have um uh personality.

SPEAKER_03 55:22

Yeah, personality is everything, yeah. So um we're we could talk about this forever, but we're gonna wrap it up. But I guess what I'm gonna ask you for is, you know, uh basically a call to the industry or not necessarily even to the industry, to, you know, the people, the professionals out there or the people in college or university, like why should they come and, you know, you know, who who would be the ideal if you were taking on an associate? Who would you be saying, hey, this is kind of what I would like coming into our industry, just so people can kind of put themselves in that shoe, their shoes. Like, could I be that person?

SPEAKER_01 55:59

Yeah, anyone who is open, open to new ideas, anyone who um is motivated by um uh helping others, right? Uh anyone who is um kind of growth oriented, right? Um, and again, the rest will sort of fall into place. Uh, but but those are the key things that you know I think are are really and and ultimately you gotta be a really good listener, right? Um you're you're you're talking um communication skills are communication skills are are are are are massive. Um and I think they only grow as you with the more experience and the more clients you have, and those that aren't really scared to make mistakes, because everyone makes mistakes, we're human, right? So, so um, you know, that that is sort of the the the qualities um of a really good advice only and the knowledge and the technicals and all of that, that can becomes that can be learned, that could be kind of explored. Um but it's the people, it's the it's the like you mentioned personality, it's the um sort of the that that piece which is gonna excel, I think.

SPEAKER_03 57:17

Yeah. And I f so on so that's awesome, and I would agree with you. And if I just made a blanket statement, what I would say is if you've ever thought or that you want to be a therapist or a counselor, and or um you are a really good listener and your friends are the they're like, oh, you're so easy to talk to and whatever, you're probably really suited for this if you like money and finance. Cause I often feel like even my clients say, I know this is probably not in your wheelhouse because this is more like we need to go to therapy. And I'm like, when it comes to money, it is in my wheelhouse. Like, no, I'm not gonna, you know, cancel your marital issues, but I can cancel your financially financial issues. So I really think that the relationship and that caring and compassion, and you just really want that has to come first and the money will easily flow second. That's my opinion.

SPEAKER_01 58:07

Exactly. Well said.

SPEAKER_03 58:08

Yeah, yeah. Okay, perfect. Thank you so much, Daniel. You're always great to listen to and engaging. So I'm sure we're gonna have you back again on another topic. But uh thanks everyone for listening. Um, Daniel, any last closing word you wanna put out there or say hi to your family, your wife, and your kids.

SPEAKER_01 58:28

Probably listening. Um last thing I'll say is um what is it? You can scale uh by being small. That's the last thing I'll end with.

SPEAKER_03 58:36

Yeah, that's awesome. That might be another topic, another episode for us. Awesome. Thanks, Daniel. Thanks everyone for listening to Hey Money Get A Life.

SPEAKER_00 58:45

Thanks for joining us for this episode of Hey Money Get a Life. Be sure to like and subscribe wherever you get your podcasts. And for more information, head to moneycoachescanada.ca