Welcome to The Whole Truth where two wholesalers, hence the Whole in Whole Truth, we're creative geniuses, help financial professionals build great practices and thrive in a rapidly changing industry. We'll bring you the stories and voices from those on the front lines of this change.
Steve Seid:
This is more than a podcast we're building a community of financial professionals who are growing, forward thinking and want to get better. Thanks for listening and joining us on this journey.
Disclosure:
The views expressed herein are those of the participants and not those of Touchstone Investments.
Steve Seid:
And welcome everybody to The Whole Truth from the Bay Area, California. I am Steve Seid.
Kurt Dupuis:
And from Atlanta, Georgia, I'm Kurt Dupuis.
Steve Seid:
We got a great one today.
Kurt Dupuis:
Yeah we do.
Steve Seid:
Not just good, great.
Kurt Dupuis:
Top tier, grade A.
Steve Seid:
We like all our episodes we've done, the ones we didn't like we've chucked in the can. But there are only a few that when we're done with the interview, Kurt will call me or I'll call him and he'll say and I quote you know what you say to me, "That was a banger," is what he says. And that's what happened with this one. We had Penny Phillips on, and Kurt will intro that in a little bit, but she was just phenomenal. And it's just one of those interviews where it's like, we covered a lot of ground, how are we going to edit this down to keep it within the time limits. Because we covered that much good stuff. She was fantastic.
Kurt Dupuis:
She's already said too, that she'll come back on. So she'll be a recurring guests like some others. Because we did not cover everything.
Steve Seid:
She's going to regret saying that to us.
Kurt Dupuis:
Yeah, she is. But she said it. We have it taped so.
Steve Seid:
Penny, if you're a good person, you're going to have to do that just because you said you're going to do it. But I feel like we may be headed to a “blocked number” situation. But anyways, it was wonderful to have Penny on. I want to start, uh, introduce something on the front-end here, that I've been thinking about lately and talking to folks about, which is the idea of a wholesaler report card. So what's the impetus of this?
Steve Seid:
You ever go and you're about to meet with a financial professional, and you're like, yeah, six months ago, one year ago, I suggested or I recommended this strategy to them. It's either been really good, or it hasn't lived up to expectations. So you're like, man, okay, this is going to be an interesting conversation and you go in and of course, they don't remember that you made that recommendation. Have you been in that situation?
Kurt Dupuis:
Every day of my life, yes.
Steve Seid:
Yeah. So I had this idea that to just start a wholesaler report card. If you're meeting with wholesalers, start a document, a note, wherever you keep your notes. Basically, each time someone makes a suggestion or recommendation to you, document it. Whether you invest in it or not, if you invest in it, you're keeping an eye on it. But even if you don't, because even if you don't decide to do that, shouldn't you want to evaluate the suggestions that people are giving you over time. To evaluate whether that wholesaler X, Y and Z has good suggestions, does that seem reasonable?
Kurt Dupuis:
Well, we all do this intuitively in real life in real time, don't we. We process this stuff, we tuck it away, and we say, hey, over time was that a good idea or not. But what you're talking about is how you build credibility, right?
Steve Seid:
Yeah.
Kurt Dupuis:
That's how you build credibility over time. And so the point you're making is, if you're not tracking, then how do you actually know whether these thoughts and recommendations are valid.
Steve Seid:
Exactly.
Kurt Dupuis:
This happens a lot in our business, though. I mean, I think of like forecasters who say, "Oh, yeah, X market is going to hit Y this year."
Steve Seid:
That's the other one.
Kurt Dupuis:
Where's the level of accountability? And I've seen studies that say, the guys that pick the winners, or with or without the spread on like NFL games, do a better job than market forecasters. So these are the people that we have on all the media channels, spouting whatever their views are. So there's a really large lack of accountability in this business.
Steve Seid:
Oh, it's crazy. There's some people I'm like, how are they still letting that person back on CNBC. When I came into grad school in '09, I kept an eye on the forecasters, and oh, there's going to be hyperinflation and this bull market... We're going to crash again. I mean, listen, you're not going to get everything right. But the point is, you should at least follow along what people are saying. And the other thing that this does is it sort of over time, and I don't want to belabor this point too much. We've probably already talked about it too long. But it separates wholesalers that are really, really thoughtful and do the work and have the insight versus, those that are selling you, what I call the “mean reversion special”. Do you know what the mean reversion special is?
Kurt Dupuis:
Right, I think I do and I like it.
Steve Seid:
It's you've got this investment strategy that looks awesome and the track record looks great, and it's perfect and blah-blah-blah.
Kurt Dupuis:
Until you buy it.
Steve Seid:
Yeah. And so you're selling that performance only to get into the natural rhythm of mean reversion. So I don't want to belabor this any more than I have, just keep track of it because I think it'll tell you exactly who's being thoughtful to you, in their recommendations and who's not. Is that fair?
Kurt Dupuis:
Fair. I like it. So let's talk about our interview with Penny. And if I'm honest, after she said something like it was the best podcast interview she'd ever been a part of, I blacked out. So I don't remember...
Steve Seid:
She didn't say that on recording, by the way. So people are going to think your lying.
Kurt Dupuis:
But I heard it, I heard it.
Steve Seid:
You heard it.
Kurt Dupuis:
Whether that was live or not. We talk a lot about practice management. This has been her full-time day job for quite a while, decade plus. So it was great to hear how she articulates things. And a lot of those things are very much in line with what we talk about, with some of the problems with the industry and some of the solutions for them.
So a couple of the big takeaways. One, is how much she emphasizes managing human capital, talking about and thinking through hiring, firing personality types, multigenerational practices, which a lot of people struggle with. She has a ton of expertise there. We talked about the idea of relentless prospecting. Which, if you are a financial professional, chances are you are an entrepreneur or... as she loves to throw out a solopreneur, which we have a lot of.
And so if you're not relentlessly promoting yourself, who else is? So I really like that idea. And then she has this almost kind of challenger sale controversial view that you should only be asking referrals from about 25% of your clients. And really interesting take because it's not something that I've heard before. But she has a lot of great ideas, and is really good at communicating them, so really excited for this one. When we come back, we'll have Ms. Penny Phillips. This is The Whole Truth, stick with us.
Steve Seid:
Penny, we're delighted to have you on, thank you so much. I'll tell you a little bit about our show, and then give the audience a little bit of a background on you. But this is a podcast, I know you've done a bunch of them. But it really is a community. I mean, what we're trying to do is group some people, mostly financial professionals, but also the surrounding people in the industry that want to get together, collaborate and get better. Our community is growing pretty rapidly, and this show has been practice management focused and we're just thrilled to have you on. So thanks for joining us.
Penny Phillips:
Thank you so much. And I love how quickly you slipped into professional mode with that intro. That was good.
Steve Seid:
Do you like that? So are you trying to say before we record I'm like kind of a bum that's probably right, that's fair.
Penny Phillips:
Laid back, I'd say laid back which I like, yeah.
Kurt Dupuis:
So I think I got to know you and some of your work through Dr. Crosby, who I think is a friend we have in common. And we had him on the podcast last year, and it was a banger. He is incredible. And so I just started seeing your name pop-up on LinkedIn, on other socials. So it's just seemed like a no brainer to get you on here and pick your brain a little bit. So can we start with background.
Penny Phillips:
Let's do it. Yeah, and it's so funny because I get that a lot. And I can only attribute my LinkedIn fame to me just relentlessly posting videos and annoying people for the past four years and so...
Kurt Dupuis:
That works.
Penny Phillips:
Exactly.
Steve Seid:
There's learning there.
Penny Phillips:
Yeah, exactly. So, I'm Penny, right now I am officially the co-founder and president of an RIA firm called Journey Strategic Wealth. We're based in New Jersey. But as of this morning, we have a national footprint, which we're really excited about. But for the past five years prior to Journey, I was running a practice management coaching and consulting company. And before that, I spent about 10 years doing practice management work in the industry for different firms, and decided to leave the grind and launch my own thing. Then I grinded even more obviously. Because you think you're going to have the flexibility and freedom when you're an entrepreneur, and then it's just craziness.
But yeah, that's been my life really for the past, I'd say last 14 years or so, is just practice management, specifically in the financial services industry, working with advisors and institutions. So launching Journey feels like the culmination of all my experiences, consulting advisors, and then deciding, hey, why don't I just launch a wealth management firm and put my money where my mouth is basically.
Steve Seid:
It's fantastic. When Kurt told me, hey, I want to have penny on the show. My immediate thought when I hear about coaches in the industry is do they have substance? Because I think a lot of them are, in my view, and this is one person's opinion. They're great talkers, and they're good on a stage and they can compel people, but at the end of the day, can they really add value. And Kurt will attest to this, I'm like man, she really has some substance. She gets deep. So the question for you when you got into consulting is, how did you know that there was a need? How did you even get into consulting?
Penny Phillips:
Yeah, I got in completely by accident. So it's not a sexy story where McKinsey hired me, and then I was a star consultant. No, I started in third-party asset management, in the wholesaling world, initially when I started as an internal, at one of the subsidiaries of New York Life. And honest to God, guys, I remember feeling like, I don't think I'll last here too long, because I didn't love that world.
Kurt Dupuis:
You didn't love sales?
Penny Phillips:
I didn't.
Steve Seid:
We have questions for you coming on that later.
Kurt Dupuis:
Oh, yeah.
Penny Phillips:
Yes. And you know what, I love that firm to death. And I ended up doing work with them, when I left and launched my own thing. But for me, it was like this, I was always thinking what can we do differently. I didn't like the idea of having numbers that I had to dial, and I'm like, this sucks man. But I liked the idea of partnership with advisors. And what I remember thinking even early on, right out of school, like 21. I'm like, there's got to be a better way to position products to advisors. Because it's such a commoditized marketplace. And I remember being really fascinated with... Well, if we can understand psychographics and behaviors of advisors, then we might be onto something. Because we can call them at the right time, or we can send them something at the right time, and it was interesting, because people weren't really thinking like that.
And I had obviously expressed, I don't want to do this. I want to do something else. And so there was a project in another part of the company. And I guess the short story is, they sort of needed somebody who was willing to travel around, and I look back now, probably single and didn't have kids and was okay, just doing whatever they said. And so, I spent a lot of time traveling the country, learning about the agency distribution system. So traditional insurance professionals, understanding that side of their business, with the thinking that they wanted to, smartly, take really successful insurance professionals, and transition them to become wealth advisors.
And they were having trouble doing that, at that time, New York Life as a whole. And the answer that we came up with, myself and the team at the time was, it's not a technical competency issue, it's a behavioral coaching issue. The amount of dopamine that surged for them on a daily basis positioning product and selling, doesn't translate to a financial planning engagement. And so I ended up building a program there called practice management solutions, and that became essentially the training for insurance agents to become financial advisors. And so I took that knowledge and then went to Envestnet and consulted there, and then just hopped around a bit before launching my own thing. But like you folks, I ran into tons of consultants and coaches and I hate to say it. But I'm like, this is the only profession where you can talk for an hour and not say anything, and people still pay them.
Kurt Dupuis:
It's so true.
Penny Phillips:
It's wild. So I just promise to never be that person basically.
Kurt Dupuis:
So was the problem that you were trying to solve more of helping those insurance folks transition to the wealth side? Or was it thinking more holistically to be business participants like CEOs and not financial professionals?
Penny Phillips:
Yeah, that's a really good point. You know, both, but I had a strong opinion on it, and I've talked about this on my video series now. The pressure that we put on advisors, and the way we've defined success in the business is bizarre to me. There's this constant thing of advisor as CEO and transition from it. But most advisors, first of all, respectfully, don't know what a CEO actually does. Like a CEO's job is not to be sitting with clients and on creating a financial plan. A CEO is a strategic decision maker about the business.
Penny Phillips:
And so, number one, why are we trying to force advisors to step into a CEO mindset, when most of them, honestly should be hiring CEOs and continuing to be advisors. So for me, it was a bunch of things. It was, number one, how to get them to literally redefine their sales process. The way they do business. Think differently about the consumer and what they're offering. So get them to evolve as an advisor to come into the 21st century, and then to ultimately to help them decide what type of leader they want to be, and then how to get there. So, yes, to be a business owner, but also understand that you can own a business and not be the CEO of the business. And that is a little bit of a different perspective on it than I think a lot of coaches take.
Steve Seid:
Yeah. And some financial professionals, they're not even predisposed to even do that, to your point. So where do you spend your time today?
Penny Phillips:
I said this quote so often the last couple of weeks. And I'll tie it in, I promise. But it's “we've learned everything, and absolutely nothing from last year.” Meaning, everybody loves to talk about how, God, so much has changed, and there's so many different things go on. And the reality is, actually nothing's changed.
Kurt Dupuis:
Just crawling along.
Penny Phillips:
Everything that we've already known about the business is true. The best in the business continue to do well and evolve, because they have an ability to shift and adjust. The movable middle is still in the middle, it's just all the same stuff. And so my answer is the exact same stuff I was talking about last year and for the past five years. Human capital, absolutely number one on the list. How do you develop talent? How do you delegate? How do you build a sustainable practice through the use of other people to help you, is basically the number one thing that I get asked about and talk about.
I would say close second, is the concept of enterprise value. Advisors are realizing we have something of value, and it's not just cash flow. But there's an enterprise we own and we got to monetize that. So conversations around that, human capital, and I would say, business monetization, top two for sure.
Kurt Dupuis:
In that human capital vein, you talk a great deal, I think a common language we use internally is connecting generations, right? It's the boomers working with Gen X, Gen Y, Gen Z, whatever generation and building a holistic practice that is multigenerational. Why is that so hard for people?
Penny Phillips:
I would say Thrivos, my consulting company, which I'm still the owner of, and it's still doing really well. That was probably the first thing that I think we became known for, is sort of trying to bridge the gap. But actually, one of the first programs I ever wrote when I launched that business was, yes, you can build a business with Gen X, Y, and Z. And it was sort of a play sarcastic on this idea that you can't... The biggest problem is that the majority of advisors in the business are in the baby boomer generation. They were raised in a negative reinforcement sales culture. And not just sales but in general negative reinforcement.
Kurt Dupuis:
Here's a phone book, go call a bunch of people.
Penny Phillips:
And if you don't hit your quarter, you suck and you are going to be kicked out of the firm. Think of our parent's generation, the way they were raised, right? Fast forward to now Gen Y, Gen Z, positive reinforcement sales culture, and positive reinforcement culture broadly. How does a young person make decisions. They make decisions by posting on social media and waiting for responses, and instant feedback, and instant reinforcement.
And what I always say to people is think about what that's done to a sales culture. You have two people who will not only end up resenting each other, but fundamentally not understanding how one another thinks, develops. And for me, that is the primary issue in the business with bridging the gap between the two. What I say unpopularly is, unfortunately, the onus is on the older generation to change and not the younger generation.
And I say that because society has already changed. The younger Gen even like younger than us, right? The Gen Zers, the 20-something year old, they don't know any other way. Their brains are wired differently now. So you can't expect that person to act and think like a baby boomer. But the baby boomers and the Gen Xers have seen both. So they would have theoretically the easiest time adjusting themselves, although that's not popular, yeah.
Steve Seid:
Yeah. You made a comment, you’re looking at this younger generation and the older generations like, oh, they're just not willing to do the work and to...
Kurt Dupuis:
They're lazy.
Penny Phillips:
Yeah, they're lazy.
Steve Seid:
Yeah. And your observation is like, well, no, that's not the case. They're just figuring out a better way to do it and to get there faster. And I wanted to ask you that question, because are they? Because I mean, I don't see a lot of them coming in and succeeding, and you see where I'm going with that.
Penny Phillips:
I totally see where you're going. But it's like we think of millennials as 21 year olds taking selfies and posting them on snap. The millennials are 35 years old. They have businesses and statistically they are more likely to be entrepreneurial, leave a corporate firm and start a business. And they're likely to do it seven years faster than their predecessors.
Penny Phillips:
So it depends on how you define success, and it's a really good point, Steve. Because the younger gen, and again, I'm generalizing it. But the younger gen defines success differently. It's much more about experiences. It's much more about, can I take that trip to Thailand on my two week vacation, and still launch my side hustle. Whereas our parents generation it was, how can I work for 60 years and finally take my first vacation when I'm retired?
Penny Phillips:
So totally different. So it depends how you define success. I can't say unequivocally, are they more successful? What I can say is, they're less willing to put up with the BS, and that can be a good or bad thing. I'll give you an example. Back in the day in corporate America, you stayed at your firm for 30 years to get your pin, that says congrats on 30 years. Especially in the New York Lifes of the world, right? Now, I mean, I've worked at places, I'm not staying anywhere for 30 years, especially if I'm not being treated well. I'm out the door finding something else, different mentality. So it's tough, it's just different.
Steve Seid:
So when you're talking to people about this, what's the solution? First, I guess, is understanding the difference between them, and your employees, and you. But then what do you advise them to do about it? Is it to change the way that they coach and train or what's the solution set?
Penny Phillips:
Yeah. It takes a tremendous amount of self-awareness, by the way, and coaching to be able to really implement initiatives effectively enough to change culture. So I don't want to make it seem like it's just easy to do. But what I say to firms, and teams is you have to focus on objectives versus tasks. Because as an industry, we're obsessed with hiring people based on a job description that was written for a role that was created 30 years ago. And we're obsessed with hiring and managing to that.
And what I say to the older gen is the younger gen, we know a couple things about them, right? We know the value creativity. They want to be part of something, but they want to be able to flex their creative and unique skill sets. So the way we do that in organizations not just in our business is, focus on what you're trying to achieve together. Establish that together. And actually, we don't use, well I won't say all the time, but traditional job descriptions. We say, here's what we need this role to achieve for our business on an ongoing basis. Here's how the role, when you achieve these things, whatever it is. Here's how you impact firm success, are you okay with that? Do you want to edit anything from that? And then let's get it going.
And what I say to advisors is, if you are completely aligned on what you're trying to achieve individually as team members, and then collectively, let people achieve it however they want. If they're working from 10:00 to 6:00 instead of 9:00 to 5:00, who cares? You're achieving the same things. And so traditionally, I have been a very objectives and key results type of consultant, because I believe it works. And so I don't try to change people because you're not going to. But I want them shifting how they define success, because I think that's where the answer lies.
Steve Seid:
And that that creates innovation, what you just described. That is how you create an innovative culture.
Penny Phillips:
That's right.
Kurt Dupuis:
Specifically as it pertains to consumers, and how consumers consume technology in the financial services industry.
Penny Phillips:
You have to be in front of the consumer at a very specific point in time, with a very specific message in order for them to engage with you.
And you have to be able to do that in a way that's both scalable and customizable at the same time. So think the Netflix's of the world, right? What they do is both scalable, because they're doing it for millions of people, but customizable. You go in, and they're picking out movies that they think you would like. Same concept, there's algorithms in AI that's underpinning that. The individual solopreneur advisor, it's almost impossible for them to do that. For them to be able to do that they have to have access to really awesome tech, and marketing automation platforms that do that. Other than tech impacting pricing, and squeezing margins in investment management. That is the biggest, I would say, tech trend that's impacting the advisory business.
Steve Seid:
I was listening to you on another podcast and you guys were talking about, like what questions do you get often? And you said, hey, I'm always asked, what are advisors doing to grow? And you said, there's only one answer to that, it's not going to change. I'm wondering if you could tell us what that answer is.
Penny Phillips:
There's two ways to get business right now. One is through your current clients. Two, it's by talking relentlessly about your business. And again, if you're a solopreneur advisor, meaning you're running your business independently, you don't have access to millions of dollars in capital to run marketing campaigns. You're a solo advisor trying to grow, or solo business trying to grow.
It's go directly to your clients, and engage with them enough and in such a superior way that they're going to want to tell others. Or secondly, relentlessly talk about your business to every single person that you engage with, including centers of influence, people who can advocate on your behalf. And most importantly, talk about the fact that you are growing and evolving. People in today's world want to be part of something greater than themselves. The best example of this is RobinHood and GameStop and the drama of a couple weeks ago. What a great example of the power of feeling like you are part of a movement. And you can do that really easily, by simply talking about your business and putting that content out there, and I do it weekly with my Wednesday Wisdoms.
Steve Seid:
One of the other things that you said on the topic of business development was this idea of institutionalizing business development. What did you mean by that phrase?
Penny Phillips:
Yeah. Consultant secret fancy word is, thesaurus, and put in some fancy words. Basically-
Kurt Dupuis:
You see how serious he's gotten now too. He's like, Seid’s full professional mode.
Steve Seid:
Listen, what Kurt says to me is like all I do is talk about frameworks. Okay, so understand who you're talking to, right.
Kurt Dupuis:
Oh, your favorite word.
Steve Seid:
Framework is my favorite word. Anyway, go ahead.
Penny Phillips:
... I think institutionalizing is up there for me. And for all my advisors, listening or salespeople, I am a salesperson that's my core skill at the end of the day. And using words like relentless, institutionalizing, conviction. We have 100% conviction in what you do, obviously, you get people interested in what you're talking about. But it's the idea that, and I ask advisors to think about this. If we were to remove you and your whole team from the organization for six months, would any leads come into the business in that six month time frame? If not, and how would those leads come in?
Penny Phillips:
Those leads would come in because you have an automated video campaign that goes out. Leads would come in because you do some sort of marketing that happens outside of you having to manually do it, that generates interest in what you do. So that's institutionalization. It's established in the organization, it can be repeated, and it doesn't need one single individual person to effectively implement it.
Kurt Dupuis:
You had posted something about marketing. And the spirit of it was, get past the strategy and just start executing, right?
Penny Phillips:
Yeah.
Kurt Dupuis:
Someone commented that had the opposite view. He was like, "Oh, but strategy is really important, and you should spend a lot of time with it." Which I don't know anybody that would disagree with that. But the point, and I think this is what we're talking around is, start doing something.
Penny Phillips:
Exactly.
Kurt Dupuis:
Make some decisions, dip your toes in the water and get to work on it. You'll figure out what works overtime.
Penny Phillips:
That's exactly right. Yeah, I know exactly who you're talking about, I love him. But I think he runs a strategic marketing firm. So of course, he has to say that. But maybe, maybe.
Kurt Dupuis:
Ah. Makes sense.
Penny Phillips:
But my point, you got my point exactly, and that's the relentless prospecting concept. And by the way, having coached advisors for a decade, I see this all the time. They get really hung up on... Do you have a marketing plan template? Do you have a business plan template?
First of all, you don't need a marketing plan template, open up a Word document and write the things you want to achieve, what's your budget. And so for me, I don't get really hung up on that type of stuff. If you look at those who are the best in the business, they're the best in the business, perhaps because they're great strategists. But more because they are able to simply do, and not a lot of things get in their way. And anybody who's been successful as an entrepreneur can attest to that.
You simply have a higher propensity than others to do. To do new stuff, to do different stuff, to do stuff that's unpopular. And so when I say, just do, what I mean is, you don't have to hire a consultant to talk you through best practices on LinkedIn, to start writing something on LinkedIn. And what I want to be sensitive to, is not everybody is a creator. That is, I think, a unique skill set that some people have. I say to advisors, there is nobody better positioned to create content than you. Because you are listening to conversations with your clients
Kurt Dupuis:
You're the front line.
Penny Phillips:
... Every single day. So if you're wondering what to write, or what's to record, keep an audit in one week of all of the questions your clients asked you in your conversations. And the question could be, do you have any recommendations for an after-school program for my kids, I got to go back to... It could be silly, everyday questions. That's where you build your marketing content around. Questions, questions that you'll find that it's so simple and not a lot of people doing it.
Kurt Dupuis:
It's so good. No, and people... so growth and marketing is the evergreen question that we get from mailbag, like what to ask people. But my first question to them is what are you doing now? But when you get the blank stare back, that's the answer. You should be doing something, do something that you enjoy. Find something you enjoy, put some dollars behind it, let er’ rip. That's the strategy.
Penny Phillips:
That's exactly right.
Kurt Dupuis:
Doesn't need to be more complicated than that.
Penny Phillips:
It doesn't. And the other thing is be okay with being vulnerable with your client. I get it, like my father, by the way, doesn't own a cell phone. So I understand these advisors better than anyone, because I've lived it.
Steve Seid:
I'm jealous of him, I'm jealous of him. I really am.
Penny Phillips:
He's off the grid and never will be on it. But so, well what I say to them is, but you're a business owner who's running a business and you're promising clients that you have this multi-gen business, we're going to be around forever. And I tell them, directly send an email to your clients right now and say to them look, we've learned a lot over the last year as a business. We realize that we need to be communicating with you in a faster and more efficient way. And we want to reach new audiences, because not enough people have access to quality advice.
Penny Phillips:
So we're going to start doing things you've never seen us do before. We're going to start recording videos, we're going to start writing blogs, and you're going to see us more on social media, we hope you'll support us. Clients would be more than happy-
Kurt Dupuis:
They would love that.
Penny Phillips:
... They would love that. First of all, they'd think it's cool. Secondly, what are they going to say? That's it... "Oh, my God, I can't believe my advisor is trying to market." Nobody's going to say that. So that immediately takes down the line of defense, and immediately gives you permission to try something and maybe eff it up a couple times, and everybody will think it's fine. So there you go.
Steve Seid:
I can't wait till this podcast is released, I'm going to send it to about five teams. Because it was literally just yesterday, "Yeah, we're kind of not really a touchy-feely kind of team. What am I going to do? A virtual wine tasting. That's not who we are.” It's like, no, no, you can do this. And it doesn't have to be where you're doing wine and cheese over zoom. It doesn't have to be like that.
Penny Phillips:
Exactly.
Kurt Dupuis:
But it can.
Steve Seid:
... It can, of course they can. I had one last night, that was fantastic. The other point you made was where does content creation come from? And this is exactly the point you made on what the best advisors are doing to grow their businesses. Being really good at what they do. And so that's also where the content should come from.
Penny Phillips:
Exactly, right. Like somebody says to me, what are things advisors are worried about right now? I talk to advisors all day, I know the answers to that. If you ask an advisor, what are the top things your clients are worried about right now, and they can't answer that, there's a deeper issue there. And we need to be honest about that.
But I say to advisors, imagine a client, your best one, run through a day in their life. Go through a whole day. Okay, so they wake up at about what time? Do they work out in the morning? If you really get to know your client, you know these things. I know most of my advisors, they go to CrossFit at XYZ time, my New Jersey advisors do. Right XYZ time, and then they're in their office. So I know their spouses, I know their kids. Because I ask, because I listen.
And so advisors are in an even better position to do that. And so write out everything that they go through in a day. They wake up, do they drop their kids off, does their spouse? And what are we trying to get at here? What we're trying to get at is, what are the psychographic challenges, and issues, and points that we can derive from this information. Meaning, beyond just knowing that your client is a Gen X entrepreneur, is your client somebody who's really struggling with work life balance? Is your client somebody who is feeling an intense amount of pressure having to care for both young kids and older parents? These are the types of things that we want to derive from understanding a day in their life, and then use that information to build marketing content. Simple.
Kurt Dupuis:
I'm curious, now that we've spent a little bit of time together here. What do you think of two wholesalers having a podcast talking about practice management? Like, does that idea strike you as alien? Does it make sense? Where are you at with that?
Penny Phillips:
It is what wholesalers should have been allowed to do or doing, 10 years ago, and so I love it. And I think it's tremendous, and we've seen this trend. We've seen the wholesaling business. Wholesalers have to for some time, moonlight as the practice management coach or practice management specialist. Because that is the way they're going to form bonds and build rapport with advisors. And so doubling down on that by actually saying, we're not just going to sort of pretend like we know about practice management, we're actually going to get deep into it so we can provide value. It is those wholesaling forces that are going to survive the next couple of years, and that's just the cold hard truth. So I love it, I think it's awesome.
Steve Seid:
We paid her to say that.
Kurt Dupuis:
Yea, checks in the mail.
Steve Seid:
By the way, is it weird that every time you say New Jersey, I do a fist bump? The audience can’t see it though.
Penny Phillips:
I noticed that. I know that's that Jersey Shore thing. I know.
Kurt Dupuis:
I've avoided the GTL joke a little while ago about Jersey.
Steve Seid:
I've never watched that show. I never will watch that show. Do you want to know why?
Kurt Dupuis:
I have watched it twice, end to end and it's amazing. Come on, it's classic, it's so good.
Steve Seid:
All right. Do you want me to get into why that show is terrible? You want me to get into that with you guys? What's the question, Kurt, then I want to talk about the Jersey Shore for a second, what's the question?
Kurt Dupuis:
Well, I'm just curious if the New Jersey, New York thing is like, I'm trying to frame this as a South Louisiana guy. Is that like Louisiana versus Mississippi? Is that what's going on there?
Steve Seid:
No, let me give you the background. So first of all, when we're watching this show about Jersey Shore, none of these people are from New Jersey at all, right? So let's start there. Maybe they're from North Jersey, maybe. But they're from Stain Island.
Penny Phillips:
Rhode Island,Poughkeepsie, Its true.
Steve Seid:
So the reason I don't watch the show, is because this is my life. So I actually lived in Jersey, and we went to the shore all the time. And in the summer, it would be invaded by these New Yorkers. That would just take a bunch of steroids and start fights with people. This is real, it's not fake. So we would avoid the bars that these people went to.
Kurt Dupuis:
So these people are real, they're just not.
Penny Phillips:
Oh, they are real. Because this is our... I don't know how old you guys are but I'm assuming we're all around the same age range. But is this like, I'm upset because I think it's a thing of the past. I think the GTL phase, that Jersey, I mean, I spent many weekends in Atlantic City and the Whole Nine yards. But I just feel like it's different now because people are... And back then by the way we really didn't have social media the way we do now. There wasn't an instant ability to share and do all the stuff that's going on now. So I'm just worried that the Jersey Shore days are gone and all the characters are gone.
Steve Seid:
Here's how we're going to solve this, because I left jersey in '05 and I haven't lived there since then. Unfortunately, I just never really get back there anymore. Here's what I want to do, because you're going to answer that question. So now you have Jersey Shore partners. Here's what I want you to do. In the summertime when things open up, I want you to tell your partners, take me to BelMar. Belmar, New Jersey.
Penny Phillips:
Come on. You think I don't think I don't know Belmar. Come on, Steve.
Steve Seid:
Do you know Belmar? Okay. I don't know you hang out on the shore, and I want you to... Where do you spend your time hanging out like Bar A?
Kurt Dupuis:
You all are just Shoring out right now!
Steve Seid:
Go to Bar A.
Penny Phillips:
I mean, as New Yorkers we are, Fire Island, Hamptons, Montauk crews. But we made our way down of course. How could you not Jersey shore, I mean.
Steve Seid:
Did you?
Penny Phillips:
Yes.
Steve Seid:
Well, I don't know some New Yorkers, they're like, why would we go down to Jersey. It's like a negative thing to go to New Jersey. It's like, I'm sorry, our beaches are better but you know. But you went down, so you appreciated Jersey, I'm loving it, okay.
Penny Phillips:
We did, but I'm a subculture. I am New York borough Greek, which is totally different. Like that is-
Steve Seid:
Is it?
Penny Phillips:
... Oh my God, and Jersey Greeks too. The tightest Greek community, the most incestuous thing in the world. And honest to God, not to make anybody jealous here, but we spent our summers, we'll go down to either AC as we called it, or we'd head to Greece. Because all of us have our families there. So our summers were on the islands, I know.
Steve Seid:
Of course.
Kurt Dupuis:
No big deal, hey. Humble brag.
Penny Phillips:
Yeah no big deal. It's not believe me, it's not like I have a mansion over there. But my family happens to be in Greece and a lot of my generation like our parents were born there. So we just would go hang there with the other Greeks, and it's like Jersey Shore but European style which is worse.
Steve Seid:
We're going to come back to business, but I have one final question. Do you have friends with diners?
Penny Phillips:
Everybody I know has a diner, every single person.
Steve Seid:
Kurt have you gone to a Jersey diner? Because like...
Kurt Dupuis:
Yeah. So my dad lived in South Jersey, Toms River.
Penny Phillips:
Oh, yeah.
Steve Seid:
The best food you'll ever have.
Kurt Dupuis:
I love the diner food…in Jersey.
Steve Seid:
The best thing ever, yeah.
Kurt Dupuis:
When I would go there I would be like Dad can we just go to a diner every day for breakfast.
Penny Phillips:
It's the best.
Steve Seid:
Okay, so referral language bringing us back. How about that? Referral language.
Penny Phillips:
Referral language.
Steve Seid:
Yeah, so just talk about how you think about that.
Penny Phillips:
This is something I've been pretty opinionated about. There's a couple things I'm opinionated about, like the value proposition, elevator speech exercises that consultants do. That would be a tie for number one with the referral language exercises. And I just think for so long, we've been pretending as an industry that any human, I mean, not any, but that most human beings would respond positively to the question of like, hey, you mentioned your neighbor often and would they be able to leverage some of... Well, first of all, you don't talk like that in real life.
And secondly, that's not, obviously because I get this question a lot, would my client feel weird if I asked be introduced to their sibling or their neighbor or their co-worker. And the honest answer is the majority of people would feel awkward. Some people can pull that off and we all know those advisors. They're the very like, sort of... The salesy thing is their thing, and so they can get away with it. But the majority of advisors first of all are not like that. And secondly, imagine going to a therapist or a psychologist, right? Talking about your parents and how much they screwed you up. And then at the end the therapist's saying, would you be open to me meeting your parents? It just similar.
Kurt Dupuis:
Or do you have any anybody else that screwed up?
Penny Phillips:
Is anyone else at your level of screwy, please introduce me to them. So what I say to advisors is, if you really are really, really good advisor. If you really have EQ, high EQ, every engagement is so obsessively focused on the client. What they want, what they need. Each conversation and I tell advisors, go into conversations with clients. Before you go in, ask yourself the question of, what is this person trying to achieve in this conversation and what do they need from me? Those are two coaching questions by the way.
And you could use that tactic with a spouse or a partner, right? If you're in an argument or having a difficult discussion, ask yourself, how can I be most helpful in this conversation? When you act like that with a client, trust me, you will never have to ask for a referral again. You will never have to, and that is the truth. And we don't say that enough to advisors, candidly, because firms don't want to spend money on EQ training and practice management.
If we trained the entire industry on that obsessive active listening. You would never have to ask for referrals. So what I say to advisors is, create referable experiences, number one, first and foremost. But switch your way of thinking about it. So if you ask me, should we be asking for referrals from every client? My answer is no.
There is a subset of people in the world who are natural connectors. And if you've read Malcolm Gladwell's work he talks a lot about this. There are people, like if you guys were to think about who do we know, who can introduce us to a great speaker. People come to mind. The movers and shakers, people who they always got a guy, like you got a good plumber, they have the best. You have a good dentist, like they have the best dentist. Those type of people exist, usually in a book of business, it's like 25% or less of your book, have that natural advocacy-type personality.
If you tap those people, they will want to help. They will be excited to refer. But you have to be able to identify those people, and then make the ask in the right way. And the way you make the ask is saying, look, we have a plan for the next 10 years. We're a rocket ship to the moon, although I hate that analogy, it's so stupid. But we're building something tremendous. We're picking a couple of clients, we want you to be part of an advisory board. We're looking to get the word out about what we're doing to more people in this specific demographic of clientele, you are a person who can help us. When you say those words to an advocate-type networky person, suddenly they feel excited. Suddenly, they feel like wow, I'm special and important, they need me. So you it can be done, but it has to be done very intentionally with a certain subset of clients.
Steve Seid:
Yeah, it's like that comment about being a part of something bigger than themselves.
Kurt Dupuis:
That's what I was thinking when we're talking about this, is that feeling that desire to be part of something it's not a millennial thing. That's an everybody thing. Everybody wants-
Penny Phillips:
It's a human thing, absolutely. And if you tell advisors, think about the people in your book, who are the best influencer, who have influence, who are the networkers. They will be able to identify a couple people without a doubt.
Kurt Dupuis:
Yeah. Well, and EQ comes up so much, when we had our chat with Dr. Crosby, that was a big differentiator and how firms will likely be hiring in the future. Which is a distinct change from how they hired historically. High EQ people are much better overall fits for where the financial advice business is going.
Penny Phillips:
There was a study done by, I think it was the Employee Benefit Research Institute. The study was done on high-net-worth baby boomers, and their propensity to move assets from one advisor to another. The advisors who garnered the most business, were advisors with high EQ and low years of experience. So everybody thinks the advisors who are doing, like advisors put on their website, we've been in business for 285 years, nobody cares about that. The truth is, you could be in business for 40 years and have low EQ, and your ability to land the business is much lower than somebody who's in the business five years with tremendously high EQ, and I mean critical thinking skills of course. But that's been proven statistically for sure.
Steve Seid:
So there's probably a million other questions we want to ask but we can't hold you forever. So we're going to close with a lightning round, quick questions, quick answers. But before we do, plug what you're doing, tell us about the more about the RIA, tell us a little bit more where people can find you.
Penny Phillips:
Yeah, sure. You can just go on any social media platform, I'm plugging stuff there. But definitely Twitter @ThrivosLLC, that's my original business. But my new thing is Journey, Journey Strategic Wealth is the name of the company. We are an RIA, and my message to folks is, working in the RIA space for several years, the one thing I noticed is that, there isn't a lot of differentiation. People go to market and say we have the best tech, and we have the best... And the truth is, no you don't. Everybody's using the same tech. It's the same services, it's the same pricing.
The advisor like the consumer, has to make a choice now between lowest cost or highest value. And for me, lowest cost is payout, right? Firms try to attract advisors with like, we'll pay you 92%. And for me, I'm like, okay, they still have to run a business, so you're not really helping them. And so for us, we decided to launch something that was on the highest value of that equation. So advisors join us, they outsource all practice management to us. Meaning, we take over payroll for their team. We help them develop team members, hire, we do all operations, billing, infrastructure, everything for them and their owners of their business completely.
So for me, it was what's so great about the wirehouse channel traditionally, what was so great. This ability to sort of give everything an advisor needs to him, but with the beauty of the independent channel, which is advisors own equity in their business and own their clients. So I think we've checkmated the business, but we'll see.
Steve Seid:
Wow, congratulations. We'll be following to see how that goes. But certainly a great idea. All right, Penny quick questions, quick answers. Why didn't you like being a wholesaler?
Penny Phillips:
Oh, God.
Kurt Dupuis:
Truth only.
Penny Phillips:
Truth only. I do not operate well in the traditional corporate structure of, you have to make this many calls and you have to hit this. It just doesn't work for me, and it was mindless.
Kurt Dupuis:
Too rigid?
Penny Phillips:
Yeah. Not for me. Not for me. Yeah, yeah, yeah.
Kurt Dupuis:
So are you into sweets?
Penny Phillips:
Yes.
Kurt Dupuis:
Okay. I need favorite Greek dessert?
Penny Phillips:
Oh gosh. This is a tough one to say. It's Galaktoboureko. Yeah, it's a long one. It's like a custard sort of pie with a phyllo, it's amazing.
Steve Seid:
Oh, that's awesome.
Penny Phillips:
You asked for it guys, yeah. I mean, come on.
Steve Seid:
Most satisfying consulting engagement? You've been dealing with a lot of teams for a long time.
Penny Phillips:
Oh wow.
Steve Seid:
Which one jumps out as like, wow, I love this.
Penny Phillips:
Yeah. I mean, it's hard to say one. I've worked with two really, really amazing teams for many years. And I've watched them grow from the solo practice with one associate to a multigen team with multiple partners. Watching that evolution real time, just incredible. So for me, I've done institutional consulting and individual advisor coaching and it's always the latter that gets me, because these are real people building real businesses, so yeah.
Kurt Dupuis:
Is it easy or hard to differentiate from the average FA?
Penny Phillips:
Me for myself, or for the FAs to differentiate from one another?
Steve Seid:
The latter.
Kurt Dupuis:
The latter.
Penny Phillips:
The answer is truthful. I'm not going to lie to you by the way, because I talk way too much.
Steve Seid:
That's okay.
Penny Phillips:
But it is difficult. Most people got into the business because they wanted to make money. And not because they had some calling to deliver advice. It's the ones that did have that calling or have a deeper purpose, that have an easy time differentiating. But it's a long answer.
Steve Seid:
No, it's good. Last question. We'll let you leave on this. You made the comment, there's absolutely no excuse for not holding virtual events. Talk about that?
Penny Phillips:
We as salespeople or service providers, you have to evolve alongside the consumer and change will never be as slow as it is today. Think about that statement, and I didn't say that, but Justin Trudeau said that in a speech. But, meaning, you have to evolve literally, everyday you have to come into the business without a preconceived notion about what's going to work. Meaning, what worked yesterday may not work today. So what do we know today? We know that people are spending their time online, there you go, there's your answer, that's all you need to know.
If tomorrow people are spending their time on a spaceship, going to Mars to visit. You got to figure a way to get into that market.
Kurt Dupuis:
Hop on that ship.
Penny Phillips:
And that is exactly it. It's that simple.
Steve Seid:
Awesome. Penny Phillips, everybody. You are awesome. Thanks so much for coming on the show.
Penny Phillips:
Oh, thanks guys, I'll be back. I'm happy to come back.
Steve Seid:
Yeah. There's probably 20 questions that we didn't get to that could have gone on.
Penny Phillips:
Yeah, that'd be fun. I'm happy to come back.
Steve Seid:
Awesome. We'll be right back with the Costanza Corner. This is The Whole Truth, stick with us.
Kurt Dupuis:
And welcome back to the whole truth and our closing segment called the Costanza Corner, where we like to end the show on a high note. Seid, you're up today, what you got?
Steve Seid:
One of my favorite because Costanza Corners I ever did. I don't know if it's yours, but it was my...
Kurt Dupuis:
It probably was mine
Steve Seid:
Remember the one we talked about where there was a meteor that crashed through this guy's house and he got rich from it. You remember that?
Kurt Dupuis:
Yes.
Steve Seid:
Would it be crazy if I told you that there's a part two to this, not the same story, but a cool, another fun, awesome story. This always happens in Asia, by the way. I don't know why is this not happening to me in California, but I digress. We've got a part two. So this is a person who is described as struggling Thai fishermen. So he was out one day and he was looking through and doing various, basically harvesting oysters.
Steve Seid:
And I'll read directly from the article, the 37 year old and his brother picked the shells off the ball, this ball that they found and took them home. They gave them to their father blah-blah-blah. And they found something after they cleaned off the ball, an orange pearl slightly bigger than a U.S. quarter. So if you picture this think about a pretty reasonable size round orange pearl. And so you can probably guess where I'm going with this, this little pearl that they found has an estimated retail value of $333,000. So how about that?
Kurt Dupuis:
That's too precise of a number to be real. Someone's taking some extra margin there.
Steve Seid:
A struggling, impoverished Thai fishermen finds this rare, orange, sizable pearl, and now he's got some dough. I loved it. I loved reading this story. Google that online, the title’s “Struggling Thai Fishermen Finds Pearl”. Take a look at this thing, it's super cool. We'll see you next time.
Kurt Dupuis:
You can find The Whole Truth and subscribe for free on Apple Podcast, Spotify, or your favorite podcast app. We'd love it, if you took the time to rate and review the show on Apple Podcasts. It helps others find the show. And for more episodes of The Whole Truth go to www.touchstoneinvestments.com/thewholetruth. That's touchstoneinvestments.com/thewholetruth all one word.
