Discovering Rollover Alternatives In Transitions After Layoffs


Government Abstract

Welcome again to the 313th episode of the Monetary Advisor Success Podcast!

My visitor on right this moment’s podcast is John Stokes. John is the founder and CEO of John Stokes Monetary, a hybrid advisory agency primarily based in Irvine, California that oversees greater than $400 million in property below administration*, for 1,800 consumer households.

What’s distinctive about John, although, is how he has constructed an experience in layoff transitions and leveraged company layoff workshops – that enormous corporations rent him to return in and ship to their soon-to-be-laid-off staff – to construct a distinct segment focus in serving to staff undergo their layoff transition… and seize the inevitable rollover and different monetary planning alternatives that come up alongside the best way.

On this episode, we discuss in-depth about how, as an knowledgeable in layoff transitions, John has leveraged relationships with numerous giant firms in California (which can be required to satisfy a California state legislation mandate to inform and put together staff for a layoff 60 days upfront) to create a distinct segment focus counseling staff by layoffs, how John established and constructed his relationships with giant firms by pitching the significance of understanding the principles for navigating unemployment insurance coverage (not specializing in worker 401(ok) rollovers straight) in order that he might provide a really wanted worth for the businesses searching for to make their layoff transitions go as easily as doable, and the way regardless of what’s historically a cyclicality to layoffs the fact is that there are so many giant firms within the US going by change and competitors that that layoffs are inevitable… which has allowed John to realize a gradual stream of over 100 in-person workshops a yr and a gradual move of latest shoppers in each bull and bear markets.

We additionally speak about how throughout the early years of John’s profession at a broker-dealer, he was impressed to work solely with these going by numerous phases of layoffs after he realized that he might totally keep away from cold-calling and constantly meet with lots of of individuals at a time throughout workshops to generate a excessive referral fee, why John insists on not being compensated for his workshops as he feels it’s his obligation to offer goodwill and assist individuals by making an attempt occasions and uncertainty (figuring out that, inevitably, among the individuals he helps will need to have interaction him additional), and why John takes the time to make sure he hires advisors which can be motivated by their willingness to assist individuals and greeting shoppers with deep empathy so as to preserve agency tradition and the skillset needed to assist shoppers by their tough and worrying layoff transitions.

And be sure to take heed to the top, the place John shares how witnessing his father undergo a layoff in New Zealand after a multi-decade profession at a single firm, and experiencing two layoffs himself early in his profession, helped John see the worth in specializing in individuals going by layoffs as a result of he might join extra deeply along with his shoppers primarily based on his personal private experiences, why the consequences of the pandemic on John’s in-person assembly cadence gave him time to understand that he had a chance to additional deepen his consumer relationships by offering monetary planning as a price add at no extra price (as previous to the pandemic, his consumer relationships had been extra transactional), and why John feels it’s vital for advisors coming into the monetary companies trade to seek out their inside ardour as quickly as doable because it not solely helps to develop a extra specialised focus (which John feels is invaluable to surviving within the trade), but it surely additionally creates higher alternatives for advisors to make use of their data and expertise for the betterment of society… and themselves.

So, whether or not you’re considering studying about how John has grown and scaled his agency by a distinct segment focus of layoff transitions, how John has leveraged digital workshops to interact with much more firms throughout the U.S., or how the limiting of in-person workshops throughout the pandemic has impressed John to supply monetary planning and has elevated alternatives for his agency to develop and scale even additional, then we hope you take pleasure in this episode of the Monetary Advisor Success podcast, with John Stokes.

Michael Kitces

Writer: Michael Kitces

Crew Kitces

Michael Kitces is Head of Planning Technique at Buckingham Strategic Wealth, a turnkey wealth administration companies supplier supporting 1000’s of unbiased monetary advisors.

As well as, he’s a co-founder of the XY Planning Community, AdvicePay, fpPathfinder, and New Planner Recruiting, the previous Practitioner Editor of the Journal of Monetary Planning, the host of the Monetary Advisor Success podcast, and the writer of the favored monetary planning trade weblog Nerd’s Eye View by his web site, devoted to advancing data in monetary planning. In 2010, Michael was acknowledged with one of many FPA’s “Coronary heart of Monetary Planning” awards for his dedication and work in advancing the occupation.

On the lookout for pattern consumer service calendars, advertising plans, and extra? Try our FAS useful resource web page!

Full Transcript:

Michael: Welcome, John Stokes, to the “Monetary Advisor Success Podcast.”

John: Nicely, thanks, Michael. Good to satisfy you.

Michael: I’m so trying ahead to the dialogue right this moment, and what, I believe, to me, is each a extremely distinctive enterprise and progress channel that you have created for your self, and one which, candidly, I am not fairly certain, it is so distinctive that you just appear to be the one one who has stumbled upon this. There’s a saying in our trade, I keep in mind it most straight from Mitch Anthony, who at all times has this excellent present for phrases, and this factor that I had at all times heard from Mitch is, when life goes in transition, cash goes in movement. And the concept of it’s this recognition that when individuals undergo life transition occasions, it tends to be very disruptive for what they’re doing with their cash, what they’re doing with their funds, and in any other case often called alternatives when monetary advisors are likely to get employed and engaged.

And so, so many people within the trade have spent years constructing round transition moments, of which one of many largest has at all times been when persons are leaving their companies, leaving their work. So retirement is an enormous one as a result of cash comes out of 401(ok) plans, and there is rollover alternatives. And liquidity occasions for enterprise house owners are an enormous one as a result of a transaction occurs, and there is {dollars}, and there is change, and a transition underway. However there’s a third approach that transition comes at work, proper? I might retire. I might have a liquidity occasion as a result of the enterprise has offered, or I can get laid off. And nobody appears to essentially give attention to the layoff a part of how these transitions occur, besides you, John, who has a beautiful web site that actually says on the homepage, “Wealth administration for professionals in transition, serving to you discover certainty in unsure occasions, uniquely certified to serve these experiencing job losses.”

John: That is proper.

Why John Selected Layoff Transitions As A Area of interest Focus [05:46]

Michael: And so, I am excited to have this dialogue of, I will name it the third leg of transition out of labor. How do you finish out on this world the place you are specializing in individuals which can be getting laid off? How does that come about?

John: Nicely, Michael, sure, certainly, I’ve heard that saying, “Cash in movement.” However I took it slightly bit additional and take a look at it as extra individuals in movement. In different phrases, retirement primarily is a one-time occasion, proper? You wait till a sure level in your life and also you retire, whereas a layoff appears to be widespread follow. It actually occurs…it is occurred to me twice in pre-occupations. And so not solely did I really feel that there’s certainly a distinct segment for me at that time, and in order quickly as I obtained into the enterprise, I labored with a Fortune 100 firm, if you happen to would. They put me by their grooming stage, the place I needed to give you my checklist of, I believe it was 100 family and friends.

Michael: 100 family and friends that you could possibly name on. Yeah, so I began within the insurance coverage world as nicely and had a kind of journeys, too.

John: Okay. And for me, I got here from New Zealand. I got here to this nation figuring out little or no individuals. I had no household. At that time in my life I’d’ve not been probably the most pleasant individual, as a result of I used to be making an attempt to construct my life, get issues going, and had that particular person mentality the place, “Okay, John’s gotta get this, gotta succeed.” So after I began the enterprise as a monetary advisor, I instantly needed to do one thing that was impactful. That 100 checklist, everyone else was doing it. Why ought to I do it? So it was like this awakening. As quickly as I obtained within the enterprise, I began making these calls to the family and friends. I had the chance to do a layoff.

A buddy of a buddy requested me to go to this manufacturing plant in Orange County, California, and there should’ve been 400, 500 individuals on this manufacturing plant that had been all getting laid off. So right here I’m in entrance of those individuals, not figuring out something actually about what this all means, and I am anticipated to speak to 400 individuals about what it means to get laid off, and what kind of monetary issues you must put together for throughout a layoff. And I assumed to myself, “Boy, that is going to be attention-grabbing. I can return to my then department supervisor and present him a listing of 400 individuals now that may be added to that household and pals, if you happen to would.”

Michael: Proper. What a chance to get in entrance of an viewers of 400 going by a transition. You had been like, “I can present them worth. I get names. I obtained a month or two of individuals to name on.”

John: Oh, certain. No less than I had names, proper? Clearly I appeared on the alternative of 401(ok)s, and the rollover alternative, however extra questions had been coming about from these individuals. “What ought to I do with my medical health insurance? What’s COBRA? What about my life insurance coverage? Is that going to go together with me or not?” These people had a pension, so all these completely different questions had been coming about. So I sat down with my department supervisor and he says, “Yeah, okay, John. If you wish to take care of individuals which can be getting their pink slip, then that is what you need to do. Yeah, I suppose I’ve to assist it, proper?”

Michael: So department supervisor was not upbeat?

John: No, he wasn’t pleased with this in any respect. Previous to me getting into the monetary service trade, I had a stopover, I name it, with a really well-known nation membership, and I used to be servicing the wealthy and well-known, if you happen to would. It was referred to as The Beverly Hills Nation Membership, and nonetheless is, truly. So I used to be amongst some influential individuals, and as I am going by the interview course of with this firm that had been very excited concerning the alternative of placing on seminars…

Michael: Received any pals nonetheless over there, John, which you could return and name on now?

John: Oh, yeah, I certain do. Through the years a few of them turned shoppers, if you happen to would. However no, it was very attention-grabbing. And as I did my analysis, Michael, there wasn’t any agency on the market that basically specialised in an individual getting laid off. Now we do not use that time period, “laid off.” It is truly “transition.” The phrase “laid off” has a destructive connotation to it, so over time we have added that “transition” phrase in there. In order they undergo, and we have got shoppers which have gone by two, three, 4, 5 transitions in all of the years in servicing their funds.

Michael: So thus, the language even from the web site, “We work with individuals in transition dealing with uncertainty. We work with those that are experiencing job losses,” proper? That is one thing that occurred to you that we’ll work on and deal with.

John: That is proper. And going by a layoff myself, previous to being a monetary advisor…in truth, as a monetary advisor I used to be laid off from a dealer seller at one level, then that takes on a special dialog itself. However be as it might, my father labored for a corporation for 44 years again in New Zealand. Forty-four years with the identical firm, and he went by a layoff. Now on the time I used to be 17 years outdated. It did not burn a gap in my coronary heart as a result of I actually did not perceive the entire dynamics behind it. However no sooner did I begin serving to individuals on this layoff scenario, I noticed, primary, you gotta have empathy. You have gotta have a deep empathy.

You may have all of the data on the earth, but when you have not obtained the empathy to have the ability to sit down with them, have a coronary heart to coronary heart, inform them there’s life after what they’ve there within the layoff scenario, that was the important thing, I believe, to my quick success is I understood that. I had that have, and that basically burnt a mission inside my coronary heart to go, “All proper, these individuals…” My department supervisor talked about that I should not be servicing them, that I must be going onto larger and higher issues, if you happen to would.

Michael: As a result of his view was, “Manufacturing plant employees aren’t going to have the funds for alternative for you?”

John: Proper.

Michael: “John, you gotta name in your outdated nation membership acquaintances. Cease speaking to individuals on the manufacturing plant.”

John: Exactly, yeah. And so clearly out of 400 individuals I’ve picked up fairly a handful of shoppers there, they usually had smaller rollovers. However after I first began, I used to be excited if I obtained a $20,000 rollover. If I introduced that again to the department supervisor, that was the jackpot for me.

Michael: Oh, yeah, 20-plus years in the past, $100,000 consumer was an enormous consumer.

John: Oh, I might by no means come throughout it, and if I did, they’d usually be on the massive brokerage homes doing enterprise with their monetary corporations they’d in place already. So I did that first presentation and I assumed to myself, “If no person else is doing this, let me go at it.” And so I began principally chilly calling. I’d name firms and go, “Hey, I went to XYZ firm. I did a complete presentation,” and, “Oh, John, I heard this pitch earlier than. You simply need to are available in and speak about 401(ok)s.” “Nicely, truly, I do not. I need to are available in and speak about unemployment insurance coverage.” “What?” “Yeah. I’ve experience in unemployment insurance coverage.” “Nicely, why?” “Nicely, as a result of in the event that they get their unemployment insurance coverage,” to your level earlier, we had been skilled that you just gotta get that rollover cash.

I will get that, however what worth can I convey on this case the place no person else is doing it? So I began to study concerning the unemployment insurance coverage, study concerning the dynamics behind that. And as soon as someone obtained unemployment insurance coverage they had been capable of get different companies that had been very helpful for getting someone by a transition, in order that turned my experience in a short time. And it has been my experience on daily basis, all day for 20 years now.

Michael: So assist me perceive slightly bit extra about this area and simply what you are instructing and sharing with them. So I will confess from my finish, my data on unemployment insurance coverage is kind of shallow as a result of I do not reside that area, proper? For higher or worse, we are likely to reside extra on the revenue and property aspect than on the lack of revenue unemployment insurance coverage aspect. So what are you instructing? What are you masking that has this sort of affect and connection to the individuals that you just’re speaking to?

John: Nicely, the preliminary factor is, so as to accumulate unemployment insurance coverage you must be laid off. If you happen to go away your employment since you needed to make a job change, you are not entitled to unemployment insurance coverage. The one approach you get that’s by the layoff situation, or an organization closure, if you happen to would. And finishing the applying course of could be relatively intimidating for almost all of individuals. They’re asking you questions on, “Why did you get laid off? What has been your wage historical past?” Individuals know that for probably the most half, proper? However getting them by the unemployment insurance coverage is what we name the door opener to getting different companies, comparable to, Michael, over time there’s been mortgage help.

The state of California had a program the place you needed to have unemployment insurance coverage earlier than you could possibly enroll within the mortgage help program. The mortgage help program obtained to the purpose the place they had been paying your complete mortgage, as much as about $70,000 was the utmost quantity, however that is sum of money. Moreover, when you’re on unemployment insurance coverage, there’s this complete coaching program that the federal authorities have in place the place you may go get coaching, make a profession change, and it would not price you a cent, however you must be on unemployment insurance coverage. So to me, that is monetary recommendation.

It is my accountability as a monetary advisor that if I am coping with my candidate, which occurs to be in transition, I’ve gotta know all sides to that, not simply concerning the rollover, not nearly must you elect COBRA versus, now referred to as the Market? How do you take care of that severance? For instance, in California you may accumulate severance, vacation pay, trip pay, train these inventory choices, and accumulate unemployment insurance coverage concurrently. Many different states do not enable that. So I needed to turn out to be an knowledgeable as a result of I’ve gone past California. For a lot of, many, a few years, California was my playground, if you happen to would.

Now, I am licensed in each state as a result of all these firms, all these individuals on the market now know me because the knowledgeable. They contact me and say, “John, we cant you to do a presentation for a corporation out of New York, or Alaska,” and so forth. So the unemployment insurance coverage is an absolute key to someone’s transition to being profitable, and it perhaps, in some instances, unsuccessful.

Michael: Proper. So now assist me perceive slightly bit extra of simply the best way this developed for you as a enterprise. So you’ve this realization of, “All proper, I can do work with individuals going by layoffs. There’s alternatives right here. If I need to try this, I gotta get within the door with firms in order that I can do workshops, however my distinctive hook is not going to be 401(ok) plans as a result of that is what everyone else desires to pitch to.” Corporations there make use of advantages individuals, so you are like, “I’ll be the one who teaches about unemployment insurance coverage,” and attempt to get workshops with them that you just educate their staff about unemployment insurance coverage?

John: Yeah, it actually begins with that. That is my entrance foot, if you happen to would, that no person else delivers, in order that will get me in, proper, to most each assembly. And the unemployment leads into clearly retirement plans, COBRA, medical health insurance, the severance, how do you deal with severance? Are you able to file for unemployment insurance coverage? Among the firms nonetheless have these pensions. So we cowl each facet of economic planning, if you happen to would, with that entrance foot leaning on…principally it is by the unemployment insurance coverage. “Let’s at the least, earlier than you do enterprise or potential enterprise with us, let’s at the least put cash in your pocket. Let’s get that unemployment insurance coverage by the system. Just be sure you get it.” In the end it is not a game-changer financially for most individuals, however over time, Michael, it is saved lots of people’s houses, if you happen to would, and household environments, so we’re happy with that. That is will, if you happen to would.

How John Engages With Companies And Constructions Layoff Workshops [19:17]

Michael: So, assist me perceive this simply from the enterprise perspective, simply what you are doing at no cost, what you are doing paid. What’s in workshop group format? What’s right down to the person work that you just do with shoppers or prospects? Take me by the move slightly little bit of how this performs out as an organization. Initially, you get some connection to an organization that claims, “John, we would like you to do one thing with us.”

John: Proper, so the decision will are available in to me. I had two final week, main firms that contacted me and stated, “John, we have used you earlier than.” One has used us earlier than, the opposite one is new. All proper, let’s use the one which’s used us earlier than. “We perceive that you just do these workshops, John, you’ve got executed them earlier than. Can we use you once more?” Completely. On this case, it is a digital presentation. Previous to Covid, Michael, virtually 100% of what we did was in a face-to-face surroundings, proper? I’d drive up the California coast, if you happen to would, or leap on the aircraft if it was in Northern California, take my briefcase. In my briefcase I’d usually have piles of data that my spouse and I had set down throughout the week and executed flyers, if you happen to would, handy out to the contributors that come to the assembly.

So the advantage of what we do is that not one of the behind the scenes I’ve to fret about, different than simply getting these packages collectively so I can have a number of handouts. Virtually 100% of those those that present as much as these conferences is being managed by the human useful resource division or internally at their finish. In order that makes it…

Michael: So these are usually attendance necessary conferences for the corporate, so good for turnout? You do not have to fret a few excessive no-show fee?

John: That is proper. No, a no present might be near 99.9%. In the event that they stated there’s 400 individuals there, if there’s 399, one’s off to the aspect perhaps taking a rest room break for some time, proper?

Michael: Okay, very good from a turnout. So if an organization is reaching out, if that is the way it initiates, does that imply actually they’re doing layoffs, they’ve determined to do layoffs, they’re now making an attempt to determine their course of for layoffs they usually’re going, “Oh, we should always most likely have somebody in to speak to the staff to assist them on this transition,” after which your identify comes up? Is it at that degree, the corporate did not simply say, “Hey, we’re doing occasional instructional lunch-and-learns for our staff. Let’s have John are available in.” It is a “We have determined to do layoffs. We have to begin getting ready to assist our groups.”

John: So Michael, I’ve obtained a number of tales there. To reply the query, 90% of the time these individuals know they’re getting laid off.

Michael: Why?

John: As a result of there is a federal legislation that is referred to as WARN, W-A-R-N, Employee Adjustment Retraining Notification. So, by legislation, if the corporate is shedding…and California, for instance, in the event that they’re shedding greater than 50 or extra staff inside a 30-day interval, they need to notify the staff. They gotta let the staff, “You have obtained 60 days earlier than you are going to lose your job.” In that 60 days, the notification has gone out, and I am a part of a staff, if you happen to would, and topic consultants that get referred to as into that 60-day interval to do these workshops and put together them for the upcoming transition. In order that’s good for me as a result of they’ll plan round that. After which there’s the opposite 10%, the place they’re below 50, perhaps they’re discovering out. I have been in instances, Michael, the place I’ve proven up at an organization, the staff have been instructed 5 minutes or half-hour earlier than I stroll into the constructing they usually’re emotionally a wreck, proper?

Michael: And also you’re on. Yay.

John: Proper. “And right here we now have a monetary advisor that is going to provide you monetary recommendation.” It is like, “I already do not need to hear from this man, thanks very a lot.” So in that situation I turn out to be extra of a, for all intents and functions, a cheerleader. “Hear, I do know you are going by this layoff. That is what I do all day. I am touring extensively to be in entrance of individuals such as you to let you recognize every thing can be okay. You have gotta make monetary selections. Put your head up. It’s important to make monetary selections. It’s important to go after the unemployment insurance coverage. It’s important to go after this stuff.” And that enables them at the least slightly little bit of hope sooner or later.

And I will contact them clearly, perhaps days later, every week later, “Hey, keep in mind me? I used to be the man there that did the pick-me-up, the monetary advisor.” So I’ve many, many, lots of of tales in that case. I have been to nicely over 600, virtually 700…I am free with my numbers right here, however over 700 firms within the final 20 years, if no more.

Michael: Yeah. So now stroll me by slightly bit extra of simply the method of what occurs as you undergo these and there after. So firms, they’re gearing as much as do layoffs. They’re reaching out to you to return in and do training. By the point you are coming in, at the least more often than not, staff have been knowledgeable that layoffs are coming as a result of WARN Act required them to take action, in order that they know the layoffs are coming.

Hopefully they obtained instructed greater than half-hour earlier than you are available in, however they know it is coming, so presumably then they’re already within the psychological state of, “Okay, I’ve obtained stuff to determine. I am searching for data. I am searching for somebody to information me about what to do right here as a result of I am slightly freaked out about what’s about to vary with these layoffs.” So that you are available in, you do an academic session or a workshop that may be very closely round unemployment insurance coverage, and what to high quality, and what the principles are, and not disqualify your self, and why it is actually good to do it due to the opposite companies that you just entry?

John: Proper.

Michael: So what occurs because the workshop closes and there after?

John: So I’ve realized that, at the least initially, that if you happen to’ve obtained 50, 100, 400 those that you must name, that is plenty of work. So I obtained actual delicate with my time administration as a result of I used to be so busy. And we’ll actually speak about all of the individuals I used to be signing up. I put that stress on the employer, that means you recognize the work schedule of your employer. I’ll come again. Put me in an workplace, put me in your cafeteria, however I would like back-to-back conferences. I can be right here for 2 or three days, ideally in an workplace as a result of we’re speaking about monetary stuff. We would like some type of privateness. So, I put all that workload on the employer, so all I am doing, Michael, on the day of they have my schedule. I will be there from 9 to five. There’s instances the place you’ve got obtained, particularly in these manufacturing crops that I used to do initially, they’re on two or three shifts, if you happen to would. They’re 24-hour operations so I could possibly be there at 6 within the morning, all the best way til midnight.

Michael: So workshop kicks off very first thing within the morning, and you then’re simply there for the remainder of the day taking one assembly after one other that the employer schedules with, they inform their staff, “If you’d like some follow-up time with our consultants, schedule by us. We’ll put you on the calendar.” And you then simply get this flurry of 1 assembly after one other with staff for whoever desires time with you for follow-up questions on unemployment, and layoffs, and the transition?

John: That is appropriate.

Michael: And the way lengthy are these conferences? What number of and the way stacked are these?

John: Oh, nicely, I nonetheless humbly maintain the corporate file at 33 in someday, so I had 33 conferences in someday.

Michael: Ouch.

John: It was an ouch.

Michael: Sorry, you are right down to…

John: Fifteen minutes.

Michael: Yeah, I’d say, 15, 20 minutes per assembly stacked all day lengthy?

John: That is proper, 15 to twenty minutes. So how do I put together? So on the workshop I am attending to fill out a questionnaire. “What do you’ve? What are your questions? Do you’ve questions associated?” So not solely I am getting ready to have the data discussion board, as a result of within the 15 minute, I am not signing them up. We’re not stepping into there and, “What’s your date of beginning, first and final identify, your Social Safety quantity? Let’s get that rollover executed.” That occurred. Extra occasions than not individuals would say, “Hear, I preferred your presentation, John. You talked about sure issues. I do really feel I am higher off served to have my cash elsewhere. Can we do the applying?”

Usually I’d push that off except they had been like, “I must signal now. I want that piece of thoughts.” So majority of the time you go into the assembly, it is usually not more than 20 or half-hour. I am simply gathering data. That is all I am doing at that time, gathering data, getting as a lot as I probably can to return for that second assembly. So I will be on the firm for that presentation. I will do the one-on-ones, if you happen to would, after which from there there’d be a handful that will say, “Yeah, no thanks. I’ve a monetary advisor,” or, “I am not prepared for that,” or regardless of the case could also be. However there could be handful that will say, “John, I need to work with you within the capability of XYZ.”

Michael: Okay. So the main target of this 15 and 20-minute assembly is a mix of, “What points are in your thoughts that I can reply for you?” And I do know individuals have a, “Hey, this is my unusual scenario. Am I nonetheless going to get unemployment insurance coverage? Or I’ve obtained this different factor occurring, how does this apply to my scenario,” proper, simply the individuals who have extra nuances or extra complexity in order that they weren’t absolutely lined within the workshop in order that they schedule a observe up. So that you’re masking questions like that and simply reside on-the-spot recommendation. However then, on the finish of the assembly, or at some a part of that assembly, saying or seeding the concept of, “And if you would like an advisor that may work with you in an ongoing foundation to assist with a few of this, hey, I try this additionally. And we will do a follow-up assembly on that if you would like,” and a few say sure and a few say no.

John: That is proper.

Michael: Okay. So a pair different questions, is there additional observe up after that? Or is it simply you do the workshop, you do the on websites for a day or two, or nonetheless lengthy it takes to get by all of the those that needed to schedule one-on-ones, after which that is it? And also you’re off to the subsequent enterprise and the subsequent workshop, and anyone who did schedule follow-ups could turn out to be a consumer, goes by an everyday new consumer course of at that time?

John: That is appropriate, yeah. Over the preliminary starting phases of this there was an unlimited quantity of layoffs. After which California, too, with the quantity of firms we now have right here and simply individuals typically, I used to be at all times busy, Michael. I had no time, no time in any respect. I am speaking about I had zero time to really have lunch, if you happen to would. It was, “All proper, on to the subsequent firm.” No sooner did I’ve these first conferences, it was the second assembly was, “We’re doing enterprise.” Within the first 15, 20 minutes in that preliminary assembly, it was very uncommon for me to enter a second assembly and second guess myself that that individual was not going to turn out to be a consumer. It was, you wanted to turn out to be a consumer. If in that second assembly they had been giving me, “Ah,” there wasn’t heat and fuzzy, they had been trying perhaps at not doing it, I’d simply transfer on.

Michael: As a result of, once more, there’s a lot quantity. The opposite factor is, there’s a lot quantity as you are doing these. What number of workshop and one-on-one cycles would you undergo? It is like firms, what number of firms would you undergo doing this within the span of a yr?

John: I believe probably the most I did in a single yr was nicely over 100.

Michael: Oh, wow.

John: Oh, no, it was unimaginable.

Michael: So at that degree, you are dwelling in a world the place chances are you’ll get to take a seat in entrance of actually dozens of prospects per week on an ongoing foundation.

John: Oh, a day.

Michael: So very a lot a world of, “You need to work with me or transfer on. I am not going to chase you. It is okay. If you wish to work with me, let’s go. If not, I’ve obtained 30 different individuals to speak to right this moment.”

John: That is proper. No, it was the second assembly was, I name the Holy Grail. Let’s get right down to enterprise right here, proper? And again then, I used to be making an attempt to include monetary planning, going by the entire holistic method. It was, “Nicely, I haven’t got time to try this.” For the primary 10 years it was all transactional, Michael. I’d take an software with me. The perfect know-how I had at that time was my cellular printing machine. I’d take that with me and spin out purposes in that second assembly as a result of I wasn’t going to return for a 3rd assembly. And that is nicely earlier than we had DocuSign, if you happen to would, proper? Again in these days you needed to have a tough copy in entrance of you. You needed to undergo that with the shoppers, and that took up 50% of your assembly simply going by the applying, if you happen to would. I needed to do shortcuts. I needed to study shortcuts. So for me to do the monetary planning and incorporate that was close to unattainable.

Michael: So do you receives a commission for the workshops? Do the businesses pay you to return in and do that as workshop work, after which chances are you’ll get one thing separate?

John: In no way. In no way, Michael. To me, it is goodwill. That was my accountability to do that. No person else was doing it, and to my shock within the yr 2022, there’s most likely a handful of individuals I do know that do it. One in all them is an ex-employee of mine, if you happen to would. However be as it might, it is onerous work. It is actually onerous work. There was an unlimited quantity of hours that I put into this, Michael, weekends, late nights. And people sacrifices, if I can use the phrase…perhaps it is not the perfect use of phrases, however I put plenty of time in it.

Michael: And so in the end out of your finish, joyful to do these workshops not paid, as a result of on the finish of the day, I am getting in entrance of dozens and dozens of prospects each week. And if you happen to see that many individuals and also you assist that many individuals, it’s simply an inevitable actuality a bunch of them are going to need to work with you. They’ve a necessity and also you helped them. They’ll need to proceed to work with you.

John: That is proper. Yeah.

The place John Stokes Monetary Stands At present [34:14]

Michael: So, assist us perceive then what that provides as much as when it comes to the enterprise right this moment. What is the present state of the enterprise of shoppers, or property, or staff, or nonetheless you measure it?

John: Yeah, okay. So our inner phrase we use is “transition and thrive.” That is what our workshops are. If you happen to take a look at our web site we’re very clear about that. We’re thriving. I do know you are going to gasp, Michael, with the quantity of shoppers that we now have, however we now have roughly 1,800 shoppers managing simply north of [$]400 million*, between the 400 and 450. Clearly that is dropped slightly bit this yr with the market.

Michael: Yeah, markets doing what markets are doing, AUM numbers extra risky than they had been prior to now yr or two. So 1,800 shoppers, simply north of 400 million, so if I do my serviette math, typical consumer is $200,000 to $250,000 of property below administration. That is, at the least as I’d envision for the layoff surroundings that you just’re in, you get a reasonably large swath of fairly center market people. “I have been working for 10 or 20 years, I’ve gathered some {dollars}. It is not sufficient for me to retire, which is why I am in transition and never retiring. However I want some assist and I want somebody that may assist me steward what I’ve obtained whereas I’m going by this transition,” in order that’s the place Stokes Monetary steps in.

John: Yeah. And clearly these numbers could also be distorted slightly bit as a result of earlier on I used to be, once more, as I discussed, if I can do a $20,000 rollover again in there, I’d signal them up and that is after I went to work.

Michael: Positive, so legacy consumer, barely smaller common, new consumer, barely larger common, as many people evolve over time.

John: Yeah. It is not unusual for us to see million-dollar accounts nowadays. I’ve damaged it down into what I name an govt staff. I am on that govt staff the place my essential accountability is I am the inner rainmaker, if you happen to would. It is my identify, I get the referral, and relying on the dimensions of that, that goes to a particular staff, if you happen to would, a particular advisor staff right here on the firm.

Michael: So then assist me perceive what the general staff construction appears like.

John: So there may be six what we name producing advisors, and there is seven operations. Out of the seven operational workers, three of them are literally licensed advisors. They staff up, a number of of them staff up with me personally to assist with my e-book of enterprise and repair that e-book of enterprise, as a result of I’ve obtained the e-book of the shoppers. After which the opposite advisors could have a, both relying on their size of interval they have been with us, how a lot new enterprise they’re bringing in and servicing, they’ll have one licensed advisor, or at the least at minimal could have a full-time assistant that is serving to them service that e-book.

Michael: And so what’s a e-book of shoppers in your advisors? How do you consider or set targets of what number of shoppers an advisor can deal with given your typical clientele?

John: In order that brings up what we began. So pre-Covid we had been on that treadmill, so we had been doing 150. In all probability pre-Covid there was 150 workshops a yr. That is what we had been doing. We had been throughout California. We’d present as much as these shows and we’d have one after the opposite, so it was chaos. It wasn’t till Covid hit, clearly we could not do in-person workshops. That modified the place now we now have different codecs of doing it, clearly digital is the brand new approach of doing it. So we have taken a breather during the last couple years, Michael, and checked out this and gone, “Okay, what path do we have to go? How can we, for all intents and functions, make it possible for these shoppers…” As I stated earlier, for all these years I have been very transactional, grabbing the 401(ok)s, certain, serving to them out with the monetary planning, start on the budgeting, the unemployment insurance coverage, however we actually by no means had a real consumer expertise with the monetary planning.

So we employed a paraplanner, and his accountability is to…he has during the last couple of years, he is gone into the e-book of enterprise and recognized who must be on a monetary planning service mannequin, and we do not cost for that. We incorporate that as a part of the service, at the least at this level. So for us, we’re going again and having a look again in time to go, “These shoppers want this service. Let’s invite them.” And we’re utilizing eMoney as our platform.

Michael: Okay. And so for the shoppers now getting extra planning recommendation companies, if you happen to’re not charging individually however you are going by the e-book, I am presuming that is primarily shoppers above a sure asset threshold, or income threshold, or simply the enterprise can afford to speculate into the shoppers this fashion, that is who you goal?

John: That is proper. That is appropriate.

Michael: So the place do you consider setting that threshold simply relative to what you are promoting and economics? The place does that make sense for you?

John: Anyone with $200,000 of property we’re focusing on now. Clearly we began with a lot larger than that, however that is what we have labored our approach by. And what we now have discovered is the quantity of outdoor property that we now have left behind over time is astronomical. If I threw numbers out at you, you’d be amazed. So we’re bringing plenty of these property in. We’re telling them the story. We’re giving them the expertise. We’re strolling them by the choice making with eMoney. Numerous that is digital they usually’re loving it. So hey, John, Stokes Monetary, I wasn’t conscious. I simply thought that we did the rollovers and some different issues. That was the extent of it. I am loving this expertise, as we’re. We’re loving the expertise as a result of we’re attending to know the consumer extra.

Michael: So I am curious, as a result of that is an attention-grabbing problem for lots of corporations that simply plenty of us in-built a extra transactional quantity enterprise. Then, as trade evolves we attempt to get extra monetary planning centric, and also you hit, to me, these typically awkward moments of, I’ve obtained this consumer that I’ll have been working with for 3, or 5, or 10 years, however the actuality is it is a extra transactional relationship. I do not know them that nicely essentially, which is why there’s a chance to exit and do planning, and interact them extra.

However then you must determine simply attain out to a consumer that will have been with you for a few years and say, “Hey, you’ve got been a consumer right here for 5 years however we might prefer to get to know you higher and do extra for you.” So I am questioning, how do you roll this out and talk it to current shoppers that weren’t getting the service, the place you need to say now, “Hey, can we do that for you,” in a approach that does not undermine the connection that was already there?

John: Yeah, that was our preliminary thought course of is, “Oh, are we going to shake them up slightly bit right here?”

Michael: It is a superb line between, “We want to do extra for you,” and, “We’re unwittingly accentuating how perhaps not as ideally related we had been to you within the first place.”

John: Nicely, it comes right down to true at coronary heart in that we apologize. “Hear, for all these years we have been very busy. You met us in transition. You knew how busy we had been. We’re only a busy operation. We’re slowing down right here. We apologize. You most likely did not get the complete service of what we might’ve supplied you, however we have been a busy operation.” I grew from having 1 consumer to 1,800 shoppers, so we inform them that story, and it is a distinctive story. They usually do know that we’re a agency that’s all about rising. So, in expressing it that approach, we had zero backlash. If something, it was, “Wow, thanks for being so honest, John. I do recognize the form of thought course of behind that. Inform us extra about what is going on on there.”

Michael: Fascinating. So that you virtually leaned in to personal it and simply say, “Hey, there have been plenty of layoffs. You transitioned rapidly. We had been rising rapidly. We simply have not actually had the chance to speculate on this relationship with you, and we acknowledge that perhaps we missed that slightly with rising so rapidly to 1,800 shoppers. Can we come again and perform a little extra for you?”

John: Proper, and it is gone over extraordinarily nicely. And positively Covid was an enormous a part of that, the place, “Hey, we’re not operating up and down the state anymore and doing these shows the place you’ve met us. We have the brakes on slightly bit. We would like to essentially get to know you and your loved ones extra,” they usually’re loving it, as we’re.

Michael: And so from a staffing finish, it seems like, since you’ve already obtained plenty of advisors which have plenty of shoppers they’re servicing as is that the best way you deal with this from a staffing finish is we’ll have a centralized paraplanner who’s going to grind, and construct, and ship plenty of these plans as a result of our current advisors won’t have the capability. Am I understanding it proper, simply the, how can we operationally ship on this?

John: Yeah, at the least within the preliminary phases, the monetary advisor is the connection supervisor of that consumer. The paraplanner is coming in additional on the operational standpoint and going, “All proper, I will do the onerous lifting, if you happen to would. I will get the info, do the plan. You may ship the plan.” Or, “I could be concerned in that as nicely, if you happen to would.” So that is what we have been doing during the last couple of years.

Michael: And does the paraplanner usually try this supply?

John: It depends upon the advisor. The paraplanner we skilled in home, he truly was once a monetary advisor with us and went on and did a number of different issues, then got here again to the agency. So we have in-built what we would like, the communication, and relying on the advisor. I would like my paraplanner with my shoppers to be concerned in each dialog to the purpose the place he now leads that dialog.

Michael: So how do you consider ongoing servicing and interesting with shoppers? Is that this a, “We’re going out to them this time to do some planning work and get to know them higher?” Is that this going to be a, “And we’ll do plan updates for you on an ongoing foundation.” How are you fascinated with this as an ongoing service mannequin now?

John: I most likely will find yourself, this is part of my follow administration, if you happen to would, working with my coaches internally with out our dealer seller, if you happen to would, is clearly we now have to undergo a segmentation interval, determine which one, the place is that supply initially? What we’re engaged on now’s simply bringing in all the skin enterprise, Michael. It is astounding how a lot outdoors enterprise was on the market that we’re now bringing in. In order we convey that in, that is giving us plenty of work to do. In order that unfolds, and we’re within the means of that, as that will get busier, I do know I will must construct out most likely extra paraplanners, if you happen to would, and extra service as that. As a result of, sure, the best way that we now have introduced this, this can be an ongoing service that they’ll have with us.

How John Advanced His Agency By Including Payment-Solely Monetary Planning [46:29]

Michael: So, I am struck by the character of the mannequin that, notably in environments like we’re in currently, one of many longstanding challenges and criticisms round, I believe, simply the AUM mannequin typically is simply the cyclicality of it, such as you’re rising in bull markets. Because the bull markets rise, you get a pullback in bear markets, which is barely additional compounded by the truth that shoppers are usually extra antsy, and have extra questions, and sometimes want extra conversations and repair within the midst of a market decline, whereas income could also be down. I really feel just like the trade’s dialogue has at all times been, “However hey, at the least the excellent news is, when markets are down, advisors that weren’t serving shoppers will get dislodged. You may have all these progress alternatives,” though I discover in follow that progress nonetheless is fairly onerous in the course of a market decline.

Numerous shoppers simply do not actually need to open their envelopes, or the emails now, in bear markets. They typically do not actually begin shifting till 6 to 12 months after the bear market once they pull the ostrich head again out of the sand and go searching. Simply I am struck by the character of what you are promoting and mannequin. I really feel such as you really have a counter-cyclical mannequin as a result of when the bear market and the recession is on, that’s the growthiest of occasions while you focus on layoffs. It is the bull markets when everyone’s hiring and no person’s shedding that get slightly tougher. However markets are rising, that is nonetheless not unhealthy information, and clearly there’s at all times some firms which can be shedding at any specific time. So do you see that in follow, that your growthiest occasions come throughout market declines and bear markets as a result of that is when layoffs pickup?

John: Mockingly, no. Michael, pre-Covid, there was by no means a month ever, and at that time…so in 18 years, I by no means had a sluggish month as a result of there’s at all times mergers and acquisitions occurring. California is in itself a transitional state. Corporations do not need to pay the excessive charges as a lot as they used to, if you happen to would, in order that they’re leaving California. So no, I’ve by no means seen a interval in all honesty the place it was sluggish, and I at all times thought that was unusual, to your level, is, okay, John’s going to be busy throughout…now do not get me fallacious. As I stated earlier, I did 100 firms one yr, and perhaps the next yr I did 30 or 40 however that is nonetheless busy.

Michael: Yeah, darn, we’re solely seeing virtually an organization every week, scheduling dozens of conferences, and standing in entrance of lots of of prospects each week.

John: Yeah, to your level, we had this bull market, proper, since ’08, ’09, and you’d suppose that John would not be busy. However as I stated earlier, we’re doing 150 workshops a yr, so there is no such thing as a decelerate right here. And actually, even with my digital conferences now, these are executed throughout the nation. I might most likely, if I need to set it up, do one or two each single day. So that is what I’ve discovered attention-grabbing initially. I stated earlier, after I joined that Fortune 100 firm, initially they had been, you are going to take care of individuals layoffs, however what are you going to do when there is no such thing as a layoffs? You already know what? I’ve to ponder that concept, however for now, that is not my fear.

Michael: Yeah, not the issue.

John: Proper.

Michael: So assist me perceive how this developed simply from the precise enterprise finish, proper? As you stated, early on you had been working in a transactional insurance coverage surroundings. Clearly all of us begin someplace on our personal of simply us. Now there’s 13 individuals over there between the advisors, and operational assist, and license people. So I am simply questioning, how did this transition for you in follow? As a result of I am envisioning because the enterprise is getting going, and you have this actually excessive quantity of workshops that the squeeze should’ve come comparatively early for, “Okay, it is working. I am getting all these shoppers, however I haven’t got any time to service all these shoppers as a result of I am getting all these workshops.”

John: That is proper. Nicely, for the primary 10 years, principally, I set it up the place it needed to be transactional, in that every thing then was both a mutual fund, or I believe ETFs had been changing into considerably widespread then, so it was all fee primarily based. I did not get licensed as a fee-based advisor, the sequence 66, I believe, till 2010. In order that 400-plus million actually began again in 2010 after I joined a dealer seller. It was a smaller dealer seller out of Florida which I completely beloved, beloved everyone that labored in there. All of them supported my enterprise mannequin. There was a interval the place I had the CFO of this dealer seller, he could not imagine how a lot I used to be doing within the purposes. “Now John, I’ve gotta come out right here and sit with you in considered one of these workshops and undergo the entire course of,” and he did. He jumped on the aircraft, got here out to California. I took him to considered one of these firms and he was simply mystified, proper?

He says, “However I’ll let you know one factor, John. You have gotta get out of this fee enterprise, and the explanation I am right here is due to the compliance guys are having strokes up there in Florida over what you are doing right here. Get your self into the AUM mannequin. Beginning constructing in that as a result of over time you are going to thank us for that.” So it wasn’t till 2010 after I awakened, if you happen to would, and realized that, boy, yeah, doing A and C shares shouldn’t be the appropriate solution to go. Let me now change the way forward for this, so that is what befell.

Michael: So assist me perceive slightly extra, what was compliance involved about? I am simply envisioning, it is a dealer seller in 2010. Fee-based mutual fund is what most individuals did, so it is like, that was the surroundings of the occasions, so why was compliance upset that you just had been doing mutual fund enterprise within the mutual fund period?

John: I believe it was extra parking-the-bus philosophy, in that, “John, you are so transactional. You are probably not going again and servicing these shoppers, and that is considerably of a priority for us,” proper? And that made sense, all proper? I can not keep in mind what guidelines had been being put in place. It actually wasn’t the fiduciary rule, however again then, Michael…

Michael: However yeah, a few of that dialogue was beginning. FINRA was selecting up slightly extra to say, “Hey.” Nicely, and there have been a bunch of the B share debacles then as nicely, so FINRA was trying extra and saying, “Hey, a few of you might be getting a reasonably non-trivial quantity of trails in these A shares and particularly C shares. What are you doing for these shoppers on an ongoing foundation for these ongoing trails?”

John: That is proper.

Michael: So what was the concept of shifting to the fee-based aspect in that context? Was it simply steady? The irony to me is that if the priority is that this enterprise could also be too transactional. Let’s go placed on a fiduciary, fee-based hat shouldn’t be at all times on the prime of some individuals’s checklist at that time. So what was the motive force to the impetus to say, “Hey, we should always do that on the fee-based aspect?”

John: I believe it was extra, “Decelerate right here. You are going too quick, John. This highway for everyone that you just’re on, that we’re on from a compliance standpoint is nearly too hectic, the place you are getting an unlimited quantity of enterprise in.” I believe within the first 4 years I signed up near 500 shoppers, if you happen to would, proper?

Michael: Wow, okay.

John: Yeah, and plenty of that was below the non-compete I had with the primary Fortune 100 firm. So sadly I needed to go away behind plenty of these shoppers, they usually’ve since contacted me over time. “Hey, John.”

Michael: Proper, a few of them discover you. However so that you needed to break free from the unique firm, do a very recent begin since you could not convey shoppers with you, so that you went all in on workshops and it labored.

John: Nicely, this is the irony, Michael. Here is the irony of that, that firm that I labored with, I did 4 years with them. For the primary two years they had been like, “Oh, John’s nonetheless doing this transactional enterprise right here. He is bringing in plenty of enterprise.” After which I modified department supervisor. I used to be driving from Orange County up into Beverly Hills every day, so on prime of every thing I am doing I’ve obtained this morning commute and night commute that will take me anyplace from three to 4 hours. It was brutal, proper, however that gave me time to at the least make my telephone calls to these shoppers and say, “Hey, the way you doing right this moment,” proper?

Michael: Throw on a headset, do some telephone calls, yeah.

John: Cellular workplace, we referred to as it. So in that third yr I went into the Irvine workplace and began working down there, near residence. The department supervisor had gone by my desk and pulled out a number of enterprise playing cards of facilities of affect that helped me over time.

Michael: Oh.

John: Proper, and the middle of affect referred to as me and stated, “John, who’s this man that is calling out of your firm desirous to convey his advisors into these firms that all of us assist out?” And inside hours, Michael, I needed to make virtually a profession resolution to both enable…the middle of affect on no account would have allowed anyone to go in there. Their belief was with me. I had been doing this for a few years. I used to be good at what I do. Why would they need to convey someone else in there, proper?

Michael: Proper, so the COI is simply going, “What the heck is happening together with your firm, John? I obtained a relationship with you, we’re good. Why is another person calling out of your firm to pitch another advisor that is not you to return in and do what you do?”

John: That is proper.

Michael: And the department supervisor was doing it since you’re so darn profitable at what you are doing and getting shoppers that department managers had been simply making an attempt to get in on the sport? Mainly?

John: Yeah, we might have these firm conferences, Michael, you keep in mind them, each Friday morning you needed to sit down there.

Michael: Weekly assembly, take a look at who’s on the board this week.

John: That is proper. And humbly, I used to be usually on the highest there. And the opposite advisors needed a chunk of that motion, and you may’t blame them. It is like, “Yeah, Stokes is on the highest there but once more, but once more, but once more, so hey, department supervisor, do one thing about this,” proper? So actually, inside days I resigned and determined that, “All proper, it is time for me to do issues alone.” And that is after I turned an unbiased advisor. That is after I went down these channels.

Michael: So discuss to us extra concerning the transition of being so heavy into the fee primarily based aspect within the early years by 2010, after which the CEO comes out and says, “John, you gotta get on the charge primarily based aspect so you may decelerate slightly and be capable to simply dig in with shoppers slightly extra, and assist them extra on an ongoing foundation.” However I do know simply the maths of that’s onerous. I am making an attempt to recollect fairly the place we had been on fee scales by 2010, however I believe we had been nonetheless in a 4% to five% a share vary then, and so simply virtually talking, going from $100,000 consumer that’ll pay you $4,000 or $5,000 on an A share, to $100,000 consumer who’ll provide you with a $250 quarterly charge 3 months from now, first quarter in AUM billing. That is a extremely massive shift simply to the enterprise, so how did you navigate simply the commissions to charge transition at that time?

John: Nicely, that was attention-grabbing. It was virtually inertia in that as quickly as I obtained licensed as a fee-based advisor, my confidence degree skyrocketed. I do not know why. I, nonetheless, right this moment, I can not clarify it, aside from these people that had monetary advisors and that had their 100, 200, 300,000, thousands and thousands of {dollars} had been now sitting down with me to go, “Oh, so you are not charging commissions. You are like my present advisor, you are on the fee-based platform. Hmm, I want to meet with you, John, and speak about that.” So these larger certified shoppers, if you happen to would, had been now having conversations with me.

Michael: Fascinating. In order that they, for higher or worse, larger high quality shoppers had been, name it, sniffing out that you just had been on commissions and did not like that you just had been on commissions, and while you weren’t on commissions instantly simply extra of these conferences and prospects had been prepared to speak to you?

John: That is proper, yeah. And as my confidence degree went up, I used to be telling that story to those firms that will principally rent me, for all intents and functions, going, “Hey, hear, let’s simply phase this. I will do your blue-collar employees and we’ll knock that out together with your higher degree C-suite, if you happen to would. That is going to be slightly bit extra on the monetary planning aspect, if you happen to do not thoughts.” “Oh, that is superb, John, so long as you give the identical message and also you assist everyone out, that is all we would like out of this,” proper? My job was going to the businesses and make them seem like heroes.

In order the staff are leaving, they are not having destructive experiences, they’re having optimistic experiences, at the least from the monetary standpoint. So as a substitute of doing the $20,000 transaction rollover, if you happen to would, now it turned $100,000. Okay, the numbers are making sense right here, and that is the way it labored out.

Michael: So what does the income combine seem like right this moment? Are you continue to on the BD aspect? Is all of it charge primarily based? Is it nonetheless a combination of every?

John: It is 98% charge primarily based. Very seldom are we doing any commission-based enterprise nowadays in any respect.

Michael: So presumably you then nonetheless reside in a dealer seller surroundings for what’s left on the commission-based aspect, proper? It is not zero, you must have some relationship there.

John: Yeah. We actually do, yeah.

Michael: So can I ask, who’s your dealer seller platform at this level?

John: Securities America.

Michael: Okay, and so is the fee-based aspect below Securities America RIA, or do you’ve your individual outdoors?

John: No, with the RIA. And so the query is, why? I have been so busy, Michael, for all these years, and nonetheless very busy. I’ve not often had the time to step again and go, “All proper, what we’re doing now’s going again and taking a look at these present shoppers and providing them extra service, proper? That is crucial proper now.” After which, as soon as we try this and undergo that course of, it would make sense to do an RIA. We’ve not obtained to that time but.

Michael: Yeah, I am simply curious even how you consider it in that surroundings. It is one factor when half my enterprise is fee-based and half my enterprise is brokerage, however sooner or later, the chances shift sufficient. You get new and completely different selections in entrance of you.

John: Yeah. Nicely, we all know what we’re good at. This agency is exceptionally good at what we do in serving to individuals in transition. And there is enterprise on the market, that is our focus is we’re nonetheless rising. I’ve particular targets I need to attain for the corporate and my workers. We have gone by a complete follow administration advisory group. Securities America Advisory Group have an distinctive teaching program, completely, 100% distinctive, and so we have gone by that and that is been a significant sport changer for us.

Michael: And so how does that work inside Securities America? What do they provide? What do you get while you have interaction with the teaching program there?

John: They name it subsequent degree, so initially it is, let’s take a look at the marketing strategy. Let’s check out the place you are at. Let’s have a look at what we have to do to reinforce that, proper? And plenty of that got here, “John, you’ve got been very transactional again over time. Let’s return to these shoppers and provide them that higher degree service,” so that is what we did, and getting the skin enterprise. There’s lots of of thousands and thousands of {dollars} that we now have entry to on eMoney that we’re taking a look at on daily basis, going, “John Stokes Monetary want to get a few of that, if not all of it.”

Michael: In order that’s a part of the chance simply in going again by the monetary planning course of in complete is, now you truly get a deal with on not simply what they’ve with you, however what’s in the whole monetary image. And in the event that they do account aggregation in eMoney, you actually get a reside, actual time, this is precisely the place all of the {dollars} within the family are. Are there any others that you could possibly be serving, as a result of you may see they’re with an advisor not doing great things?

John: That is proper, yeah. And the enterprise that we’re getting from that, I had a consumer that is been with me for 16 years, had a really small account with us for a few years that is receiving thousands and thousands of {dollars} in an inheritance, and that dialog happened with me simply going again to say, “I might like to only give you extra.” “Oh, nicely, John, by the best way, glad you reached out to us as a result of we’re speaking with the monetary agency.” It was an uncle. We had been speaking with the monetary agency the place the uncle was doing enterprise with. “Glad you reached out, we want to meet with you, and several other of the members of the family have turn out to be shoppers with thousands and thousands of {dollars} in property, if you happen to would, that probably won’t ever have come our approach.”

Michael: Proper. And so then do you pay for the teaching providing, or it is simply included for Securities if you happen to’re at a sure degree of manufacturing?

John: We do, we pay for it, however to me, it is minimal. You get to speak together with your coach a number of occasions a month, in some instances extra for one hour. It is within the $300 vary. To me, that is price completely each cent and a few.

Michael: 300 {dollars} per…

John: Per 30 days.

Michael: Per 30 days? Okay.

John: Yeah, once more, it is minimal.

Michael: Yeah, it is very, very reasonably priced for knowledgeable coach conversations.

John: And these are good coaches that we’re in entrance of. Clearly, I believe they’ve given me cream of the crop due to the form of manufacturing we’re doing and what degree we need to go to as a agency. However my expertise has been nothing however very optimistic. They usually’ll put the brakes on us to say, “John, it is nice that you’ll develop, however let’s take this era, actually throughout Covid, the place we will take a look at what’s working, what’s not, what must be improved, what you need to go away behind,” in order that’s been a beautiful expertise for us.

Michael: Okay. So I am additionally questioning, you’ve this, to me, you’ve an attention-grabbing mannequin in that so many purchasers come into service, proper, approach, approach, approach past what one individual might ever remotely handle. It is why you’ve got ended out with a half a dozen. However you do not essentially want advisors that drive plenty of enterprise improvement since you’ve obtained a machine for going out and doing these workshops that I’ll presume simply retains rising as you construct your status, and your expertise, and your community. So you’ve, to me, a really distinctive steadiness of how excessive of a quantity of shoppers you may usher in your self, however then how excessive of a quantity of shoppers that should be served. So how do you method simply the method of hiring advisors and staffing up? The place do you discover the advisors and the way do you prepare the advisors to do that inside a agency?

John: All of it comes from…A majority of our advisors on the agency have come by referrals, and that we all know that we’re a, for all intents and functions, a advertising machine. That is what they hear about us. And so by a present advisor, he could refer one other advisor by perhaps going to a convention, if you happen to would, and go, “Hey, I’ve obtained a number of hundred shoppers that I’ve acquired during the last 10 years.” “Nicely, how did you try this?” The man I am working with has been within the enterprise for 25 years plus. I am his junior advisor however he has lower than 100 shoppers. How is it that you just’re doing this?

In order that they inform the story after which they arrive in for an interview. We interview not a lot on the credentials, Michael. I’ve employed probably the most clever CFPs. They have all these designations, they’ve it labored out, and since they both did not need to do the transactional aspect of it, they needed to enter rather more of the planning aspect of it, or they did not need to make these drives. They did not need to be on the freeway for the two-plus hours on daily basis. There are completely different circumstances clearly. Or a few of them, you try to educate them sure issues about someone in transition, for instance, the entire unemployment insurance coverage factor, they usually go, “John, that is not why I obtained my designation. I do not need to do one thing like that at no cost, I need to cost. If I’ll sit with someone and have them undergo the applying, if you happen to would, with unemployment insurance coverage, ought to I not be capable to cost for that?” Nicely, we do not.

That is a part of our goodwill. That is our outreach, if you happen to would. So the advisors I’ve, unbelievable, obtained empathy, perceive that we’ll educate them every thing they should know particular to someone in transition, and that is your area of interest. You need to signal onto that, that is the corporate to be with.

Michael: So then, what are you hiring for or screening for? If it is not credentials as a result of you are going to educate them what they should learn about working with shoppers in transition, what do you assess or consider to strive to determine who’s going to be match or not?

John: Initially, their human expertise. Are they personable? Do they care? Within the interview course of, if I am telling unhappy tales about someone in transition, I’ve loads of these, Michael, the place individuals simply completely heartbroken. Dropping your job within the type of a layoff is, it occurred to me. It is not a pleasant expertise, and there is lots of people on the market, 1000’s that I have been in entrance of which can be completely turned the wrong way up. So we’re searching for someone with good human expertise, and what does that imply? That simply signifies that, are they distinctive sufficient the place they’ve their very own life story? Have they skilled individuals earlier than which have gone by layoffs? Do they perceive the dynamics there? That is what we’re searching for.

Michael: Fascinating. And so it sounds such as you’re getting individuals who could have some degree of expertise within the trade as a result of they’re coming by you by phrase of mouth to the agency and what you are doing. However I’ll presume then, nonetheless tending to be youthful and nonetheless studying, and also you’re hiring them rather more for the human expertise, the communication expertise. If I inform them a tragic story, are they displaying, and relating, and demonstrating the empathy that you’d hope to see them then conduct in entrance of shoppers.

John: That’s appropriate.

Michael: And that is the way you’re evaluating them?

John: That is proper.

The Surprises John Encountered On His Journey [1:10:54]

Michael: So what shocked you probably the most about this journey of constructing an advisory enterprise?

John: The quantity of individuals on the market that basically want monetary help. We come throughout lots of people, and these individuals could have present advisors, they could not. However as considered one of my managers at one level, considered one of my corporations that I labored at stated, “John, one factor that I might say to ensure that everyone to understand is the accountability. You will have a accountability as being a licensed skilled to supply individuals monetary recommendation, and that does not imply they need to have HNW on a resume, excessive web price. Undergo life, because you’re in entrance of lots of people, and simply be typically considering their monetary life however themselves, and make that your story, and every thing else will come later.” That is been very true.

I’ve spent, Michael, an unlimited period of time on these do-it-yourselfers, these those that need to take up your time, and haven’t any intentions of doing enterprise with you. And infrequently I get aspect stepped, if you happen to would, on that, and I nonetheless very seldom, however once in a while, will meet with somebody and, “Boy, I ought to’ve identified higher,” if you happen to would. I am much more articulate with that. I am extraordinarily involved about the best way I take advantage of my time as a result of I do need this agency to develop, however this isn’t about John, that is about my staff at this level in my life. That is about what they need out of it and to actually ship that have.

I’ve had advisors come into this firm that I ought to by no means have employed. It was not match, so after the actual fact, being the state of California, you’ve the, nicely, they’re my shoppers however they’re your shoppers. They’re your shoppers however they’re my shoppers, proper?

Michael: Yeah, simply the problem over who will get to proceed with the consumer relationship in that world of, I introduced the consumer to the agency, and also you service the consumer to the agency, so you could have had the servicing relationship, however you would not have had it if the agency did not present that relationship to you. And that creates pressure in plenty of corporations.

John: Proper, however our retention ratio right here is over 98.5%, extraordinarily excessive retention ratio. Individuals are available in right here as shoppers as a result of they are going by a tough time of their life. We’re there with empathy. We’re there as a result of we all know what we’re doing. I jokingly inform shoppers, “Hear, for the primary 15 years I used to be making an attempt to determine this out. Now I do know my stuff. You are going by a transition, you actually should be at John Stokes Monetary as a result of we all know care for you, prime to backside.”

Michael: So, how do you deal with those while you discover and notice they are not match, they are a DIYer and it is clear that they are not going to be just right for you, however you continue to attempt to deal with these moments with grace?

John: Simply from the center, simply hear…two other ways. Clearly one from the center, simply inform them that we’re most likely not the perfect match for you. “Why?” We do not have to provide a motive. “Eh, we simply really feel that perhaps at this level the place we’re going and the place you are at, we’re most likely not match. So keep the place you are at, or go elsewhere.”

Michael: And you do not give an additional motive than that?

John: Not likely, I am not required to. It is not one thing that I would want to clarify away, if you happen to would. And the opposite could be extra, “We’re not fairly prepared at this level. We are able to recognize you got here to us from an organization. There’s plenty of layoffs occurring there. We have to prioritize our time. We’ll get to you after we get to your sort of factor, if you happen to do not thoughts. You are okay proper now. The place you are at proper now, you are okay. May not be good, won’t be what you need. You should store round. By all means, go and do it. We’ll come again to you at some later date. We’ll speak about this,” if you happen to would.

Michael: And since you recognize by the point you come again to them they’ll have gone onto different issues, or being doing it themselves, as a result of you may already inform they’re do-it-yourselfers?

John: That is proper.

Michael: So simply inserting a pause and ready interval, after which the method types it out for itself with that?

John: That is proper, yeah. And we make our errors, and I’ve actually signed up individuals over time the place as I am signing them up I am going, “Oh, boy, this could possibly be a tough consumer. That is considered one of these shoppers that the market goes down, it is my fault.” We do not want that. Every little thing that we do now’s discretionary. That is the best way that we function. We inform them up entrance, “We make the selections right here. That is what we’ll do. If that is not what you need, please do not come on as a result of we now have no real interest in you coming to us and telling us our job.”

The Low Level On John’s Journey [1:16:01]

Michael: So what was the low level for you on this journey?

John: Really all of it got here on the Covid interval the place, as I stated earlier, it was all go, go, go, on that treadmill, roar on the market, we’re all producing. Covid hits, after which that face-to-face conferences that we now have, these seminars got here to a halt.

Michael: Got here to a sudden, screeching halt.

John: Screaming halt.

Michael: One I’d think about, particularly, you are out in California and California was notably proactive very early on in shut downs, and social distancing, and limiting teams, so you actually had been in an surroundings that simply…it obtained stopped?

John: Oh, yeah, completely. However there was nonetheless layoffs, and so these…perhaps facilities of affect, or my attain outs, I take part in plenty of different forms of occasions, the place HR occasions, various things, all that got here to a screaming halt and it went digital. It went digital in a short time, and that is a ability set going from having face-to-face shows and now doing this just about. So I needed to, and I am nonetheless within the means of growing that ability set, superb tuning our shows, proper? As a result of it is simple to be in eye-to-eye contact with someone for probably the most half and going, “Let’s get to that subsequent assembly.” Simply your power alone can painting that degree of confidence to get you to that assembly.

Whereas just about, in some instances I do not even get to see who I am presenting in entrance of. So with that comes, Michael, a brand new ability set that I am nonetheless studying. As I stated earlier, previous to Covid, we had been licensed in perhaps 10 states or so. Now I am licensed in each state as a result of we’re getting these digital conferences from all throughout the nation, individuals taking part all throughout the nation. That is a optimistic, however the destructive aspect of that’s, I’ve to be an knowledgeable on virtually each state’s unemployment insurance coverage, if you happen to would, and a majority of these states have completely different guidelines.

Michael: Fascinating. So the “excellent news” of Covid and being pushed just about is it unlocks a complete market in 49 states past California’s, so far as California is, however you open up a complete enormous, broader market of firms which you could get in entrance of. It is fairly straight ahead to do it in digital workshop format, however there’s nonetheless domain-specific data of unemployment insurance coverage guidelines in that state. Not all of the states are the identical, and so all of the effectivity you had of figuring out California chilly is now disrupted since you gotta study a complete bunch of latest states as you undergo every workshop in no matter state that firm’s staff are in?

John: That is appropriate.

Michael: So how do the one-on-ones after the workshop work in a digital surroundings? Is it nonetheless the identical factor, like the corporate will open up your time in calendar, the staff in 15 to 30-minute intervals, and also you simply have 8 hours of Zoom conferences, 15 and 20 minutes at a time, all day lengthy?

John: Primarily, yeah. We give them alternative to reap the benefits of what we name the session. I do not like to make use of the phrase “free,” if you happen to would, as a result of that downplays what in the end will happen within the session, however we’ll provide a session, and that usually is only a dialogue. The place are you at? The place are you dwelling? What’s your circumstances? Why had been you laid off? How is your severance? Check out what I name the second, “Let’s take a breather and take a look at the place you are at now.” After which I’m going into, “The place would you prefer to be,” and getting extra into that complete roadmap expertise, if you happen to would, with them on the Zoom. And is it working in addition to with face-to-face? No, it is not.

I am an incredible believer that if you happen to get someone in entrance of you, the likelihood of you doing enterprise with them is rather more larger than doing a digital expertise. And I at all times take heed to your podcasts, however I’ve listened to those that do digital they usually’ve figured it out. However for me and my type, I’ve gotta have face-to-face conferences. Do not get me fallacious, we’re signing up shoppers all throughout the nation which have very giant portfolios, and that could be as a result of they’ve not obtained a monetary advisor starting right into a layoff, and, “Oh, okay, nicely, John’s going to deal with perhaps this rollover, proper? Here is in entrance of me. He appears to know what he is doing right here. Nicely, let me simply hand it over to him.”

The Recommendation John Would Give His Former Self And Newer, Youthful Advisors [1:21:03]

Michael: So what are you aware now that you just want you could possibly return and let you know from 10, 20 years in the past while you had been nonetheless within the early days?

John: Much less transactional. Trying again, it was absolute chaos. And if I had began perhaps with a minimal again then…as you stated earlier, if you happen to obtained $100,000 rollover 20 years in the past, that is equal to a million-plus nowadays, proper? So simply moving into the entire fee-based surroundings rather a lot earlier, I believe, would’ve been extraordinarily useful.

Michael: So what would you’ve instructed your self to really get you there, although? You began transactional and stayed for some time. What was not connecting, or had been you not seeing charge primarily based initially?

John: It was extra, “Boy, I’ve to study a complete new ability set right here.” Primary, I wasn’t licensed within the 66. I did not have that, so okay, I’ve gotta take every week off perhaps, and I used to be simply so busy. Taking a break day for me was simply one thing I could not do. So simply stepping again, and taking a look at my future, and going, “Hmm, do I need to preserve this transactional approach of doing it?” I knew earlier on that was not what I needed. It was simply I could not be courageous sufficient if I’d, or I would not take that second to take a look at my future and go, “Oh, nicely…” It wasn’t till my supervisor in compliance stated, “John, we’d like you.” It was a compelled problem. “We want you to cease right here, decelerate, and take a look at this from this standpoint.”

Michael: Fascinating. So what recommendation would you give youthful and newer advisors coming in right this moment?

John: Discover that inside ardour. My area of interest is one thing that I created 20 years in the past, when the phrase “area of interest” was by no means mentioned. I stated earlier, my administration thought I used to be…it was, “What do you imply you are serving to individuals solely in layoffs? Why would you try this?” So discover no matter it’s that completely wakes you up within the morning and also you’re able to go, and get that area of interest. To me, that’s completely crucial. And when you verify what that area of interest is and decide what it’s, reside it, breathe it, examine it, get mentors on the market in the event that they’re doing it, and simply do it and be proud about what you do. As I stated earlier, we’re licensed professionals. Be happy with what we do. Use that license for the higher good of society and your self.

Michael: And the way do you determine what the area of interest must be? How did you arrive at what yours is?

John: Mine got here from my prior life expertise. After I obtained laid off, my father obtained laid off. So discover circumstances in your life that perhaps you had prior experiences. Possibly you handled monetary advisors earlier than that, I do not need to be like that individual. I do not need to be that approach. I need to be this fashion. So in the end I do not suppose I can articulate that, Michael, aside from discover that inside ardour, as a result of this enterprise now means that you can try this, and also you’re anticipated to try this. You are anticipated to be in that area of interest from day one.

The Subsequent Steps On John’s Journey And What Success Means To Him [1:24:38]

Michael: So what comes subsequent for you from right here?

John: I like the truth that I can have the rainmaker title, if you happen to would, as a result of I completely love what I do. I am married to what I do, and telling that story, and assembly with the shoppers, and having face-to-face conferences, or these digital conferences, that is my calling, Michael. Behind the scenes I’ve in-built an incredible infrastructure, a core of wonderful advisors, and we’re actual comfy in that respect. Our aim is to double what we’re at now, and I imagine that we’ll simply try this purely and easily off natural progress.

Michael: Very cool. Very cool. In order we wrap up, this can be a podcast about success, and one of many themes that comes up is simply the phrase “success” means various things to completely different individuals. And so you’ve got had this splendidly profitable quick progress enterprise, and extraordinary move of shoppers, and now scaling up even additional, and so the enterprise is doing very, very nicely. How do you outline success for your self at this level?

John: At this level in my life it is all about steadiness, spending rather more high quality time with my spouse and my youngsters, getting again and figuring out my members of the family extra. As a result of for a sure interval I used to be all, “Go, go,” and I missed out on that chance. And simply balancing out that, I am biking now about 100 miles every week.

Michael: Wow.

John: Yeah, proper.

Michael: That is plenty of biking. Okay.

John: I’ve obtained a motorbike journey subsequent weekend. It is 100 miles, 7,000 toes of climbing, so give me a name the next week, Michael, and we’ll do one other podcast, and let’s have a look at how I really feel then.

Michael: That is fairly a journey with that a lot elevation.

John: So we hear about this rather a lot, and particularly at the moment, with work-life steadiness. For me, it is simply balancing out all of these vital issues that perhaps I haven’t got as a lot time to be concerned in. I personal a semi-pro soccer staff so I am doing that now. So I am a mentor to those gamers on my staff. They’ve plenty of struggles of their life. They’re younger males, so I spend as a lot time…I’m going out to each follow. I choose up the balls for them, I take their water to the video games. I do issues now the place I can take a look at this and go, “All proper, I’ve achieved rather a lot however there’s much more to do for different individuals.”

Michael: Nicely, very cool, very cool. Nicely, thanks a lot, John, for becoming a member of us on the “Monetary Advisor Success Podcast.”

John: Michael, I’ve had plenty of enjoyable right this moment. Thanks very a lot.

Michael: Likewise, thanks.

*John Stokes Monetary Property Underneath Administration exceeded $400 million as of the date of this interview, 10/12/2022.
**Securities supplied by Securities America, Inc., member FINRA/SIPC.
Advisory companies supplied by Securities America Advisors, Inc.
John Stokes Monetary and Securities America are separate entities.

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