Read The Transcript Below:

Steven (00:52):

Hello everyone, and welcome to the next episode of the Retirement Tax Services podcast, Financial Professionals Edition. I’m your host, Steven Jarvis, CPA, and with me on the show this week we have a huge fan of if nothing else, the podcast intro song. So Derrick Kinney, welcome to the show.

Derrick (01:08):

Steven, thank you so much. It’s a pleasure to be here. And yes, I’m a huge fan of the intro music, probably some of the best I’ve heard on any podcast, so keep it up my friend.

Steven (01:18):

Well, I really appreciate that because as I record the podcast, I really should start playing the song to get myself hyped and in the mood because I don’t hear the song as often as a lot of my listeners do. So I appreciate the shout-out and the reminder on that. So Derek, give us a little bit of a background of who you are and what you do so we can set the stage for this conversation we’re going to have.

Derrick (01:37):

Yeah, so I’m a former Forbes financial advisor and was with Ameriprise Financial, a great broker-dealer for 25 years. And at the end of my career, I began to feel like I needed to do something different. I felt like Derrick 2.0 was coming on quickly and I realized if I stayed as an advisor, I wasn’t going to be providing the best value, the best service, the best leadership for my team, and I just felt like I was sort of going through the motions. And some of your listeners may have experienced that. And so I go on a sabbatical every year, so I take about five days completely by myself and I ask myself three questions. How do I be a better husband? How do I be a better father, and how do I be a better business owner? And those questions guide me for the whole year.

(02:26):

I figure if I’m going to run fast 51 weeks out of the year, take at least one week to figure out what am I running fast toward. If not, you just kind of run in a circle. And I’ve been guilty of that for many, many years. So I’m in Boston July of 2019 and I begin to write a list out of all the things I would enjoy doing, and I wrote on the list, write a book, launch a podcast, coach, speak, consult. And surprisingly Steven, what wasn’t on the list was being a financial advisor. And then I knew at that point it was time to sell and I’d been buying practices, had bought four other businesses. I called my wife and said, Honey, I think God is sending me a clear message here. I think it’s time to sell. And she wasn’t surprised. She was sort of expecting it. She’d been feeling the same thing from me as well. And so that then made the bold decision for me to say, okay, it’s time for me to transition from that and then go to the next phase of my life.

Steven (03:25):

Oh, that’s really interesting being able to talk to someone who’s been through that whole cycle, not just being a financial advisor for 25 years, but having purchased other practices and then ultimately selling. I want to talk more about that, but the tax nerd side of me keyed in on one of the things you said that I want you to talk to a little bit more because you mentioned that you spent those years at Ameriprise, big broker-dealer, especially when we talk about tax planning, it happens on both sides. You have advisors on the independent side that say, oh, tax planning is this unique thing I can do because people in the BD space can’t ever even say the word tax. And then I also have people in the BD space who misunderstand what compliance is trying to tell them, and they literally won’t say the word tax. And while this wasn’t the core of your service offering as far as, Hey, I’m Derek the tax guy, it was something that you would at least help make sure your client addressed. And so talk a little bit about navigating that in the BD world of not wanting to leave your clients out in the cold when it came to taxes, but making sure you’re still staying compliant and having a successful 25-year career.

Derrick (04:24):

Yeah, so let me tell you a story. So there was a couple that came into my office and they were both business owners and they were concerned about the money they were making, but not giving too much to Uncle Sam the relative that sort of asked for everything with an open hand. And so we began to come up with a strategy to help them from a tax standpoint. But let me press pause right there. What I told them in my dialogue was, listen, I am not a tax expert. My job is to be a tax strategist to help you identify a tax game plan that can help you make more money, but also save more money in taxes based on some investment strategies or when we go to sell different investments, you’ve got to keep in mind is it going to be a short-term gain, a long-term gain, all those pieces. But I told them my expertise, my specialization is in retirement income planning. It’s a small slice of the pie and we want to go very, very deep, but it’s not very wide. And so they liked the fact that wanted someone to help them not just in their accumulation years, but also in the distribution years down the road. And so I would tell them, first of all, do you have a quality CPA? And they’d always ask me, well, Derek, how do you define the word quality?

(05:41):

I said, is it someone, not just that you trust, but is it someone that you believe is on the cutting edge of learning every day how they can maximize every dollar for you? And that whittled the list down very, very quickly. And oftentimes they didn’t have someone. So I had curated a sort of a small short list of people in the local Dallas-Fort Worth area. So I’d refer people and oftentimes I would go with them to meet with their tax person. And part of that was just building in that while I wasn’t billing myself as the tax expert, I was the tax strategist, but more importantly, I was the quarterback of this team to make sure that everything flowed together. And here’s what I’ll tell you, Steven, and this is something powerful that I learned midway through my career. There is a power in two professionals arguing with each other on behalf of the client.

(06:38):

When I say, you know what? I don’t like that strategy and the CPA, I love that strategy. I said, it’s not going to work. And the CPA says it’s going to work, and the client sits back and it’s like two professionals are arguing to only give me the finest best strategy. It was just a beautiful thing. And so what I found is that by having that relationship, it actually elevated my status in the eyes of the client because so many advisors think, well, if I’m not everything to everybody, they’re going to go to somebody else. And I refute that and say, you want to be the smallest part of what you’re best at. So people view you as the trusted expert and they know that you can refer them to other experts.

Steven (07:19):

What I tell advisors especially, I mean they come to me about the tax planning piece of it, but I think this applies in other areas, is that you want to be committed to helping them find the answer. You don’t want to try and tell them that you’re going to have the answer to your point of why not just lead with the fact that, Hey, I’m not an expert in this area, but I’m going to go with you. I’m going to make this introduction. I’m going to help you with this strategy. I’m going to help you with the part I can, and then I’m going to take responsibility for helping make sure the rest of it gets addressed. I do think it’s interesting. I’d love to hear a little bit more about this. I have never, maybe I shouldn’t say never. I certainly don’t take the approach of let’s argue in front of the client about a strategy.

(07:59):

I’ve definitely disagreed with advisors at times. We’ll even go so far as to say argued. But I usually personally, I just usually do that behind the scenes so that we’re coming to the client with here’s our united strategy for how we move forward. That might be because I work very directly with so many advisors, we work really hand in hand. And maybe if it’s a little bit different of a dynamic, but maybe tell me more about that. Is that something you do across the board or that was a little bit more unique situation that you were willing to just say, Nope, let’s just have it out right now?

Derrick (08:28):

Well, and I want to backpedal a bit here. We were throwing things at each other and it wasn’t elevating voices, but what I found is there is this magic that occurs when one professional, which was me, the lead professional from my clients, when I would bring in other guest added value professionals and then we’re hashing out these ideas in front of the client because that way they knew we weren’t just selling them this prepackaged one size fits all solution. We were like, okay, here’s how this could work and here’s how it couldn’t work. And all of that really made this beautiful drama for the client to see here are these two people who I trust that are custom crafting this strategy just for me. And so yeah, we never got voice elevated or things like that, but it was just this whole model of leveraging other professionals and let you see sort of basically you’re letting the client see your imperfect version of you. You don’t have this perfectly packaged persona. Let’s talk about this and see if it works, if it doesn’t work. But then the client knows that you did what was clearly in their best interest because it was just for them. Got it.

Steven (09:37):

Thanks for clarifying that. Yeah, I heard the word argument and my brain goes to sitcom like Mom and Dad, that kind of a thing. But yeah, I love that description of now the client gets to see there’s multiple professionals involved in this. They’re taking the time to hash this out and really figure out what’s best for me. That is the value. It might feel like a little bit of a show to the client, but it’s not just for their benefit. You really are spending the time to make sure that ultimately what gets decided is not some cookie-cutter approach that can be applied to a hundred million different people. It’s for you, for this particular client based on the work of multiple professionals, we’ve come up with what we feel is the best recommendation.

Derrick (10:16):

I think that’s well said, Steven. Yes.

Steven (10:18):

Awesome. Yeah, I appreciate you sharing that perspective. I love being able to dive in and see what this really looks like in practice. But before we switch topics, I just want to tie a little bit of a bow on the compliance piece. As you described, that approach that you took, just so that we say it all out loud, is this something you’re hiding from compliance and hoping they don’t notice or you had this full blessing, they knew this is the way you’re operating, but because of the value to the client, you’re full steam ahead?

Derrick (10:41):

Yeah, I mean, what I found is you can either make compliance the enemy or you can help them be your cooperative partner in the process. And so what we found when you think about the financial planning process, there were multiple steps. One piece of it was tax planning, but there’s always the disclaimer that this is not tax advise. Talk to your CPA, your accountant, et cetera. And we would include as part of the plan, Hey, we visited with their CPA, here’s the advice that the CPA finally gave them. And so ultimately all the tax advice was coming from their CPA. And so that’s how we wanted to provide more of a holistic approach. And again, I’m always really cautious of people that say, well, Derek, I don’t want there to be any other professionals because what if they refer you to another advisor and they take your business or they do some things? And that was so rare because basically you’re building a relationship and relationships are always more valuable than revenue. If you have that perspective, you’re going to have a lot better life and I think a much better business.

Steven (11:47):

What I think is interesting about that objection, which I’ve heard too, of wait, if I involve other professionals, they might refer those out. Those are usually the same advisors who complain that they never get referrals from CPAs. And so on the one hand they’re saying, oh, CPAs never refer anyone, but then it’s in their own client. They’re worried that the CPA might refer their client out. So sometimes we got to take a step back and really keep respect on what’s going on here because I’m with you. And also maybe you can talk about this a little bit. I know that as you work with advisors, you’re really focused on helping advisors understand how they can be memorable because rather than being scared and saying, I’m never going to let another professional into my client’s life because they might take my clients, why don’t we focus on providing a service in a way that no one would ever think about leaving us anyways? 

Commercial (12:31):

Hey there, advisors, this is Jamie. You might recognize my voice from my Worlds to Conquer episode over at the Perfect RIAs podcast. I get a lot of questions from my financial advisors about what type of continuing education should they attend, how should they dedicate themselves to professional development this year and what conferences are really worth going to. Well, I’m going to let you in on a little secret. The one conference I will not miss is the Retirement Tax Services Summit this September. It is going to be held in Phoenix, Arizona, and this is the most sensational conference I go to, and not because of all the fanfare involved in being in Phoenix, but instead about collaborating with like-minded individuals. And these are people that have legal expert tax planning advice. These are people that do qualified accounts, big retirements. They are creating five and 10-year tax plans. They have guest speakers that talk about hyper-efficiency and the things that you need to know to keep you on the cutting edge of being a financial advisor. It is certainly where I will be. You don’t want to miss this conference, so make sure that you jump over to retirementtaxservices.com and register to attend this summit. I know it’s where I’ll be this September.

Derrick (13:40):

So let me tell you another story. So let’s say that you were at a mixer after a financial advisor event, and you’re walking around the room and you’re having casual conversation and let’s say there’s other people there as well, and you bump into someone, they ask you, what do you do for a living? And you say you’re a financial advisor, and you talk a bit about that, and then you say to them, Hey, what do you do? And this person says, well, I’m a personal trainer. And you say, oh, really? Where did you get your education? What did you do? And they say, well, we help people get in shape so they can live the life they want. And you’re like, okay, great. Well, you make a mental note and you may come back to them later on in the night in a conversation. Well, as you’re moving on, you meet another personal trainer and the person asks you, what do you do for a living?

(14:23):

You say, again, I’m a financial advisor, but this person says, when you ask them, what do you do for a living? You know how busy professionals struggle with balancing their business and their lives? And you’re kind of nodding your head, well, we help those people be fit and have their life in order so they can be the cool grandparents to chase their grandkids across the floor and live the life they’ve always wanted. Wow. And so you have more conversation. Well, let’s say a week goes by and you’re talking to your wife and you both decide that you need a personal trainer. Which of those two personal trainers would be more memorable, Steven?

Steven (15:01):

Yeah. It’s the one that was able to articulate and provide a vision for what it is they do for me.

Derrick (15:07):

Yeah. And so oftentimes we take for granted the power of our words and how we can introduce people into what I call a relatable problem. Okay, so let me make this more personal. Let’s say now you’re at church or you’re at Rotary or you’re at Kiwanis and someone asks you the dreaded question I would hate when people ask, so Derek, what do you do for a living? And the moment I uttered the words, I’m a financial advisor, you could just see the eyes in their head roll back, they almost went to sleep right in front of you. They ran off to the next conversation. And what happened is, people have this mental checklist of what they think a financial advisor does. Well, I don’t need any insurance. They would say, or I already have my mutual funds, or I already have another advisor, and I didn’t even say anything, and they’re already shutting the door to me without me saying any other words.

(15:59):

And I said, there has to be a better way. And so what I’ve worked on is, well, I call it the know how statement, and what I discovered is people say, Derek, what do you do? And I say, well, you know how so many people worry about running out of money in retirement. I’m kind of nodding my head as I do it. We help craft a customized game plan so people can live the life they want and not worry about running out of money. And then I talk about we specialize in what’s called retirement income planning. And if they’re still with me, let me tell you a quick story and I’ll tell about a couple who we helped. So you’re a financial advisor? Well, yeah. We specialize in helping people close to retirement, not run out of money. Oh, well, what happens is there is now you’ve connected them into what I call a relatable problem.

(16:49):

Because if I say financial advisor, I’m leaving it up to the client to figure out what I do. And the sad reality is, and this is no fault of the clients as advisors, we have to own this if we are not being clear with our messaging. If the client can’t figure out what we do, we can’t allow them to figure this out. We’ve got to let them know, here’s the problem we solve. And so as I like to say, when you own a problem, you own your success. And so the goal is we want to make sure that when people leave that social interaction days, weeks go by, they think, oh, you know what? Taxes and complicated tax issues well, Steven Jarvis, where do I find Steven Jarvis? They remember because you didn’t just say, well, I’m a CPA. No, you introduced them to a relatable problem.

(17:39):

And what we know is people remember stories and things that relate to them far longer than any kind of data point. And so when you do that, you’ll start to have confidence because the worst thing to do, especially around the holidays or these big social gatherings, is you want to use these to deepen relationships. But here’s what I believe. If you are listening right now and you don’t feel like you are the number one most qualified financial advisor or CPA to work with in your area, well then you should leave the profession. You shouldn’t be doing what you’re doing because you owe it to yourself to then articulate that if you are the best in a way that causes people to want to work with you because you’re the best at solving their problems.

Steven (18:23):

At the very least, you need to be committed to becoming the best. You need to invest at your time and money to become the best. But I’m with you. If you’re not completely convinced that you are the best option for that client, you shouldn’t be working with that client. The other thing that stood out to me, what you were describing, because we’ve all been in that situation, it comes up all the time, what do you do? And you have the people who will err on the really succinct side of I’m a CPA, I’m a financial advisor. And you’re absolutely right. People are going to make a hundred assumptions and they’re going to move on. And oh, by the way, they’ve met a lot of other CPAs and financial advisors. They’re never going to remember you out of the crowd. The other extreme end of the spectrum that I see is when people take the what do you do for a living as an invitation to share their entire life story all at once without taking a breath.

(19:07):

And it usually starts with some kind of long explanation of all of their credentials and all of the clever marketing words they’ve come up with to give the impression that they’re somehow superior to everyone around them. And so what I like about how you approach that is, and you even mentioned it, you’ve intentionally scripted it in stages and you commented somewhere in there of, and if they’re still with me, then I’ll go on. And so you’re engaging as you go along that if you give that first response, which is way better, then I’m a financial advisor or the dissertation, and you can see the end of that and they say, okay, great. It was nice to meet you, Derek, then you’re not going to steamroll the rest of their evening. But if they lean in a little bit, if they smile, if they seem like they’re intrigued, then we have something to build on. So I really like that middle ground of doing something memorable in a really positive way.

Derrick (19:55):

Well, what I find is that if we’re being honest, I was a financial advisor for 25 years. I worked really, really hard, and I suspect everyone listening works really, really hard. And I just came to this conclusion that if we keep working hard and getting the same results, we’re just going to get burned out. And ultimately we’ve got to make it easier to succeed as a financial advisor and as a CPA and as interactive as we all are, as many people are involved in their community that they can’t help but be around other people. I just want to give people doorways where they can easily interact with people. Because what we find is you’re probably talking to at least an average or possibly a high net worth prospect right now as you’re saying this. And so how can you connect with them? People worry about financial problems. We know that the bigger the money they have, the bigger the problems are. And so when you talk less about yourself and enter the room, not worried about how do I prove myself as the smartest person here, which I’ve made that mistakes countless times, Steven and I always get burned. It’s the consistent way to burn myself when I act like the smartest person. Instead, just treat them like they’re the smartest person and how can I solve the problems of every smartest person in the room? That’s really my job.

Steven (21:19):

And the way you’re describing all of this, I would expect that you place a huge emphasis on outcomes beyond the dollars and cents. It can be really easy to get hung up on the numbers of what’s the distribution rate, what are the investment returns, what’s the tax rate. What are the tax savings? As finance and tax nerds, it’s really easy to get focused on those things, but at the end of the day, no one’s walking to that party and thinking, man, I really hope I meet someone today who can help lower my taxable income. That’s not the way people think about it. But people do think about, they’re worried about running out of money in retirement. They’re worried about accomplishing all the goals they’ve set for themselves about traveling with their grandkids, about buying that second house on the lake. And so as we tie these two real-life experiences and the actual goals that people have, and we can articulate what we do in terms of that, we’re going to have so much better outcomes for our clients as I do tax planning, even though I get really excited when we can save real tax dollars.

(22:16):

Absolutely. That’s fantastic. We’re still always going to tie it back to what it helps the client accomplish because that’s the thing that’s going to get them to lean in and really buy into the plan and the process and execute follow-through on it.

Derrick (22:30):

I think you’re exactly right. I was just thinking about one of my favorite desserts is key lime pie. I love key lime pie, and when I’m eating key lime pie, I enjoy the taste of it, the texture, just the velvet silkiness of the key lime pie. I’m not really curious about what brand of graham cracker you guys used to make this key lime pie. Hey, what type of eggs or cream did you use? Now, some people who were really key lime pie aficionados may really get into that, but I’m not. I just enjoy the experience of it, and I trust that they used quality ingredients because it tastes really good. And I know the place I bought it from is a trustworthy bakery. And one of the things that I find is financial advisors can often unwillingly and unknowingly have limiting beliefs that stunt their growth.

(23:24):

And what I mean by that is sometimes they view that clients are paying for what they think they’re paying for, but it’s completely the opposite. They may think, well, they’re paying for accuracy, they’re paying for me to calculate these exact numbers, the precision, and it becomes sort of a cold, I trade dollars for data type relationship. And that’s really not the pathway to growth. Now you need to be accurate and you need to be knowledgeable and competent. I think of those, Steven, as more table stakes in these relationships. I think high net worth people or anyone in general comes to a professional assuming that that professional has a framework and a plan to get the job done. But I find that the advisors who really connect are those that can really talk about things on a relational level because ultimately we know that people will buy based on logic and they’ll validate based on emotion, all those things.

(24:24):

But you think about even Maslow’s hierarchy, and the top of that is self-actualization. People want to be part of something bigger. They want to know that their life mattered. Did they make a difference? And even some of the marketing pyramids that are out there now of how to best market to people, you’ve got the base level things, but ultimately as you go up that pyramid, it’s talking about what are things they want for their lives? What do they want their legacy to be? What is the impact they want to have? And that’s where I think we are truly the guide for our clients. We basically are tour guides for their life to get them to the success they want to get to. And the byproduct is the numbers and the accuracy and the investments and the funds, all those things. But when clients realize that this person gets me, this person deeply understands my fears and my worries and my concerns, and they know me, that to me is the depth of a relationship that obviously people are willing to pay for because they trust you. But I think it gives you the value that people really want in their relationship.

Steven (25:32):

So many great things in what you just said and one of the things I love about this podcast is we give advisors so many ways that they can communicate effectively with their clients. And so for people listening, as Derek talks and things resonate with you, you should be taking detailed notes or go back and listen to the podcast again, don’t take what Derek’s saying word for word because it needs to be true to you. Because if I were going to use that explanation around the pie, I would need to change it and talk about peach pie because I don’t like pea lime pie, but the rest of it all still works. That sounds like a silly thing to pick out of there. But when you listen to other advisors, there’s always things that you can learn about how to more effectively communicate, because a lot of our job comes down to that.

(26:12):

And if clients aren’t following through on your recommendations, or if prospects aren’t following through and signing up as a client, you need to look at how you’re communicating these things because especially if you’ve been doing this for any amount of time and you’ve had some level of success, you have the expertise to do this. So if someone’s not following through, you need to look to yourself and say, how am I communicating these things? So yeah, find those advisors that talk in a way that resonates with you and make those little changes that you need to. So it’s true to your personality, but do what works. Find people that you can follow. Derek, we always like to make sure that we take the information we’re sharing and turn it into value, which for us means that people can take action on it. So as you’re thinking about the conversation we’ve been having, how do advisors take this kind of freewheeling conversation we’ve had and do something specific with it when this episode ends?

Derrick (27:04):

Well, here’s one of my favorite things, and when I had my financial advising practice, it took me a while to figure this out, but once I did, it really elevated our business growth. That was, I thought people were coming to me as an advisor just to solve their general problems, to work them through the financial planning process. And here’s the outcome. What I realized was what they really viewed me as and needed me to be was a problem solver. And so the takeaway, Steven, that I would ask every advisor and CPA listening to do just get your favorite beverage, a cup of coffee, glass of wine, whatever it is, and do two things. First of all, think about the top five clients that you serve right now in terms of revenue. These are the clients that pay you the most. They’re voting for you with their dollars, and they’re saying, Steven’s my guy, Susan’s my lady, whatever that may be.

(28:00):

And then ask yourself of those five people, what problem did you solve for them? And then what solution did you provide for them? And then who referred them to you? So identifying your top most, five highly compensated, the ones that pay you the most, clients, what problem did you solve for them? What solution and who referred them? And then we want to do what I call a recent and relevant test. And that is now look at your most recent five clients and do the same thing and ask, of the most recent five clients we brought on, what problem did we solve for them? What solution did we provide and who referred them? Now, this does a couple things. First of all, it flies completely in the face of people right now saying, you need to have the latest and greatest artificial intelligence marketing techniques. You need to have the seminar service.

(28:54):

You’ve got to do this and that. The fancy stuff for 2024, I believe right now that old is new. And you can simply adopt a focus group concept to skyrocket your business and let your current clients and your best clients tell you, here’s why we picked you. And so what you’re going to find when you look at that piece of paper on your screen with your team, okay, here are the problems, and what you can distill it down to then is ideally one central problem. Here’s the core problem that we solve for clients, and then here’s the core solution of how we deliver that solution. Then most importantly, who’s referring these people to us? Where are they coming from? Because what I find is oftentimes in the busyness of growth, people forget the people handing us the ticket to our growth. We want to treat them like the kings and the queens. So that’d be the takeaway is identifying just very simply what problems are you solving. And then begin to brand yourself and note that our practice specializes in inserting that problem because ultimately we all have a limited number of brain cells, and I don’t want clients to be forced to burn their brain cells to try to figure out, now what problem does Steven solve? Now, what does Derrick do? We want to make it very clear for them to easily say, I have a problem. I work with this person.

Steven (30:20):

Derek, that’s such a great framework. I appreciate you articulating it that way. That gives clear direction on what people can go and do with this. I love that. To break it out into your top five clients and your most recent five clients, the only other thing I wanted to add from the conversation we’re having, I loved how you talked about introducing yourself. I’m sure there are so many people listening whether they’d admitted out loud or not, that when someone asks what they do, they say, well, I’m a financial advisor. I’m a fiduciary, I’m a financial planner, whatever they say. So if you’re guilty of that, go back and use this recommendation from Derek of what would that sound like if you started with how, what’s that problem that you’re going to tell people that you solve? So you know how this problem exists, we help people fix that problem. That’s the framework we’re given. Alright, so Derek, before we close this out, if people are excited about what you’re talking about, want to learn more about the things you’re doing, how you put out content, the coaching you’re doing, how do they learn more about you?

Derrick (31:11):

Yeah, two things. We have a website, successforadvisors.com, and we do quite a bit of speaking. I’ve got the Good Money podcast teaching advisors how to be in the top 1%, and then we’re about to unveil some coaching very, very soon. Stay tuned for that, and also you can follow us on LinkedIn is a great way to follow us as well.

Steven (31:36):

Awesome. We’ll make sure those get linked in the show notes. Derek, thanks so much for being here. It’s been a pleasure talking to you.

Derrick (31:41):

Steven, this has been an honor. I followed your show for a long time. I love your content and it was a real joy to be with you. So thanks for having me.

Steven (31:47):

Of course. And if you’ve enjoyed listening to the podcast, take a minute and go give it five stars. Leave us a comment. We want to share this with as many advisors as we possibly can. Thanks for being here, and until next time, good luck out there. And remember to tip your server, not the IRS!