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Top Advisor Podcast
#105 – Your Road Map to Ideal Clients, Ideal Business, and Ideal Life with Bill Bachrach, CSP, CPAE
01:03:41
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- [00:00]
A
Welcome, welcome. In the financial advisory world, everyone talks about the importance of building high trust relationships. But it wasn't always that way. In 1996, my featured guest's book, Values Based the Art of Building High Trust Client Relationships was a groundbreaking work. All these years later, this gentleman has remained a relevant force in our industry, helping thousands of financial advisors attract more ideal clients, building a more ideal business, and crafting an ideal life. You could say that Bill Cates and Bill Bacharach are competitors, but first and foremost we're friends and we've been friends for a long time. Before we dig into this topic, I need to tell you about my newest book, the Hidden Stop Robbing Yourself of Lasting Wealth. An irresistible tale of financial redemption. The story is a parable that that's set during a bumbled bank robbery, so it's a great blend of tension, suspense and fun and delivers a powerful message about financial mindset. The book explores the beliefs, assumptions and emotions that form our money stories, meaning our self talk that we've lived for so long that we start to believe them to be true. And for most human financial advisors, including money stories are often broken because they're built on limiting beliefs, mistaken assumptions, unhelpful emotions. And these broken money stories lead to unnecessary anxiety, fear and unproductive actions, blocking everyone really from achieving a life full of abundance. Financial advisors and other business leaders are using the Hidden Heist in three ways that build on each other. First, advisors are finding the book as a kind of a wake up call for their own thinking about money and their ability to achieve abundance. And then they're using the Hidden Heist with their support team members for an open and honest discussion about everyone's money stories, starting to rewrite their stories to contribute to their own success and the success of the firm, and then bringing great empathy to the stories their clients bring with them. And advisors are also purchasing copies of the Hidden Heist to give to their clients, sometimes for them in turn to give to their adult children. The Hidden Heist is a compelling story with twists and turns. Readers are calling it a page turner and one of my clients recently texted me and said that she couldn't stop listening to the audio version of the book. Curious. Go to thehiddenheist.com that's thehiddenheist.com to learn more and catch our fun one minute video trailer. Today's show is sponsored by Nexrudo. Nextruto helps financial advisors attract and engage qualified pre retirees in their local market by filling educational seminars with high intent prospects and turning those audiences into new client opportunities. To get your free local market report to see how many millionaire pre retirees are in your area, go to nexruto.com that's n-e x R-U-T-O.com and I'll tell you a bit more about NXTRUDO later in the show. Now real quick, this show was originally hosted as a live webinar so you'll kind of see how it plays out when you get into the show. Just make sure you check the show notes for the links mentioned in the conversation. And now on with the show. Well, welcome everybody. If you would like a roadmap to more ideal clients, an ideal business and your ideal life, you are in the right place. Few preliminary things Real quick as we get started and people logging in, I hope you're ready to take a lot of notes. This is going to be a high content session. You're going to get exposed to some ideas and ways of thinking that definitely worth taking note. Yes, we will be recording this and I'm trying to experiment. This is the first time I'm doing this. As you may many of you may know I have a podcast called Top Advisor Podcast. We've been fortunate to be ranked number in the top 3% worldwide among podcasts. And so what I'm doing now is I'm going to have this live interview with our guest today and then we're going to turn it into the podcast. And so following this I will send you a link to the replay which would be in the form of the podcast that you can share with others. Other other things we're going to send to you as well. We'll talk about as we go. So just want to let you know it is being recorded. We should have time for questions. I'll be monitoring the Q and A as we go. I have disabled the chat, at least I think I did if I did it properly just because the chat goes too fast and Bill and I are going to be talking back and forth a lot and just don't have a chance to to look at the chat. So if you have a question, comment, put it in the Q and A. We'll see it, it'll stay there and we will get to it as best we can. There is Bill's email address. If you have a follow up question for him later. There's my email address. Yeah, it's the Bill and Bill show. What else we got? Oh by the way, this is sponsored by folks at nextrudo. I'm just getting to know them. And I'm telling you that I'm very impressed with the work they do. In a nutshell, they help financial advisors engage with qualified pre retirees in a local market. And what they do they have, you can get a free market local market report and identify all the millionaire pre retirees in your area. And they can help you with seminar outreach and a lot of other tools. I'm going to give you a little more on Nuxtrudo in a few minutes, but if you have some interest, if you want to do a local free market report, you can just go there now or I better yet, wait till after we're done@nextrudo.com but if it weren't for those folks, we wouldn't be here. So thank you to them. So with that, I'm going to open this up and do a little introduction of today's guest and then we'll stop the slides. We'll have some slides, a little bit as we go, but it's mostly an interview. So we all know that in the financial advisory world, everybody talks about the importance of, of trust, building high trust relationships, right? But it wasn't always that way. In 1996, Bill Bacharach's book, Values Based Selling the Art of Building High Trust Relationships really was a groundbreaking work. He's the, I call him the OG of the trusted advisor movement. Shortly after that, he released Values Based Financial Planning, another great book. Still seminal books as far as I'm concerned. And Bill has remained a force in this industry. Many of you know him, know of him. That's why you're here today. So I think what sets Bill's work apart from a lot of folks that are in of our ilk, speakers, consultants, coaches, he actually helps people produce results. Some people are interested in sharing ideas. Bill Bacharach's interested in helping people actually produce results. Otherwise, what's the whole point anyway, right? So. And more of his story will come out as we go, but Bill Bachrach zooming in from La Jolla, California, welcome to Top Advisor podcast.
- [07:37]
B
Hey, Bill, thanks for having me. I always appreciate being with you. I thought I would take my opening moments just to acknowledge you. So you and I have known each other for a long time and you are the real deal. So what I mean by that is you're somebody who really cares about helping people produce results. You've got a lot of integrity. You actually practice what you preach. So as you know, there are. Some people are in. Some people in our business are a little less focused on that I appreciate what you said. They're more interested in talking than they are in producing results. And I just want you to know I really appreciate being a professional colleague of yours and being able to call you my friend as well. So thanks for having me on today.
- [08:18]
A
Shucks, I bet you say that to all the fellows. So I shared a little formal introduction. How would you summarize the work that you do for advisors?
- [08:32]
B
Yeah, I would say that our focus has definitely been on building high trust client relationships, but specifically to produce a significant outcome. So I would say the most disappointing thing for me both when I was a young financial advisor, I was fortunate to work at Merrill lynch and quite a bit of success there. When I was, when I was younger and developing what evolved into values based financial planning is it was sort of striking to me how most financial advisors work too many hours for too little money for too many of the wrong clients. And it's not that we do that on purpose, it's that a lot of the training that we get, or the lack of training, so to speak, sort of puts us in that position. I was reflecting while I was shaving this morning and thinking about our time together. My first client who worked very hard to get, generated $56 of revenue.
- [09:30]
A
Lifetime, that lifetime revenue.
- [09:32]
B
Well, it was, it was very transactional. And let me tell you, you know, so while that was, you know, more than 30 years ago, $56 wasn't a lot of money then either. So if you were to adjust that for inflation and, and I worked really hard to get that client and, and I had other clients who were in similar amounts of money. And before you know it, it's easy to have hundreds or even thousands of clients again, working too many hours for too little money for too many of the wrong, wrong clients. And I'll bet many of the people who are listening to us talk today, that's where they find themselves. So you can even be producing a lot and still have too many clients for too little money, working too many hours. So that's what I'm most passionate about. And for decades I did that in the form of very high end coaching programs. And now we took everything that we know and we put it in an online learning platform using sort of Peter Diamandis singularity terms. We democratized all of our systems and processes so everyone can have access at much less than what our high end training and coaching programs used to cost.
- [10:39]
A
Yeah, good. And to everybody here, Bill's put together a little gift for everybody. We'll get that off to you a Little bit. And then you can learn more about Bill if you're not familiar with his work. So in the title, we talk about ideal clients, ideal business. Can you put a few numbers to that? Let's get concrete with that for a minute.
- [10:57]
B
Yeah, absolutely. The highest number of clients, and there are some presuppositions in this, are 50. So 50 clients who each pay you. I call it annual recurring revenue. It could be a flat fee, it could be a planning fee, plus a percentage of assets under management, some combination of assets, commissions, but the recurring revenue, so that when you multiply your number of clients, no more than 50 and fewer is better times. The annual recurring revenue per client. That actually gives you the money that you need to. To pay for your ideal business. So after business expenses and taxes, you have enough money to fund your own ideal life. I have this sort of crazy idea that people who give other people advice about their money should actually have some idea. Yeah, you don't have to be rich to give others financial advice. And it's okay if your clients have more money than you, but it's actually being on the path of being financially independent yourself and being financially successful. So an ideal business has no more than 50 ideal clients. And if you want a specific number, it isn't just what I believe. We've been working on this for decades. And so in collaboration with our most successful students who've built their ideal businesses and created their ideal lives, it's hard to imagine you could do what needs to be done for an ideal client for less than 20 grand a year. So we can break that out in more detail if you like, but no more than 50 clients, where each client pays you at least $20,000 a year.
- [12:39]
A
And now I know some people are thinking like, I got 300 clients already. These are like, people are, you know, so look, here's the deal. For some of you, this is extremely aspirational. And even if you don't aspire to that. Exactly. I think you're still going to find a lot of value in what we're talking about, because the principles that Bill teaches and some of the strategies and tactics that go with them really apply to any practice. Bill, you're probably a little bit familiar, at least with Rob Knapp, who did the supernova program. Rob passed recently. His number was 75 clients. He started out with 125 and realized you really can't give concierge service to that many people. And so, you know, but that we're in the ballpark there.
- [13:32]
B
Yeah, let's let's just say you want to have fewer clients. Fewer clients for whom you do more and therefore get paid more. And how do you like you describe that. We work with people like that all the time. They're already, they already have. Working too many hours for too little money for too many of the wrong clients. So essentially you're, you're working on two businesses simultaneously. So your focus becomes acquiring ideal clients while you continue to manage, I call it your non ideal client business because you need the cash flow. So essentially the cash flow from your non ideal clients fund the building of your ideal client business.
- [14:11]
A
Right. And that book could be saleable if you want to. There's other ways to not have to be caught up in that anymore. All right, so I want to shift to what you're, what you're really known for. Well, you're known for this as well, I should say. But the high trust thing, right, I want to talk about that. So you know, why, why did you get focused on that and why is that the through line still today in everything that you do?
- [14:43]
B
I had an epiphany as a young financial advisor. So like a lot of us, I got sucked into the sales training path, right? So I was studying, I thought, well, you got to be good at sales. We probably all heard that before. And so I'm studying sales training, how to make features and benefits presentations, how to handle objections which I, maybe that's the irreverent part. I saw that in the promotion. It's going to be an irreverent discussion. I think, I think every, I think everything in sales training is bullshit. I think it's wrong and I think it is completely the wrong path because that'll be the irreverent moment. So there'll be more features and benefits presentations. Handling objections, closing, right? Always be closing. Close early. Close often close late. Find the pain. You're tunneling for pain. Find their pain points. People hate that. So I was studying sales training and I was actually in a very well known sales training class. And I, I asked the instructor, I said, you know, it occurs to me that when someone trusts me, I don't need anything that I'm learning in sales training. And he looked at me and he kind of paused. And it was, this was a person who always had an answer for everything. And he didn't have an answer. And I said, so why aren't we studying trust and how to build trust instead of how to make sales? I said, especially with what I do. You know, these are long term relationships. This is ongoing Service. And this isn't transactional. I'm not selling copy machines here. We're building relationships, doing comprehensive planning. I'm dealing with both spouses, maybe with multiple generations. So that caused me to embark on a journey where I went, okay, it's not sales training. And I just immersed myself essentially in why do human beings trust one another? And how do you reverse engineer that? What I found fascinating is there was no trust training. I couldn't, like, enroll in a class. And so I didn't really want to become the inventor of trust training. I wanted to be the best student of it, but it really didn't exist. Like, you know, you can enroll in 50 sales training courses from 50 experts, but there wasn't trust training. So that was the epiphany. And I've always said for years, you know, trust trumps everything, you know. You know, as a referral expert, without trust, you are not going to get referred.
- [17:14]
A
Yep. I teach that referrals are based on the principle of borrowed trust.
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B
Yes.
- [17:18]
A
Borrowed the trust in one relationship long enough to earn our own trust in the new relationship. And whatever process you may have for bringing a prospect along to becoming a client, everything gets easier when you meet them through a referral, or I should say, an introduction from someone they already trust. Right. It makes the whole everything work. So for those of you just joining it. Yes, we are recording this. Yes, we are taking questions. So if you have a question, put it in the Q and A. I've disabled the chat because it moves too fast. We won't have time to check it out. We don't want to miss it. So put in the Q and A. And so with that. All right, so that's the principle. I like to think in terms of principles, strategies, and tactics. Now let's get to more of the strategy and the tactical side. So what do advisors do? What is the process for building trust?
- [18:13]
B
It's the oldest principle on the planet. It works in business relationships. It's true in personal relationships. It's true with your children. It's probably true with your pets. The answer is to be a really good listener. And in order to be a really good listener, that presupposes that you ask really good questions.
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A
Yeah.
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B
So from your. The principle is building high trust. The strategy, if you will, is ask really good questions and listen. And the tactics would be. So what specific questions? So I think the action item for the financial advisors who are participating today is to review your entire process. And from the very, very beginning, when from the. You get a referral and you're talking to someone, whether you're talking to a stranger, you're talking to a prospect on a list. I know, I know. That your sponsor talks about educational seminars. Yes. So when you get that room full of people, the first thing you should do is you should ask those people questions. Right. So they should be asking questions and you should be listening. I'm sorry, you should be asking questions and listening to their answers. That creates empathy, that creates emotional connection. So asking good questions and being a really good listener, which apparently, Bill, you would think, well, this is so known. Why are we still teaching this? You know, how is it that you and I are sitting here having a conversation about something as fundamental is asking good questions and listening? And I'm happy to talk about some specific questions, but you as an advisor, you should look at your process. And what most advisors do is they make the mistake of going, well, you know, I'm going to ask you a bunch of questions because I need to get to know know you. But before I do that, you probably want to know something about me. So let me tell you all about me. I've actually fixed training manuals of major financial services companies. One comes to mind where they said, so, Bill, we're bringing you in, we want you to read our script. And that was, that was basically the script. And I've seen this repeatedly. I'm going to ask you a lot of questions, but first I'm going to tell you all about me. And I was on the airplane reading this manual, flying to this event. And, and I, I timed myself. I tried to think it at a conversational pace. And it was 28 minutes of talking about myself, my background, my credentials, why the company is so great. And then it pivoted back and said, well, now that I've told you all about me, let me ask you some questions about you. And, and the reason I laugh about the time is, wasn't this Dale Carnegie in the 20s and the 30s, how to win friends and influence people? Isn't this Stephen Covey, seek first to understand and then be understood? So how is it that in 2026, you could have a competitive advantage in building trust by being really good at asking questions and actually listening to what people say?
- [21:30]
A
And there, there's the key, actually listening. And so, as we all know, most of us in conversations quite often are listening or waiting for our time to talk or, you know, someone's talking about a vacation, we want to chime in about our vacation or whatever. So, you know, you talked about the always be closing I haven't always be, but mine is my ABC is always be curious.
- [21:57]
B
Oh, it's good.
- [21:58]
A
And so I'm just gonna. This is, this is my interview of you, but I can't help but chime in a little a phrase, three words that I find that if people could just adopt these three words, every conversation, every relationship would be better. And they're really simple. And it's as simply as tell me more. Right. Rather than waiting for you to chime in and your answer, your response, your observation, and there's a time to chime in and comment and all, but just take a beat and say tell me more or other versions of that phrase. And you know, it's the old to be interesting, be interested. So give us a couple, give us two or three questions. What do they sound like? What do they look like?
- [22:48]
B
Well, let's talk about. I like your idea of strategically. So where are we strategically in the process? So are we at the first meeting? So both spouses with their documents somewhere where you can have an effective meeting. So that's a big part of it. I walked into a Starbucks last year and I saw a financial advisor having a meeting with a client and, or maybe it was a prospect, I'm not sure. But their financial documents were kind of spread on the table. I could, I could, I could literally have walked by and taken like a video or a picture of their, of their tax returns and all this stuff. So are you, first of all, are you, are you, are you in a place where you can create a great experience? So it isn't just asking the questions, it's creating an environment to have a great experience. So is it pre meeting your sponsor teaches people to do educational seminars. Are you with a group of people? So how do you ask questions of the group of people? But I love your. I call what you said. It's called the way of being. So you have to have specific tactics that are based on a strategy. And then what you described, always be curious is a great way of describing what I call the trusted advisor way of being. So you can take, you can give two people the same questions and one will be very effective with them and the other will come across as manipulative and salesy. Like they're always looking through. I call it looking through your asset glasses or your money glasses because it sounds more like you're asking questions, kind of gotcha questions. And that's what we were taught in sales training, right? Ask questions that will set them up so you can sell them something versus doing what you're talking about. Always be curious. So I'm going to go. And we can, we can. I'm happy to go. In various places, depending on what you ask or what your participants ask through the Q and A. Let's. My favorite question is the first question at the beginning meeting, and this is talked about in the main book that your audience should get today is Values Based Financial Planning. And there's a link. We're going to give you that book for free. We're going to ask you to just cover shipping for that. But Bill's going to put up a link to that where you can get a copy of Value Space Financial Planning for free. So you can dive deeper into what we're talking about here. But the core question is what's important about money to you? And that's the operative. That's the values based question. And there is no. And it's the conversation that that question creates. It's not just the question. Right. So the preamble to that is in order to help you make smart choices about your money, it would make sense that I understand what's important to you. So let's start with that. What's important about money to you? And you would actually take each spouse up what I call their value staircase or their values hierarchy, one at a time. But that's the starter question. And the next eight to 15 minutes of your first meeting is listening to each of them talk about what's important to them.
- [26:01]
A
So it's. And it's all about them.
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B
It's all about. That's one of my. Right there. It's title, one of my books. It's all about them.
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A
Oh, I forgot about that. But there it is.
- [26:11]
B
Now that I didn't make up the statement, I just turned it into a book title.
- [26:16]
A
And this is often hard for people because we're used to, for some reason, so many humans, not all, but so many humans just feel more comfortable telling and talking about themselves and what they do rather than being in that place of curiosity. Some people are naturally in a place of curiosity and others have to work on it. So if you're not, then work on it. Right? Practice it. Practice not having the talk, practice taking a beat, practice saying tell me more, et cetera. So what's important about money to you? And I know that the order of those words are important as well, because I, I repeated this back to you once and you said no, no, no, and I had it shifted wrong. So you end up with the word you. What's important to money? What's important about money to you. And then and I know that you teach you go further what's important about that and tell me more about that and then you're really getting to know them before you really, you know it's the old prescription without diagnosis is malpractice. I suppose. So I got a lot to discuss with you. I want to ask you about mistakes that people make around this. When you've got a study that you've done was very revealing. I want to make sure everybody hears some of the things that you've learned in this study. A few other meaty topics. But first I want to take a quick pause for a word from our sponsor nextrudo. And actually to do that I have to share my slides and I hopefully have the slide teed up. Let's go. There we go. All right, so real quick, just getting to know nextruto and I'm telling you I'm very impressed. Mostly I'm impressed with how much they care about producing great results for folks. So we all know that the most, most people find their advisor in a human human connection. Michael Kitces has, has Sorry, I just did something on my screen that I could. There we go. Has talked about this that supports this. It's the human human connection still trumps everything else in terms of how you find your clients. And one of those in his study is, is seminar. Seminar still has a viable path and it builds, you know, it's an in person setting allows you to build trust if you do it the right way. Getting in front of the right people, right. Always the right audience is important. Nextrudo comes in, that's their expertise and they handle the heavy lifting here so you can focus on earning the business. They help you design the seminar or if you have one they can help you work with that to fine tune it, make it even better. Effective presentation skills to be a better presenter if that's something you might need. But one of the big things I think that distinguishes them is the customized territory marketing that they they can do and also helping you with compliance approval. That's a big part of what they do. So they take the the headache away from you on that. So their specialty is getting pre retirees, specifically those with about 1 million or more of investable assets into a room with you. They promote the vet, they get bodies and seats, you bring your value, you spur them to action, you set the appointments, etc. And because they guarantee exclusive rights, you never have to worry about them selling leads, creating leads for someone else, a competitor in your area because you're getting exclusive rights to this to the, to the group that you'll be marketing to. You'll work with owner Steve Abbott. Yes, directly with the owner Steve. He provides incredible support. He makes it easier for you to get the right fit model in what he does. And so I've looked at nextrudo, I've looked at other models. I don't take on sponsors lightly and I wanted to make sure that it was someone I could vouch for. I could say at least worth checking out and considering. So just go to nextrudo.com that's N E X R U T O. It's on the screen. If you're watching the video.com request your free local market report and you'll see how many millionaire pre retires live in your area. I did that in my area, Annapolis, Maryland just to get a sense and there were a lot. So it's a viable market for sure. And one other thing I want to mention is while we're in a little promotion mode, here is my next webinar podcast is going to be with Scott Bushke who was referred to me by none other than Bill Bacharach. And I'm telling you this is going to be a good one. How Financial Advisors Win and Keep Business Owner Assets. We're going to show the report on one of his studies which is the $100 million opportunity holding that you're hiding in your book. Most advisors, a majority advisors, lose their business owner clients when the business owner sells the business because the advisor didn't position him or herself properly and soon enough in the relationship. So that's going to be a good one. I will send the link to this in a follow up to this, this presentation here. So with that we're coming back to Bill and I've got some questions are starting to come in Bill, but first, what is one of the most common mistakes advisors make in their effort to build trust? You may have touched on it already, but give us a little more.
- [31:49]
B
Yeah, it's deeper than. Well, let's recap. It's failing to ask good questions and listen. So in every scenario I recommend for you as the advisor that you consider when am I particularly having a one on one interaction, whether it's whether they're in the prospect phase, somebody you've been referred to when you're calling them, it's the in person meeting. In every one of those scenarios there should be lots of question asking and lots of listening and you can almost always, I think you always can figure out how to actually do that. So the mistake is not doing that. And a good exercise is to actually record yourself and listen to the recordings. And I think with the AI tools today, we've done it analog for a long time by just doing the arithmetic. How many minutes did you talk and how many minutes did they talk? Right, so, so there's three things that happen. There's you talking them, talking and there's silence. And you would keep track of all that you've take. You take sort of a professional athletes approach to recording what you actually do and analyzing it, whether you get professional coaching or not, to see what do you actually sound like. There's what you think happens and then there's what actually happens. So there's a pretty good chance you think you listened better than you did. There's a pretty good chance you think you talked less than you actually talked. Although I think if we asked everybody, raise your hand, most of us would go, yeah, we probably talked too much. And I appreciated your point, Bill. Something you work at, you know, being a great communicator, being a great question asker, being a great listener, and then someone who can actually take what they heard and hopefully wrote down and bring it back in a way that is effective in motivating people to take action. Understanding the distinction between values and goals and needs and wants. So being able to do that is the right thing and the mistake is not. But I'll answer your question this way. If you said, Bill, what do you think is the biggest mistake financial advisors make? And the in the 40 years now that you've been a financial advisor and been teaching financial advisors, I think it's thinking they can't afford it. And what many of us do as business owners, entrepreneurs, self employed professionals, is we're really good at recognizing how much something costs. Like the cost of yes, but we often fail to calculate the cost of no. Yeah, right. So I find it fascinating how many financial advisors say, well, what did you pay for your four year college degree? You know, a hundred thousand, two hundred thousand, three hundred thousand? You know, a good college, a community college, a bad community college is a couple of grand a semester. And then you find out, well, how much money have you actually invested in your business and in your career? And it's sort of shocking. So the cost of that, that training class or that piece of computer software or a service like nextrudo? Well, you know, how much it costs to purchase it, how much does it cost to not buy it and therefore not get the benefits? I think that's the bit, the big mistake is really thinking like an owner and an investor rather than an expense cutter.
- [35:18]
A
Yes, there's an investment to moving forward and there's a cost to doing nothing. And you remind me of one advisor I was coaching many years ago. Not everybody's capable of this. But here's what he used to do. He would ask a good question and then he would just listen. He wouldn't take notes. He wouldn't distract. He would just listen. And then he would say, so this is what I heard you say. And he would repeat back. And then he'd write a few notes as he was repeating back that. I get that right. And the clients just loved him for this because he really, truly was listening. And they would say, yeah, you got it right. You understand me or no? No, what I really meant was this. Now you really understand me, right? So talk about a methodology. It's a little slower, takes a little time and patience. And not everybody is, you know, born into that level of patience. So we've got a couple of questions here. Let's take a break. Take a couple questions. So this is from Mr. Or Mrs. Anonymous. We always. They show up on every one of my webinars. So thank you for attending. Again, this person says, I don't know if you have a good answer for them or not, but I work with firms where I'm compensated based on products I sell, manage accounts, insurance setter rather than aum. How can I structure my advisory process to align with a planning first philosophy like bills while still operating within my compensation model? That's a big question, but give us a little something.
- [36:53]
B
No, it's really pretty simple. So putting planning first is a decision that's based on what's best for the client. And you actually said it earlier, right. You said philosophy, strategy, tactics. Right. So there's another way of looking at it that's complementary. So vision and strategy and tactics. So when you're helping someone to make decisions, whether if you were a business consultant, if you were a personal financial advisor, anybody who's helping people make smart choices over the long term, I believe it's vision first, which is big picture. And then secondly, you have to have a strategy which is a plan. And then third, you have the tactics. So the reason the whole financial services industry has decided to embrace planning is because it's proven, and all the planning companies have proven this. Money Guide financial profiles, Right? Capital E Money. Every single one is proven that if you have a plan that more products are purchased.
- [37:56]
A
Yes.
- [37:57]
B
Which I think is the wrong reason to be a planner. But nonetheless, if your company's goal is for you to sell a lot of products, you will sell more products as the output of producing a plan. So when I started in the business, Merrill lynch allowed me to charge a whopping $175. That was the fee for the plan.
- [38:19]
A
Wow.
- [38:20]
B
Right? It probably would have been better if it was zero. I can't tell you how many times I would get to the. And I believe that you have one meeting and if you run that meeting effectively at the end of that meeting in less than an hour, you will get hired. Because planning is so obvious. In the research report that we did of millionaires and multimillionaires, which I know you dropped the link in the chat. You can get a free copy of this. 67% of millionaires and multimillionaires do not have a written financial plan. Which is means their financial. Their wealth managers are saying let's skip planning and go straight to tactics.
- [38:56]
A
Yeah.
- [38:56]
B
Which is. Which is a mistake. So you embrace planning because it's the right thing to do for the client. And then a byproduct is you'll generate more revenue per client. That being said, the challenge that you have if you. And you didn't quite say this, but I'm not sure. So I'm going to point this out. You have to have something that generates recurring revenue. Otherwise you are absolutely on the path of working too many hours for too little money for too many of the wrong clients. Because now you're obligated to serve all those people. But you only got paid in the first year. If they don't buy more products, you don't get paid. So I would rec. I doubt that that's the case. But since I can't have a two way conversation with the person who asked the question, I'm just going to point that out. You have to be able to create annual recurring revenue so at some point you can have a fixed and finite number of clients for whom you are their trusted advisor.
- [39:53]
A
And that annual revenue recurring isn't always just a percentage of aum. You could have a flat planning fee that you charge every year. I'm coaching an advisor right now. That's what he does. And it's 15, 20,000 a year for his clients.
- [40:07]
B
That's actually the fastest growing segment of the financial services industry is migrating to a flat fee fee. So it used to be GDC and then it was percentage of aum. And I always find it entertaining when people think that the last form of compensation is the last form of compensation. Right. So there was a time when Aum was the big transition. I also find it entertaining what Vice said. I finally decided to go all in on a fee for a percentage of assets under management. I go, that was the transition of the 90s. Right. It's like, it's sort of like, it's, it's like it's die hard. When he says, welcome to the party, pal.
- [40:50]
A
It's still happening. I just, I just spoke at a firm two days ago that, that they're in that part of the transition rather than the next phase. But they'll get there. All right, one more quick question and then we'll ask. I got one for you. And then we'll keep going back and forth. Jack Reeder. Hey, Jack, good to hear from you. So after asking the what's important about money to you question, what follow up questions do you see as a caveat here? Do you suggest when the prospect is reticent or seems reluctant to say much? Right. So not everyone's going to be flowing with answers to this question. A lot of people haven't even thought it's the first time they've ever heard that question. Right. So how do we get a little more, I guess what he's saying?
- [41:35]
B
Yeah, it's not that you ask another question. This is, this is. Jack, you are. This is very insightful. So what happens is, especially as you're becoming better at asking questions and listening, you have your, I mentioned earlier your trusted advisor way of being. So there's the verbal, you asked the question and then there's your non verbal. And so, I mean, I've had, I don't know, tens, tens and tens of thousands of advisors have gone through various training processes for this many of them. I've done workshops all over the world. And as you know, Bill, I do a lot of role play. So you partner and what you can absolutely see. Not only that, I've coached thousands of recordings from God knows how many, many hundreds if not thousands of advisors. And what happens is I ask a question and then I'm anticipating an answer and inside. And we all have this. I have an internal silence clock that I'm comfortable with.
- [42:34]
A
I know exactly right?
- [42:36]
B
Yep. So I ask you a question and you need, I'm just going to say eight seconds to think of your answer. So Jack, you're misinterpreting. They're not reticent to answer the question. They need more time than you're comfortable with. So they need eight seconds to answer the question. And you've Got a five second tolerance for silence clock in your head and it's you who's getting anxious. So if you would just sit back and relax and recognize there's my tolerance for silence clock. And you're starting to feel kind of twitchy, like they're not answering. So you're, you're basically, you're making it up. You don't really know why they're taking that long to answer the question. I always just figure that's how long they need to take to answer the question. And it could be they could answer the question really quickly. So you have a five second silence tolerance and they answer the question in two seconds, you got no problem. Right. But if they answer the question, if they take four seconds to answer the question and now they're bumping up against your 5 seconds tolerance, you start to get, oh, I need to say something, I need to ask something else. When actually all you need to do is instead of leaning in, is just lean back and relax and they will sense that it's okay for them to think this long before they answer. And you're right. Bill and Jack, these are meaningful conversations. Some people answer right away. I'm guessing that Jack is probably already. His question sounds like someone who's been through my training and has, has asked the what's important about money to you question. Right. Because this is Jack. I think. So this is exactly the kind of question you've had this experience and I'm just telling you it's, it's, it's easy to blame them. It's not them. Yeah, it's you becoming a better communicator and saying, fine, I can sit here for 8 or 10 or 15. It's really not that long a time. If it took somebody 20 seconds to think of their answer, fine. So it's not a follow up question because they're not answering. And if they're really stuck, what if they say, I'm sorry, I don't, I don't think I can answer your question. You ask the same question slower.
- [44:47]
A
Right? So now give them a couple of examples. Could you say some folks have said this?
- [44:51]
B
No, no, no, never. You never lead, Bill. That's, that's the hallmark of shitty communication, is I'm just going to give you multiple choice.
- [45:00]
A
Well, I wouldn't do that initially. I would just.
- [45:03]
B
You would do it never. You wouldn't tell them what their goals are.
- [45:07]
A
All right, all right, all right, I hear you.
- [45:09]
B
Never. Never.
- [45:09]
A
All right, so real quick, I want to share a slide. Bill, this is your Gift to everybody. We got more questions, don't worry. But just real quick. What, what are they getting here for free and it's in the chat. So ping it and get there. But tell them what they're getting real quick.
- [45:25]
B
Yeah, well the first thing is you want to get this report, right. So this is, we, we dropped about $40,000 to ask millionaires and multimillionaires some really key questions about their relationship with their financial advisors. Now we called it the High Net Worth Client Trust Gap. A national study on millionaires and multimillionaire satisfaction. What it means for financial advisors. We could have called it rich people are easier to steal from their current financial advisors than you probably believe. So 51% of the millionaires and multimillionaires that we surveyed would pay more money for a better financial advisor. Right. So these are people who already paying 30, 40, 50 to $100,000 a year for a financial advisor. They would pay more money for a better financial advisor. 29% of the are already considering replacing their financial advisor. 67% don't have a financial plan. Very high, I'm not going to remember every percentage, but a very high percentage of them have no advisor who takes the lead and is sort of the quarterback or orchestra conductor of all of their subject matter experts. So what do you do with it? Well, first of all, I think you'll find insights that will give you confidence that rich people are stealable from their current financial advisor. And then what we're hearing from a lot of advisors because this is relatively new, is they're reverse engineering. They're using this data as a way of reverse engineering to make sure they are doing all the things that rich people are saying cause them to be unsatisfied. So just because they're not leaving their financial advisor, there's a difference between satisfied and loyal. Right. And another interesting stat from this bill is that women in every category tested are more likely to leave their financial advisor than men. And men predispose. Predispose. Pre. Pre. Deceased women and means ultimately, before the next generation is in charge of the money, she's going to be in charge of the money. Usually he dies in his 70s and she lives another 12 and a half years.
- [47:35]
A
Yep.
- [47:36]
B
Right. So that's important data. I mentioned you'd get a free copy of Values Based Financial Planning. We're not going to charge you for the. But it does cost us about 10 bucks to for shipping and handling and packaging. So you'll click on that and you'll cover that cost. And we'll send you the book. And then we do have a webinar on going deeper into the what to do and how to do it from some of the things that we're talking about here on client acquisition. So if some of what I'm saying is resonating, that'll be a deeper dive. So friends of Bill, friends of Bill.
- [48:07]
A
Cates, Bill and Bill. Bill and Bill.
- [48:09]
B
Yeah.
- [48:11]
A
When I'm sending emails to Mr. Bachrach's chief assistant, Michael, I always do BB and BC so he knows which Bill I'm talking about.
- [48:22]
B
Right.
- [48:24]
A
Question about Canada. I know the shipping is a little more to Canada. Actually it's not cheap to ship a.
- [48:30]
B
Book to Canada, but we're just gonna factor that in. It's whatever the flat fee is. I say it's 10 bucks. I think it's $9 and some change. We'll, we'll take care of it.
- [48:44]
A
Take care of it.
- [48:45]
B
I mean, Australia, I mean, so apparently we just didn't really want to complicate this whole thing by saying, okay, we're going to put the book on the scale with your zip code.
- [48:56]
A
Right.
- [48:56]
B
And we're going to weigh the envelope. I mean.
- [48:59]
A
Yep. Got it. Good, good. All right. Well, that's good. So that Maria answers your question. Let me stop the share here from Steve Abbott, actually, our friend, the sponsor at nextrudo, he says I often hear this from advisors. My business is great, but I'm so Busy. They have 300 ish recurring revenue clients. How do I recommend they get to the top 50? You kind of touched on. Do they bring in a junior advisor? Do they give them away? Do they sell part of their book? Probably any of those options are viable. Right?
- [49:32]
B
Well, that's the trap, Bill and Steve. That's the trap is you get so busy taking care of your non ideal, I'm working too many hours for too little money, trying to serve too many of the wrong clients. So we have an exercise inside the Advisor Roadmap virtual training platform. It's exercise number one. You create a vision for your ideal life. You define your ideal business and you develop your ideal client strategy. And then the next course is the action plan. So you take a look and go, well, of my Steve, using your number 300 clients. I have four ideal clients. And that's usually the case if you really have an ideal client profile and you overlay it on your clientele. Most financial advisors currently have single digits of truly ideal clients because it's not just recurring revenue, Bill and Steve, it's also personality. Right. So Some clients pay you a lot of money, but you see their name in your appointment book and you just go, crap. It ruins your whole day just to see that they're coming in. And you kind of say, if they weren't paying me a lot of money, I would never do business with these people. So a truly ideal client is both money and personality. So now you say, well, I've got four ideal clients in our hypothetical example. And now your focus becomes. And what I like about what you're doing, Steve, is we're focusing on millionaires, so we're only inviting the right people to attend. Therefore, we increase the probability that our future clients will be ideal clients. And from that point forward, your focus is on ideal clients. You accept ideal clients, and we call profitable non ideal clients. So you've defined both your target ideal client and the minimum you'll accept as long as you need the money. And then to your point, you've got those options. You can hire a junior advisor, you can sell your. You can sell your non ideal clients. And there's sort of a sweet spot when you get to about 30 to 40% of your ideal clients. That's when you really find that it's time. And most advisors that we've trained and coached of all the options, they do end up selling their non ideal clients. And now they recapture all that time. Because hiring a junior advisor is a project. Managing a junior advisor is a project. Supervising a junior advisor is a project. You own everything they do. So if they screw up, make an honest mistake, and now you've got a client complaint. That's a big project. Right. So most advisors find if they're really building their ideal business, it doesn't include supervising a lot of employees.
- [52:05]
A
All right, those are the questions. I've answered a few, just typing some of them there. Let's see, where do I want to go? I got so many things. So you've covered the study a little bit, which is really good. Let's talk about something that's near and dear to my heart. Everybody kind of knows me as the referral coach. I get introduced these days as the OG of referrals or the goat or whatever. And you're the OG of value. And this is where our worlds cross. And we've had a lot of robust conversations. We did stuff for MDRT videos together, had a lot of fun. So give us your thought around the whole thing around referrals and introductions.
- [52:51]
B
You know, there's. There's something else we should put. I'll tell my team to add we did. It was longer than an article, so we kind of called it a little guidebook. And it's called the Relationship Bridges. And it totally aligns with what, what you teach and it adds our perspective, which might be valuable. I touched on it earlier, but let's dive deeper into it. So I call it the Relationship Bridges. Because first you have to build a high enough trust, a high enough level of trust with both spouses, right? So assuming you're dealing with married people, both spouses, if they're widows or widowers or singles or divorcees or whatever, then just one. But often it's both spouses. So you have to build a high enough level of trust so that they do all of their business with you so your existing clients upgrade to being ideal clients. So there's a big difference between somebody who does some of their business with you. 23% of the millionaires in our study said I'm lying to my financial advisor. Like I am purposely lying to my financial advisor. And the main lie I tell is that you know where all my money is. So there's. You got to build enough trust so you really have the entire relationship. Because you can't create a comprehensive strategy with incomplete information. So that's the first relationship bridge.
- [54:12]
A
Yes.
- [54:12]
B
And then the second relationship bridge is they have to trust you enough, I believe, even more. Let's use a 1 to 10 scale. Let's say they need to trust you at an 8 to do business with you, which is a high level of trust, but to actually refer you, and I'll use myself as an example. So now if I refer you to my friends and my family and my colleagues, I'm risking those relationships. So if you screw up with them, if you screw up with them, it doesn't just affect me, it affects them if it's just me. If I don't refer you, I'm safe. And you hear that all the time. I don't really like to refer. And what they're telling you, whether you want to hear it or not, is, and I hear this all the time, some people just don't refer. Bullshit. They don't trust you enough to refer. Right. This isn't some people don't refer to. Right. Everybody refers if they trust you enough to refer. And you should not assume because they trust you enough to do business with you that they trust you enough to refer. You have to cross both bridges. Right? So 27% of the millionaires here said my financial advisors said they were going to do something and didn't follow through. So not enough for me to fire them, maybe. But I can't refer somebody to my friends who has even one time not followed up on something. And it doesn't really matter how small it is. So relationship bridge number one is trust you enough to be your client. Relationship bridge number two is trust you enough to introduce people to others. And you say, well, but what if I don't want referrals? Do I care if they trust me that much? Yeah, you want them to trust you the maximum level, whether they're referring or not. So I'll tell Michael to add that he's more than my assistant, by the way. He's the director of Advisor Roadmap, virtual training platform.
- [56:08]
A
Michael. Sorry.
- [56:10]
B
He runs the business.
- [56:11]
A
All right. You're the real boss. All right.
- [56:14]
B
I do fun stuff like talk to you.
- [56:16]
A
Yeah, Indeed. Good. We're doing. Got one more question, then we're kind of wrapped this up. So Maria's from Canada, obviously. She keeps asking about Candice. She says when I put my Canadian shipping address, the only shipping option is $60, not the 999. So I just bought the book on Amazon, which would only cost 27. All I can say is, don't worry about the pennies, Maria.
- [56:44]
B
Yeah.
- [56:45]
A
Worry about all the dollars that you're going to make by reading the book. That's all I can say.
- [56:50]
B
You can also just send an email to michaelbackrack.com or if you send it to me, because, Bill, you put my email address up earlier, I'll forward it and we'll take care of that. That's just, I don't know, an oversight on our part to make it simple for you. Sorry about that.
- [57:07]
A
Yep. Just let's don't worry about a dollar here or there, considering what you're going to learn from the book. So real quick, Bill, because everyone's always curious about, you know, the buzzword, the sexy word these days is AI. Let's bring this home with just a minute or two of your thoughts around AI and what it's doing or how should advisors react, especially related to trust in the main topic of our.
- [57:35]
B
Of course. Yeah. If I were a financial advisor in this AI world, my mantra would be be as analog as possible. Right. So because what we're talking about is a human connection. So the one thing that we have as humans is the ability to make a human connection. Right. So by definition, no matter how well AI can emulate a human connection, we all know it's not a human. Right. So especially your target market. So your target market are Wealthier, more successful people. Right. Your sponsor is going to put people who have a million dollars of investable assets in the room. Right? You might want people, and that's the bottom. Right. If they have 2, 3, 4, 5 million, 10 million, 15 million, maybe not the ultra high net worth. We're not talking about billionaires, but 95% of millionaires in the United States have less than $10 million. Right. So there are only 900 billionaires in the world. Right. So that's not that, that's not really the target. So be as analog as possible. Be as human as possible. So use AI to do all the technical work. So the technicians, Bill, I think are screwed if you say, but I'm expert at managing money, you know, I'm expert at doing the technical work of planning. The software really does the lion's share, the lifting of the planning. You do the human part. So I think too many financial advisors are actually trying to say, well, I'm going to let my website, you got to fill out a form and you got to do all this stuff. They're actually trying to separate, they're trying to separate out and have machines do as much as possible, delegate the technical work to the machines and double down on the human work, make the emotional connection. That's the problem with even doing meetings virtually. I think people are going to become more and more suspicious of anything that is virtual. Right. So you and I is this, we just now created an avatar of me, right? So in about 30 days, when you join Advisor Roadmap, you're going to be able to have a conversation with AI Bill and you're going to get many hours of the ability to ask AI Bill questions. And it looks like me, it's my voice. We uploaded everything I've ever said about building high trust relationships, etc. And we're testing it now and the answers are as good as what I would say. But if you wanted to pay me to sit with you for 10 hours, you know we're talking about tens of thousands of dollars, right? I'm working less, not more. Right. So there's that. So people are going to become more and more. Now we're transparent about that. We're not telling you it's me, but it's really an avatar. Right? But people are, I think people are going to become less and less trusting and if they're not physically in the same room as you, I think there's going to be some doubt about whether or not you are actually real. So you want to be analog, you want to be human. You want to be real. You want to make that connection. So just keep in mind most people who have millions of dollars are in their 50s, 60s, 70s and 80s, right? So statistically it just takes decades to become a millionaire or a multimillionaire. It's not a criticism of any generation. It just takes that long. It just takes time. There are exceptions to that. But if you want to build, if you want 50 ideal clients, you want 50 millionaires as clients, most if not all of them are going to be in their 50s, 6070s and 80s.
- [61:20]
A
Good, good. So real quick as we wrap up here, I just want to say thank you to Nuxtrudo for making this possible. Go to any xruto.com nextruto.com and get your free market report. They'll give you analysis of how many million dollar pre retirees are in your area and then reach out to them and they'll help you go further from there. Bill Bachrach, the OG of trust and value based selling in this world. Parting shots, parting comments please.
- [61:54]
B
Yeah, you asked me the question earlier, what's the biggest mistake that advisors make? And I think it's, I said it's not recognizing that you make investments. Well, the key thing to follow up with that is, yeah, there's no point in making investments if you're not going to execute. Right. So the second biggest mistake that advisors make is they show up for things like this and they take notes and they think it's great. And then they, three months later they find their notes and go, hey, that was really good information. So my advice is that you learn less and execute more of what you learn because action creates results. Conversation doesn't create results. Action creates results indeed.
- [62:36]
A
Bill Bachrach, thank you for being my guest today. Appreciate you. And everyone will be get the recording out to everyone. We got the follow up. All that a lot of thank yous and hearts and things coming Bill. So thanks again bud.
- [62:49]
B
Yeah, it's my pleasure Bill. Always good to be with you.
- [62:51]
A
To you. The listener of this podcast may ask a small favor. If you like this episode or like the podcast in general, please leave a five star review on the platform. You're listening to the show. Not all platforms have a place for reviews, but if yours does, I'd be grateful. Thank you. Don't forget to check out my newest book, thehiddenheist.com thehiddenheist.com and pay a visit to our resources page. Jam packed with free resources to help you attract and retain more right fit clients. Go to referralcoach.com resources. That's referralcoach.com resources. And while these are free, free to you, I know you will find them quite valuable. This is Bill Cates reminding you that ideas do not make you more successful. Only acting on those ideas will bring you the success you desire. Thanks for stopping by.