B (3:43)

Thanks, Bill. Appreciate the invite. And wow, Deep thinker. I don't get accused of that very often. I'll have to play that clip for my wife. I'm sure she'll have a field day with that one, but thank you.

A (3:54)

Well, you know, we show up in different ways with different people in our lives, so I get that. So, briefly, Duncan, how long have you been working with financial advisors and what were the origins of your business? Pareto Systems.

B (4:10)

Yeah, thanks. Well, first of all, yeah, you mentioned Kelowna, British Columbia. That's where I live. That's right in between Vancouver and Banff. Beautiful part of the world.

A (4:20)

Yeah.

B (4:21)

To give everybody some context. It's like if you took Lake Tahoe and Napa Valley and put them together in Canada. That's where I live. A little bit more context. You could take California, Oregon and Washington State and put them into British Columbia and still have room, if you can believe that. Wow, magnificent. Natural splendor here. But back to your other question. I started over 30 years ago now, accidentally. I had a marketing company and some of my clients and friends were financial professionals. And so I got to know the business a little bit and I had a friend who said to me, he said, look, if you ever want to make any real money, get into the business of money, because that's where it all is. And so of course, that got my attention. I just started giving them some business development and client acquisition ideas that happened to work. So I worked in Canada through the mid-90s and had a breakthrough in the US in 1997. And today the lion's share of our interactions are with American based financial professionals. And yeah, so I appreciate it a great deal. I say to my friends in the U.S. i am the most American Canadian you'll ever meet.

A (5:53)

Because you don't apologize as much or what?

B (5:56)

Well, no, I still have many reasons to apologize, but no, I really appreciate entrepreneurship. The difference between having a job and creating a job and creating other jobs. The entrepreneur is such a noble position in the community. And what I love, Bill, and I'm sure you do as well, is that more and more financial professionals are becoming entrepreneurial now. A lot of people hear that word and they think it's a French word for somebody who works at home in their underwear.

A (6:36)

Hardly.

B (6:37)

Well, exactly. The big distinction is they don't work in the business transacting, they work on the business, building something, building advocacy, building enterprise value, building sustainable momentum. And I really admire the alchemy that comes out of entrepreneurship.

A (6:54)

So that's a little bit of your history and kind of your appreciation for the business. I'm curious, do you have a kind of a mission now that drives you? What are a mission, your why, guiding principles, lots of names you can put on. Essentially the same thing. But what, you know, what drives you these days?

B (7:10)

I've somehow landed in this sweet spot between balancing why and how. Okay, so why is the purpose, how is the process? And I try to live by that myself. And what I love is the alignment. Because the most enlightened advisor has a deep sense of purpose, but they also understand the importance of being process based. Because, and you would know this because you've been around the block as well. Advisors started having a book of business and then they started to transition to wear more hats and have a book of busyness. Very, very busy. Bench strength, bandwidth, all kinds of deeper solutions, complex needs. But now the enlightened advisors moved all the way over to having an actual business, which ultimately means they place as much importance on practice management and relationship management as they do on asset management and their technical ability. So that's why I love where we are today in terms of this era. For the financial professional, that's great.

A (8:25)

I love that the balance between the why and the how, both are very important. I know I've, in my experience, when it comes to the referral things that I talk about, the advisors that really do have that sense of purpose, that are on kind of a mission, they tend to do better in terms of client engagement, in terms of becoming more referable and actually being more proactive in a way that produces results, it's great. So you and I could probably talk about client engagement and client acquisition for days. For today's show, we're going to focus on strategic partnerships. First question, why do you believe advisors should expunge the term centers of influence from their vocabulary.

B (9:09)

Expunge. That's not a word you hear every day, but I like it.

A (9:12)

Well, I used eradicate earlier. That's not a hear a word you use. Eliminate. Would that be better?

B (9:19)

Well, I do appreciate the broad lexicon because the words matter. And here's to answer your question. Bottom line is that the industry has shifted so dramatically. When I do a consultation with an advisory team, I often remind them, I say, imagine there's an empty chair in this room and one of your clients walks in and sits down. As we're talking about client acquisition, business development, would you be absolutely proud with how they interpreted what you're working on? It's like, Bill, it's like the best restaurants are an open kitchen. They're so proud of what they do, they show it off. It's part of the vibe. It's part of their culture. They're fully transparent. So I hear advisors use words like production, wallet, share, I eat what I kill, you know, things like that. And I go, would you ever say that to a client? And of course they say no. And I say, well, you've got to be completely transparent. So fast forward to center of influence. Who's the winner? The winner in that position is I'm engaging in this relationship for the purposes of getting more referrals. That's the effect, that's not the cause. What I like to say is, as a financial professional, we have established a vast network of strategic partners and other service providers that we engage in the process so that as a client, you always have the complete picture. So the nuance there is, I'm not referring someone out, I'm engaging them in for the purposes of what that does for a client. All a client wants is you've got this, right? You've got this. Things don't fall through the cracks. You're integrated, you're not a siloed professional. And vast, you know, I love acronyms. VAST is an acronym. Value Added Support Team. You see the distinction there, Bill, is that that's proprietary. That's something I've developed. And as a thought leader, and you know this because you do this incredibly well, is thought leadership and subject matter expertise is not just the intention and the knowledge. It's the proprietary assembly of what we've created that brings value to a client. So. So that's a long winded explanation of the positioning. But I can tell you clients interpret that, they internalize that very favorably. And then of course, in the spirit of referrals, they socialize that positioning. So that's, that's my thought there.

A (12:33)

Yeah, I want to, I want to comment on a couple of those things. I love the expression proprietary assembly. It's purposeful and referring in, not out, so to speak. I think it's a great way to think about it. You know, the empty chair concept is great. In my book Radical Relevance, the second rule of Radical Relevance is give your clients a seat at the table. Now, when I wrote that, I meant it more like as you're working your positioning statements and you're working your marketing and all that, find a few clients that might help you with that, and they see your business a little bit from their perspective rather than your perspective and can help with that. But this is another way to look at giving them a seat at the table, meaning they're there all the time. Are you proud of how you talk about what you do? Even, you know, quote unquote, when, when you're not in front of a client? And I think that kind of raises the level of, of professionalism, does it not? When. And, and when you use the words, even when a client isn't there, that are the right words, you're gonna. That's. That energy is going to carry forth when you're in front of clients. Is that making sense? Am I getting that right?

B (13:48)

No, no, absolutely. And actually, I, I have gone through a lot of your content over the years, and I remember hearing that, that concept of the seat of the table, and I really like that because ultimately what it means is every investment of effort I make culminates into elevating the client experience. What's in the client's best interest. And you know the words, we all know the expression. It's not what you say, it's what they hear. And the law of resonance, this is getting maybe a little esoteric, but the law of resonance is the value of what you communicate actually begins at the end of the conversation. Like, what are they taking away with them as they're heading down to their car and then driving home? What are they thinking a day later, a week later? What have they really locked in, in terms of their appreciation for your value? So all of that matters. And again, coming back to what you were saying about, you know, the essence of referability, it's being referable. It's. It's your intentionality. It's your, your. The fact that this is a calling, it's not a job. And, and that is palpable in, in the way somebody conducts themselves.

A (15:08)

So let's get. I don't know if tactical is the right word here for a minute, but who make the best strategic partners? Who have you seen in your work with advisory firms? Obviously, CPAs can we know, estate planning attorneys can different other types of attorneys, not just estate planning attorneys, can be strategic partners. What else have you seen out there? Anything creative or interesting or just give us your take on that.

B (15:40)

Well, yeah, great question. And you know, a financial professional is a knowledge for profit fee for service advisor. So the self evident collaborative partner is somebody else who's fee for service. But in actuality, and I mean those are golden. But my favorite influencers are other business owners. Business owners who tend to operate without a safety net. They have maximum discernment, total personal responsibility. And ultimately, when you think about what an advocate is, an advocate doesn't refer someone to you because they're trying to help you grow your business. They feel they're doing somebody a disservice by not introducing them to you. So they're an advocate for you. They're an advocate for the friend or the colleague or the family member. So the concept of advocacy and the value added support team goes beyond just the obvious. Yes, you want to have a methodical, airtight process with engaging the obvious strategic partners. But this, this goes beyond into any influencer, especially entrepreneurs.

A (17:07)

So are you making a, a distinction between an influencer slash advocate and a strategic strategic partner? Or are they one in the same? Is one a subset of the other? I got a little confused with that.

B (17:25)

Okay, well, let me give you my frame on this, please. And if you'll indulge me, there's two levels to this. Okay, all right. And cut me off and chime in. But first of all, as a planner, the lost art is in future pacing. Future pacing. Where the relationship's going. Not just where it is and where we've come from, but trajectory. Okay? So of course, as a client's life unfolds, their needs will evolve and become complex. So a financial professional is designed to identify unmet needs and gaps and address those, but also get out in front of evolving needs. And, and that's the positioning that, that future pacing of why we want to interact with specific strategic partners. Now here's what's interesting about this, okay. I often say to advisors, be the buyer, not the seller, which means you meet with a prospective client. It's a fit process, it's not a sales encounter. But see your value through their lens. And I'll give you this little episode. Financial professional calls me up for a little scenario planning consultation. He says I just got introduced to a ultra high net worth prospective client, a good friend of a good client who just sold his business. And he's agreed, he wants to come in and meet with me. And I said, okay, let's get prepared, let's lay out the agenda. And I said, you're going to formulate how he will perceive you. I want you to expand your thinking from perception to perspective. I want you to see your value through his eyes. So go on to ChatGPT and just simply say, I'm a high net worth investor, I've just sold my business. I'm about to meet a financial professional for the first time. What questions should I ask to see if there's a good fit? I like that. Unbelievable. And wait three seconds and look at the feedback. It's incredible. And then we all know how this works. Many issues are two or three questions deep. Keep asking it for more detail. What it reveals are things like this. How many clients do you have? Okay, so I'm, I'm high net worth. I need, I have complex needs. I have an expectation of very personalized service. That's a. So professional scarcity, that's a big deal. Second question, what is your position on alternative investments outside of the markets? Another question, how do you work with my other service providers? My point here, and I could spend an hour just on this concept, the point is it's not what you do, it's what your value does and how it aligns with what somebody wants when you see it through their lens. Your ability to articulate value to the prospective client, let alone their other service providers or gaps in their, you know, other service providers, where you can make an introduction elevates, it amplifies your fee worthiness, it makes you more referable. It's just such a powerful, you know, dynamic. So let me stop there because I want to add to that, but let me stop there and let you add to that.

A (21:02)

Well, first of all, I love the idea of using AI or any other tool to gain more perspective on what clients or potential clients are looking from us and being ready to answer those questions. I think that's a great exercise there. Just knowing that someone may come in asking those types of questions and let's be ready. So I love that. I guess what I wanted to know is so strategic partners, a value added support team, you call it vast. These are folks who in some way or another are going to integrate or interrelate with the work you do and your client. And as a team of sorts, you work together to serve the Client, obviously it's great if those people become advocates and they are influencers to bring more folks to you, more of the right folks. But advocates don't, aren't necessarily. I mean, we want strategic partners to be advocates, but advocates aren't necessarily strategic partners. I guess that's where I'm going with this question.

B (22:12)

Yeah, fair enough. So let me, let me bookend this with my frame and then I'll give you a scenario. All right, so my refrain, my frame on advocacy is why, who, how? So why do you make yourself available to be a sounding board and why should somebody be an advocate? Who, who is the addressable audience and who are the people you're going to engage in? Those are the people. Okay, so the why is the purpose. The who is the person. And what's really key here, and you know this bill, as it relates to professional scarcity, is to narrow your focus, but widen your scope. Narrow your focus, meaning you're not all things to all people, but widen the scope in terms of the value you actually bring to somebody. And I'll show you this in a second. So why, who? And then how, how is the process. That's how we frame this out. And this applies to all forms of advocacy. Now I'll give you a little scenario. I know somebody who plays at a very high level in the risk management and insurance space, especially with business owners. So you think about the complex risk management issues for the owner of a very successful thriving vineyard. I mean, there's cyber there, there, there's liability, there's all kinds of different pieces to that risk management puzzle. Okay, so here's what they're noticing. They have this massive client, massive premiums, great relationship, and then they sell the business and the buyer of the business has their own relationships. Or let's just say it's a next gen scenario. The next gen comes in based on the continuity and succession dynamic and they have a different perspective on who they're going to align themselves with. What they're finding is that if they align themselves and engage wealth management professionals into their concierge level of service, it strengthens the relationships, it deepens the likelihood that the business isn't going to migrate away. Now let's talk about the whole notion of preparing heirs and family investment legacy like business owners tend to kick that can down the road. If a financial professional fully builds out their value added support team, whether it's insurance, whether it's various other fee for service professionals, they're competitor proofing the relationship. This is why the enlightened have second, third and fourth generation clients, there's a synchronicity that starts to happen and they see less defections. So yeah, I'm not even sure if I'm answering your question, but I just want people to fully and panoramically understand what it means to be referable and how that converts to actual referrals. Yeah.

A (25:46)

Yeah, I like that. You know Duncan, in just a few minutes I'd like you to share what I believe you call your progression for how these relationships develop and a couple other topics questions I want to run by you. But first, let's take a brief pause to listen to a few words from our sponsors.

C (26:07)

This podcast is sponsored by Proudmouth, the Influence Accelerators. Tired of chasing potential clients, we help you spend less time selling and more time advising by amplifying your influence over a growing audience of magnetically attracted fans who will chase you down instead. Visit proudmouth.com to learn more.

A (26:27)

I want to take about 90 seconds to talk about one of the big trends in our industry and that is holistic financial planning. As you may know, holistic planning is not just about investments or insurance. Kind of as Duncan was talking about. Holistic planning is about creating a master plan where everything works together. Investments, insurance, taxes, estate planning, even your clients personal goals and values come into play. Many clients are loving this new dynamic in our industry where the advisor connects all the dots for their clients. This more comprehensive approach leads to clients gaining greater clarity, confidence and peace of mind, which is what all clients ultimately want. Now there's a platform that makes it easier for advisors to engage in true holistic planning. It's called IVAultX from the folks at Ironclad Family. IVAult X is a one stop digital vault for all your clients financial documents, personal records and even legacy plans. You help your clients get organized and secure for which they will love you. Your next step is to grab your free guide on how to make becoming a more holistic advisor easier for you and your team. Simply go to holisticadvisorguide.com to access this free guide. That's www.holisticadvisorguide.com. the link is also in the show notes. IVAultX may just be your key to bringing integrated financial guidance and the resulting peace of mind to your clients and their families. This episode is also brought to you by Harbor Capital Advisors. Let's Talk about Harbor's LinkedIn page for a minute because they're giving you direct access to some of the top minds from across the industry. Here are some facts about Harbor Capital's team. Their CIO brings deep experience from his days at JP Morgan and Goldman Sachs. Their head of ETFs has worked on the launch of many ETFs around the world, and one of their portfolio managers leveraged his prior experience at the Fed to color his opinion on monetary policy and the macroeconomic environment. And their capital markets Expert breaks down complex market structures and offers ETF 101 insights with a side of unexpected musical references. Kind of fun. He also just happened to interview me for Harbor's podcast the Active Advisor. You'll see my episode posted in their LinkedIn feed, but don't take my word for it. You can check out Harbor Capital Advisors on LinkedIn and listen to my podcast episode while you're there. The views expressed herein are those of Bill Case at the time the comments were made. They may not be reflective of their current opinions, are subject to change without prior notice, and should not be considered investment advice. All investing involves risk, including loss of principal. Harbor Capital Advisors, Inc. Is not affiliated with Referral Coach or Top Advisor podcast. Foreside Fund Services, LLC is a distributor of Harbor's ETFs 3880661. Now back to my conversation with my Featured guest, Duncan McPherson, business coach, speaker, author and founder of Pareto Systems. Duncan, for our listeners who'd like to know more about Pareto Systems and all the ways that you work with advisors and their teams, where should they go to learn more and contact you?

B (29:54)

Well, Bill, we're actually at capacity, so we're not taking on new clients right now, so. No, I'm kidding.

A (30:02)

I think that's known as sarcasm.

B (30:04)

Yes, I'm very appreciative that you picked up on that. No, I mean, I think the best way somebody can get to know us a little bit better it would be to start with LinkedIn. Just look for me, Duncan McPherson. I should pop right up. We're very active there. We share actionable, proven strategies at LinkedIn pretty much every business day. Also, paretosystems.com I mean, people can just schedule a call and pop the hood and kick our tires and get to know us better. We don't try to convince someone to become a client. We just share with us what we do and how it's impacted others and see if that aligns with what somebody's aspiring to. So that that'd be the probably the best bet.

A (30:46)

I would also recommend that they take a look at your two books. They're both great books. I've read them both the Advisor Playbook and The blue square method. So I'll put a little plug in there for you on that one.

B (30:55)

Thank you.

A (30:57)

As promised, tell us about the progression of how advisors can approach and develop their strategic partnerships.

B (31:06)

Well, okay, so in, in the spirit of beginning with the end in mind, what does a client want? They want somebody who will liberate them to go live their life. So I think of CFO as a complete family office. So I guess what I'm saying there, Bill, is detach yourself from an expectation of an outcome in terms of actual referrals and just immerse yourself in the exercise of elevating the client experience. So what does that mean? I had an advisor not long ago who started reframing his relationships with long term clients. And he basically said this. We're very excited right now. We've engaged a practice management consultant to help us elevate and raise the bar. And I can't wait to show you what that looks like. One of the things that they've asked us to do is to fully build out our process. That includes engaging other service providers. And then he has the conversation with the client about how they feel about their other relationships. Again with the cpa, the attorney, other insurance and subject matter experts, et cetera. They kickstart the conversation there. And then the advisor asks for permission. Do I have your permission? To reach out to these providers so they understand our process and we can determine if there's any gaps in how we can collaborate to raise the client experience for you. Clients, of course, buy in. The advisor reaches out, introduces himself. There is no conversation about referrals. It's let's get together and talk about how we can raise the bar. They meet. The advisor explains what makes them different, their people, their practice and their process, and starts looking at ways they can formalize and integrate. Then the advisor, and I'm grossly accelerating and simplifying this. But this is where it gets to the bottom line. The advisor then says to the strategic partner, this is an existing relationship that a client has. The advisor will say to that accountant or to that attorney, are you accepting new clients? Currently, virtually everybody says yes. The advisor then says, if I ever have an opportunity to make an introduction, how would you like me to describe you? Pretty simple. And of course, they attempt to articulate their value with a value proposition.

A (34:08)

Simple question to ask, but most people don't answer it very well.

B (34:11)

Isn't that true?

A (34:12)

That's another topic, but go ahead.

B (34:14)

Yeah, absolutely. And of course, based on the law of reciprocity, if you ask somebody how Would you like me to describe you? They will often then say, how would you like me to describe you? And our process for the value proposition is simple. It's tell them who your ideal client is, tell them what it is they want from you, tell them how you get them there, and then just explain the process. So here's how that sounds. So if you're for example, the attorney and you say to me, yeah, if I ever get a chance to introduce you, what would you like me to say? And if I'm the advisor, I'd say, well, I appreciate that. I think what I'd like you to consider saying is that I'm part of a financial advisory team. We work primarily with successful business owners, professionals and executives in the prime of their lives. And among other things, what they aspire to is to achieve that work optional lifestyle. They just want to get to a point where they go to work because they want to, not because they have to. And they're thinking about their liquidity event down the road. So we have developed and refined a process that puts all the pieces of that puzzle together, engages all the service providers so that our client always has the complete picture. So there you go, there's the 60 second value proposition, but there's no expectation. And it's an attract, not chase dynamic. I want advisors to think of themselves as farmers, not hunters. They're not going out looking for new clients. They're going out to convey their professional contrast and the things that make them different in the marketplace, their people, their practice and their process, and then plant that seed and then nurture that and then see where it goes. So, so that's the tip of the spear. There's a whole back end to that bill. But that's, that's the entry point.

A (36:19)

Well, there's the one thing I want to emphasize is something I've been teaching myself as well. And we're so aligned in a lot of this. The first point of contact, the reason for contact is how do we as knowing each other serve our client in common better? Right? That's the beginning. We have a client in common. How do we serve him or her or them better by knowing each other as opposed to a lot of advisors will go looking for these strategic partnerships, centers of influence, advocates, whatever word you put on it, just immediately looking for that referral relationship and that's off putting to most of those folks it feels salesy. They don't like salesy. It's off. But how do we serve each other better? And then I also say is how do I, as an advisor, how can I serve you your practice? And it may be referrals, but it may be other things. Right. I may know some things about marketing you don't know or client engagement that you don't know and lots of ways to bring value to that strategic partnership short of actually sending business their way. So start with how do we serve our client? In common, better. One last thing I want to ask you, Duncan, this is great and you've proven my point that you are a deep thinker. Thinker around this. By the way, I read something you read said busy doesn't mean productive. Productivity comes from having a plan and a process and the ability to communicate that to clients. Let's wrap up this interview with what do you mean by that? Put a little more meat on that bone.

B (37:53)

Okay, so as you were saying that, I just happened to look at this book right here and the image on the COVID as you can see, it's somebody has popped the lid on a giant hourglass and they're pouring in more sand.

A (38:08)

Don't we wish. Yeah, well, maybe, maybe not. Maybe not.

B (38:11)

I don't know. I mean there's so many self fulfilling elements to this. But here, here's what it comes down to. And I don't mean to dumb this down or oversimplify it with a metaphor, but every advisor is either transactional or directional. Transactional. They're trading time for money. They're pumping up a leaky tire. It's like putting sand in a shopping cart. They're not building anything, but they have a living. They're making a living. They have a job and everything's fine. And many people are content with that. And that's perfectly fine. Other advisors are continually focusing on what they're building and the sustainable, predictable, scalable aspects of what it means to put more sand in the hourglass. So you know, cause and effect. Okay, so Pareto Systems, The Pareto principle, 80%. 80% of your productivity comes from 20% of your activity of your. All the things you could do today, Bill, this might be the most valuable hour of your day in terms of persuasive impact, reach, et cetera. I had a mentor a long time ago. He said to me, don't major in minor things, don't mistake movement for achievement. Everybody's busy. Busy doing what? Are you trading your time for money? Or are you building something and taking the lawn game and attracting, not chasing. That's part of that. So again, long winded response to your question. But building something, that's what it comes.

A (39:54)

Down to, I like that. I like the sand in a shopping cart. You're right. You can be quote unquote successful in this business, make a good income being transactional. And I would say my judgment is that it's a little harder to sustain a high level of success over a long period of time when you're doing that. And if you want, if you as an advisor want to create a situation, you mentioned that the, the a work optional lifestyle, well then it can't be a transactional business, can it? No, it's got to be deeper than that. So that's, that's good. My featured guest on today's show is Baduncan McPherson, business coach, speaker, author, founder of Pareto Systems. Duncan, thank you for your insight. Thank you for your always your willingness to help me and help this industry. Appreciate you.

B (40:51)

Right back at you. Likewise. I mean, you're, you're a spokesperson and an ambassador for the most noble profession in the world, in my opinion. So I appreciate everything you do as well.

A (41:05)

I do believe it's a noble profession. I believe that everyone on this planet deserves to make educated financial decisions that are in their best interest. And that shows up in lots of ways and lots of work that we do. But you're right, taking care of one's financial house impacts every aspect of one's life. The Top Advisor podcast is sponsored by Proudmouth, creators of the Pod Rocket Academy. This episode has been sponsored by Harbor Capital Advisors and Ironclad Family, the creators of Ivault X. 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'll be grateful. If you haven't already, here are four places you might want to visit. Number one, for my latest book, the Language of Referrals, just go to languageofreferrals.com for a bunch of guides scripts that I mentioned earlier in the program, go to referralcoach.com resources referralcoach.com resources for the most comprehensive referral and introductions training on the planet, I say humbly, go to TheCatesAcademy.com that's TheCatesAcademy.Com and finally, check out our coaching that I do with Advisors, go to CoachCates.com 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. Thank you for listening to the Top Advisor Podcast brought to you by Proud Mouse Pot Rocket Academy. I encourage you to Visit my website, referralcoach.com for links to my books, online courses and to register for the Cates Academy.