#FASuccess Ep 037: Leveraging Unique Centers Of Influence To Grow A Niche Advisory Firm For Doctors with Johanna Fox Turner


Executive Summary

Welcome back to the thirty-seventh episode of the Financial Advisor Success podcast!

My guest on today’s podcast is Johanna Fox Turner. Johanna is the founder of Fox and Company, a fee-only financial planning firm that specializes in working with physicians.

What’s unique about Johanna’s advisory business, though, is the sheer volume of rapid success that she’s had with her recent pivot to specializing in doctors. After having already spent more than 10 years building her fee-only advisory business, and more than 30 years working as a CPA with a separate accounting firm, focusing into a niche has transformed her growth, from a practice that had steadily grown to 150 clients over a decade, to one that is now fielding 4 prospect inquiries a week from doctors, and has a waiting list to accept new clients! And 100% of her doctor clients work with her virtually, through email and video conferencing!

In this episode, Johanna details not only why she decided to make a shift to a niche advisory firm working with doctors – on a purely virtual basis – as an experienced 60-year-old advisor, but how she actually went about marketing her new niche, the unique Centers of Influence – two leading bloggers for doctors – that she’s been able to build relationships with to generate a high volume of referrals, and why answering online questions in a niche can generate substantial new business, even as answering similar questions on “Ask An Advisor” Q&A sites like Nerdwallet generates no results at all.

In addition, we talk about the way that Johanna completely restructured her advisory fees into a three-tiered retainer structure to serve her niche (because the Centers of Influence she gets referrals from don’t believe in the AUM model!), what scheduling and video teleconferencing software she adopted to work with those new clients, and the 5-meeting financial planning process she uses to work with clients, built heavily around using eMoney Advisor not only to do financial planning, but also making the eMoney portal a central part of her value proposition with clients.

And be certain to listen to the end, where Johanna talks about how she broke the news of shifting into a niche to her existing clients, and why despite her fears, her existing non-doctor clients haven’t left even as she focuses into her new doctor niche… although, ironically, she voluntarily decided to transition out nearly 1/3rd of her smallest clients just to help create capacity for the new growth she’s now experiencing!

So whether you’re curious about the unique Centers of Influence that can be cultivated in a niche, want to understand how an existing advisor can pivot into a niche, or simply want a glimpse of how an advisor has customized everything from her pricing and business model to her services and deliverables to fit her specific target clientele, I hope you enjoy this episode of the Financial Advisor Success podcast!

What You’ll Learn In This Podcast Episode

  • Fox & Company as it exists today [3:54]
  • Why Fox & Company moved to the three-tiered flat fee retainer structure and how they set it up [14:03]
  • Why online message forums can get you clients, but generalized “Ask An Advisor” platforms do not [26:09]
  • How niches provide unique ways to get your name in front of potential clients and build trust without blatantly advertising [30:48]
  • Why it’s important to learn about the issues your ideal clients face (and how to do it) [30:48]
  • How Johanna transformed her financial planning process and her business model to fit her target clientele [36:14]
  • The changes Johanna has made to accommodate her new niche [36:14]
  • Ways to find your niche and transition into it without alienating existing clients [44:45]
  • The best financial planning and teleconferencing software for working with clients virtually [52:25]
  • Ideas for marketing using “non-traditional” Centers of Influence [1:16:11]

Resources Featured In This Episode:

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Full Transcript: Leveraging Unique Centers Of Influence To Grow A Niche Advisory Firm For Doctors with Johanna Fox Turner

Michael: Welcome, everyone. Welcome to the 37th episode of the Financial Advisor Success Podcast. My guest on today’s podcast is Johanna Fox Turner. Johanna is the Founder of Fox & Company, a fee-only financial planning firm that specializes in working with physicians. What’s unique about Johanna’s advisory business, though, is the sheer volume of rapid growth that she’s had with her recent pivot to specializing in doctors. After having already spent more than 10 years building her generalist fee-only advisory business and more than 30 years working as a CPA with a separate accounting firm, focusing into a niche has transformed her growth from a practice that had steadily grown to almost 150 clients in a decade to one that is now fielding four prospect inquiries a week from doctors, and 100% of her doctor clients work with her virtually through email and video conferencing.

In this episode Johanna details not only why she decided to make a shift to a niche advisory firm working with doctors on a purely virtual basis as a 60-year old advisor, but how she actually went about marketing her new niche, and the unique centers of influence to leading bloggers for doctors that she’s been able to build relationships with to generate a high volume of referrals, and why answering online questions in a niche can generate substantial new business, even as answering similar questions on ask-an-advisor Q&A sites like NerdWallet can generate no results.

In addition, we also talk about the way that Johanna completely restructured her advisory fees from an AUM model into a three-tiered retainer structure to serve her niche, what scheduling and video teleconferencing software she adopted to work with these new clients, and the five meeting planning process that she uses to deliver her financial planning value built heavily around using eMoney Advisor not only to do financial planning, but to make the eMoney portal a central part of her value proposition for clients.

And be certain to listen to the end where Johanna talks about how she broke the news of shifting into a niche to her existing clients, and why despite her fears, her existing non-doctor clients haven’t left even as she focuses into her new doctor niche, although ironically she decided voluntarily to transition out nearly a third of her smallest clients just to help create capacity for the new growth. So with that introduction, I hope you enjoy this episode of the Financial Advisor Success Podcast, with Johanna Fox Turner. Welcome, Johanna Fox Turner, to the Financial Advisor Success Podcast.

Johanna: Thank you. It is my pleasure to be here.

Michael: I’m excited to have you on this show because you sent me a really cool email that talked about some of the story of how your business has evolved over the past couple of years from being a CPA and just doing the tax and accounting side, and then getting your CFP and starting to do financial planning, and then shifting over the past few years into a niche, and that it’s kind of transformed the whole business. So I love these transformation stories for advisors that find breakthroughs. So I’m really excited to have you on the podcast to share the story of all the changes you’ve been making, and what’s worked, and even some of the lessons learned of what didn’t work along the way.

Johanna: Okay.

Fox & Company As It Exists Today [3:54]

Michael: So as a starting point, can you tell us a little bit about your advisory firm as it exists today?

Johanna: As it exists today, we’re a fee-only financial advisory firm. I have a partner, Michelle Neiswender, who is very instrumental in the firm, and also an office manager, Robyn Elliott, who really keeps my head on straight. And then we have a new employee, Ben Nanny, who is a CPA and CFP who sought us out, and he came on with us just in June.

Michael: Okay, so I know you came originally out of the accounting world. You’re a CPA and a CFP.

Johanna: Mm-hmm.

Michael: So how much of the business is tax work and accounting work versus the fee-only financial planning side?

Johanna: Well, there are two separate firms. I have different partners in each firm. So right now I split my time about 25% CPA, 75% financial planning until it gets to tax season, and then it’s more 50/50 for those few months.

Michael: Oh, that’s good. I thought you were going to say it’s 90/10 the other way.

Johanna: No, we’re pretty Zen at the CPA firm.

Michael: Okay, so kind of 25% CPA, 75% financial planning, and then the pendulum swings back a little to be 50/50 during tax season.

Johanna: Yes.

Michael: So what does the accounting side of the business look like?

Johanna: Well, up until a year and a half ago the accounting side looked kind of like the financial planning side, which was a little bit of everything. We worked with a lot of small businesses, a lot of tax, but we do focus on a year-round business so that the tax return itself, we like to think of that as an afterthought because we’ve been planning all during the year. So we don’t want any surprises in March and April.

Michael: Okay, and how many people are involved in the CPA firm side?

Johanna: CPA firm side there are seven including a part-time intern.

Michael: Okay, but it sounds like you’ve got a partner over there that drives a lot of the day to day management and activity of that business at this point, if you’re only over there 25% or so.

Johanna: Yes, absolutely, two partners now. We added a young lady, Laura Clifford, in January of this year because she was working with so many of our physicians, and we wanted for her to be officially the partner, and “Here, you get all these physicians and now that’s your job.”

Michael: Okay. So is the ownership shared at all between them aside from just, you’re the common point between the two, but you and Michelle are on your own on the planning firm, and then you and the other partners are on their own on the CPA side?

Johanna: Yes, we’re all in the same building. One side is financial planning and investment management. The other side is CPA services, and I literally have an office that is in the middle, and one door opens to the CPA side, one door opens to the planning side.

Michael: Wow, you took that 50/50 split thing very literally in your office design.

Johanna: Yeah, I did. You just never know who’s going to walk in here, but yes.

Michael: So on the advisory firm side, can you tell us a little bit more about what that business looks like? I mean are you doing investment…It sounds like you’re doing investment management and planning, but not the tax work, because that gets referred over to the separate CPA firm. What actually happens in the financial planning business at this point?

Johanna: Yes, well we do tax planning, of course, as financial planners. That’s what we do also, but it’s more from the 30,000 foot angle looking down at planning for this year and many years ahead. We focus on financial planning. In other words clients or prospective clients will come to us thinking, “I need you to manage my investments,” or, “I don’t want a lot of risk,” and that perspective, and we say, “Well, we really don’t do that until we have a plan in place.” So the plan gets the focus, and we look at the investments as a tool to help them reach the goals in the plan, but not as the driver of the plan.

Michael: Okay. And how many clients do you work with on the planning firm side?

Johanna: Well, until recently it was way too many, like 150. But we had businesses that had come to us through the CPA firm that had simple plans, and we’d manage the simple plans, and it was really getting out of hand. Until we changed into this niche focus, we really didn’t know what to do about it. So now we’re paring back, and we have less than 100. I don’t have an exact number right now.

Michael: And what did you do with the 50-odd clients that used to be part of the count but now apparently aren’t part of the count anymore?

Johanna: Yes, that was difficult, but we have been working with a coach, Diane McPhee, and she was very blunt, “You’ve got to do something about this.” We worked out a letter, we found several options for these smaller clients, and gave them plenty of time, but-

Michael: Other advisors you could refer them to, basically?

Johanna: Yes, other advisors. We custody with TD Ameritrade. So we also gave them the opportunity to go to the institutional side of TD Ameritrade, and they could use the portfolio that we had set up for them. And you know, if they ever need to call with a question, sure, call us with a question.

Michael: So you’re already in the portfolio. You can, in theory, just sort of have that as a retail account at that point, as long as you don’t go in there and muck with it.

Johanna: Exactly.

Michael: It’s designed to do its thing for a while from here.

Johanna: Exactly, and so far it’s gone really well. It’s been a smooth transition. I know some clients haven’t made that change yet, but by the end of September, I believe, they are all going to be de-linked.

Michael: So how did you break the news to them?

Johanna: We wrote a very careful letter.

Michael: What’s the angle? We can’t serve you anymore, we’re not a fit for you, or some other messaging?

Johanna: Well, it was that our minimums have gone up, and it wouldn’t be fair to expect you to pay these minimums. So we have some alternate suggestions for you, and please call us. And some of the clients got direct phone calls, too.

Michael: Did you ever consider at all trying to sell that segment of the practice as opposed to just saying, “I wish you well, here’s someone else to work with”?

Johanna: We really didn’t, and the main reason is, well, two reasons. Nobody around here really does planning the way we do, and focuses on investment management the way we do. And secondly, it just didn’t sit right with me to sell clients. So we wanted to be there to assist them and talk to them, and I didn’t want for them to have the idea that, “Well, you had this value to us and I got some money for you.”

Michael: Yeah, okay. So just tried to make sure they were shepherded on to the right place. And I take it these are the smallest clients in the books, they’re kind of the old 80/20 rule-

Johanna: Exactly.

Michael: The bulk of your revenue comes from the top 20. So by the time you got down to the bottom 50 out of 150, like it’s a lot of people, but it really wasn’t a lot of revenue for the practice.

Johanna: Yes, and it sounds almost cold the way I’m telling it right now, but it was a very difficult decision, because these people were friends, we’d known them. Some of them had a simple plan, and they’d leave the employer but keep the money with us.

Michael: You’ve got these, like, $17,000 simple IRA, but someone you’ve worked with for 12 years, kind of scenarios.

Johanna: Yeah, $7,000. It went down to $700, I’m embarrassed to admit, but it did.

Michael: So I know always the flipside argument on these discussions about whether to let go of clients is, you know, $7,000 accounts usually don’t call very often or have a lot of demands either. So what was it that led you to make the decision to actually end the relationship with them instead of just kind of letting them hang out on the books and just not meeting with them as much, maybe, because their accounts don’t make the math work on meeting regularly?

Johanna: You know, we talked about that, and that was one reason we hadn’t done anything sooner. Really, we hardly hear from these people. They’re really good folks, and they pay their bills on time and everything, but we just really need to consolidate our efforts from the back office side, because whether it’s a $7,000 account or a $700,000 account, we still have the same compliance needs and we still have to reach out once a year, and it just added up.

Fox & Company’s Three Tiered Flat-Fee Retainer Structure [14:03]

Michael: Yeah, so you’re now refined down to 100 clients or so, and what does the fee model look like for these folks? Are you charging assets under management and there’s some asset base there? Or are you primarily straight planning fees? How do you measure the size of the business?

Johanna: You know, that’s interesting because everybody measures financial planning firms by AUM, and we still have some AUM clients who really weren’t interested in planning. So we’ve continued with those, the larger clients, and our business going forward though is flat fee. So we have three different tiers of flat fees, and that’s what we promote.

Michael: Okay, but that’s new clients going forward-

Johanna: Yes.

Michael: Not necessarily where you were in the past.

Johanna: Exactly.

Michael: So are you looking to convert existing AUM clients over to this flat fee structure as well? Or are you going to hold onto AUM clients doing AUM and simply do the new fee structure going forward for the new clients?

Johanna: Well, what we plan to do is give those clients the choice. Do you want to come in under this fee schedule? Are you happy where you are? We’ve already reached out to one of our larger clients and said, “You know, you’re paying us X number of dollars. At this point you would save money by going onto the new system, and you might want to consider that.” So we’re going to approach those clients, but it’s just been a whirlwind lately. We’ve just been really, really busy.

Michael: Yeah. So what does the fee structure look like going forward? You mentioned three tiers of planning fees. So what are the tiers, how do you price, how does this work?

Johanna: Okay, so we have a basic tier that’s $5,000 per year with a $1,000 set up fee, and that is full, comprehensive financial planning, but not investment management. So we give recommendations. We’ll give them a portfolio that we recommend for their 401(k)’s, 403(b)’s, or other individual accounts, and we’ll still give them advice for investments, but they manage it and implement themselves. So the second tier, premium, is $2,500 a quarter, and we do what we have for the basic, same services, and we manage investments up to $1 million. The third tier, which is really a bargain for somebody that has a lot of assets to manage, is that we do all of that, we’re also in-person quarterback for meeting directly with attorneys, insurance agents, CPA’s if they’re not using our firm, and investments over $1 million.

Michael: Okay, interesting. So with kind of these investment thresholds indirectly tied, you’re not running an AUM model, but there is kind of a dividing line here that if you’ve got a large portfolio you still have to opt into the top tier-

Johanna: Yes.

Michael: You get a bunch of other planning services as well, but you still kind of nudge people over or under that line about whether they’re going to land at the $10,000 a year retainer fee or the $15,000 a year retainer fee.

Johanna: Right, and the reason we did it, we added, let’s see, differentiated according to whether we were managing investments is because so many of our clients were coming to us with five, 10, even more different investment accounts, and yes, we’ll manage it, but man, that’s a lot of work.

Michael: Yeah, so just the raw implementation of the investment management adds some piece to their accounts, but you’re not doing it…I guess anybody under $1 million, if they want an account managed, they have to move up to the second tier, but it doesn’t actually matter how large the account is, although I guess obviously if it’s a tiny starter IRA they probably don’t want to pay the higher fee just to have a very small account managed. They kind of figure out for themselves where that threshold is of a couple hundred thousand dollars before it probably makes sense to switch up.

Johanna: Right, and we’ll tell them that. We’ll say, “You know, you handle it. We will give you the portfolio. We’ll even give you the rebalancing once a year. You have to be in charge of the relationship with the custodian.”

Michael: Okay, so what led you this direction in the first place? Were there concerns about the AUM fees that you were doing before and how it was growing that you wanted to move to this flat fee kind of structure? What brought you in this direction?

Johanna: Well, that’s a very good question. I’m very involved in The White Coat Investor website.

Michael: White Coat Investor. So for those who aren’t familiar, what’s White Coat Investor?

Johanna: That is the largest doctor/physician financial website on the web, and the most popular. Actually I checked on the statistics today. They get around half a million hits per month.

Michael: Wow.

Johanna: Yeah, and let’s see, 130,000-150,000 new hits per month. So it’s a pretty big deal. Well, let me back up. This has been a blog since 2011. In 2016 Jim Dahle started a forum, and this forum was like dynamite. I mean he has so many people going to this website, it wasn’t hard to populate the forum. People were signing up, they were posting questions, they were commenting. So I got involved like on the second day. However, the history of the blog is that he is very much against AUM fees. So it’s like AUM is evil.

Michael: This is Jim’s personal opinion as the guy who runs the blog and the website. So that’s his house, these are his rules.

Johanna: Exactly. He says, “You’re in my living room, these are my rules.” And he writes articles that discuss why AUM is not the way to go and how people get ripped off, and so forth and so on. So all of the followers, or most of the followers, have that same opinion. So I knew if we were going to work with doctors who came to us through this website, that that was going to be an automatic turnoff, and we had to do something.

Michael: Okay, so the fee structure, you moved into a retainer fee-style structure to be able to effectively get clients from White Coat Investor, because…So I take it Jim’s not against advisors, necessarily. He’s just against advisors that charge AUM fees.

Johanna: Well, he’s against most advisors, too. I think what actually led to him starting this blog was a bad experience with an advisor and being sold whole life insurance, and getting bad advice, and he got so mad he wasn’t going to take it anymore. So he started writing this blog, and he had a real flair for it. And actually physicians are a group of people that really, really need good financial advice, and by good I define that at a minimum as fee-only, but nobody was catering to that. So he found a space and occupied it, and I mean he rules that space.

Michael: Interesting. Well yeah, a site doing half a million visitors a month, that’s a really big number. That’s a lot of traffic.

Johanna: Yeah, and you know that most of them are physicians.

Michael: Because it’s White Coat Investor and he’s a doctor that writes about, I guess, investing stuff or all financial stuff for doctors?

Johanna: You know what, I’m not sure I understood that.

Michael: What does he write about? Is it all investing, because it’s called White Coat Investor? Or what does he cover?

Johanna: No, he covers what kind of insurance you should have, how much disability, for example. A recent blog post was on estate planning, and at what point you need so-and-so estate planning, and he’s remarkably knowledgeable. So he writes these excellent articles and then gets conversations going, and then he allows a lot of people to post guest posts. I’ve been able to do four so far. If you do a fairly decent job and he has an opening, he’s going to post your article, which is an amazing opportunity.

Michael: So you’re literally getting clients by writing articles on a doctor’s blog.

Johanna: Oh, absolutely.

Michael: It sounds kind of incredible, right? I mean relative to all the challenges that most of us advisors have in getting clients, you’re writing an article on a doctor’s blog and getting doctor clients. What kind of articles do you write that get business from the site?

Johanna: Well, I try to think of topics that haven’t been covered and that the normal reader with not a lot of financial knowledge would like to read. So the most recent one dissected the ADV, told the readers how to find an ADV on the website, and then went through it section by section to tell people what was important an what really was kind of boilerplate. I think that was pretty well received.

Michael: Interesting. So kind of literally helping. It wasn’t about you and what you do. It was just literally like, “Here’s how you do due diligence on advisors,” or at least RIA’s, by reading an ADV.

Johanna: Yeah, and that’s a really good point because if I, or any other financial advisor, were to come on and say, “If you need anything else, give me a call. Here’s my number,” it’s an automatic turnoff. So it’s very easy to come up with topics. Another one was how to find a good CPA. Another one was, should you choose a PC or S Corporation for your practice.

Michael: Okay, so very classic doctor specific issue if you’re in private practice and you’re trying to figure out how to structure the entity.

Johanna: Yes, and just try to be very, very helpful. But honestly, where most of the traffic comes from, and where I get to have most of the interaction, is from answering questions on the forum.

Michael: So the forum just literally means it’s a message board, people type questions, you type responses, and it says who you are, so people can see you post things that seem knowledgeable and say, “Hey, I’ve got to get in touch with this person”?

Johanna: Yeah. He lets us use a signature, and we can have one link so that people can click through, but what’s important is just being willing to take the time and answer these specific questions, not expecting anything in return.

Why Online Forums Can Get You Clients But Generalized “Ask An Advisor” Platforms Do Not [26:09]

Michael: So would you view this as similar to some of the other ask-an-advisor forums that are out there? Brightscope did this for a while, NerdWallet did it for a while, Investopedia has launched one as well. Would you view it in the same context?

Johanna: No, it’s different. I was a NerdWallet promoter for almost two years, I think, and NerdWallet used to put the pictures of the top five responders on their front page, and my goal was to be number one, have my picture in the number one or number two spot. And that was out of all the advisors that were posting, and I was consistently in that spot.

Michael: Wow. So how much time were you spending on that?

Johanna: I would say at least two hours a day, a day.

Michael: A day? I mean that was basically your marketing time.

Johanna: Yes.

Michael: Was writing responses for NerdWallet questions.

Johanna: Yes, and ask me how much business I got from that.

Michael: How much business did you get from that?

Johanna: Not one client.

Michael: Wow.

Johanna: Call me a slow learner, but it did take a while for me to figure out this just isn’t worth it.

Michael: So a year or two of a couple hours a day ongoing to hold the number one spot, and not even the number one spot didn’t produce a client. I’m not trying to give you a hard time about it.

Johanna: I know. I’m laughing at myself.

Michael: This is one of these things I beat the drum about a couple of times on Nerd’s Eye View over the years, that like, this has been the cautionary note that I’ve written for a long time that the people who are typing questions into Google, where NerdWallet ask-an-advisor answers come up, are usually not the people that are actually looking for an advisor. I guess kind of by definition, if you were looking for an advisor, you would type “advisor” into Google, not your question.

Johanna: Right. I guess that’s true.

Michael: That would come up with a NerdWallet answer. The people who are typing the questions and reading the answers are the people who want to find the answers online, and not through an advisor. So what makes answering questions on a White Coat Investor forum different than answering questions on NerdWallet or Investopedia or one of those?

Johanna: Okay. I’m going to back up and tell you the one good thing that happened to me from NerdWallet.

Michael: Okay, we’ll throw NerdWallet a bone.

Johanna: Yeah, we’ll throw them a little bone. It is that I learned the answers to all of these questions so well that I didn’t have to Google the answers. I mean, I was like a walking encyclopedia of retirement information, insurance information, anything financial planning. So that really helped hone my skills. Maybe I should have just gone back to school. I don’t know. But it did help hone my skills so that when the forum was started at White Coat Investor, I mean I could jump right in and click, click, click, give those answers, and feel very confident, and I had improved my communication skills.

Michael: Right. So it was phenomenal practice even if it wasn’t actually the forum, even if NerdWallet wasn’t the forum that actually got the results.

Johanna: Yeah. I mean, seriously, I was like Google. I did not have to look up anything. So again, when the White Coat Investor started the forum and people were asking the same questions, I mean it was great.

Michael: So why is it that when you type the answer into NerdWallet, no business comes, and when you type the answer into a White Coat Investor forum, business shows up?

Johanna: First of all, it was a targeted audience. We decided pretty quickly that, you know, we’ve got a big opportunity here because there aren’t any fee-only planners that are appealing to physicians. The physicians are highly targeted in school and in residency by insurance companies. And so by the time they’re out of training, they’re just pretty jaded.

Michael: Yeah, apparently as was Jim, causing him to be so spited that he launched a blog.

Johanna: Exactly.

Why It Is Important To Learn About The Issues Your Ideal Clients Are Facing [30:48]

Michael: To attack those practices. So if you’re reading a White Coat Investor forum, you’re there because you’re a doctor, which probably means you have some financial means, because doctors tend to. So it’s much more likely that someone who’s there actually is qualified to do business with you, and that means a few of them do? Is that basically what it comes down to?

Johanna: Well, it does partially. Another thing that has been very helpful for me is, I didn’t just read the questions that pertained to me. It’s not all totally financial, and when somebody would post something about their clinic or their practice, I would read all of those and follow them because I was passionate just about learning what I needed to know about doctors that I didn’t know. So the information was there in that forum, just out in the open.

Michael: Interesting. So that’s that old, how do you really learn about the issues in your niche? Go read their forums and message boards to see literally what they’re talking about. It’s actually out there in public if you go look.

Johanna: Yes, and I knew a lot of the conversation I was having was not with doctors who have been out of school for a while and who have million dollar accounts. A lot of these are physicians who are just graduating residency, and not only do they not have any assets, they have negative net worth.

Michael: Right, because they’ve got a giant student loan for med school.

Johanna: Yes, and so they’re graduating. They have come from earning about $50,000 a year and being burdened with all this student loan debt to all of a sudden having, some of them, high six figure salaries, and it’s such a temptation to do the wrong thing that they really, really need good advice.

Michael: So they start searching online, they find White Coat Investor, they start reading, at some point they show up on the forums, and then they’re asking questions, and then you’re answering them.

Johanna: Yes. I checked the other day, I’ve answered more questions than anybody on the forum, but it’s because I’m there all the time.

Michael: Yeah, but it’s producing business, it sounds like.

Johanna: Yes. We have initial consults, three or four a week, some weeks more than that.

Michael: Three or four a week? That’s a lot of prospects.

Johanna: I know, it is. It’s like our business has totally flipped.

Michael: So how do they come in? Do they contact you through White Coat Investor forum? Like, “Hey, saw your response to that tax question that was spot-on. How do I work with you?” How do they actually reach you?

Johanna: Some people call. We have a link on our website that you can click on and send a request, but the best thing for us has been to use ScheduleOnce. Have you ever heard of that?

Michael: Oh yeah, one of the scheduling apps. You can just give people a link and they can schedule themselves right on the calendar.

Johanna: Oh, it’s fabulous. So doctors will call me and say, “I love the way I set up my appointment. It was so easy, it was so sharp, and you’re doing a good thing.” So it was pretty cool just to get complimented on the way we set up our appointments. So they just click a button and they can choose Michelle or me, and they can choose the time, and it’s all automated.

Michael: Interesting, and they’re coming to your website because they’re seeing your stuff on White Coat Investor’s forums and saying, “Who is this person?” and Googling your name and trying to find you?

Johanna: Yeah, or they’ll say, “I read an answer. It was a good answer, it was what I was looking for. What do I need to do next?” So they’ll schedule an appointment and then I’ll send a follow-up email saying, “Thank you for doing this. Please go to our website and read some of this information before we meet,” because I want them to come kind of prequalifying themselves. So here’s a look at our fee schedule, here’s what our-

Michael: So you put the fee schedule and those tiers are just right out there on the website?

Johanna: Yes. Well, they’re in a link. It’s, “Click here to find out what we cost and what you get for it.” But I send that link to prospective clients when they first schedule an appointment, because you know, if somebody is coming to me expecting $200 a month for full-blown financial planning, I’d rather them know beforehand that that’s not going to work.

Michael: Right. So you can basically, you know, “Here are my prices. If you’re not interested, feel free to screen yourself out and not actually do this call with me.”

Johanna: Yeah, I mean I don’t want to waste their time. These people are very busy. A lot of them are dual doctor couples, and I want them to know as much as possible beforehand, and then we can get down to business when we’re meeting.

Changes Johanna Has Made To Accommodate Her New Niche [36:14]

Michael: So how do you actually end up meeting with these folks? Because I know you’re not in a big metropolitan area. You’re in Kentucky and, I guess somewhat rural Kentucky.

Johanna: Yes.

Michael: So these are folks that are contacting you from anywhere and everywhere all over the place? Are you working with some of these people virtually or most of them virtually?

Johanna: All of them virtually.

Michael: All of them virtually?

Johanna: All of them. We tried to break into the physician market about four years ago and found out that, unless you know somebody or have some kind of an in, it’s almost impossible to get through the gatekeeper. So we had really given up on that when this shift came in the way we were able to do business. And my partner, Michelle, is really good with software and trying to figure solutions out, and she put together what we needed to meet with clients, to set up the appointments, to send documents electronically, get electronic signatures.

Michael: So the whole onboarding process for you is all digital, is all virtual.

Johanna: Yes.

Michael: Well, I guess it has to be because they’re not in the area.

Johanna: It has to be, and it’s really cool because these are busy people. They can meet in their homes. They don’t have to run and get a babysitter. So a lot of times the kids are running around, they’re in their very casual clothes, and we just fit meetings into their days.

Michael: Interesting. So they’ll hire you at $5,000 and $10,000 and $15,000 retainer fees sight unseen?

Johanna: Well, I call it face to face because we’re looking at each other. We’re using AnyMeeting. We’re thinking about going to Zoom, but I’m so used to doing it that way, to me it’s like they are sitting in my office.

Michael: Okay, because it’s all video conferencing. So AnyMeeting is a video conferencing tool. Zoom is a video conferencing tool. So are basically all of your meetings then video meetings with clients?

Johanna: Yes, they are.

Michael: Or do you also do phone and email and the rest?

Johanna: Well, okay. I do very few face to face, I’ll say that, and those are with the clients who are already with us. All of our physician clients are virtual, and yes, if they need to follow up with emails, some people do want to talk on the phone, but most people, we’re looking at each other on the computer screen.

Michael: Okay. So I’m curious how this shift came about for you. You did NerdWallet forums, it didn’t work so well. You did White Coat Investor forums, it started working better, and then you did all these changes to your fee schedule and decided to go into a niche? Or did it come the other way around, like you were doing NerdWallet stuff that wasn’t going well, you said, “Jeez, we’ve got to do something different,” decided to go after a niche, decided to make it doctors, found White Coat Investor, and then pursued accordingly. There’s sort of a chicken and egg thing here. Which came first in the change for you?

Johanna: That’s exactly right, the niche found us. So we had planned on working with local doctors, and then we had given that up because we just couldn’t get into their offices.

Michael: Because doctors have gatekeepers and their office managers are pretty much trained to keep financial people like us away from them.

Johanna: Exactly, yes. So we had just decided, okay, we’re going to go back to same old, same old. And then this forum came up in January 2016, and I mean a month later I was saying, “This is going to be big, and we didn’t have any phone calls at that point. But just being able to interact directly with these physicians who needed help, they prequalified me. It’s like when they came to their first appointment, it was almost like we already knew each other.

Michael: Because you may not know them, but they’ve read your things in the forum, they probably scrutinized your website, because these are doctors who like looking things up online. So apparently they’re going to read a whole bunch before they contact you. So they’ve already made the decision they like you before they even ever bother setting a meeting with you.

Johanna: Right. So it’s not me trying to get you as a client. It’s you saying, “You know, I need a good financial advisor. I know I want a fee-only financial advisor. I like the way you write. I’d like to know more.”

Michael: And you’re kind enough to say yes to some of them.

Johanna: Oh yeah. That’s another thing. Traditionally I’ve heard so many people say doctors are horrible to work with. You know, God complex and all of that. The physicians that come through the White Coat Investor website, or any of these others…You know, now there’s a lot of other physician financial websites. When they come through these sites they already have a level of knowledge about financial planning, about taxes. They have already started doing their due diligence, and they are bought into this, “I like to work hard, save my money, do the right things with my money, and maybe retire early, but I don’t know what those things are.”

Michael: So that’s where they need the help. They know how to look up technical stuff online. They don’t know how to figure out some of the trade-offs and the decisions?

Johanna: Well, they’ve said, “You know, I’m busy, I’ve tried doing this on my own. It’s just too complicated.” And it’s not that they’re dumb, too complicated in that way, but it’s that, “It takes so much time, I’d rather have a professional to work with, and I trust you.”

Michael: Because they’ve read all your stuff. So they trust you.

Johanna: I think so, but also because I am giving away a ton of free advice, and I enjoy it. I really, truly enjoy doing that and I’m not trying to push people to me. The information is available. I’m not on the forum to say, “Click here and get your free consultation.” They know how to do that.

Michael: So how did you otherwise figure out how to go after these folks? I mean, was it just down to, I’ve done the Q&A thing, this forum looks interesting, we’re going to try it, it started working, so you kept doing it? Or was there kind of other stuff to how you set this up in the first place?

Johanna: Well, yes. We redesigned our website and we put an area in based upon the advice of a physician to put in an area that said, “For doctors only.” We put all of our physician related information in that area so that when they come to our website, they see that link there and they can go right to their own special space.

Michael: I mean, does it literally block them? If you’re not a doctor you can’t read the For Doctors Only section?

Johanna: No, no, no. But we want to make it clear that we work with physicians, we know what we’re talking about, and if you’re a physician and want to talk to us, here’s what you need to learn, and we have a blog there where I post articles for physicians, but that are also, you know, appropriate for business owners and other people. But I do blog about issues that are discussed a lot on the forum that people have questions about. And then we write a newsletter each month. They can sign up for the newsletter, and we do it ourselves, and it has a Doctor Dilemma, it has a video, it has an article, and it’s all targeted toward doctors.

Michael: I think it’s an interesting phenomenon to have a For Doctors Only section of the website. Everybody who’s not a doctor says, “What the heck is that?” but if you are a doctor, it’s like, “Oh, there’s something special for me.”

Johanna: Yes.

How Johanna Transitioned Into A Niche Without Alienating Clients [44:45]

Michael: So do your existing clients who aren’t doctors start asking you questions, like, “What’s with the For Doctors Only thing on the website?”

Johanna: They haven’t really asked about that area of the website. You know, if somebody’s a client, they’re probably not going to your website over and over and over. They’ve seen it, they know it’s there, they know how to look up your picture. But there’s usually no reason to keep going back.

Michael: They probably already know your phone number at this point.

Johanna: Yes. So there’s not any reason to go there, but I believe because we have so much rich content in the For Doctors Only section that we do get more return visits.

Michael: Well, and we had Evelyn Zohlen on the podcast in the past, episode 21.

Johanna: Yes, I just listened to that.

Michael: So kitces.com/21 if anyone wants to go back and listen. Evelyn also had a firm that she pivoted into a niche. She was a generalist and then started focusing on women in transition. So a lot of widows and divorcees. You had kind of made a similar comment that her website and her marketing got pretty specific to the new niche, and I know so many advisors, their fear is, “If I go into this new niche, am I going to alienate all my clients?” And Evelyn’s comment was, “They already like me and they already work with me, and frankly, they don’t look at my marketing very much because they already like me and work with me. So it’s really not an issue. Most of them don’t even notice. Even if they do, they like working with me because they’re already with me. So they tend to just hang out, and it’s not a big deal to them unless you make it a big deal, which obviously you’re not going to do.”

Johanna: Right, and I think that it held us back in the past from really trying to focus in one…And I know because I had read your website for so long that we should have had a niche sooner, but you do have that question, “Are all my clients going to be turned off and go somewhere else?” Well, no, they’re not. You’re still the same advisor to them, they still trust you, and as long as you’re still providing the same services, and I had to explain this to a couple of clients, no, nothing’s changed. You’re our client, we’re here for you, we’ll give you the same services. However, we are focusing on the physician business because we are growing that area so much.

Michael: Well, and again, when you’re getting a couple new prospects a week, even if a couple of older, existing, pre-niche clients start leaving, you’re going to replace them way faster than they’re going to be able to leave when you start getting that much momentum and growing in a niche.

Johanna: Yeah, but you know, these people are our friends. We are very close to our clients. So I don’t look at it as, “Okay, you go. I’ll find your replacement really soon.” I want to have that same close, warm relationship, just because I know their lives. They’re special to me.

Michael: Yeah. So as you look forward from here, you’re only 18 months into the niche, from you know, really getting active on the forums in early 2016. You’re already seeing all this momentum of new client business. So I mean, where do you expect it to go from here? What else are you looking to do with it from here?

Johanna: Oh my, okay. One thing we’re going to do is add what’s called skinny planning.

Michael: Skinny planning.

Johanna: Skinny planning. This is for physicians who are still in training. So when they’re in training, like we said, they have the huge student loan debt, they’re only making about $50,000 a year. Sometimes both spouses are in training and making $50,000 a year, but they desperately need financial planning. So we’re going to offer this for a year at half price for physicians in residency. We’ll see how it works, but we’re thinking if we can start working with them then and helping them when they’re out of training, that they’ll probably stay with us.

Michael: And I guess presumably if they’re income is more modest at that point, there probably aren’t as many complex planning issues going on yet. So you can afford to work with them and service them on skinny planning for skinny pricing.

Johanna: Yeah, and that’s why it took us a few months to work this out, and we haven’t rolled it out yet. We’re going to do it before the end of the year. But we really thought about what are the most important areas for physicians while they’re in training. Well, one is student loans, one is cashflow, is a real big one, and then they already want to start investing for retirement. So we’re going to work with them on retirement planning, just getting those Roth IRA’s set up and talking to them about, “Okay, you can still do this once you are making a lot of money, we’re going to do the backdoor Roth IRA,” and just doing some education.

Michael: So I’m still kind of fascinated or curious about how you got over the hump to make this change. Like you’d mentioned, it was a hard change, you talked about switching to a niche, you were concerned about what would happen to all the existing clients if you made the switch. What ultimately pushed you over the line to try to make the switch anyways, despite all those concerns? Is that a coach pushing you? Was that some pain point in the business that you just weren’t happy with and needed something to change?

Johanna: Well, we kind of had our own ideas and we were muddling along and changing the website and changing our fee structure, and then Michelle and I sat down and said, “This is ridiculous. We need to hire a coach that knows what she’s doing, invest some money,” and we hired Diane McPhee of DMAC Consulting, and she forced us to do the difficult tasks. And she also, if I write a letter, the fee structure we have now is different from the one that we had when we started, because we realized that we weren’t charging enough, we were having way too many meetings, 14 meetings, and Diane came in and said, “No, no, no.”

Michael: Your financial planning process was 14 meetings?

Johanna: Can you believe that?

Michael: I’m sorry, I have to ask, but did the clients show up for 14 meetings? That’s a lot of meetings.

Johanna: Well, we had to do some nudging, but you know, in the beginning when we were talking to the prospective clients we would say, “And we have 14 meetings. We go into…” and they were going, “Yeah, wow. You do all this stuff.” Well, then you start the meeting process and it’s like, “How soon until I get a plan? I want to see the numbers.” So we’ve trimmed that down. We haven’t taken away the services, but we’ve kind of rearranged things so that they can get a plan sooner and get excited, because they’re not going to get really excited until they can see some projections.

The Software Johanna Uses To Meet With Clients Virtually [52:25]

Michael: So what does the planning meeting process look like for you now?

Johanna: Well, we use eMoney Software. We love eMoney Software. We changed to that from Money Guide Pro. Again, this was part of our huge upheaval. Michelle came to me and said, “You know, we’re going to be working virtually. I think eMoney is going to be better suited to this,” and it’s a hard learning curve, but it’s been great. So the first meeting-

Michael: I’m sorry, I’m just curious, what wasn’t working around using Money Guide Pro virtually? I mean I presume either of them you can do a screen share with a client in AnyMeeting or Zoom or whatever you use. What was it that pushed you away from Money Guide Pro and over to eMoney Advisor?

Johanna: Well, first of all, we weren’t that dissatisfied with Money Guide Pro, and it’s a heck of a deal. It costs $995 per year if you have a discount through your broker firm.

Michael: Yeah, whereas eMoney Advisor is retailing, I think, for $324 a month now.

Johanna: We just pay it all at once and forget about it. It’s about $4,000 a year, but what eMoney does is allow the clients to connect with all of their accounts. eMoney will even keep track of their airline miles. But they have their own special little area that they can see from day to day the change in their net worth, we can put a budget in it, and it’s live. It all syncs.

Michael: So it’s not about the planning software, actually, for you at this point. It’s the portal, it’s all the stuff that happens in the portal?

Johanna: The portal’s great. I mean they have their own file cabinets that they upload information and we see it immediately. But yes, and the funny thing is we’ve been working with these clients for months. We’re just now getting to the point that we’re really having a huge crop of plans that we’re going to have to, they’re all coming in at once. So we’re figuring out what do clients want to see and what do clients not want to see, and try to use eMoney as best we can, but also trying to come up with our own executive summaries for them to use.

Michael: Interesting. So what does the planning process, then, look like? So you do some data gathering and load them into eMoney? Or how does this get started?

Johanna: Okay, so we used to send clients these long lists to take home and bring us all of this to the office and fill out all of this information.

Michael: Right, all the homework, the get started homework.

Johanna: Yes, pages and pages. We would lose some clients at that point. Just, “Are you kidding me?” So with eMoney they just link their accounts into eMoney, the upload their documents into their vault. We never send people, say, send us this paper information, we just say, “Do this, we’re going to be able to see it, we’re going to be able to ask you questions.” So the first meeting is a training meeting on eMoney.

Michael: Interesting. Your first meeting with clients, as opposed to doing data gathering, is training on eMoney so that they can gather their own data, basically.

Johanna: Yes, and it just makes things so much more efficient, and again, these are physicians. They’re smart people, they’re scientifically oriented. Technology is not a difficult situation for them, and as far as we can tell they like having their own access and control.

Michael: So you don’t have a lot of the, “Oh my god, I can’t connect financial account to the internet. I’m afraid of the privacy and the security and what’s going to happen with all of it.” That’s not a concern for them?

Johanna: Well, so many of them are used to using Mint and YNAB and all of these other programs. We send them information on the security of eMoney, and then I will send them a little sheet, and then we’ll send them a link to eMoney Security, and it’s double encrypted. It’s wonderful. And maybe one or two have said, “You know, I’m not sure about this,” but then they always change, and they just go with the flow.

Michael: They say they’re not certain, and then they start using and it’s like, “Oh, this is actually handy. I think I’m good with this.”

Johanna: And it’s easy, and yeah. We haven’t had anybody say, “We can’t do this.”

Michael: Yeah. So the first meeting, instead of being classic data gathering, is basically eMoney Advisor training so they can gather and input their own data, because it all gets aggregated in. So then what’s next?

Johanna: Under our new system, cash flow. So we have a meeting for goals and cash flow, and Michelle, my partner, is the expert with cash flow. She’s a budget guru, she’s good with credit cards, and anything to do with cash flow. Her family’s on a tight ship. So the next goal is for us to get a handle on their cash flow, get a budget together, and this is so eye opening for so many clients. They’ll say, “You know, I’ve never really had a budget, and this is showing me so much,” because in eMoney once you link your accounts it’s going to go back to the beginning of last year and show you where you’ve been spending all your money.

Michael: So you get rid of the infamous, you can’t do budgeting with clients about their cash flow because they don’t know where their money is going in the first place, and the people who need the most help know the least about where the money’s going, because eMoney just yanks all of it in automatically, and just shows them, here it is. Like here’s your instant spending x-ray.

Johanna: And it’s not just that. It’s also pulling in their credit cards. So they know really what they’re spending their money on.

Michael: Okay, so first meeting essentially is training on eMoney Advisor. Second meeting is basically using the cash flow information that eMoney Advisor is now grabbing in so that you can start doing cash flow, budgeting, and talking about goals.

Johanna: Right, and we emphasize that cash flow to begin with, to get a financial plan, at least the way we do it, is king. Until we get your budget down, and we also say, you know, this isn’t a beat you over the head budget that you’ve got to stick to, that we’re going to make you feel guilty if you went over budget. This is information. So once you see the information and where your money is going, it’s very easy for them to make those changes that they had been talking about forever.

Michael: Yeah, so the second meeting you’re going through goals and cash flow and budgeting. So then what happens next?

Johanna: Next is investment and retirement planning. That’s one of our core meetings. When a client signs up with us, signs the engagement letter, they each get a copy of Nick Murray’s “Simple Wealth, Inevitable Wealth.”

Michael: Oh, so you actually send them a copy of the book.

Johanna: We send them a free copy of the book. If it’s a couple, they each get their own copy of the book with the instructions to please read this before we have our investment and retirement planning meeting, because this book totally explains our philosophy about investments and why we make the recommendations we do. And then we have a little Power Point during that meeting hitting the highlights of the book, and just go into that in depth and answer their questions. If they’re not sure what a mutual fund is, even, and what’s short term, what’s long term, how do we allocate their investments. So we want to have this meeting, in fact we insist on having this meeting before we make any investment recommendations.

Michael: Okay, so this is now an investment implementation meeting. This is like an investment education plus retirement projections?

Johanna: We’re not doing retirement projections yet, but it’s talking about saving for retirement, what kinds of accounts, let’s look at the accounts that you have right now, let’s look at what you’re doing, you’re filling our your 401(k). Do you have a 457(b)? Do you want to start a taxable account? So we’re talking about all those accounts, but after that,

Michael: It sounds like it’s very education oriented, since a lot of these are younger doctors in their 20’s and 30’s, and they just don’t understand this stuff yet.

Johanna: Or they do, but they may not understand the way we do things. We believe it’s very important to develop trust, that they have to understand why we make the recommendations that we do and understand the logic behind it. So otherwise the market goes down, you’re going to be getting all these panicked phone calls. That’s not our game. We emphasize with them, the market is going to go down, this is what we’re going to do, and we’re happy to talk to you, we’ll help you through it, but we’re not going to sell and sit on the sidelines, so to speak. So after this meeting they get an IPS.

Michael: Okay, so now we’ve got some understanding of what kind of risks they’re comfortable with, what sort of portfolio fits their goals and their situation and their risk tolerance.

Johanna: Right. So they get the IPS and then we make our recommendations about how we think they should be investing their money, and at that point we’re ready to do the initial foundation plan.

Michael: Okay, so we’re effectively at a fourth meeting now?

Johanna: Yes.

Michael: Okay, so this is your foundation plan, this is when you start doing classic projections, retirement planning projections and things like that?

Johanna: Yes, and we emphasize to our client that this is only the foundation. Your plans are going to change maybe even tomorrow. So we’re going to keep up with it, we’re going to keep an eye on it, but if something big happens, say, next month, just let us know and let’s put it on the agenda to have at our next review meeting.

Michael: Okay, and so you go through the foundation plan meeting. That ends where? Like now you’re going to start crafting recommendations beyond the investment portfolio because we did an IPS at the end of the last meeting?

Johanna: Yes, we’re going to implement the investment recommendations, and then we’re going to have another meeting of their choice at that point on areas that we didn’t have to figure out before they got their foundation plan.

Michael: So kind of insurance and estate kind of stuff?

Johanna: Yes, and it depends upon where they are in their lives. You know, a single physician not married, no kids, estate planning is not a big priority. But disability insurance is, and making sure that their assets are protected in case they get sued is. So we’ll review all of that and discuss that.

Michael: Okay, so that’s kind of the fifth meeting and maybe additional meetings if they have a bunch of additional stuff.

Johanna: Yeah, and then additional meetings are as they need them according to their needs. It’s amazing to me how many physicians we have that are first and second generation Americans. For these physicians, a big goal for them is being able to support their parents. So one of our meetings is children and parents, and preparing ahead if you’re wanting to be able to support your parents or family members, because so many of these physicians’ families, they’ll get out of school and they kind of look to them to pick up all the pieces if somebody needs money. So we’re kind of helping them with those conversations.

Michael: We got you to med school and through it so you can come home and support the family. That’s part of the deal.

Johanna: Well yeah, I mean they’re supposed to be the rich doctors, and they have it made. And what we know is that these physicians celebrate when they get to zero net worth. It’s a big deal.

Michael: Yeah, because it’s not negative anymore. You actually overcame the mountain of student loans.

Johanna: Exactly.

Michael: So that’s the process that’s sort of five meetings, potentially extending a little further if they’ve got a bunch of other issues, but that’s the core of what their $5,000 minimum planning fee buys them.

Johanna: Well, ongoing planning throughout the year. I mean Michelle’s going to check in in three months to see how their budget’s going and check on their cashflow. Then three months after that we’re going to revisit the plan and see what needs tweaking, see if they just want to be on autopilot for a while or if they have questions. But with these physicians it just seems like there’s always something coming up. They might not like their job and want to do some locums on the side, want to move to a different state, get pregnant.

Michael: Yeah, it’s one of the things I’ve always commented. We see this all the time at XY Planning Network as well. I always hear these questions, “Well, after you do the initial plan for folks, what do you do on an ongoing basis if you’re charging them an ongoing retainer?” Because I see this in our advisory firm. We work with a lot of retirees, and after you get through the first couple years of stuff, and they’re retired and their life stabilizes, not a lot of new stuff tends to come up as planning issues, until there’s a health event or something happens that changes their lives. But we see this all the time on the XYPN side, that when you’re working with folks in their 20’s and 30’s, and even well into their 40’s, life changes so much, so often at that point. So you’re working and then you meet someone, and then you’re dating, and then you’re merging household finances, and then you’re getting married, and then you’re having kids, and then you’re buying a house, and then you’re getting a divorce. And then you meet your second love and then you’re getting married again, and now you’re a blended family and you’ve had three job changes in the meantime. So much stuff happens that life doesn’t tend to be that stable. There’s a lot of ongoing planning things that just come up because life happens.

Johanna: Exactly. And not just life that happens, but their goals change. I mean I’m asking people in their early 30’s when do they want to retire? Well, they have an idea, but then they say, “I’d like to work longer. I’d like to retire sooner and just work part-time.” I was speaking with a physician the other day and his wife, and they said, “By the way, we’ve decided we don’t want that vacation home.” So wonderful. Let’s change your plan.

Michael: That will free up some dollars in your plan.

Johanna: Yeah, that’s not going to be difficult. But the point is that we want them to have clarity that the decisions they make today aren’t going to come back and bite them in 10 years, and that I’m not having to say, “Okay, guess what, you spent $20,000 extra on vacations every year. You’ve got to work three more years.” They want to know that sooner so that they can make that decision with that knowledge.

Michael: And in general is your ongoing meeting structure with clients quarterly? Like you said, there’s a lot of these sort of three months, then we do this three months, then we do that. Is that kind of the default structure, you charge quarterly retainers and you meet quarterly with clients?

Johanna: That’s the plan. As I mentioned earlier, we’re just now getting to this big crop of physicians that we’re doing a lot of plans for. So tentatively we’re planning on meeting quarterly, but being available for those questions and to give them that information when they reach out to us. So we really, really encourage them to be in contact with us and not let a big decision sit, but to go ahead and talk to us when we can do something about it.

Michael: And all of these meetings are virtual?

Johanna: Yes.

Michael: So just straight video chats? Or do you do a lot of screen sharing as well? I mean how do virtual meetings get conducted for you?

Johanna: Screen sharing absolutely. The very first meeting, the initial consult can be either Face Time or AnyMeeting, because we don’t need to screen share on that. But after that we use AnyMeeting, and as I said, we’re thinking about going to Zoom. We’ve tried that a little bit and really like it.

Michael: What don’t you like about AnyMeeting by contrasting?

Johanna: The pictures don’t seem to be as clear. I mean we’re pretty happy with AnyMeeting, but Zoom seems to be clearer and it seems to require less bandwidth. So we don’t have as many frozen screens. But we’ve got to take some time with that and make sure it’s not just a fluke. But we definitely need to share screens because they are in eMoney, we’re in eMoney, and we’re showing them all of this information.

Michael: And how long do the meetings usually last with this series of four or five meetings? Is this still the classic hour and a half to two hour planning meetings, you’re just doing them virtually?

Johanna: Yes. So in the beginning these meetings, when we’re really digging deep and trying to gather all this information and get it input and discussing goals and having the conversations, it’s going to be one to two hours.

Michael: Okay, and then on the ongoing basis it’s just kind of whatever it is, if there’s a lot of stuff on the agenda, there’s a lot, and if there’s not much and it’s a quick check-in, then it turns out to be shorter?

Johanna: We’ll probably block out two hours, but be prepared. You know, some clients don’t like to talk a lot. Some clients do. We’re kind of getting to know who’s who. So we can kind of tell in advance how long a meeting is going to last. And you know, a really cool thing about the virtual is that the husband and the wife, both spouses aren’t always in the same place. So we have some physicians who do locums and travel around, and then another one may be at the hospital at home where she works, and they both log in from where they are and we have these three-way meetings, and they don’t have to totally upend their schedule just to find a place and a time that they can get together.

Michael: Right, yeah. It’s a good point. If you’re working with folks in their 20’s, 30’s, and 40’s, where just logistics of who’s going to take care of the kids for a few hours while we go to the advisor’s office for a meeting is a nontrivial stress point.

Johanna: Exactly, and that’s one of the most beautiful things of doing virtual planning, is I will see the husband and wife sitting in their room at the breakfast table with the computer up, and then these sweet little kids wandering in and being held. Just, it’s so nonintrusive to be able to do it this way.

Michael: So as you look back now on this transition that you’ve made into the niche and all of the business development that’s coming from it, I’m wondering, what would have had to happen for you to have made this change sooner? Was it just, you had to try other things that didn’t work for long enough to be willing to take the plunge to try a niche?

Johanna: Oh man, it almost seems like it happened the way it was supposed to happen. I was ready to just jump into this forum and try to help people because I had NerdWallet, I mean it didn’t get me any clients, but it did help me gain confidence in answering questions online. And when you are answering questions on a physician forum where there are thousands of physicians reading the answer and one of them may know something you don’t know, you’ve got to be really careful that you don’t screw up and say something that everybody will jump on you for. So it can be kind of nerve-wracking, but as far as the timeline, I just think it happened the way it was supposed to happen.

Michael: Wow, and how many doctor clients are coming through at this point? How much has your business shifted to doctors over the past 18 months?

Johanna: Oh, I’m working almost 100% with doctors. Now, picture this, last summer we had three physician clients. Between our two firms right now we have almost 100.

Michael: Between the planning firm and the CPA?

Johanna: CPA, some clients are CPA, and I haven’t really even talked about that, but we get a lot of CPA clients too. Some are planning clients, and we’ve got a waiting list for the planning clients. It’s just six to eight weeks, but still we’re being very careful about not onboarding too many at once. We want to be able to give the time that each one of these clients really, really needs.

Michael: And then, of course, the irony for at least some of them, there’s nothing like making a prospective client really anxious to work with you than telling them they have to wait two months.

Johanna: I guess. We don’t use that as a selling tool, but it is-

Michael: I know, but I’ve seen a similar phenomenon. One of the challenges for me when I got to the point where the business had grown to a level that any client that came in and wanted to work with me had to get handed to another advisor, because I had 20 other businesses and things to do, and I had to start telling people that they couldn’t have me, they couldn’t work with me, it just made them want to work with me more, just the fact that I told them they can’t seemed to make them want to do it more. It’s an interesting mental psychology trick there. And I mean I wasn’t doing it to try to negative sell them to make them want to work with me even more. I really, really couldn’t work with them. They had to work with one of the other advisors in the firm. But there is a really weird, strange psychology that sometimes comes from that. You know, when growth picks up and you have to manage the growth by slowing people down and you tell them there’s a waiting list, from their end it’s just like, “Wow, I wasn’t sure if I should work with this advisor, but I decided to go for it, and I contacted her and I found out she’s got a six to eight week waiting list. Well, now she really must be legit. I wasn’t sure before, but she won’t take my money. It’s got to be real.”

Johanna: Yeah, you mean people are waiting? Yeah, it is kind of interesting.

Ideas For Marketing Using Non-Traditional COIs [1:16:11]

Michael: Yeah, it’s funny all those mental games we play. So where does this go for you from here? Like just, you’re going to keep going White Coat Investor forums as long as you can? Are you now planning other things, other niches or other communities or other ways to get to this doctor niche now that you’re finding it works?

Johanna: Oh, well there’s something I didn’t mention, also. Through White Coat Investor I’ve gotten to know a female physician blogger who interviewed me and hired me for their financial planner, and she is kind of the financial guru of this huge Facebook group called Physician Moms Group, PMG. Have you heard of that?

Michael: Physician Moms Group. So just I guess as the name implies, physicians who are moms and balancing physician-ship and motherhood and all of the challenges that go with that kind of work/life balance.

Johanna: Yes, and this is an exclusive group. You cannot be a member of this group unless you are a woman and a physician.

Michael: Okay, so you can’t even get in, but they kind of interviewed you in the inner circle. So you got a glimpse?

Johanna: Well, actually the financial guru, the female financial guru, I was going to be in New York last year. I posted it on White Coat Investors saying, “Are there any good restaurants? Anybody recommend anything?” And she said, “Would you mind meeting?” and I said, “No, that would be cool,” and I didn’t know she was interviewing me at that point. So who’d have thought, over cool cocktails. So she decided to hire me for her financial planner, and she’s been very vocal.

Michael: Oh, she personally hired you.

Johanna: Yes. So now her blog is starting to gain traction and she’ll interview me for her blog, and about half of our referrals now come from Physician Moms Group.

Michael: See, there’s an interesting effect there, to me. This to me is the classic how you market through centers of influence. Literally, Jim Dahle is a center of influence. He runs a platform for the niche you want to reach with hundreds of thousands of readers every month. This woman runs a physician’s moms group with thousands and thousands of people. She is literally a center of influence for that community. And most of us in the advisory world, we all go after the same centers of influence. It’s the attorneys and accountants because those are the ones that do the tax planning and estate planning for the clients that we typically work with. But it’s a fascinating thing to me that once you start focusing into a niche, you open up a whole new category of centers of influence that no one else is calling.

Johanna: That is so interesting. I had never looked at it that way, but you’re on to something.

Michael: You’re driving a whole bunch of referrals because you’ve got great relationships with two centers of influence in your doctor-

Johanna: Yeah, as the owner of a CPA firm, I couldn’t market to CPA’s.

Michael: Yeah, that’s true. That was never a good COI channel for you. Not so much.

Johanna: Wasn’t an option, but that’s pretty cool. I guess they are centers of influence, and I really hadn’t thought about that.

Michael: They’re COI’s no one else calls on, because we all go after the same accountants and attorneys, and you’re the only one calling on the one who managed Physician Moms Group. The joys of specializing into a niche. So as we come towards the end of the podcast here, I am still wondering where else this goes for you from here. With this kind of growth coming in, are you looking at hiring more people, are you looking at making other changes to systems? If it really sustains several prospects a week ongoing, that adds up to a lot of clients very quickly. Obviously not every prospect says yes, but it’s still going to add up to a lot of clients pretty quickly. So are you looking at this and saying, “We’re going to get some for a while, and then we’ll get to a good place, and then I just want to live a comfortable lifestyle practice”? Or are you looking at trying to build this up even further? Where do you want it to go from the business perspective from here?

Johanna: That’s an interesting question. I don’t really want to build an empire, but I would like to have the firm that is thought of as the fee-only financial planning and investment firm for physicians. So my goal is to grow judiciously so that we are economizing on the time that we spend doing things that aren’t really gaining us anything, and have our systems down for working with these physicians. I don’t know what we’re wanting to grow to. I’m thinking, say, 100 planning clients at this point that we could handle, and then I really want to hit this hard for five years, and sell. The other two people in the firm want to be owners. Michelle is and Ben wants to buy in, and that’s one reason why they are here, because I wanted people to work with me who were younger than me and who would want to be owners. So I’d like to sell in five years, still work for the firm, but not be working in the firm, if you know what I mean.

Michael: Well, very cool. So as we wrap up, I know you listen to the podcast as well, so you know we tend to end with the same question of, you know, we talk about success, and success means different things to different people. So as you’re looking at this huge transition and then your own five-year exit plan from here, how are you defining success at this point?

Johanna: To me, my personal success would be to use the talents that God has given me to make people’s lives better. Financial planning is truly an area that I think everybody could benefit from, whereas as a CPA that wasn’t the case. But I feel like I have found my calling, and to be able to literally see people’s lives change because of the information that they didn’t have before, and to be able to use my gifts to do that, I mean it’s like I’m not working. I’m working, but it’s just a joy. It’s just a joy.

Michael: Well, very cool. I’m so excited that you found such a positive transition for the business. Unfortunately a lot of advisors spend a lot of time in their businesses and never quite get to the point where they’re that energized to be going, and here you are 10 plus years into a planning firm and 30 plus years into a CPA practice, and now this energized in a niche. It’s a really, really cool thing to see. So thank you for coming and joining us and sharing your story.

Johanna: Oh, thank you. I’ve been honored to talk to you. Thank you so much, Michael.

Michael: My pleasure, my pleasure.



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