The Influential Advisor Podcast
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The Influential Advisor Podcast
117: Jon Randall | Top 50 Most Innovative Voices In Advisor Growth Series
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What keeps successful financial advisors from scaling beyond a founder-dependent practice? Dr. Jon Randall, founder of XFA, shares the psychology, systems, and strategic shifts that help advisory firms overcome growth constraints.
In this episode of The Influential Advisor Podcast and our Top 50 Most Innovative Voices in Advisor Growth series, Dr. Jon Randall joins Paul G. McManus to discuss why many financial advisors become stuck around $1 million to $1.5 million in revenue and what it takes to move from advisor to entrepreneur and CEO.
You’ll learn why the founder’s capacity often becomes the biggest constraint inside a growing firm, how holding on to every client can limit service and growth, and how building the right team creates more time for leadership, business development, CPA relationships, and acquisitions.
Dr. Randall also explains how financial advisors can:
• Identify the constraints preventing their firms from growing
• Make the transition from advisor to entrepreneur and CEO
• Scale from approximately $1 million to $10 million in revenue
• Transition client relationships without an abrupt handoff
• Avoid giving new advisors only the firm’s smallest clients
• Hire team members without expecting them to behave like founders
• Segment clients according to revenue and service needs
• Create more capacity for referrals and strategic growth
• Track revenue per client and revenue per team member
• Use books to build authority and communicate important ideas
• Prepare for a coming wave of financial advisor practice sales
One of Dr. Randall’s most powerful ideas is that founders may unintentionally hurt clients by refusing to let go. When the founder is involved in every meeting and relationship, clients may receive less time and attention than another advisor on the team could provide.
The goal is not necessarily to stop serving clients. It is to become more intentional about where the founder’s time creates the greatest value while building a team that can gradually take on more responsibility.
ABOUT DR. JON RANDALL
Dr. Jon Randall is the founder of XFA, officially Extraordinary Financial Advisors, a coaching and consulting firm that helps financial advisors identify growth constraints, improve profitability, build stronger teams, and scale beyond the founder.
After beginning his career as a financial advisor in 1999, Jon rebuilt his practice in North Carolina and began teaching other advisors how to grow. He later sold his practice to focus fully on advisor coaching and combined his industry experience with research in performance psychology and the theory of constraints.
He is also the author of The Extraordinary Financial Advisor Practice.
Learn more about Dr. Jon Randall and XFA at XFA.coach.
ABOUT INFLUENTIAL ADVISOR MEDIA
The Influential Advisor Podcast, hosted by Paul G. McManus, features conversations with leading voices shaping the future of financial advisor growth, marketing, authority, media, and business development.
Subscribe for more strategies on financial advisor marketing, authority building, books, referrals, AI search visibility, advisor growth, and building a more influential advisory business.
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The Cost Of Doing It All
SPEAKER_01If you are going to grow, you do have to let go of you being the one to help everyone is not possible. You will hurt the people that you're trying to do this with because you can't give them the time that they need. So when you've been doing the financial advisor business for a long time, guess what? Your brain is going to trick you back into doing the things you've always been doing, especially the busier you get. And I think what happens a lot with advisors is they'll get someone on their team and the first thing they think is, oh, they're not good enough. They're not like me, right? They're not grinding 80 hours a week like I did, which they're not going to. But they said 91% of practices are struggling with productivity due to many unprofitable clients. 51% of clients of financial advisors are not profitable. If you're getting into scaling and you want to start bringing in people on your team, other advisors around your team, your most important metric is.
Meet John Randall And XFA
SPEAKER_00Welcome back to the top 50 most innovative voices in advisor growth. I'm your host, Paul G. McManus. In this episode, I'm joined by John Randall, founder of XFA Coach and one of the leading voices in helping financial advisors grow, scale, and evolve from practitioners into true business owners. John began his career as a financial advisor himself. He built a successful practice and then transitioned into coaching and consulting, helping other advisors break through growth ceilings and build firms designed to scale. John holds a PhD, is a best-selling author, and brings a distinctive combination of psychology, business strategy, and real-world advisory experience to his work. In our conversation today, we explore what it takes to move beyond being consumed by client delivery and step fully into that role of CEO. We discuss why so many advisory firms reach a growth ceiling, how the most successful advisors build scalable practices, and what John has learned from working with some of the industry's highest performing firms. Before we jump in, be sure to subscribe to our YouTube channel or wherever you're listening so you don't miss a new episode of the top 50 most innovative voices in advisor growth. And now here's my conversation
Writing Books As Durable Assets
SPEAKER_00with John Randall. So how are you doing today, John?
SPEAKER_01Awesome. So excited to talk to you, the master of creating books and media, Mr. Paul. It's awesome to be here.
SPEAKER_00Before this interview, I found my copy of your original book here. When did you write this?
SPEAKER_01I it was published in 2010. And I wrote it really in 2008, 2009. So I was doing a lot of workshops for advisors on client acquisition. And I had a workbook that I took them through. And one advisor said, This is good stuff. You should make it into an actual book. And I said, I could make it into an actual book. So I had a speaking engagement in San Francisco. So from the East Coast where I live in North Carolina, it's pretty, pretty long flights, over a five-hour plane flight. So on the flight there and the flight back, I really organized it more in a book, selected people that could be interviewed throughout. And you know, back then I was, you know, very much an amateur. I used a ghost writer to help me with how to put a book together. They interviewed some of the people. But yeah, it's come a long way from them, but there's still some diehard followers of that book. So, you know, are 16, 17 years later, still relevant, right? The concepts are still relevant. So it's nice to see that's still around.
SPEAKER_00That's what I love about books, is that they're durable assets that to your point, you wrote this in 16 years ago and it's still useful. I mean, how cool. I mean, you know, any other kind of marketing, Facebook ads, you name it, seminars, you know, they all have their place, but you stop spending the money, it's done. Whereas assets, whether it's a bot, you know, podcasts, video books, or things that can last years, if not decades.
SPEAKER_01Yeah, it really is neat. And I think the the book that we recently did together, the extraordinary financial advisor is far better and more organized. But yeah, it is neat to see that some great content does uh withstand the test of time, which is the hardest uh tested.
SPEAKER_00Well, I I think it's I think it's great ideas stand the test of time. And so with that, I want to get a little bit into your
From Advisor To Coach
SPEAKER_00backstory. So from what I know about you, and I'm just gonna frame out what I know, and then you tell the story in your own words. But you started out as a financial advisor with Americze, and then at some point you transitioned into coaching advisors. Tell us about how you got started in your now role as the elite coach to elite advisors.
SPEAKER_01Yeah, it was really something I stumbled into. I had no idea I would be doing this. So I started as an advisor in Long Island, New York. I'm not from there, didn't grow up there, but my wife is from there and grew up there. We met in college up in Massachusetts. And the closest office to where she was from is this town called Haw Pog, New York. And I went there and met this guy named John Cutton, who was one of my training managers when I started. So our good friend was one of the wonderful people there who taught me the business. And uh boy, what a tremendous advisor, you know, he was back then, and of course he he is today. So I really had a great introduction to the business as a young kid straight out of college. I mean, I was 22 years old and it looked like I was 12, but just grit and grind and figured out how to be one of the you know smaller number of advisors that actually made it and and didn't opt out or didn't get let go. So I learned so much through that. And my wife and I, we had some family in North Carolina and we were visiting, and we we fell in love with that. We didn't have children yet. So in 2004, so it started in 1999, 2004, we decided to move. So I said, you know, it's so cheap to live here. I I could start over. You know, I could sell what we built in New York, I could start over. So I did. Now, when you start over, it's interesting. You learn a lot in the first five years, and starting from scratch again, you can do it so much better. So it probably took me a year and a half to rebuild what it took me my first five years. So I had these advisors in North Carolina said, hey, John Randall, what are do those big producers like John Cutton, what do they do in New York? Would you show me? So I started to show them best practices. Some I even partnered with and said, hey, why don't I get involved with some of your clients? I can help you. But then I grew really quickly because I knew it worked and what didn't. So I just only did the stuff that worked. And so that really was what brought on a lot of people to say, would you show me how to grow? Would you show me how to do more business with clients? Would you show me how to attract new ideal clients to my practice? And it spread across North Carolina. Someone I knew moved to Texas and said, Hey, would you come down and teach these advisors in Texas and Louisiana how to grow? Someone I knew from New York moved to Florida and said, Hey, would you come down and teach these advisors in Florida how to grow? So I got in this like circuit of just helping and other advisors, which led to all this consulting I was doing. And it's became this thing. And it was really fun for me. I really enjoyed it. And I missed the work with individual clients, but it was hard for me to make a bigger difference with, you know, my one practice and the offices we had. I can make a much bigger difference in the industry through all these other advisors. So it was really in, let's see, it was nine years ago. So 2017 is when I sold the last bit of my practice and just went all in on helping advisors. And I would say in the in the pandemic, we really expanded out of you know, a smaller bubble of advisors we're working with to really saying, hey, let's scale this, let's bring in other coaches and teach them how to do what we do. Let's get into other pools of advisors and really expand for independence RAD RAs that really helped them grow. So it's it's been quite a journey. And thankfully, some of these people I started working with who were really small are now like Baron's top 100 advisors. And it's neat to be not only helping them in their journey, but also learning what worked. And so what's happened is some of the wonderful people that have grown to that extent, that learning from it has created shortcuts for others. So it's really built our program and not just of my experience, but documented it, creating shortcuts for others to follow in the same path, but to do it in far less time.
Why A PhD Changed Coaching
SPEAKER_00Now, you weren't satisfied with simply learning from the best of the best. You decided to go out and get a PhD. Tell me about that decision and what you learned as a result of getting a PhD and what you studied.
SPEAKER_01Well, it's completely insane. I don't recommend it. I told my two sons I said, I don't recommend doing this. This is crazy thing. Yeah, I ran out of stuff to do. I've always been someone that uh has always sharpened the saw. And so I just I did you know these uh coaching designations, learn stuff, and would go to every kind of workshop and thing just to learn about entrepreneurship or our industry. And I just ran out of stuff to do. I was always interested in psychology. And I was specifically interested in performance psychology. And I got a taste of it. I played drums professionally when I was younger in my college years. I toured around in the summer, and it was a had some really great mentors that really did performance psychology with us in the shows. I got to play in the shows, some of the shows I played in became very successful Broadway shows. And so it was always there helping advisors. And and part of what I joke about is that I I went down that rabbit hole to figure out why financial advisors don't do what they should be doing. It was just how we are as humans, right? It's how we are as humans. And so the more I learned about psychology, performance, then it really clicks. One of the first things I learned is just how much the human brain creates equilibrium. Like our brain will trick us back into the same things, into we like this kind of food, not that kind of food, right? We do this routine around here, we don't do that routine around here. So if anyone's ever experienced all of a sudden trying to get up two or three hours earlier than you normally get up to do something you don't do, like go run miles or go work out, it's really hard to do that. Your brain will find every way to trick you and stay in that warm bed, right? And you'll quickly invent reasons why, oh, it's raining today. That's just that's just how we are. So when you've been doing the financial advisor business for a long time, guess what? Your brain is going to trick you back into doing the things you've always been doing, especially the busier you get. So the biggest conundrum in our industry of advisors is they're just busy, right? There's a lot of America wants help from advisors. They're getting busy, they get filled up. So they get even more in this rut of just doing things that they want to do in their bubble. And when new things come along, their brain says, that's not the way we do it around here, we do it this way. So it really created a route for these best practices I was slinging around weren't working. There was something deeper going on. So it was really finding what are the things that are, you know, really holding them back, what's the real change that needs to happen? Then how can they perform in that uncomfortable space that they need to be in, right? To step out of their bubble, to expand a little bit, to shift their business where they need to so it will grow faster. And just having the tools to do that, it really created a new basis for the coach and consulting that we do.
SPEAKER_00Help me understand a little bit better about your business today. What's the official name of the business?
SPEAKER_01Yeah, the full name is Extraordinary Financial Advisors, but we just say XFA to be short. And the website is also synonymous with everyone calls us XFA coach or XFA dot coach. And so through doctoral work, really when you get a doctorate degree, a PhD, you are conducting a brand new research study that has never been done before. That's pretty much what a doctoral dissertation is. So when I learned about how to do research, how to organize information, I couldn't do my dissertation on our industry yet because I might be known, right? And it might be, it might create an inaccurate study if someone knows me. So I have to be really anonymous in a different field. I'm passionate about um, I'm a foodie, so I'm passionate about the uh hospitality industry. I always learn if I go to a nice restaurant or stay in a nice place like the Britt's Carlton. I always learn from that experience there and try and apply it to the financial advisor business. But so I did it there just about the change that was imposed on that industry when the pandemic happened in March of 2020. I mean, there were places that, sorry, your restaurant's not allowed to be open. And what massive change that an owner would go through, especially if they were only a sit-down restaurant and suddenly had to figure out how to do to-go food just to survive. So it was a very extreme example, which is interesting, but you're conducting research and learning.
Constraints That Stall Firm Growth
SPEAKER_01So I came across this theory of constraints, which is really from manufacturing. So you think about manufacturing, the vehicle you drive, there's all these steps that are part of making it. And so if there's a constraint early in the process, it holds back all the other steps in the process. So we developed a system called XFA growth model that's actually based on the theory of constraints. So we just see the most common things that are occurring early in the process. So I love client acquisition, ideal client acquisition, practice acquisition. I love this stuff. This is my favorite stuff. But there's these things earlier in the process that are actually the issues why advisors are not attracting enough new clients, why they could have kind of stalled, and they don't realize it. They just keep doing more here, where it's really there's a constraint, you know, probably a few along the way. So it's a very systematic way that we can diagnose a practice, but also help them install solutions or small changes very quickly that can unlock the rest of the process and create a lot of growth really, really quickly. So that's really become the foundation of what we do. And so we've just been able to diagnose practices quicker. We've been able to install solutions much faster, which is why they're growing so much faster in scaling. I mean, we're having people 10x their business in less than five years. And it's really fun to see the results and see it in action, which has kind of, you know, led us just to some refinements to make it even better
Lessons From A 17B Firm
SPEAKER_01as we go.
SPEAKER_00You mentioned John Cutton before. And so, for how fortuitous was that that when you started out at a young age as an advisor, he was your training manager, and now he's one of your clients, and you work with him and his team. And just for someone that doesn't isn't aware of who he is, he's the largest firm inside the MeriPrice system. The last time I checked, they were at 16 billion of assets under management.
SPEAKER_01I think as of last year, they were, I think they crossed to over 17. They already have like a half billion of new inflows halfway through this year. The goal's a billion for the year. So it's wild. It's just growing so quickly. It's it's so exciting to see. So it's neat though. I mean, I knew John when he was just one dude being an advisor, right? And masterful with clients, masterful with other CPAs. He was just so good, so talented. He's such a driven person, too, that it was it was uh fortuitous is a wonderful word that I could learn from someone like that early in my career, but also be part of helping the solutions to help, you know, well, become a top 10 Baron's industry, like independent advisor. And I mean, that's a big deal, right? There's many, many, you know, hundreds of thousands of advisors. And to the top 10 is a pretty big deal. In fact, uh number five last year, they were, which is very impressive. So it's neat to see not only what works there at a massive scale, right? When you're you're approaching and crossing over triple digit number of advisors on your team, it's a completely different game, right? It's it's totally completely different game. And and I always say that when advisors start crossing in the multiple millions and they need another advisor on their team, that's when they start crossing into the scaling game, which is a very different game than just being an individual advisor. And so so much has been tested there at such a high volume of how to scale that business, how to create massive inflows and funnels of new clients and new assets coming in, how to acquire, how to really keep a lot of advisors on their team, which they've been extremely successful at. So it's not only the X of A solutions and the growth model working there, but it's also great to see that practices like that that are just so far down the path, it's neat to see them leave, you know, nuggets of knowledge along the way for others and uh use that as learning for someone that does want to 10x or scale their business one day. Maybe not as big as Cuton and have 100 advisors on their team, but someone might want to go from 10 million in revenue or a million in revenue to 10 million in revenue. And there's so many lessons there from someone further down the path and so new many mistakes that were made that John Cutton would be the first one to say that, you know, don't do this at this stage. If I started over, you know, I would do this differently. There's so many people that have been able to, you know, give back to others that, you know, when you're at the spot, I wish I did this differently, or, you know, now we have that XFA is here's the shortcuts. So fortuitous is a great word, and uh uh John Currently is certainly such a wonderful person and a great person for each of us to work with.
SPEAKER_00Yeah. I was also fortuitous to get to know him. I met him, I want to say three or four years ago, even today. And I just published my book, The Short Book Formula. And I did what I recommend my author clients do, which is once you publish the book, go on what I call a virtual speaking tour, which essentially means guest podcasting. And I didn't know who he was at the time, but we I got booked on his podcast. And since then, he's been an amazing client of mine. And, you know, it's and I've helped him at this point publish one book. And we're in the process of writing a second book, more aimed at advisors, something that he had shared with me early on, which I think is an interesting story, was that when he first applied to work for a Meritrise, that they turned him down because he didn't have any sales skills.
SPEAKER_01I tell you, it was his cutthroat in New York. They wanted people that already had a career who could sell. It was, it was, it really was that way. So it's so funny that one of the greatest, you know, in the business wild.
SPEAKER_00And if I recall the story correctly, he ended up, and he was still a young guy at that time, and so he ended up going and working at the gap so he could get some sales experience and then reapply. I think he actually like changed the location that he reapplied, so he kind of got in the side door, but the rest is history. So it's it was fortuitous for America as well that they accepted him back then because he's grown like a monster in the years since. You know, just yourself having that, you know, front row seat to his growth, you know, I'd love just to kind of maybe see some high-level observations that from where he started, he started just like every other advisor does. He wasn't given anything. He he built everything that he has to the point where he's that today, and you know, he hasn't personally worked with a client in over 10 years or something like that. And so just any high-level observations or insights that you've seen working with someone like John and having that front row state.
SPEAKER_01Yeah, it's neat to see the journey along the way. And and there's there's advisors out there that have like challenged me and said, there's no way an advisor could do over 100 million in revenue. That's impossible. Or it must be just a whole bunch of advisors plugged in, and it's like, no, look at the Baron's, you know, information. It's out there and it's real. And yes, he owns it all. It's not fake, it's not a bunch of advisors plugging in like like some RIAs are. Like it's real. He owns all of that revenue, and it's very impressive to see. But I think the foundations from early on, he was very aware of profit margin early on, very, very early on. And it was it was neat to see in New York some people further down the path because at the channel we were in, it was a time where there was a choice that you could be an employee advisor or you could be an independent advisor. And real estate was so expensive in New York. At first, people were scared of that and said, you know, why on earth would be we'd be an independent advisor? This seems insane. Um, so most people stayed in the employee track because it was uh it was more comfortable, right? You didn't have to pay for real estate, didn't have to hire staff, right? It just seemed a lot safer. And then, you know, one by one, people went independent and said, Oh, wow, okay, this is better, I can make more. And then it just kind of slowly went down that path. But it was neat to see just how aware he was of that early on as an entrepreneur, which I think a lot of advisors go through these stages of just being an advisor, not really an entrepreneur. So they're just worried about, hey, let me do stuff with clients. We're not really worried about like business economics and profit margin in the business. So he's very savvy to that early on, because that's, you know, as an owner, that's that's a big part of what you take home, your profits. So I would just say that he very, very early on understood the value in I can accelerate growth by buying something, and I can help somebody else make more than they could make on their own by feeding them some clients. It's a win-win scenario there. So when he did some of that and realized I can buy something, it pays for itself. I can pay somebody else to do the work. They're making more than they could on their own, but there's a profit margin in this. There must be something here. So he was really in the scaling game. What I say to a lot of advisors, he was just at it a lot earlier. He stumbled into it a lot earlier than others. So he was kind of ahead of the pace of I need ways to bring in business, you know, organically from CPAs, the master of CPA relationships, and through acquisition, and then always having enough capacity with some other advisors to, you know, kind of feed them and have that mutually beneficial relationship there. It was neat to see that at the early stages and just see how far that's gone. Now, he'll be the first one to tell you that it took two to three times the amount of time to get from a million in revenue to 10 million in revenue compared to what it took to get from 10 million in revenue to 100 million in revenue. It was almost like a third of the time it took to get there. And I find that journey from a million to 10 million is very difficult because you can't think like a financial advisor. You need to graduate from that role, which is why I think it's like 14 years now since Cutton's been in a client meeting, because him being Being stuck in delivery, as like Dan Martell calls it, it's being stuck in the client meetings. It's the most time-consuming thing that goes on. So advisors have a tough time letting go of that. And you don't have to be that extreme and let go of all the clients. I mean, we we still work with many, you know, Barron's top 100, but you know, scaled practices. They still have some clients. Now it's not 200, right? It might be less than 50 or less than 30. One of ours has 17 clients that still keeps them in the game. They still have their advisor hat on a little bit, but it's not most of their week. So Cutton really learned I need to do the things that only I can do. I need to focus on bringing in more to the business through CPA relationships, through acquisitions, and feed the firm. And then you realize I'm going to get other people to help me with that. And the larger you get, the more you need coming in to keep up growth rate. So it's just a need to see that from an entrepreneur standpoint, there's the advisor department, there's centralized look operations, and then there's this whole new business development department that's finding CPA relationships, working CPA relationships, finding advisor acquisitions, finding advisors to join the team to service all the business that's coming in. So there's a whole team of people now that are constantly doing that all day, every day there at Cut and Wealth. It's their main role. So it's it's neat to see just the evolution of it over time. But I would say that from early on, you just had some natural ability to think a little bit more like an entrepreneur. He will get very granular in the numbers. I mean, he's he's capable of doing that. He's not just a high-level rah-rah guy. Like he will grind down to the details. And he's still involved with a lot of things. Like on Saturdays, he still teaches Saturday mornings. Every single Saturday morning, he teaches basically a divisor development class where he teaches skills, advisor skills. So he doesn't need to do it one-on-one with individual clients. He can do it at scale with many, many advisors. So a lot of learning from that for listeners that are producing maybe over a million. I find a lot of advisors get stuck around 1.5 million because it's the capacity point where they need another advisor on the team, right? And to do multiple millions, unless you have access to a lot of really high network clients, which not every advisor does, you need another advisor to scale from a million to 10 million. You need multiple advisors on your team, and it's a completely different game.
SPEAKER_00So just for clarity, the people that you primarily work with, the advisors that you primarily work with at XFA Coach, where roughly are they? And that's the question.
SPEAKER_01Yeah, the average firm we work with is about six and a half million of revenue, but they didn't start there. A lot of people come in in between that million and two million range is probably the most common entry point where they're, you know, at that advisor stage, they've sort of hit a ceiling. I hired another advisor, I'm not growing. What should I do? That's the most common place that people come in. We have some others come in between that million to 10 million range typically that want to be like, you know, some of these larger practices that we we work with. So that's usually where they come in. It's quite a range, and people are on that journey. And not everyone's looking to do a hundred million of revenue. Some people have some goals that, hey, I want to 10x my business from here to here, and that's great. We can help them do that faster than they could on their own. But, you know, our average continues to increase. I mean, just a couple years ago, our average was under 5 million. Now the average is is six and a half million. They're really, you know, as a group, growing very, very quickly and scaling pretty quickly. But, you know, just over a million, that's typically where people come in, where they're they're either approaching the ceiling or they got they got stuck.
SPEAKER_00Talk more about that ceiling.
Letting Go Without Abandoning Clients
SPEAKER_00For example, I was just on a call with an advisor client of mine, successful guy. He's built out a practice, and he's in that stage where he wants to start to remove himself from the day-to-day advising operations. But what's interesting, and I've heard this from many advisors, is they got into the business being an advisor versus making that shift into the entrepreneur. And I find that in talking to these very successful advisors, even the ones that are growing and scaling and acquiring practices, is that they have this emotional resistance to letting go of the clients that help them build the firm. You know, on the surface, it seems like, well, you know, it shouldn't be that big of a deal, but I think it really is a big deal for many people. How do you help coach founder advisors to make that shift from advisor to CEO? And what are some of the insights you can share?
SPEAKER_01Yeah, this is where psychology helps so much. So it's going to that basic concept where we crave equilibrium. Our brain will constantly trick us back there. We will invent reasons why we should keep working with this client, why we need to keep working with this client. They've been with me from the beginning. They're so nice. You know, I went to their daughter's wedding, right? We invent all these reasons. The one that hit home for me, and it wasn't until somebody else helped me realize this that I'm not helping them by trying to hold on to them. I'm actually hurting them because you get at a point in the business where capacity is always the number one constraint. So the founder's capacity is always the bottleneck, right? It's always the thing that holds back to business. So if you have too many clients in your plate, it's the most time-consuming thing that goes on. And if you need to start doing other activities like more new business development to generate more referrals, maybe to generate some new CPAY relationships to get a new client, maybe to figure out how to go and acquire some other practice. It takes a long time to acquire a practice, and they're not all going to work out. It's a big time commitment. So there's bigger things that the firm needs from the founder that they're the only ones capable of doing it. Now, again, I reference back what I said earlier. It doesn't mean you have to totally get out of the game of being an advisor. I mean, even though it's been what, 14, who knows, maybe 15 years now with John Cutton since he's seen clients. He said a couple years ago, he said, you know what, I wish I kept a small group of clients so I was just in the game. He said I'd probably be even better if I did. But if you are going to grow, you do have to let go of you being the one to help everyone, is not possible. You will hurt the people that you're trying to do this with because you can't give them the time that they need. Whereas other advisors on your team, they can. And it may not be they take over a relationship. Maybe an advisor helps you with the client relationship, especially if they're they're newer, they're maybe not quite to your level. They could do easy things, you do harder things. It is about getting you freer and the client's so much better off. So it's really until they can see that new beginning of, oh, wow, the client is better off if I help them in a way that's different than my psychology of I need to do it. That's the one that hit home for me. And so when I can help other people see that, they say, oh my gosh, I can't believe I'm hurting, you know, this client by holding on to them. You know, I should help them by getting more time with another advisor on my team and helping them find a better person to work with. So that's really the shift. And then once they see that, that they're actually hurting the client and they would help them by making this shift and they would help their business grow and making this shift, that's the case. Doesn't mean they didn't are never going to talk to that client again. They could give them a quick phone call and check in once a year and be part of that. So I get that is it's a very common thing, but I think it's just the root of how we are as humans and our psychology. It's always, it's, it's the natural thing that every advisor is going to say that I just can't get out of that. I have to be the one to do it. No one else could ever do this. And and going through, I tell you what, when you sell your practice, it's pretty humbling because when clients just latch onto the new advisor and run and forget about you, it's pretty humbling. And really, you know, for me, it's like, yeah, the clients are better off, right? Because I'm not doing this consulting all the time and and spending less time in my practice, the clients are way better off being with an advisor, an owner who's a full-time advisor and really all in on clients. They're so much better off from it. But uh once you see that when clients go to another advisor in your team and are fine, or you know, they go to another practice, they're okay. They're not going anywhere. They're okay. And so I think there's comfort to knowing that you're still around as a founder. Maybe you're leading the person who's doing the work, or maybe you still have some input on the how portfolios are run, how financial planning advice is given. Uh, there's some comfort in knowing that you're behind the scenes or your fingerprint is still around all the things that are done there at the firm. But it doesn't mean you have to completely eject from clients. It just means you're just gonna have to do this, right? You're gonna have to spend time with the most important ones that create most of the revenue and profit. That's what you should do. But your time needs to be spent growing the firm because most cases the founder is the one that can grow the firm and they need to spend more and more time doing that.
SPEAKER_00There's also, I can think of a couple of examples. One is that just that emotional attachment to existing clients and you know, people that have helped you build the firm from the ground up. Another one that I see is the founder, owner, advisor. They have the mindset, okay, I'm gonna give more and more clients to my team. There's they're building out the team, but for the really complex cases, I enjoy them. And so there's this desire to want to be part of the more complex cases, which I think creates a little bit of that bottleneck. Do you see that play out very often? And if so, how do you advise around
Client Segmentation With A Ritz Model
SPEAKER_00that?
SPEAKER_01So it's interesting, we're big at X of A on client segmentation. It helps unlock a lot of time, but it helps align the time and energy of the team towards the revenue, not the asset, the revenue of the clients. So when you really look at where's the revenue coming from, more time should be invested at the top. And the mistake a lot make is everything gravitates to the mean where all clients are kind of getting this average experience. There really isn't anything special at the top, and too much time is given at the bottom, which is diluting and really, you know, wasting a lot of time there. So I've seen some practices go to the extent of not just segmenting clients, but segmenting their team. And we have quite a few. I mean, I can count on on you know more than my 10 fingers how many practices we're working with that have done this, where the founder has taken a small group of their team and almost having like a boutique within their larger business. And so it's a smaller number of clients and like less than 100 clients. It's it's it's a much smaller group, and they might have you know another advisor or maybe a really top supporting team member that will be a very high-end experience for these high-level clients. And we interviewed some of them in our our annual X of A intensive, our big annual event that we put on. And so there is a more intense level of care where it might be weekly interactions in some case with the team, maybe monthly interactions, but it's it's almost like a small business within the business. And so I relate this to the Marriott Corporation. So the Marriott Corporation has like a ton of different brands, right? They got over 30 different brands now, they seem like one of their brands they own is the Ritz-Carlton. So there's like thousands and thousands and thousands of Marriott's Fairfield Inns, right? All the different brands around, but there's only a little over 30 Ritz-Carltons in America that are very exclusive and very special. And they're they're all wonderful for what you get, right? I'm the fan of the Fairfield Inn. If I just need a quick stay, or I'm I'm working and just need a quick overnight, or I got an early flight in the morning and I want to stay near the airport, Fairfield Inn's awesome. They even give you a free breakfast. It's wonderful. But if you're maybe doing a special trip with your significant other, your family, and you want to have a nice experience, it's wonderful to do that. So that's kind of what these businesses have done is say, hey, let me take a small fortune on my team for a small number of clients and have a Ritz-Carlton experience with this group. And then the rest of it is very scalable, right? Your average client is very scalable. So the industry average client as of last year had about 1.66 million in assets, producing a little over 10,000 of revenue. So if you can have advisors on your team that are proficient enough to help a client with around 1.66 million, that's very scalable, right? That's very scalable. So you can have your regular advisors and regular staff helping out those kind of people. And then I've even seen teams go to the extent that, hey, we have a different team that helps the bottom of our book. So you look at the large, large, like you know, wirehouse broker dealers, they all have call centers. So a lot of those firms, they do not compensate their advisors on clients that have less than half million because they know over half million is where they're typically profitable. Under that level, they're not profitable for traditional advisor. So they have a different offering at that level. It's more efficient, right? And it's more quick phone calls than longer traditional meetings. So I've even seen teams go to that extent where they have a small elite team working with like the Ritz-Carleton clients. They've got like their standard Marriott model, and then they have a super high volume value offering like the Fairfield In, where they're able to, you know, handle many, many clients at scale, but it's it's very efficient. So that's a way that people can stay in the game and have fun with the more complex cases, just like the Marriott, you know, different brands, but all kind of under one corporation or one company. So it's a neat way that that evolves, which is it's so much fun that I mean, of the many hundreds of practices we work with, they're all unique. The fundamentals in the growth model are universal, but their iteration of it is very unique to them, which is so cool in the independent space and RA space that you can build it exactly how you want. Your clients, your access points, your team. You can build your business any way you want. So it's neat to see what some of these evolve to. And I think a lot of it is is around what the founder wants, what they might want. That I want, like that example. I just want to work with the complex cases. It's really fun for me. Awesome. So that's really hard to replace. And if they want to do that, great. And maybe it's uh just them helping those clients, or maybe they have a small team that eventually helps those clients. It's a neat, neat path.
SPEAKER_00For for someone at that stage, I think you said maybe a million and a half or wherever it's at, and they started the business, they're the founder, and maybe they simply do enjoy being the advisor, but they also have the ambition to grow and to scale. And I talk to advisors all the time, like you do. And what I've seen is a pattern of you can do that, but you need either a business partner that can take over that role of CEO. One of the things I was just talking to about recently was that in my case, for example, I recently brought my brother into the business. And so it's easier for me to now step back more and to make him more client-facing and me less client-facing. I'd say for a couple of reasons. One is that, you know, gets speed very quickly, comes already with skills and all these different things. I mean, I like to joke that, you know, I've cloned myself and it's, you know, he just has a little bit more hair and a few less pounds. Um but there's also a certain level of comfort, meaning that there's a little bit of an expectancy that he's gonna be there, you know, for the long term, and I can build off of that foundation. Whereas I think maybe other people, if they don't have that family member or maybe business partner and they feel stuck, the constraint is their calendar, their time, what's the move for them that
Hiring Mistakes And Unprofitable Clients
SPEAKER_00you find?
SPEAKER_01Yeah, so you're so lucky to have, you know, Gabe is incredible. And I think for the majority, doesn't have that. And I think what happens a lot with advisors is they'll get someone on their team, and the first thing they think is, oh, they're not good enough. They're not like me, right? They're not grinding 80 hours a week like I did, which they're not going to, right? They would have their own business if they were completely insane, like founders like us, right? They would already have done it, or they're going to leave you because they can make more money doing it somewhere else, right? So you don't want to hire yourself. And it's a very difficult advisors really struggle with this one. They're just not good enough. They haven't, you know, put it in the grind, they're not trying to get new clients, and that's okay. That's okay. Guess what? Normal people work nine to five. That's normal. That's normal. So if you bring an advisor in your team and you feed them, guess what? It can be a wonderful relationship for both of you. You can generate a huge profit margin on somebody like that. You can help them make more than they could on their own. But they need to be good enough. That's it. So 60% is good as the founder might be good enough to bring the value that clients need. And that's the hard one. And I'm not saying that you should diminish the experience of your practice. I'm saying that you're probably overkill, those of you listening. You're probably overkill for what your clients need, especially your middle clients or bottom clients. And you bring somebody in that 60% is good, they're good enough. They can deliver tremendous value for your middle clients or smaller clients. The other thing I see too is we're rooted because advisors build the business by themselves. They're the only one working with the clients. So they have this vision of like, well, I work with these clients and this advisor needs to work with their clients, right? And I guess I'll give them some, right? The first move they make, which is a mistake, is well, I'll just give them all my small clients and see how they do. With the same problem still with the practice, right? I mean, it's still there and they're not going to learn.
SPEAKER_00And expand upon that. I mean, that that's probably very common practice, I would imagine. Why is that a mistake?
SPEAKER_01Everyone does it because those clients are usually not profitable. I mean, the the studies out there are wild. I mean, we get a lot of the research on what are advisors charging for their services, but they said 91% of practices are struggling with productivity due to too many unprofitable clients. Investment news study on independence every year says the same thing. Praxis are clogged up. Fidelity came out with a study last year. They said 51% of clients of financial advisors are not profitable. So I get founders like, hey, let me get my problems off my plate. Okay, I'm a fan of that, but the problem's still in your business. And when you dump them on a smaller, on a new advisor, you're never ever going to generate a profit margin on that hire, right? If you invest in a who, you need to generate a profit margin on that investment. You're never going to do it when you do that. Plus, what are they going to learn? They're going to learn how to deal with smaller clients, not the, you know, 1.66 million industry average client. So instead of them taking a block of clients and running them, that would be great, but maybe not somebody's not ready for that. They could give value on the easier things and get to know clients, and you could do the harder things. So if you had somebody come in and handle half of your interactions throughout the year, you just bought back half of your time. That's a pretty big deal. And with that half that time, could you go make the practice grow? Is somebody good enough to handle half your interactions for the easy stuff? And you come in, you handle the harder stuff. It's a much faster way for someone to get into the business, and it's a much faster way for a founder to get somebody in action with clients and talk to them, which is the most time-consuming thing that goes on. It's just different thinking that is the better solution here, instead of them being good enough to run, you know, over a million in revenue for the firm. It's could they be good enough to help you go get an extra million in revenue for the firm and them help you that way? And then maybe down the road, they know the clients and they're ready to take over and leave relationships on their own. It's a much smoother path for clients too, where it's not this disjunct. I work with this person, no, I work with this person. It's more of like a pendulum swing of I worked here. And so clients go through the same thing, right? They have that they're humans too. They go to the psychology of wait a minute, I work with founder. What do you mean there's somebody else here that that's, you know, that does not compute? But studies show clients prefer teams over individuals. Because if God forbid something happened to the founder, there's other people around they have continuity they could continue with if that was the case. And for those that are going to have to get out of some client interactions, maybe relationships down the road, you need other people to do it. So it's better for the client to have like a pendulum swing into that relationship instead of it being such a disjunct or sudden change with which humans, you know, humans don't like.
SPEAKER_00Now, I'm a big fan of business books, obviously, but also business parables.
Business Parables And Advisor Authorship
SPEAKER_00One that has made a big impact on my own thinking, and I read this probably 10, 20 years ago, was a book called The EMeth by Michael Gerber. And you know, the core big idea of that is work in your business, work on your business. And I think that's become common business wisdom at this point. You hired us to help you write and publish your recent book. And interestingly, you decided to do it as a business parable, which I think is, I mean, fantastic. I know there's one shared client that we have, and Chris had originally come to us about writing a book. And one of the things I like to do in my own process is to send samples of books to them just so they kind of get their head around it. And I think we had just published your book, and so I decided to send your book as an example. You know, for the person who's thinking, well, people don't read books anymore. That's not true. You know, when someone's about to make an important decision, they absolutely will read a book if it's relatively consumable. And so the book is something that can be read cover to cover in about two hours. Yes. And I hear, and I heard back from Chris, I, you know, I followed up on my sales call, and he's like, Yeah, you know, I read John's book and I've, you know, reached out to their company, and we're gonna hire them. I'm like, well, that's fantastic. What about me? And long story short, he came back and became a client of ours too. But there's something about a business parable where it takes a lot of concepts that are conceptual in nature. So something different about showing versus telling. So, with that in mind, tell us or show us about your book, the extraordinary financial advisor practice. Who'd you write it for? What's it about? And ultimately, what's the journey the protagonist goes through as a result of the book?
SPEAKER_01Yeah, so I had a lot of information organized from you know all this consulting that we do. So it's actually you, Paul, that helped me on the path that the textbook I wanted to write would not be well as received.
SPEAKER_00It would look very good on my bookshelf. I mean, I would be over there, but like if I have a question, I know that book is there, and it'd give me a it would give me a sense of comfort knowing it's there.
SPEAKER_01And that was my vision that how can I get this this great information we've learned out to more advisors? Because really, you know, our our vision is to make a positive impact on our industry. I really believe in our industry. I believe it it creates tremendous value for Americans. America needs it, America wants it. But unfortunately, most advisors are ordinary at best. Our industry is pretty lackluster. And that's the reputation of it. So, how can we help it be extraordinary? How can we help some advisors really stand out and make a difference? So when you brought the concept of wow, testing is so much better as a parable, it made sense that you know what? We just see what advisors go through. And if we have this, you know, fictitious advisor name we made up, Michael Stevens, it brought it to life. And people that read the book, that that whether they were people already working with or people I knew or people that that came to X of A because of the book, they said, I see myself in this chapter. That's me. That's me. I'm here. And so I think it just brings it to life and makes it a real human. Which Emith did for us, right? Emith did for us. Oh my gosh, you know, I'm stuck in the same thing. It's a neat concept to do a book that way. And it's it's really great to see. I mean, we we have so many advisors we work with together, and it's so neat to see their books come out that isn't a textbook or concept. It's here's real stories of going through it. I think it helps readers conceptualize it. Because you think about other books like nonfiction and things like that. I mean, that's kind of part of it, uh, whether it's like a romantic novel, it's it's you can see yourself in the journey or wow, can you imagine being in this situation, maybe in a World War II book, whatever it might be? It's it's just something we do it as humans. I mean, naturally, as humans, we're gonna look at what is our experience? How does this relate to our experience? What if my experience was that? But we when you hit home for somebody that this is what we you know see a lot of, so you you write something that hits home to them, it's just it's nice to see that connection. So thank you for taking the book into a far better direction than I would have, you know, taken it down the wrong path. But uh it was really your guidance on how to do books. I'm just pretty good at the information and the consulting. I'm not good at writing books, but you're the master at it. So just having some concept to bring to you and your firm and Gabe and the wonderful people on your team, it really helps to have people that know the short book formula, that know how to organize information and to really make it enjoyable from a reader standpoint, and not just people say, hey, that was a good book, but hey, that was a good book, and I want to take action on it. I want to follow up with this author and and maybe go deeper, maybe get some help from that person because obviously they've helped people just like me.
SPEAKER_00And that's the idea behind the short book formula, is that information is ubiquitous, it's abundant, especially in the age of AI. May not always be accurate, but you know, we're all on ChatGPT asking questions, getting answers. In my mind, we don't just need more information. If I want to know what the difference between a Roth IRA and a, you know, something else is, I can ask ChatGPT and I'll get an answer like that. And so it's really establishing a clear point of view. And more importantly, it's taking, it's it's helping people to identify or to see themselves in the character, and whether that's done through a regular nonfiction or whether that's done through a business parable. I think the main thing is to be super clear on who the reader is for this, so that when they read it, they're like, that's me. You know, he's talking to me. And that's the magic of writing a book. And so one of our shared clients, Laura, she's written a book already with my firm. And I think through your encouragement, she's decided to write a second book. And in this case, it is a business parable. And so, you know, she's a financial advisor, and so this is geared towards her ideal reader. And anything that you can share about just the conversations that you've had in terms of helping her guide her thinking in terms of what this book could become for her.
SPEAKER_01Yeah, so I would say for RAs, there's a little bit more freedom in doing the work. There, there's some SEC rules for advisors that are part of like an independent broker dealer, like a you know, a FINRA firm. There's there's a little bit more rules there. So if you're gonna talk about, hey, I'm a financial advisor with the XYZ firm, there's a lot of compliance that that goes along with that. And so obviously you would have to go through compliance for you. And you can do it. You can publish the book and do it. It's just you just gotta check a lot of boxes and stay within their rails. Or you can do it as an outside business, which you can't say anything about being a financial advisor or being associated with that firm, but you can talk about this concept as an author. You can just be a genuine author and and talk about that. So it's neat to see advisor have both, right? They have both, which is which is good. And so, you know, one is very specifically designed for, hey, you know, here's my financial advisor book and says, you know, all the proper things that it does, but this is just more of, hey, this is real life. This is real life, what's going on? Let me just just talk about this as an experienced author, not as, you know, a financial advisor of XYZ firm. It's neat to see that. And it's also neat to see, too, when you do that, you can do more of a, you have more freedom to do a parable of fictitious people, right? You can have some fictitious people that are like based on, you know, maybe real people or real life situations that you can talk about because it does really hit home. And in in business concepts, there's not a lot of parables, right? It's totally with the mistake I was going to make of just here's a lot of information and it's super boring. It's it really is enjoyable when it really hits home to the reader and it's like designed for it's like, oh my gosh, I'm going through this. I'm I'm at the same place as this person, or I'm about to be in the place of that person. It it really is a neat connection point. But uh it's neat to see just just what advisors choose and and what they do. But uh it it's just an evolution, I'd say, over the last few years of of just seeing the neat books that advisors come out. And um, I feel like every week there's the new advisor coming out with a new book is is really exciting, and uh, they just get better and better and better, which is which is fun. And and I enjoy reading them because they're not war and peace. It's not it's gonna take you months to read it, right? You literally can read it in in less than a couple hours, right? It's it's it's very enjoyable to do, which is very approachable for you know from the reader's perspective. So it's written for the reader, not so much from the writer. It's it's very easy to pick it up and go through it.
SPEAKER_00100%. I think I think that's one of the biggest mistakes is to think it, you know, is to think in terms of me and what I want to say versus the best books, start with who is the ideal reader for it, you know, what's the conversation already going inside their head? And so when they pick it up, they immediately say, Oh, that's me. Identify with this, tell me more. Right. And so that you have to have that self-identification. I would add to that, you know, in terms of doing an OBA versus a non-OBA book. Today, I would argue it almost doesn't matter to the extent that what's the first place that we go to now when we want to look someone up. So let's say I get, you know, whether it's a client, it's a prospect, it's a vendor, it's whatever it is. The first thing I do is I go to either Google AI overviews or I go to ChatGPT and I say, who is Dr. John Randall? And it's gonna give me a synthesis of who you are and it's gonna pull from all the sources that it can find online. It's gonna pull, you know, if if you're an advisor, it's gonna pull from your advisory website. If you're an author, it's gonna pull from your author information. And so it's gonna create a composite. And so, you know, that's something that regulators, I don't know how they're gonna try to put some walls up between that. I think it's essentially impossible because people are just an integrated person. You don't separate your author hat from your advisor hat. You're just who you are when you're in a conversation with someone, you're talking about ideas, you're recommending resources. It's just a very natural human thing to do.
SPEAKER_01Yeah, yeah, it is. And that's why it's it's there is is two very specific lanes of this is my approved funnel where I can say all the approved things, and then an outside thing, which have to be totally different, right? You couldn't talk about this thing here, it just has to be totally different. But you're right, by accident, people are gonna find it and come through that funnel. And, you know, then they could be referred to the you know, the official financial advisor business is fine. But uh but you're right. It's it's a really neat way to go. And I think it just unlocks some freedoms for from that path. Just of course, you know, follow the rules that you're a broker dealer, right? I mean, they're they're they're evolving, and as as more people are publishing books, they're you know saying, hey, wait a minute, you know, we haven't had a lot of people do this. Let's figure out the right way to do it, and uh so no one gets in trouble. And it's all I mean, compliance is all safety for you. I know so many people don't enjoy it. Some people call it the business prevention department, but it's it's designed to protect your your business, right? It's designed to protect you. So it's there for reason, it's there to help you. So follow it, so listen to it, it it'll help you. But but yeah, it's just it's neat to see that that there is two very clear paths there, and it gives you some options as as an advisor. But again, if you're an RAA out there, you have a a little bit more freedom to uh is it that the rules aren't as strict, I should say.
SPEAKER_00Yeah. Building off the the authorship conversation we're having, you published your first
The Coming Wave Of Sellers
SPEAKER_00book. I believe you said 2010. You've just published a second book, and now you're thinking about a third book. What's your third book idea about?
SPEAKER_01Oh, I have so many ideas. I want to go back and redo my first one. All right, I just have so many ideas, but it's it's really what's what's relevant. And and as I look at our industry and what what's to come, we're about to have a big wave of sellers. So right now there's there's about 32 buyers to each sell right now because it's it's been pretty easy to be a financial advisor. At the time of this recording, it's been a really easy three and a half plus years in the markets, right? You don't have to be that proactive of clients. They're probably like, oh, I'm not my advisor, but I'm making money. So, you know, but it's the it's the downturns that that get people. So I started in 1999, which is a huge boom in the market. And I remember my father saying to me, you know, 2000 was a crappy year, the bubble burst on the tech bubble. 2001 was 9-11, 2002, the economy was just bad. It was three down years in a row. And I remember my dad saying, like, you okay. It seems like a pretty crappy business you chose. And I said, Dad, it's the best time to be a financial advisor because everyone's upset with their advisor, they're losing money, they're not hearing from their advisor, they want to change, and here I am. I can welcome them and give them the change they're looking for. Same thing in 2008 was a huge downturn. And those times are really where people were comfortable, consumers are comfortable. If they were ever thinking about changing their financial advice, they're gone, right? They're they're making a change. So we've had a lot of complacent advisors that have said, you know, my equilibrium is just keep on keep on being an advisor, right? And if they creep on the edge of the cliff of jumping off into retirement and selling the business, they're like, I don't know what's down there. I'm gonna back off and go back to what my brain says and just keep on doing this. But when we do have some kind of, you know, we go through cycles in the markets, right? It goes up most of the time, but sometimes it goes down. That's what breaks people. And so I just see a lot of the complacent advisors that have been hanging on that are gonna realize, oh my gosh, I'm gonna lose a lot of assets, I'm gonna lose the value of my business. And so I've been preparing advisors for this wave into helping them, helping sellers be better prepared for what they should be looking for. Because I find unless advisors have bought other practices, they're not very savvy into what goes on. So not many advisors are working with a whole bunch of clients who have sold businesses. So the whole thing's kind of new and foreign. They kind of hear some stuff around the industry, they might be here. I I hear practices are going for this amount. And but there's so much to it. There's a lot to it. So that's what it really is what I envision. How do we help these people with what the right thing is to do? How do we help them find the right suitor or successor for for the practice? What are the things that they should be looking for, evaluating? Because it really isn't a guide for them. It's just there's a lot for buyers, right? We have a lot for buyers at X of A because we mostly work with buyers. In occasion, we do help sellers. Some people will grow their business, and it's not because they're older. We've had people sell their business for eight figures at 39 in their 40s, young 50s. They just get burnt out and they say, if I could, I've saved some money, if I sell this business, I'll never have to work again for the rest of my life. And that's a great place to be. So we've helped people sell younger with within our group, but but we want to get in position to help more who are selling because I think that is the gap that I see out there. They're just not quite sure what to do. So we want to educate them what to do and make it easier for them for how you know what to expect and how to find a uh proper seller and or a proper buyer for their business. But that's that's really the intent of what's coming. And and so to have that ready for this wave that's about to come here, that's what's coming next. And and I could just I could just see another iteration of attract more clients, better clients, and uh just incorporating some modernization of it. I mean, the fundamentals are still the same, like referrals and target marketing, right? That that's all still the same, but there's so much evolving, right, with uh how clients are finding advisors, right? It really is evolving, which you're on the cutting edge of with everything everything you do, all the media things you do. You're really on the cutting edge of that. So uh that's certainly the next one I see coming, is a wave of sellers that aren't fully prepared. So let's help them be prepared and help them find the right buyer.
SPEAKER_00Couple of final questions. First, is there any question that I haven't asked you that you would think would be valuable to this conversation?
The Metrics That Actually Matter
SPEAKER_01The most popular thing that advisors, they always want to hear about and always ask me about is yeah, I want to acquire more clients faster, how are praxies doing it, or I want to, you know, I want to buy practices, how how are other practices doing it? Listen, I love that stuff. It's some of my absolute favorite stuff. And we have the most amount of value at X of A around those things. And it's fun, it's exciting. I would just say that just be aware of what your constraints are that are really holding you back. So if you're not having an overflow of constant referrals coming to you, it has to do with what you're doing with clients. It has to do with optimizing what you're doing there. So I think that there's it just leads to what are the constraints in the business. The other thing I would say too, what metrics are really important to pay attention to. There's so much information advisors have, like AUM and GDC, and there's all these terms that are that are flown around and advisors aren't sure what the heck to look at. One of the most important metrics that everyone should pay attention to is what is your revenue per client? Not AUM, right? What is your revenue per client? And if you're going to grow and scale an independent advisor business, even you just want to double. Even if you're at 500,000, you want to grow to a million, or if you're at a million and you want to go to 2 million without any other advisors, that's it. It's the revenue per client. Who are the smaller ones holding you back? And how can you generate more with what you have? And how can we duplicate some of those people? Like that is such a critical metric to pay attention to. If you're getting into scaling and you want to start bringing in people on your team, other advisors around your team, your most important metric is what's your revenue per team member? It's really that. So to me, I just think we've helped simplify what are the key things to really look at. There's a very small number of them, but if you got down your revenue per team member, you're driving revenue per client, you're going to have a far more profitable business. It's not just about top-line growth, it's about driving profits, like some of the best, like John Cutton. That's really the key to the business here. And then, you know, then you're in a much better position to do all the fun growth things that we have. So it's not everyone's favorite news to hear that that, oh, there's a couple of things to work on before you get that. But I'm telling you, the practices that do it, we had a panel of a few advisors, individuals who attract more than 100 million in net new assets annually, all from referrals. And we interviewed them on a panel and they all said the exact same thing that, hey, we overcame the capacity constraint, we optimized what we're doing with clients, and our top people just started referring us. Just have like, we don't do any marketing, we don't need to do anything. It just sort of happened. And so if you do some of the things I'm talking about, it will lead to so much more growth. So just keep that in mind. I love the growth things. There are definitely some techniques that that are working better than others out there. But if you have some of these other constraints or lower revenue per client, it's it the problem's only going to get worse. And you put a zero behind your numbers after you 10x and that problem's still there, it just gets harder and harder to fix. And all this is this is all the stuff in the book, right, Paul, that that we did. It's it's all in there. But that's the only other thing I'd say, just to kind of tie some of these concepts together that those small constraints do hold that growth. And when you overcome them, it's like a rocket ship. It's awesome to see.
SPEAKER_00Yeah. You have the book published.
How To Get The Book And Help
SPEAKER_00It's on Amazon. You also have an audiobook version for someone that wants to get a copy. What's the best place for them to go to?
SPEAKER_01Yeah, just uh go to our website, xave.coach. Um, there's information about the book there. You can just email me, John J-O-N at Xave.coach. Uh, we're happy to hook you up with it. But yeah, we have a digital version. We actually have paired the audiobook with a flip book. I learned from my coach, Alex Ramosi, taught me that if you listen and read at the same time, it's the maximum amount of intake as a human. We'll remember more. So we we've sort of built that that you can listen and read along at the same time. You know, you really want to geek out on this stuff. But it's nice to go with the flow of the book and you can even speed up if like when I listen to audiobook, I usually speed it up to maybe one and a quarter, one and a half times. You can kind of speed read going through it. But uh just reach out to me or go to our website, there's some info about the book, and also some free resources on our website too at xfa.coach.
SPEAKER_00Now, now one of the things that we did with you is that we cloned your voice, and so we had AI John, who sounds just like human John, read the book. What was that experience like?
SPEAKER_01It was unreal. My wife couldn't believe how efficient everything was. I mean, and and all the advisors that I know who have worked with you, they've talked about if I've just I'm here visiting one today, they've talked about how easy you make the process. But this one blew my mind. How I spoke into something for a really short period of time. And the audio book came back, and I was just thinking, what on earth is this gonna be? It sounded exactly like me. Like my inflections and everything was unbelievable. But the fact it sounded just like me blew my mind, and my wife was like, wow.
SPEAKER_00Where can people find out more about you and your work?
SPEAKER_01The easiest place is the website, xva.coach. So the main thing we do with advisors is we hold scaling workshops, and we hold them about about every two weeks. So, like I said, there's some free resources on the website. There's info about the book, but what we do, we don't just coach people directly off the street or people reach out to us. We ask them to go through a scaling workshop. And it's just a couple hour commitment. But what we do is is we take people through a process to help them identify their constraints, to help them identify their fastest growth opportunities, to give them some direction. And so there's great information in there. You could just attend one of the workshops and learn a grind a lot of great stuff and go implement it on your own. You'll have exactly what to do. We go through a little kind of a worksheet or a scorecard through it that'll give you your growth plan by going through this this couple hour workshop directly with me. And then for those that do want to talk about uh getting some help with implementation or fast tracking their implementation, we do that after the fact. We do that after the fact. We want to teach people and learn. That that's that's one of the most popular things people do is they check that out. There's info about it right on the website there, x of a.coach. It's it's pretty straightforward. So free stuff, book, scaling workshop, easiest way to check us out. Everything's you know, super low cost or free to check that out. It's just again, we're trying to make a difference in the industry and help more people. The more we get back to the industry, the more people that that want coaching and consulting and helping from us, which we're we're certainly happy to do.
SPEAKER_00Fantastic. Don, it's been a pleasure. I've enjoyed the conversation.
SPEAKER_01Thank you. And keep these podcasts and videos going. They're awesome.