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EP 45 | Matt Regan on Embracing the Art of Listening for Holistic Goals-Based Financial Planning

05.13.21 | 0 Market Scale

Matt Regan is the President of Wealthcare Capital Management, a tech-enabled RIA helping financial advisors maximize the value of their practices.  By developing strategies that create personalized and compelling client experiences, Matt and his team empower advisors to become intentional about the service they deliver. Matt has over two decades of experience in the financial services industry, having served as COO of Wescott Financial Advisory Group, a strategic and operational consultant for Splendid Splinter, and the Co-Founder and Managing Partner for WR Hambrecht + Co. He earned his Bachelor’s degree in History from the University of Toronto - University of St. Michael’s College and his Master’s degree in History from Villanova University. Matt currently resides in Philadelphia, PA with his wife and three children.

Matt joins me today to share his journey from teaching school-age special needs children to starting his career in financial services — and how learning to listen and admitting he doesn’t have all the answers has helped him become successful. We discuss what goals-based planning is and why listening and asking questions is at the heart of a successful holistic, goals-based plan. Matt explains how goals-based planning is different from other financial planning strategies and why market performance is less important than your likelihood of achieving your goals. We discuss how Matt’s company grew by over 33% in assets over the last 13 months, despite the COVID-19 pandemic, and how the pandemic has impacted the financial advisory industry as a whole. We also discuss the importance of creating a great client service model, how to build your independent practice to scale, and why financial planners and advisors need to create a practice with a standardized approach to succession.

“Advisors have come to the conclusion that the value that they provide isn’t in talking about things like standard deviation and market returns. It’s in holistic, goals-based planning, and that’s all about listening and admitting that you don’t have all the answers.” - Matt Regan

This week on The Model FA Podcast:

  • Matt’s career journey from teaching special needs students to working in the financial services industry
  • How Wealthcare Capital Management helps financial advisors maximize the value of their practice
  • The impact of actively listening to your clients and asking questions
  • Why listening to your clients and admitting you don’t have all the answers is the heart of holistic, goals-based planning
  • How goals-based financial planning differs from financial planning strategies
  • Why market performance is irrelevant for goals-based financial planning
  • How Matt’s company acquired over $1 billion in assets over the last 13 months, despite the economic downturn due to COVID-19
  • How the COVID-19 pandemic has impacted the financial advisory industry
  • Why now is the time to ask your clients for referrals
  • Why Matt is so passionate about helping independent financial advisors
  • Creating true enterprise value on your independent practice
  • Understanding what a great client service model is and why it’s important
  • The benefits of specializing your financial advisory services and how to do it
  • Why Matt believes less than 20% of financial advisors actually have a succession plan of their own in place, and why it’s vital to create one
  •  

Resources Mentioned:

Our Favorite Quotes:

“If part of your mission as a firm is to serve clients and help them get to their goals, well, realistically, you can’t serve the hundreds of millions of people in this country on your own. So if you develop something that can empower other folks to be innovative as well, it’s part of perpetuating that mission.” - David DeCelle

“Market performance is irrelevant. It’s how you’re doing with regards to the likelihood of you achieving the goals that matter to you and your plan.” - Matt Regan

“Whether you’re working with advisors or you’re working with individual investors, they’re all people. If they feel like they are heard and that you're approaching them with exactly what they were asking for,  there’s no real ‘selling’ that’s going on. It’s more filling a particular need that you help them identify.” - David DeCelle

Connect with Matt Regan:

 

 

About the Model FA Podcast

The Model FA podcast is a show for fiduciary financial advisors. In each episode, our host David DeCelle sits down with industry experts, strategic thinkers, and advisors to explore what it takes  to build a successful practice — and have an abundant life in the process. We believe in continuous learning, tactical advice, and strategies that work — no “gotchas” or BS. Join us to hear stories from successful financial advisors, get actionable ideas from experts, and re-discover your drive to build the practice of your dreams. 

Did you like this conversation? Then leave us a rating and a review in whatever podcast player you use. We would love your feedback, and your ratings help us reach more advisors with ideas for growing their practices, attracting great clients, and achieving a better quality of life. While you are there, feel free to share your ideas about future podcast guests or topics you’d love to see covered. 

Our Team:

President of Model FA, David DeCelle

 

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FULL TRANSCRIPT

Matt Regan  0:06  

In our world, in the wealth care world, wealth care advisors who adopt our practice, married the goals-based plan with the goals-based financial solutions of the portfolio and we implement trade and rebalance on the household level. It’s, in a sense, a framework that our advisors follow. The reason that it's effective client service and it’s effective client experience is that everybody's on the same page as far as what the expectations are.

 

David DeCelle  0:38  

Welcome Model FA's, I am very excited about our guest today, Matt Regan, who is the president of Wealthcare Capital, which is a technology enabled RIA that provides advisors who are interested in maximizing the value of their practices on their platform service and technology that they need to succeed. So Matt's expertise ranges from client acquisition, client service, put together a cool software tool that's all about goals-based financial planning that we're going to be getting into today. So very excited to have Matt on our show. Matt, welcome. 

 

Matt Regan

David, it’s a pleasure to be here. Thanks for taking me on. 

 

David DeCelle

Of course, of course. And I know we had a little scheduling snafu first time around with some construction on my building. So I appreciate your patience with getting this back on the calendar. 

 

Matt Regan  1:30  

No worries, no worries. 

 

David DeCelle  1:32  

Awesome. So I guess just to get things started, tell us a little bit about your background. So you originally graduated from the University of Toronto. Did you go straight into financial services from there? Or what was kind of your journey from graduation up to this point? 

 

Matt Regan  1:48  

The answer is no, I didn't. I actually took a somewhat circuitous path to finance. I started out as a school teacher; I graduated with a degree in history and got a master's degree in history. And then I ended up teaching at a special ed school for three years for children with learning disabilities, and loved it, unfortunately, just couldn't make ends meet when it came time to get married and have kids. We make it very difficult for teachers to be able to afford that in this country. And I was forced into finance but quickly found out that I really do love finance and wealth management. I started on the clearing side of the business. I worked for a clearing firm in Philadelphia, and I was actually in the securities lending world, which is kind of an esoteric part of broker dealer land. And from there, I kind of caught the wave of all of the banks and broker dealers that were establishing online brokerage businesses. I'm so old that I was kind of at the outside of the online brokerage business, and we had a business helping banks put together their discount online brokerage channels. And from there, I flipped over and joined a guy named Bill Hambrecht, who started the industry's first online investment bank called WR Hambrecht and Company and worked there for 12 or 13 years running his brokerage business. We pioneered the use of an auction to bring companies public. So we brought companies like Google and Morningstar and interactive brokers public through the use of an online auction called Open IPO. And after that, I found my way to Vanguard as a consultant and help them to build what ultimately became the broker dealer platform on which their robo-advisor sits. I was a consultant out there for three years and worked with that great team on putting together really the foundations of their broker dealer platform, and then flipped over to the RIA business. I was the chief operating officer of a large RIA in Philadelphia called Wescott Financial. Great, great firm, great people, and was ultimately recruited into Wealthcare, almost three years ago, to run this business, which is a really interesting, innovative financial technology play in the RIA space. So there's the whole shootin’ match. 

 

David DeCelle  3:53  

So I definitely have some follow up questions to that. A couple just data points. So Wealthcare now, what are you guys managing? How many advisors are you currently serving? Give our audience a sense of the size of you guys. 

 

Matt Regan  4:06  

Yes, so we are a platform solution for advisors seeking independence. We currently have 160 advisors; we manage nearly 4 billion in assets for those 160 advisors. And we have to be one of the fastest growing RIAs out there. We've added a billion dollars of AUM in just the past 13 months. So we're very happy about the way our business is growing and that advisors are finding our solution to be a compelling one. 

 

David DeCelle  4:31  

Love it. So I want to get back to that growth because I've spoken with a number of advisors and firms, which is interesting, because some of which have had their best year ever. Others are like, wow, that year was crappy, huh? And they're just on two totally different pages. So I want to get a sense as to what you guys did to experience that growth. I’d imagine there was some organic stuff as well as some additional advisors joining the firm with the consolidation that's happening in the industry. So I do want to hit on that. Don't let me forget. But let me go back to your teaching days. So I would imagine as a teacher, and granted you had some stuff in between, but in terms of working within the personalities of advisors who may want to join your firm, working within the personalities of clients — I'm not sure how much time you're spending with actual retail clients now. What were some of the principles that you took from being great teacher to what I would imagine was an audience that was challenging to be able to get them to learn certain things and do some of the things that you were sharing? Because you mentioned special needs folks, how did you find that principles from that side of your life, translated over into financial services? 

 

Matt Regan  5:43  

When I think back, I was young, I got into a classroom probably quicker than most because I started at an independent school. So I didn't go through the whole licensing process and student teaching and all that — I was kind of thrown into it. And I was thrown into a very challenging part of the education world, which is special ed, particularly learning disabilities. And really, the success that I had there was in kind of admitting that I didn't really know what I was doing and being coming a listener. I find that very similar to where I am today. I had never been a financial advisor; I'd never had a retail book of business. I came up on the operations and the technology side of the world, and I had some success there. But when I came into this business, it really kind of served me well to listen to our advisors. I mean, these are the people that are providing; you know, they're really doing the Lord's work on behalf of their clients. I have the utmost respect for our advisors, because I don't know that I could ever do what they do. And I think that's kind of helped me along the way is to admit that you don't know everything, and really kind of soak up the knowledge that our advisors provide, because that's the only way we can provide them the services and the platform that's going to work for them. Ultimately, we want to grow as a business, but that's based upon our advisors’ ability to grow. And organic growth in this industry is one of the big challenges that all advisors face. And we've cracked the code a little bit on that. Our advisors grow at three to four times the industry average, because of the service offering that we give them. But look, I couldn't do that; that doesn't have any to do with me. That has to do with the advisors telling us that these are the services they'd like to have us solve. 

 

David DeCelle  7:18  

There's a really good book. Actually, one of our prior guests that we have on the podcast, Ivan Farber, Conversations is his book. And he actually just, it was funny, when I had him on the show, he had a book and I was like, hey, just so you know, I'll skim through your book so I can ask relevant questions, but I don't really read books, I listened to them. So can you make me an audio book? So it just hit audible actually, a couple days ago so he's got an audio book now. I've since finished it and what you had said, that really resonated with me that made me think of that was doing a good job listening, and asking great questions. And whether it's for you, or other advisors, or anyone listening, that book is really, really good; not just from a philosophical, “you should be listening” type of vibe or point of view, but like giving you the tools and the tactics to do so. Because whether you're working with advisors, or you're working with individual investors, they're all people, right? And if they feel like they're heard, and that they feel like you're approaching them with exactly what they were asking for, there's no real selling that's going on. It's more so filling a particular need that you help them identify. So it's interesting that in the teaching world, as well as your role now working with advisors, it's kind of one in the same in terms of the skill set that you need from a human-to-human perspective. 

Matt Regan  8:45  

Yeah. And, to kind of continue on that, I think it's always easier to be an effective listener when you admit that you're not the expert on something. I mean, it's really hard to take that mindset into a conversation and say, well, I already know all this, so I don't really…but I'm going to listen. That doesn't work; you have to go in and say, I admit that I'm not the expert on this and I'm here to learn. I mean, that works in a classroom incredibly, particularly a very diverse classroom, where you have people with different skill levels and different aptitudes. But it absolutely works. And we do an advisor conference every year — it's the best thing for me, that happens, because we get all of our advisors together, and they tell me about their business. And that's hugely important in my learning curve. 

 

David DeCelle

When I was early on in my career, because I spent seven years as an advisor before being a consultant. And based on the training that I received, and even the note of some of the things that our management was mentioning to us of like, hey, just by going through this training you already know more than 90% of people that you're going to meet with. And it kind of caused me to be very assumptive and tell them what they should be doing, as opposed to listening. And that's a skill set that just quite frankly, took me some time to develop. And having changed from just telling to doing a better job listening, I feel like relationships have gone better, sales have increased, the business has grown. But I think it's to your point, it's admitting that you don't know everything, as well as just being a lot more patient. Because you can get a quick sale if you're being super salesy, but those people may leave because they're feeling pressured, or they may back out early on, because they just said yes to you, and said, no, via email afterwards. And I found a lot of times people would say yes, to me, and then no, afterwards, because they kind of just felt pressured in that situation.

 

Matt Regan  10:46  

Yeah. And I think across the industry, if one thing has changed over the past X number of years, you fill in the blank, it's that advisors have come to the conclusion that — look Jack Bogle’s got $7 trillion at Vanguard that says that you're not going to beat the market and just buy indexes. Right? I mean, it's hard to argue with that, but advisors have kind of come to the conclusion that the value that they provide isn’t in talking about things like standard deviation and market returns. It's in holistic goals-based planning. And that's all about listening and admitting that you don't have the answers. Clients don't want to hear that you have a better solve, that you're the Warren Buffett of Westchester, Pennsylvania, and you're gonna solve all their problems that way. That game has changed and advisors have come to realize that the value is in the holistic back and forth. And that's all about listening.

 

David DeCelle  11:40  

So it's a nice segue. And then after this, I want to know more about the growth over the last 13 months. So I know you created a software tool for this to like help specifically with your advisors, but more kind of 30,000-foot view. Tell me a little bit more about what goals-based financial planning means to you? And how does that differ from other financial planning strategies or processes that advisors may be using today?

 

Matt Regan  12:06  

Well, that kind of hits at the heart of Wealthcare. It absolutely predates my involvement with the company. So this company started in 1999, in Richmond, by a guy named Dave Loeper, who invented the industry's first goals-based financial planning software. He came up with the idea of goals-based financial planning software, as an analogue to what was typical, which was a cash flow model. And Dave really came to the realization that what really matters in a financial plan is not so much the top down, how are you going to spend what you have, but rather flipping it to, kind of let's talk about what you want to do in life. What do you want to achieve? How do you want to live? How do you want your legacy and your retirement and your family taken care of? And from that is really what was known in the marketplace as Financeware; Wells Fargo advisors know it as Envision; we call it GDX 360, the goals driven experience. But goals-based planning to me is really much more of kind of cutting right back to where we came from — a conversational way to get at what's important. And really what clients want to know, at the end of the day, is essentially one question, and that's, am I going to make it? Am I going to be able to do the things that I want to do and live in retirement with enough means to get by? So that's the question that goals-based planning solves for. And there's a lot of math that goes into that, and a lot of algorithms and Monte Carlo simulations and historical back-testing. And the power of goals-based, Monte Carlo based engine planning — it’s actually a mathematical wizardry that far exceeds my paygrade. But the bottom line is, is you're answering that one kind of fundamental question, which is, if these are the things that I want to do, and these are the assets that I have, and this is what's going to happen in the marketplace or likely going to happen in the marketplace, considering the worst possible scenario and the best possible scenario, what's the chances that I'm going to make it? And that's what our planning software solves. We're not the only one; our competitors do the same thing. But that's really where Dave started and that's where the firm came from.

 

David DeCelle  14:10  

Well, it's cool to that if other people are doing it, and you guys are one of the pioneers of doing it, it shows that you're onto something, right? Because other people are adopting it, which is, I think anytime you're replicated in some way, shape or form, it's a compliment. And at the end of the day, and we've talked about this before, which is, having an abundant mind and open to collaboration and plenty of abundance to go around. It's, hey, if part of your mission as a firm is to serve clients and help them get to their goals, well, realistically, you can’t serve the hundreds of millions of people in this country on your own. So if you develop something that can empower other folks to be innovative as well, it's just kind of further perpetuating that mission, which I think is pretty cool.

 

Matt Regan  14:59  

No, I think that's right. That's right. You know, where the whole conversation gets interesting is you kind of flip the script on the client saying to the advisor, well, my neighbor says that he owns the S&P and he was up 15% last year. Why am I only up 10%? Or, I was talking to somebody at work, and they have this stock picker that's doing great. And he owns Tesla in his account, and he's doing fantastic. The only way to take that out of the conversation is you say, again, let's look at the plan; are we on track or off track? Market performance is irrelevant. It's how you're dealing with regards to the likelihood of you achieving the goals that matter to you and your plan. And if you're taking risk, that you're not getting any reward [that means anything for], that can be best expressed by saying, you're on track, you're doing well, you're going to make it.

 

David DeCelle  15:51  

Gotcha. So, we're recording this right now, on February 24; you're probably listening to this here in the spring. So last 13 months or so have been a whirlwind of a year-ish with COVID, and going virtual, and things shutting down, and things along those lines. And it's interesting, because I spoke with a lot of advisors and a lot of firms, as I mentioned before, where some of which had their best year ever. Other ones look back and they're like, wow, that was the worst year ever. And I feel like figuratively, maybe literally, I don't know, that they've just been hiding under their desk and waiting for this all to be done. And I think anytime there's situations like this is the massive opportunity to innovate and level up. So you guys brought over just over a billion dollars in assets or so over the last 13 months. So you grew by what, 33% in, quote, one of the worst years in recent history. So what do you credit that to? Obviously, advisors and working really hard. But I guess, I don’t need the exact numbers per se, but just to get a sense of the billion dollars, what came from advisors joining the firm, and then what came from the advisors actually growing?

 

Matt Regan  17:08  

It's about half and a half, actually. Which, I think that's, that's a coincidence. But there's market appreciation in there. If we learned anything in this crazy year, it's that the market doesn't have much to do with the economy. It's been a very strange time to be in the wealth management industry during COVID, because we're not really seeing the effects that I think the rest of our fellow country members are seeing. We're not trying to run a retail business or a restaurant or, God forbid, a resort or a hospitality business. So things have been relatively good in our world, which it's a little disjointed. It kind of puts us in an odd space, but I think things have kind of been well set up for advisors, particularly advisors that have been thinking about moving towards independence. If we learned one thing working remotely, it's that, it isn't that fine plush carpet, fancy office space, and the grandfather clock in the wirehouse, that's defining our value as advisors; because now they're all working from home offices or basements, and they're providing great service to their clients. So the fact that the office, and the trappings of the wirehouse, were kind of stripped away quickly forced advisors to look in the mirror and say, you know what, maybe I'm the really important part of this — it isn't the name on the business card. At the same time, this is kind of a funny one, but it became a really easy time to deal with clients. You know, one of the challenges, and this is kind of mundane, that advisors have is getting in touch with their clients. If they need the paperwork signed, or they need to find them, or, particularly if you're in the process of leaving somewhere, you've got to get everything repapered and moved over. Well, advisors know right where their clients are; they're at home, just like they are. So it's been kind of easy to handle that part of the business. And I think lastly, why it's been a great year for advisors is, advisors are trusted confidants and consiglieres for their clients. And in times of stress advisors really prove their value. And people maybe were considering a robo, or considering moving advisors, all of a sudden are seeing the value in spades that advisors provide to them. So it's a little bit been our Super Bowl, as far as that's concerned. If you want to talk about growth itself within Wealthcare, we're a complete outsourced solution for advisors. We provide them financial planning and investment solution. We provide them compliance and operations and trading and marketing support and billing and all that sort of stuff. So if we're doing our job right, our advisors should be doing the important things to grow their practice: meeting with prospects, talking with clients, kissing babies, growing their practice. That's the challenge for an independent advisor and it's the challenge that we help them solve. So yes, our advisors have grown nicely during the pandemic, but that should be all the time if we're doing our job right. At the same time, I continue to see the movement towards independence throughout the industry. People are leaving wirehouses in droves, they continue to do that, which we consider to be a good thing. And they're, advisors are, continuing to see that it's not just the investment portfolio that they need to outsource. TAMPS have grown incredibly, but it's other things; it's other non-revenue generating activities that they need to get out of their lives. You know, they shouldn't be trading, they shouldn't be billing, they shouldn't be doing compliance; hire somebody like us to do that for you. And that's the way you grow your practice.

 

David DeCelle

Gotcha.

 

Patrick Brewer  20:44  

Hey, Model FAs, I know you're enjoying this conversation. But I wanted to take a quick break to talk to you about the Model FA Accelerator. This is a unique collaboration between us and you, where we help you build a financial advising practice that you can be proud of. We focus on the foundational concepts around how to pick a niche or a specialization, how to price your services, how to construct an offer that people are going to buy, and then how to market it and sell it in a way that will get people to sign on the dotted line and become clients of your firm — all while giving you the information to scale and set up workflows and operational processes that will allow you to reclaim your time and build a practice that doesn't run you. So if you'd like to hear more about that, go to www.ModelFA.com/accelerator or www.ModelFA.com. Hover over Work With Us and click on Accelerator. Hope to see in the program.

 

David DeCelle  21:36  

I was just on a call with my business partners, Pat and Dan Allison, who you know. We were on a call with some of the folks over at DFA and we were asked, how has COVID in the virtual world changed the referring process. And there's some nuances that have changed, right? When people are out and about at dinner, which they're not at anymore, you may come up in conversation. So it's empowering them to know how and when to bring you up when appropriate. But over the last 18 months, whether it's politics, or the news, or whatever, I feel like people's trust is at an all-time low with a lot of different types of people. And therefore, with our belief is and what we've seen, is now is the best time to ask for a referral. Because if I love my advisor, and I have the utmost trust, and you don't have trust in general based on the last 18 months, I can pass my trust over to you and you're like thirsty for that trust, because you may be lost. So we found that the people who have actually doubled down on getting introductions from their folks that they are currently serving, that's a lot of the reason why they've grown because those people are seeking someone that they can trust. And just by going out and looking on their own, it’s just not as trustworthy as it used to be because they're getting sent so much random information that's conflicting in other aspects of their life. And so it's been a pretty unique 18 months as it relates to business development. A lot of times people think things have changed a lot. And I think they've just like pivoted slightly — Zoom calls versus in person. But for all intents and purposes, the psychological side of growing your business with your clients and getting referrals hasn't really changed all that much.

 

Matt Regan  23:25  

I love that. I'm gonna steal that whole concept that you just laid out there.

 

David DeCelle  23:29  

You don’t have to steal it, I'm giving it to you!

 

Matt Regan  23:30  

Yeah. You boil it down, it's very hard to look somebody in the eye that you trust, that's telling you that this advisor is a good guy and does well; it's hard to look him in the eye and say, that's fake news, right? I mean, that's what matters right now.

 

David DeCelle  23:46  

Yeah, that's interesting. You brought up a couple times now, the migration from wirehouses, captains, firms of that nature to the independent side of things. And obviously, there's a lot of that migration, as well as in the independent side; a lot of consolidation, where people may go and start Joe Schmo Financial and get to a certain point and want to join a larger firm for the additional support, so they can free up their time to only focus on the things that give them energy, as opposed to things that distract them and inhibit their ability to grow. Why are you so passionate about independent versus some of the other channels that people can be a part of?

 

Matt Regan  24:25  

Probably because I'm cynical about Wall Street or — we saw this in 2008, right. All of a sudden, it wasn't that cool to have Merrill Lynch or Goldman Sachs on your business card. And that doesn't mean that they're going out of business. They're doing just fine. And they've actually, the wirehouses have actually kind of come around and said, hey, wealth management, it's a lot more predictable and profitable than being the vampire squid and trading against large organizations. But look,, from where I sit, I think the idea of what's changed from a technology point of view from tools available, to put the positive spin on it, is that you can run your business very effectively as an independent with world class investments, world class technology tools, incredible access to marketing support, incredible ability to scale yourself, if you're doing things correctly — and do it on your own, that's what's changed. Now, the flip side of that to be cynical, is that you don't need to be at a big wirehouse to get that anymore. And that, therefore, they're really not providing you much in the way of the support that you need to provide what really matters, which is wise counsel and good advice to your clients. I don't know that I'm totally, I'm not certainly not anti-wirehouse. I mean, there's great people there too. But for those that are considering moving towards independence, and embracing that, and embracing fee-only, that to me is a better business model. And one that is eminently doable right now.

 

David DeCelle  26:02  

It is. And I feel like once people go over to independence, they realize some of the restrictions that they just kind of got used to, specifically from a marketing standpoint. They come over to the independent space, and they're like, oh, I can actually market my business like it's 2021, as opposed to the 1990s, or 80s, or whatever. I also think that when they're going independent, they really need to look themselves in the mirror and ask is me going out purely on my own and getting a higher payout — let's say, hypothetically, they're going from like, 40 or 50% payout at a wirehouse, 30% to 50% even, to a 90 something percent? Well, all the problems that the wirehouse was solving for them that they may not even realize, from a compliance standpoint, technology standpoint, etc.; they now need to take that additional revenue that they have from a percentage standpoint and go and solve those problems themselves. And there are some folks out there that are very talented and can do that. There's other folks that I would say, you need to look yourself in the mirror and figure out where you derive energy. So, what is your zone of genius, compared to your zone of excellence, to a zone of competence, to a zone of incompetence; and anything you write in the bottom two quadrants, your zone of competence and your zone of incompetence, you should not be dealing with those at all. So you need to find a partner like you or another RIA in the industry who can address those problems; otherwise, you're just going to be unhappy, and you're going to get stuck in your business, and therefore be unable to grow. So as you're going from a wirehouse [27:49 BD cap], and going into the independent space, I don't want to say it's fairly simple, it's just like, not easy. And making sure that you have the right team in place, if you're not going to do it on your own, so that you're not just getting bogged down with some of the stuff that you just got used to the wirehouse taking care of for you.

 

Matt Regan  28:06  

Yeah, and I think the really interesting thing is that there's multiple models emerging within the independent space. I mean, you can literally go find a solution that gets you a 98% payout, and you get a desk and a compliance officer that doesn't pay very much attention, if that's what you're looking for. Or you can embrace a more full solution, a W-2 employee solution within a firm that has various tiers of service that you can take advantage of, or not take advantage of, and everywhere in between. So I think for the independent advisor, whether he's at that growth stall, which is always tough, that 50 to $70 million in AUM, where he's looking around and saying, God, I'm busy, what do I do next? I'd like to hire somebody, do I have to hire a compliance officer or a trader, or God forbid, a portfolio manager? Whether you're in that area, or whether you're creating that ensemble practice and saying, I want to build a big business here. I want it to be mine and be part of my legacy, and I want to hire advisors underneath me and put together a business. There's a solution out there for every one of those stories, which is awesome.

 

David DeCelle  29:16  

Yeah. And there's a lot of consultants out there in the industry that can help with advisors and playing matchmaker, and to your point earlier on more the client side, these consultants do more of a goals-based approach, like what's an ideal scenario look for you, and help educate them. Because I know coming from, I was at Northwestern for seven years, and coming into the independent space from a consulting perspective, I was like, oh my god, there's so many things that I didn't even know about being there. So it can be an intimidating process. So making sure that you have someone, whether it be a mentor, a consultant, or someone to help with that process, as you're going through that discovery phase, I think is pretty important for these folks because they just don't know what they don't know.

 

Matt Regan  30:02  

I agree. And then I think it continues, right? I mean, once you're there, and you've established your practice, and you've chosen which channel that you're in of independence, there's that next big piece. And that is, how do you create true enterprise value in that practice? Because it doesn't matter which way you ended up independent, if everything is bespoke, and every client's portfolio looks different, and your planning process is different, and your account minimums are here and there, and you're doing things differently for every different client — you're not creating anything that has real enterprise value. So where those consultants can help, is to help you focus completely on you got to create a framework, you got to create a methodology, you got to create some sort of formula that can scale yourself, scale your business, get out of the bespoke world. And that's kind of the next piece once you've chosen your lane to go independent. The next piece is how do you create a practice with real value? There's a lot of very smart people in the industry that can help out with that. 

 

David DeCelle  31:03  

Love it. So I know, in our initial conversation before we booked the podcast, you seem fairly passionate about the importance of a great client service model. I'd like you to speak to that a little bit more. And then we'll transition over to your favorite book. So from a client service perspective, what does that mean to you and your firm? What defines great client service? 

 

Matt Regan  31:28  

Well, I actually think it goes back to what I was just kind of talking through, which is the idea that you create something that is repeatable, and relevant, and scalable, has a lot to do with that client experience. In our world, in the Wealthcare world, Wealthcare advisors who adopt our practice marry the goals-based plan with the goals-based financial solution; so the portfolio. And we implement trade and rebalance on the household level; it's in a sense of framework that our advisors follow. The reason that it's effective client service, and its effective client experience, is that everybody's on the same page, as far as what the expectations are. I think a lot of times, an advisor can get in a situation where they're looking at a client and the client saying, okay, wait, is this what we said we were gonna do? Is this the way that we said it was gonna happen? I don't know whether what you're telling me or what I'm seeing in my portfolio was consistent with where we started the conversation. I think that that creation of a formula and an approach centers people on what's important. In our world, it's answering that question, am I going to make it? And so that's kind of, to me — the client experience, I think, is dependent upon some sort of framework that you can establish for delivering your services.

 

David DeCelle  32:48  

So I agree with that. I also think what advisors, where they can get hung up a lot, is if they're working with a bunch of different types of people. So for example, they work with business owners. They work with executives. They work with retirees, they work with widows, whatever the niche is. I find that when they take more of a shotgun approach, and try and serve everyone, what they find themselves doing as they continue to get more and more and more clients, is they've made all these different promises on the front end, and the business owner, their whole plan is different than the retiree, and vice versa, depending on their stage in life and what they're doing. So you're making all these promises on the front end. And if you don't have an exact deliverable on what that service looks like, from a, what they're compensating you for standpoint, and what the experience looks like, as it relates to how are you adding value outside of the scope of what you're helping them with, then they can start to get bogged down and their growth starts to level out because they find themselves stuck trying to do all the things that they promised on the front end without having the future in mind with okay, how does this actually scale? So with that, one of my questions would be, do your advisors tend to specialize with certain groups of people? Do they tend to be all over the place? What's kind of the vibe over there?

 

Matt Regan  34:15  

The successful ones do. And there's two ways to kind of get at it, I think. One is, as you say, pick a specialty and then go with that. We have advisors that focus specifically on women. And we have advisors that focus on business owners, and they do a great job and they've grown nicely, and they know what their niches and it helps them to focus their marketing. It helps them to focus their planning approach; it helps to focus how they're talking to people about referrals, that just makes it easier. And then the second piece of that, I think, is effectively segmenting those clients. We've seen advisors more and more, look at that bottom of their book, that bottom 20% of their clients, and make really smart decisions about how to either transition or change the way they service those clients. And that's important because you want to make sure that you're not spending time on clients that aren't as economical as the other ones. Again, you want to focus on your most important and your most valuable relationships. That's all practice management. I mean, that's all, who are you? What are you good at? And are you spending your time wisely and operating at the top of your license? Think about it as a dentist's office. The dental hygienist is the person that does the teeth cleaning, and does the flossing, and handles that piece of it; and the dentist, who's the guy with all the knowledge, kind of walks in at the end and says, okay, let's look at what's going on here. I'm going to take a look at the big issue here, and make sure that you're okay. That's what a good effective advisor does is operates at the top of his license.

 

David DeCelle  35:46  

Agreed. And I think that it's important for advisors, especially. I would imagine, just based on industry standards, that a lot of your advisors of the 160 are probably above 45, if not above 50, or so years old. So I think that also presents a great opportunity, from a succession planning standpoint, to hire a lead advisor to bite their teeth on, so to speak, that lower rung of client based on their AUM or income, or however your kind of judging them from that perspective. Or I shouldn't say judging, I should say, categorizing. And then you're building a relationship with this advisor, and they're building a relationship with your clients over a 10-year period or so to where it's just a much smoother transition, when you're going about a succession plan like that, as opposed to maybe just a straight up sale. So people I think, should be thinking about succession planning, at least I think 10 years in advance to groom now the appropriate person, because you may even kiss some frogs along the way and that first person may not be that long term fit. So making sure that you're not waiting till the 11th hour to do that, I think could be very helpful for them. 

 

Matt Regan  36:57  

You know, it's probably the biggest challenge that our industry faces is that; I think the FPA came out with a study that said that less than 25% of advisors had succession plans in place. That's a shocking number for people that are supposed to be in the planning business. But it makes sense because people don't like to lose themselves in that relationship. And it's hard to let go, and there's a million reasons. Advisors are very busy, they don't get around to that. But I think what's encouraging is that the industry as a whole has kind of acknowledged that this is a big, big risk factor, and custodians and platform companies like ours are coming up with solutions for these advisors. Whether it's some sort of pairing or whether it's assurance plans, where there's agreements to buy practices; we're seeing some of that in the marketplace. Formalizing buy-sell agreements, there's a lot going on to kind of address that. But at the risk of flogging the dead pony, I think it goes back to, you need to create a practice that has a standardized approach to it. Because if you're passing on something that's completely bespoke to whoever is succeeding you, you're handing off something that's going to slip through your hands like sand. You have to have something that has a formula, a framework, and approach, because that's the only way it'll continue to be effective for the person that's stepping into your shoes. 

 

David DeCelle  38:21  

100%. So before we get into the after-hours section, which I'm excited about, whatever questions you're thinking I'm going to ask, it’s probably not them, so I’m excited to see some of your answers. But for our listeners out there, if this is your first episode that you're listening to, what I asked every single guest is what their favorite book is. I think a lot of times in our industry advisors fit one of three categories: either they're complacent, and they've stopped learning; or they're hungry to learn, but they get stuck in just the industry related stuff; or the third category, which I think is a small subset, is you're actually learning everything that you can all over the place and putting your nose in books and your ears and podcasts and things like that. So every guest I asked what their favorite book is, and I am very interested, Matt, to hear what you liked about the book that you shared. Oftentimes, just by default, I get a lot of business book recommendations and favorite books and your favorite book, I may need help with the author's name but Midnight's Children, is it Salman Rushdie?

 

Matt Regan  39:26  

Salman Rushdie. Yeah.

 

David DeCelle  39:28  

Rushdie. So, from my understanding, this is a book that is about India's road to independence from the British. It's kind of like the general theme, but curious to know.

 

Matt Regan  39:38  

That's exactly right. So Rushdie is one of my favorite authors. And I went down the fiction path. I'm not a big reader of business literature. I should be — that's my own flaw.

 

David DeCelle  39:50  

Well listen to some of our episodes. There's plenty of recommendations on there.

 

Matt Regan  39:53  

Yeah, well, I do spend a lot of time listening to podcasts so I think that picks up some of that, right? But my reading is mainly fiction and Rushdie captures a couple of things for me. As I mentioned, I'm a historian by training; I have a master's degree in history and an undergrad degree in history. And Rushdie’s work is always very historical based. So this is the story of the partition of India back in 1947, but it's told, as you said, through kind of this magical, mysterious parable. And that's very characteristic of Rushdie’s work as well. So I do like kind of the fantastic, but I also love the fact that it's grounded in history, it's a fantastic book. And it's one that you need to find time to kind of clear your head to read. We're so darn busy in our day, when I do find the time to read, it's usually fiction that I pick up; that probably goes back to my days, as a school teacher. It's very enjoyable for me.

 

David DeCelle  40:47  

Well it kind of probably allows you to unplug a little bit too as opposed to making your brain go and go and go with a business book. And then you're like, oh, I have an idea and I got to go back to my desk and start working on that. So I feel like, and there's been a couple fiction book recommendations with our guests so far, and I think it's helpful for me as well, because I'm on the other side, where it's like, all business, all marketing, all personal development. I feel oftentimes, like my brain just needs a break for a little bit. And I think these types of books could still be, what's the word, I'm looking for stimulating my mind, but not necessarily making me want to take action immediately to where I can't like turn off, so I’ll have to check that out.

 

Matt Regan  41:31  

Yeah, I would encourage you to do that. I think sometimes we need to unplug and get that other side of our brain engaged.

 

David DeCelle  41:36  

Cool. So Matt, before we get into the after-hours section, and for those of you who want to stick around for that, please do. This will all be in the show notes as well. But Matt, if someone's interested in touching base with you, either as a follow up to this show, or to learn more about what you have going on, what's the best way to get in touch with you guys?

 

Matt Regan  41:52  

WealthcareGTX.com is the corporate website; my contact information is on there. [email protected] is the email handle. But yeah, I would encourage people to visit our website and find out more about our solution.

 

David DeCelle  42:06  

Awesome. Well, thank you very much for being on the show. And for those of you who are listening, two asks for you. If you found value in today's show, we'd love for you to share this with a colleague that you think would find it interesting as well as continue to share some exposure as to what we're doing, and help out those around you as well. Also, what would be really helpful for us is if you went ahead and left a review on iTunes, that will create some more visibility for us. So we’d appreciate you doing that as well. And if you do decide to do that, feel free to take a screenshot of that. And then shoot me a text at 978-228-2338. Again, 978-228-2338. And just reference this episode with Matt, and I'll collect all those reviews, basically put your name in a hat. And we'll give you access to our digital program that we have, the accelerator program that you can take a look at on our website, as a thank you for going out of your way and saying some nice things about us. Hopefully anyways. So appreciate everyone's time. We're gonna be heading into the after-hours now. Matt, appreciate the time so far.

 

Matt Regan  43:16  

David, thanks so much.

 

David DeCelle  43:30  

Cool. That was fun, man. I think I really, really liked to hear about the growth that you had in what a lot of people view as a tumultuous year, which everyone's situation is different, of course, and it could have been more impactful for them than others. But I also feel like our industry, based on the revenue models and how we get compensated, it can create complacency. And a lot of people just kind of stopped. Because I mean, after the initial downturn in March or so, when it bounced back up, it's like, okay, well, things are hitting the fan right now, but I'm still getting my quarterly check. So I'm glad to hear that you guys actually maximized the opportunity as opposed to just chilled.

 

Matt Regan  44:21  

Yeah, and I don't want to cast aspersions at that mindset too, because I think we tend to underestimate how difficult it's been for people. I mean, isolation and kind of the uncertainty, I certainly don't fault people for kind of freezing in their tracks and saying holy smokes, what in the world's going to happen going forward? Now, what happened in our industry is that the market kind of pulled us along and pulled us up, but there is a sense of kind of unreality around it, because why did the market continue to plow on when so many people were in such dire straits. But that's the disconnect. And there's a little bit of a jarring piece of that I think for people. So I don't, again, I don't blame people who got stuck mid-year and said, I'm not gonna do anything. I'm just gonna see what happens.

 

David DeCelle  45:10  

But I think too, I wouldn't say I blame them either. But I think that in times like this people need to become resourceful. So if they find that their mind isn't right, for example, maybe they should look into hiring a coach, or a therapist even depending on how severe it is. Or if they're unmotivated to do certain activities in their business, it's okay; it's time to be resourceful to figure out, okay, who can help with that stuff? So I think that of the ones who felt kind of stuck, and if you're still listening and you're one of these people, my biggest piece of advice would just be, don't be afraid to ask for help with whatever it is that you're struggling with. So, but all in all very impressed with the growth that you had in a crazy year. Let's get to some fun questions. So these are a bunch of Would you rathers. I’m not sure if you ever come across Would you rather questions, but —

 

Matt Regan  46:05  

Yeah, I used to do them with my daughter all the time.

 

David DeCelle  46:07  

Oh, great. Perfect. So would you rather lose the ability to cry altogether, or cry every day for 20 minutes randomly? And these are tears of joy and sadness. And I think crying feels good in the right circumstances.

 

Matt Regan  46:28  

I do, but I'm not a big crier. So I think I would actually find a way to live without it.

 

David DeCelle  46:33  

Awesome. Would you rather have a face that everyone laughs at? Or name that everyone laughs at?

 

Matt Regan  46:40  

A name. I actually wish I had a funnier name.

 

David DeCelle  46:43  

You have a very basic straight —

 

Matt Regan  46:45  

It's so boring but it'd be great if your name was like, Mickey O’Donuts, or something like that. And people be like, really? A great conversation starter.

 

David DeCelle  46:55  

What about a hook for a hand or peg for a leg? 

 

Matt Regan  47:01  

Hook for a hand. No explanation.

 

David DeCelle  47:05  

And then the last one would be: Would you rather have the ability to read the minds of everyone in the world or be able to move objects with your mind? 

 

Matt Regan  47:24  

Oh, read the mind, yeah. 

 

David DeCelle

I think that's dangerously powerful. In the right hands, you could do goo.

 

Matt Regan

It would end up being disturbing after a pretty short period of time. 

 

David DeCelle  47:27  

Yeah, for sure. Well, for everyone who stuck around for the after-hours portion, really appreciate your time. We're probably about an hour or so into the podcast now. So that does not go unnoticed, so thank you so much for that. If you do have any questions for us, feel free to reach out to me directly. My email is [email protected] And also feel free to connect with me on the social platforms as well. Simply google David DeCelle, d-e-c-e-l-l-e. And you'll see all the links to my social profile on that search. The platform that I use the most, which is the most fun as well, because we get to know each other personally is Instagram. So feel free to connect with me on there. And always happy to have a conversation. So don't hesitate to reach out and all of Matt's contact information will be in the show notes as well. Matt, thank you so much for your time.

 

Matt Regan  48:18  

Thanks so much. Have a great day.

 

Transcribed by https://otter.ai