Financial advising with a

EP 69 | The Fundamental 4: How Financial Advisors Can Grow Purposefully with Andrea Lopez-Schlapia

11.03.21 | 0 Market Scale

Andrea Lopez-Schlapia is the founder and CEO of IronstoneHQ, an organization that helps financial advisory professionals design, develop, and sustain their businesses. After rising through the ranks of several global investment firms such as Dreyfus, Prudential, and Deutsche Bank, Andrea founded IronstoneHQ in 2008 to help financial advisors. She is the creator of IronstoneHQ’s Fundamental 4 scorecard and blueprint, a system she designed to help financial advisors grow purposefully, operate more efficiently, and continue their business’s legacy. 

Andrea joins me today to discuss the Fundamental 4 blueprint and how organizations can leverage it for exponential growth. She explains why businesses should cast a vision through strategic planning and outlines how leaders can put those plans into action through business development. She underscores why it’s important to systematize and standardize a company’s systems and processes. Andrea also highlights why it’s critical to cultivate the human element of an organization and shares some of her strategies for developing company culture. 

“Cast a wide net at the beginning of your career. Explore what you like—what becomes your sweet spot is your growth.” - Andrea Schlapia 

This week on The Model FA Podcast: 

        Andrea’s background and the catalyst behind IronstoneHQ

        The leap from being a great financial advisor to becoming a great business owner

        What the Fundamental 4 blueprint is and how it was created

        How often the Fundamental 4 should be implemented in an organization

        How to fall in love with your business again

        Being strategic and protecting your energy by working with people who give you energy

        The 10:3:1:Q method for casting your company’s vision

        The importance of having a clear vision for your business and writing it down on paper

        Picking and refining a niche and what it means to be a small giant

        How to pick a niche when starting out

        How to quickly build up trust with clients

        Operational effectiveness and the power of consistency

        Segmentation and why it’s important to document your business’s services and operations

        The psychology of selling

        The human element of culture-building and strategies for improving culture

        What development days are and why you should implement them monthly 

Resources Mentioned: 

        Book: Small Giants: Companies That Choose to Be Great Instead of Big by Bo Burlingham

        Book: The Checklist Manifesto: How to Get Things Right by Atul Gawande

        Book: Traction: Get a Grip on Your Business by Gino Wickman 

Our Favorite Quotes: 

        “When you build a community, you start educating people on what you do. Then it becomes an automatic referral-generating machine.” - Andrea Schlapia

        “Trust isn’t something that just takes time; it’s based on the accumulation of experiences.” - David DeCelle

        “Serving your clients better starts with serving yourself and your people.” - David DeCelle 

Connect with Andrea Schlapia: 

        IronstoneHQ

        The Fundamental 4

        IronstoneHQ on LinkedIn

        IronstoneHQ on Instagram

        IronstoneHQ on Facebook

        IronstoneHQ on Twitter

        IronstoneHQ on YouTube

        Andrea Schlapia on LinkedIn

 

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

Andrea Schlapia  00:07

The operational effectiveness is all about consistency. Because this is something that we want to create a repeatable process, whether it's your segmentation, and then what's your definition of ABCD? What's the ABC get? That's your service metrics; exactly what you said. What’s the experience that I am going to get from your firm and from your team, and who is doing what?

 

David DeCelle  00:33

Welcome Model FAs. I am very excited to bring one of our industry colleagues, Andrea Schlapia, to the podcast today. So Andrea is the founder of Ironstone and a go-to practice management expert for independent financial advisory firms, and really those looking to transition over to independence. She's the creator of Ironstone’s Fundamental 4 scorecard and blueprint, and we'll be diving deep into that today for the majority of the show. And that's really a system that guides financial advisory teams and business owners to grow purposefully, operate more efficiently, and ultimately leave the next generation with a wealth of knowledge to continue the business legacy. Andrea is a business owner, educator, coach, and speaker. She holds, which I'm impressed by, designations as a Registered Corporate Coach, a Human Capital Strategist, a Strategic HR Business Partner, and you're gonna have to help me out with this one here. Actually no, it's right here, Certified Administrator of PXT Select and Myers Briggs assessments. We got a couple folks on our teams that are certified with that as well. So good to see some more folks like us and you out there. Andrea is known for her dynamic and entertaining presentation style, with interactive high energy sessions built with how-to strategies for real world implementation. Which, I know there's a lot of folks out there that can get you excited and motivated, but you leave conferences or these speaking events and don't really know how to implement it. So, glad that you're including the how-to strategies alongside your presentation. Andrea has been featured in multiple industry publications and audio broadcasts as a practice management specialist and change agent in her field. Most recently, she was featured in the Nerd’s Eye View podcast with Michael Kitces, focusing on getting the right people in the right seat, which we’re pretty passionate about that topic as well. So I feel like we'll have a lot of really great stuff to talk about. So Andrea, welcome to the show. I appreciate you joining.

 

Andrea Schlapia  02:43

Thank you so much. It's a pleasure, and I'm looking forward to our collaboration. So this is going to be fun.

 

David DeCelle  02:47

Awesome. So before we get into Ironstone’s Fundamental 4 scorecard and blueprint, I want to help give our audience a little sense as to how you got to where you are today. So kind of a two part question to start. So first off, how long have you been running Ironstone, and what actually got you there? So what was your previous experience? Was it in our industry, in a separate industry? What's that stuff look like?

 

Andrea Schlapia  03:18

Excellent question. So I've been in the industry a little over 25 years. It's frightening that that number gets a little bit bigger every single year; it's harder and harder to say. But Ironstone has been in existence for 13 years this December. So let me just backtrack a little bit. I was an advisor and had the opportunity to sit in the adviser chair. But my mentor gave me the opportunity to start training advisors and I fell in love with that side of it, and the learning and the development and just seeing somebody evolve in their space. So that transitioned my whole thinking around what my career would look like. I'm from a teaching and education family and background; everybody in my family is in that lane. So I'm just mixing the two up of finance and education together. And so transition to start training new advisors that came in the field, and again, just fell in love with that. So that led me down the road of working at several different consulting firms; and then ultimately at three different mutual fund firms of Dreyfus, Prudential, and then DWS investments which is Deutsche Bank. Practice Management departments are not awesome in down markets. So I had the opportunity to get laid off twice, in 2002 and 2008, and by the same person, so it was Groundhog's Day, same time of year, everything.

 

David DeCelle  04:30

Oh, man.

 

Andrea Schlapia  04:33

December 2008 was my second layoff month and that was the catalyst for Ironstone. So why not start a small business consulting firm, all in practice management in December of 2008. So with that said, 13 years now run with Ironstone. We are privileged to get to work with the folks that we do, and I will say my team for the last 13 years have been virtual so last year did not disrupt our world whatsoever on a day to day basis per se, because my team is in all different spots of the country, and we work virtually. So we've been helping people work virtually for, again, the last 13 years. So it's been our normal, and had the opportunity to help folks just transition to that, from last year.

 

David DeCelle  05:22

Love it. So I want to dive a little bit deeper on one of the points you had made. So it seemed like for the most part, you had a fairly stable position outside of down markets, to a certain degree. Guaranteed income, you knew what you were gonna be making every other week. And I feel like there's advisors out there who are in more of a salaried role, who are in turn considering starting something on their own, where it's more of a eat what you kill type of setup. What was some of that like? So in 2008, laid off, decided to then say, if I want to get laid off again, I'm going to do it myself, if it ever came to that. So you didn't want to be subjected to corporate decisions and things like that. But having been in a similar position myself, not in that same year, but transitioning from an advisor into the consulting space. I'm curious to know what were some of the hesitations or excitements? And how did you finally decide to take the chance and ultimately bet on yourself and create something of significance on your own, and obviously, ultimately building the team?

 

Andrea Schlapia  06:41

Well, let me even back up from Ironstone’s inception. So remember, I said I got laid off two different times in 2002. So 2002, rewind that, November of that year, I attempted to go out on my own and be in that consultant space. Literally did a roadshow hardcore from Florida up to New York, packed all of the every practice management tool, template resource, marketing, and walked into every single door, every single advisor office that I had ever gone into when working at Dreyfus, to promote this, this new consulting gig that I was launching. And it was probably the hardest thing, the most gratifying thing, but I really just didn't have enough time in business. So I went back into, and that's when I went to Prudential and said, you know what, I'm not ready for this yet. So to your point of, what are all the fears and trepidation and excitement of it? I mean, part of it is the fear of the unknown, right? You just don't know what you don't know, of how to run a business, what are all the parts and pieces. I was a great financial advisor, a good, great practice management coach, consultant, and the opportunity that I had to walk into every mutual fund or, as I should say, working at mutual fund, the opportunity to walk into every custodian, whether it was wire, bank, insurance, independent, everybody had the same problems. So that was really the catalyst for Ironstone on the practice management. But it also allowed me to see what business owners were doing and weren't doing, how they were running it, what was successful, wasn't successful. I think just getting the infrastructure in place for your business and shifting from a good or great financial advisor to an actual CEO and a business owner. That is a chasm, that is a leap, to change your mind to how do I run this business versus how do I be a great financial advisor? And just getting the scaffolding around that mindset, if you will, to be able to say, okay, I have to think about how to put a strategic plan together. I have to think about what my business plan is. I have to think about the operations of the business. I have to think about the human element of the business. Which by the way, all those things I just said, Ironstone’s fundamental for.

 

David DeCelle  09:09

It’s interesting, because I've come across a lot of like larger institutions. I'd be curious to see if you've noticed this too, to a degree, and we don't need to like name names of certain companies. But I feel like there's a lot of larger institutions that may say that they have practice management solutions for their advisors, and whether or not that's true, I think a lot of times things can get lost in communication and maybe not dispersed throughout their field force as appropriately as possible. I feel like there's a lot of mutual fund companies out there that as a value added service beyond investment management, they say they provide practice management solutions; but when you start to ask them what that actually is, it's tough to get a direct answer or, as you put it, a blueprint that is easily implementable. And I find a lot of times, part of the value in firms or advisors working with folks like you or us is we get to see so many different business models, and we're privy to so much information from various companies that we just get to cross pollinate all the great ideas that folks are doing. But is that something that you've noticed too, in terms of, I don't want to say there's a lot of smoke and mirrors out there, but I can't think of another saying. But you get what I'm trying to say where they say one thing, but when you pull back the curtain, it's not as organized and implementable as maybe they say it is. Do you know notice that too?

Andrea Schlapia  10:41

100%, and concur with everything that you just said. And I think part of what you actually mentioned, when you were just introducing me, is the real world application. There's where I see the big gap is because a lot of coach, consultant, firms that say they have practice management, to your point, it's a lot of theory, and it's great. I'm not saying that that content isn’t good. But when it comes to like, hey, how do you actually do this thing? There isn't a tool or a template or a guide, and that is everything that we are. Because again, that was the benefit of being able to walk into every custodian in my time of working with those mutual fund firms, and seeing wow, okay, it doesn't matter what level of AUM or revenue you are, if you're a corner office or not. Or if you're in a bank, or a wire, or you're an independent; you all are saying the same things; you all have the same challenges and issues and all of the same practice management pain points. So that was the reasoning behind let's create a roadmap because all of this is really the pattern and consistency that we see, regardless of what firm, what level of firm, what level of practice that we're in. And so if we can create something that's repeatable, that makes it that much easier.

 

David DeCelle  12:03

So when you talk about the Fundamental 4 scorecard, and blueprint, as you call it, is it something that in December of 2008, you kind of opened up your business with that already created? Or was that kind of a culmination of your experiences shortly thereafter? So I guess my question is sort of how long has this been around so we can get a sense of how long advisors that you're working with have had an opportunity to actually implement this?

 

Andrea Schlapia  12:33

I will say it has been from the inception of Ironstone. So all of the last 13 years. With that said, all of the pieces and parts have been out there before you and I even existed in this industry, but it's just a matter of the framework that it's in. I will say, when I'm at conferences and have this up on the screen, this is the slide that everybody takes the picture of, because it's so manageable, mentally manageable, when you look at it in this infrastructure. Say, oh, wow, okay, these are all the pieces and parts that I need to have as a part of my business infrastructure. So Fundamental 4, again, strategic planning, business development, operational effectiveness, and human element. And then we actually have eight disciplines underneath each of those. So there's really 32 line items that we help business owners and practice owners slice and dice their business and take a look at it and help them to have measurable areas within the firm so that they can say, okay, where are we at with x.

 

David DeCelle  13:35

So I'm just pulling up your website here so I can kind of follow along as you're diving deep into this. But help give us sort of a generalized overview of what the Fundamental 4 is, categorically those four points, and then let's dive a little bit deeper into each one of them so that the folks who are listening to this episode can get a good sense as to what that actually covers and how that could benefit their business.

 

Andrea Schlapia  14:05

Yeah, absolutely. I mean, bottom line, this is to help gain control, boost morale, and grow your practice. That is our theme of everything around our Fundamental 4. But strategic planning is really looking at where do you want to take your firm, and really creating the overall plan. And some of the things that are underneath that, remember I said there's eight different disciplines underneath each of those fundamentals? So underneath strategic planning, is this is where your business plan lives, and thinking about your succession planning, and how you're compensating your team members—which, yes, dotted lines over to the human element, but you as a business owner have to be fiscally responsible and know what your compensation and incentive dollars are that you're going to invest in your people. What is your investment philosophy and your investment model? What are your operating costs? So those are just some of the things underneath strategic planning. As far as business development goes, how are you going to grow your business? So this is defining your sales strategy and your niche and your targets, defining all of the revenue generating activity that you're going to implement within your team to grow the business. Again, some of the things underneath that business development category is your niche marketing, your referral network, your literal marketing plan, what’s your branding and value proposition. So just getting really granular in how you are marketing your firm, and the activity that goes around that. And then the operational effectiveness is all about systemization. So how can you standardize all of your procedures, your SOPs, standard operating procedures, your reports, your tracking, all of the data around the firm, and just memorializing through process and system again, like plan onboarding, and client service metrics, and client segmentation, and what's the technology that you're going to use. So this is the machine part of the business. And then the human element, well, who's on the team? Getting the right people on the bus in the right seat, defining roles and responsibilities, which are hiring and onboarding, opportunity, instead of here's your phone, computer desk, good luck to you. We actually have an infrastructure that we work towards to give the best experience to bring folks in to create a true culture, the business owner’s truly acting as a leader and a CEO mindset to elevate humans that are on the team. Because that's what's going to create a really positive culture, that's what's going to motivate folks, it's going to be a clear career path of how you get to the next, and what the expectations are, your performance feedback, performance. And I will say, performance feedback in our world and the way we define it is this is on a regular basis. So for all your listeners, don't pass out right now when I say every 90 days is the objective. So that means four times a year instead of the one time of the year. That's a performance review, like hey, great, you got a job, here's your raise, keep on truckin’. Performance feedback is really a coaching experience. And that's why we are saying, let's do that every 90 days, because that's a smaller window of time to evaluate what are the successes, what are the challenges, write goals and objectives for that individual. And it’s really a two way communication so that it's not just me giving you your numbers, David, but hey, you're doing a self-assessment. How do you feel like you did? And we built a system with 15 key performance indicators or KPIs, if you will, and that really helps set the stage for successful performance feedback. So we've got a lot of different processes and systems built into the Fundamental 4 so that it's, again, not just, here's this blueprint, good luck, but really how to implement all of these things. And guess what? The Fundamental 4 allows for any content, regardless of provider, to fit inside of this framework. And that was the other important piece of this, because we can't be everything to everybody, and that's why Small Giants is one of my favorite books. Because again, it's about being great. It's not being big, it's not being huge, a huge, giant machine. We fit for a very select group of folks, and again, all kinds of practice management can fit inside the Fundamental 4.

 

David DeCelle  18:29

So there's a lot there. You may have seen or heard me typing as you were chatting throughout, taking a couple of notes so I don't forget some things. So we're very much in alignment with how we kind of think about coaching and serving advisors. And what I've noticed is, I would say the majority of advisors, the way they start off in this business is either in some sort of heavy sales capacity at particular firms, or they start off in more of like a support, power planner type of role and then grow into their own advisor, so to speak. And as a result of that, I find that there's very few advisors who are actually running a business. They tend to just either be selling, or they tend to just be advising, and then they get to a point where they're like, whoa, I haven't done any of this stuff. And no wonder why I'm feeling bogged down or no wonder why I’m kind of getting into a mundane routine. One of the things I tell advisors that I'm most passionate about is getting them to fall in love with their business again, through strategic vision, and through helping them scale with systems and processes, through protecting their energy by working with the type of people that give them energy as opposed to drain them. So as it relates to the first key point, and for those of you who are listening, when you have a chance and the website should be in the show notes, but if you go to Ironstonehq.com/our-approach, you'll get an outline of the Fundamental 4 right there. So again, that should be in the show notes, but if not, feel free to type that in when, of course, you're not driving if you're listening to this on the road. But for strategic planning, when you talk about vision, can you give me an example of what that exercise looks like? Because when I go through this exercise with advisors, common questions I get are, well, should it be business? Or should it be personal? Should it be both? What timeframe are we looking at? Is it one year? Is it ten years? Is it three? How do you encourage folks to think through the vision aspect of this? Because I find that that is, I think, the most important part, I would say, of the Fundamental 4, because if you can't cast the vision, the other things don't really matter. They don’t get excited, it seems like more of a chore to implement certain things if you don't know ultimately why you're implementing it. So help me understand how you think through visioning for an advisor to actually get them excited about the other three components of the Fundamental 4.

 

Andrea Schlapia  21:10

Think about this formula, 10-3-1-Q. I’ll say that one more time: 10-3-1-Q. What's your ten year outlook? And we can go revenue, we can go assets, we can go number of households, we can go number of team members, number of locations. So what is the ten year outlook? And I will even add this one question to every single one of those numbers: What does success look like? What does success look like? So in the ten year timeframe, in the three year timeframe, in a one year timeframe, and in a quarterly timeframe. Because we're reverse engineering what that ten year roadmap looks like. So if we look out again, far reaching to the ten year, some of it might feel so uncomfortable, and like not even realistic. That's what the ten year vision even is. And that's what we're talking about of almost scary, like, okay, there's no way I can be the $2 billion, or billion dollar firm, or whatever the numbers are. And again, it's not just one number, it's again, what's your definition of success? Because your definition and my definition would be completely different, and it doesn't mean that it's wrong. It's just what is that? So whether it's numbers, location, households, number of team members, all of those things are part of what success can look like, but in a ten year perspective. And then reverse engineer. If that's what the ten year is, what do we need to do three years out to align with the ten year? And then that's what the one year is. What do we need to do in the next 12 months to align with the three year? And then what do I need to do on a quarterly basis to align with that one year, and chunk it down into the 90 day blocks. That's why I say 10-3-1-Q. I'm all about acronyms and shortening, and all of that kind of stuff.

 

David DeCelle  22:54

I was just gonna say I love how it's easy to remember that. And I'm chuckling as you're going through that because I suggest that folks do something very similar. And I know the other book that you had mentioned that we've talked about on other episodes is Traction, which you're holding up right now. I was gonna say it smells a lot like Traction. But what I liked that you did about it is you made it easy to remember. The other thing that I suggest that folks do, which can seem sort of fluffy, but I'm a big believer in casting a vision, but in the present tense and actually writing out what that looks like, what it feels like, what smells like so to speak. Try and activate all your senses so that you can start to envision that already happening at each of those stages. And then just making sure, to the point that was made in your bio about, how do you actually get there. So it's one thing to have a pie in the sky type of dream, it's another thing to know the steps to take to actually get there. So I like that a lot.

 

Andrea Schlapia  23:55

And that's why the Q part of that equation is so critical, because that's, what's the activity that you're going to do in the next 90 days that correlates with all of those other timelines. And I think the downfall or the gap that I see so much is, again, if I have my business owner cap on, I might know that backwards and forwards, but it's in my head. And the lack of communication to the rest of the team and the players that are on the bus that don't know what your vision is and what your definition of success is, that is absolutely the wrench in the bicycle spoke, to stop everything. Because you have it in your head but it's not on paper, and it's not something that's truly a living breathing thing. So I'm all about visualization and put it up on the wall. And if you have heard of storyboarding, storyboarding is a brainstorming tool. That is like one thought, one Post-it note on the wall. And the reason why I love that instead of the whiteboard—whiteboards, flip charts are great—but one thought, one Post-it note, you can move those Post-it notes all around. You can get your whole team involved in it. All of a sudden, we say what’s success look like? Everybody has a different color Post-it note. You can start moving those Post-it notes, around categorize them in the same, like topics, start prioritizing them. And it's a really fun activity to get your whole team involved, just to answer the question, even without any of those timeframes. What does success look like to you? Because, to your point, get those senses going and through visualization of what that even means to you.

 

David DeCelle  25:38

Yeah, I think it's important to go through a similar exercise with assuming that an advisor has a team, go through the exercise with them as well, so that they're more bought into the vision. And I think that what you'll find most of the time is that if you add up collectively everyone else's vision on the team, it probably adds up to what your vision is for the firm. But when you position it as, hey, this is what you all want to do, there's just way more buy in as opposed to like, alright, this is what I decided, here's what we're going to work on. And there may be some of that to a degree, but when you empower them to think through, well, what does my life look like in ten years, or three years, or one year, it most likely will add up to what you were hoping for anyways.

 

Andrea Schlapia  26:22

They can see how they can contribute to that plan—whichever time frame we're talking about; ten, three, one, Q; they can see where they fit into that. And I think that's the challenge that I see all too often is okay, here's this plan, but I have no idea how I'm actually contributing to that. What's my slice of the pie, if you will, to make sure that that happens?

 

David DeCelle 

Cool.

 

Patrick Brewer  26:46

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  27:37

So moving on to the second portion, business development. How do you think through working with a niche? So, I've heard plenty of people that say, I work with folks who have over a million dollars in investable assets, which I don't think is a niche. And I have heard people say, I work with anesthesiologists within a 100 mile radius of where my office is? Two totally opposite ends of the spectrum. So I have some thoughts on a niche, but I'm curious to see kind of how you help folks determine what niche to work with, and what you would consider a niche versus not the niche? Because there's a lot of differing opinions out there. So curious, your take on it.

 

Andrea Schlapia  28:20

Yeah, absolutely. Well, I always like to start with what is your sweet spot? Where do you feel like you are really, really exceptional? And then who are the people that are going to want that particular specialty? That's going to help you define it, first of all, because, yes, a million dollars and up, or 2 million or 5 million, that's not a niche, that's a number. And I know when I first started this Ironstone gig, I had a specific custodian that I worked with very, very heavily. And we still work with that custodian today, very, very in depth, and we know their language. I can get into their home office when it's not closed down, and go in and meet with their regional directors, and meet with their practice management group and truly speak their language. So it's almost as if my team and I work with or are employed with that custodian, but we're not. Knowing the language, being able to speak the language of a particular group of people. So, like your anesthesiologists within 100 mile radius. Now that's a niche. You are so specialized, and you become part of their community. That's the fun part is, again, this is back to Small Giants. It's not trying to be everything to everybody, but who is the group, what's the community that you want to be a part of? And then guess what? It makes it that much more fun to work within that community because now you've created that group of people that are like minded. Yes, we specialize in independence, but independence is still pretty broad. So that's why I say, we work with some specific custodians, where we truly know their world, we know their technology, we can talk all through the Fundamental 4 and plug in some of the things that they're already doing within that firm.

 

David DeCelle  30:20

So I agree with all of that. I do think that depending on the advisors stage of business, that's certainly the end goal. But then the question becomes, well, how do I get there? What if I'm brand new, and I'm just entering the industry; how do I pick a niche? Or, hey, I already have 100 or 200 clients that are all over the place? How do I refine that? So I want to kind of give you my take on kind of the pre work to your end goal that you just referenced, and kind of see if I'm missing anything. So if you're an advisor who's just getting started off in the business, I think, personally, I think it's premature to pick a niche right off the bat. So when I was an advisor, I thought that I was going to really enjoy working with attorneys, and I know plenty of advisors who work with attorneys, and that's great. For me, it was nauseating, because they were always too busy to give me the time of day. They were very combative as it relates to recommendations and things like that, and our personalities just weren't aligned. So if I had gone all in at that point, and had a website that spoke to attorneys, and all my collateral created for attorneys, it would have been like, well, this was kind of a waste, because I don't enjoy working with them. But I wouldn't have known that if I didn't experience it. So I always share with people, when you're looking for a niche, especially at the beginning, try and work with a bunch of different people to get a sense as to who you naturally gravitate towards, and are you going to bring some people in your business that are not ideal, that are not in your niche? Sure, but that doesn't mean you can't serve them moving forward. But you got to kind of date before you get married, so to speak. So there's three qualifications that I bring people through in identifying a niche, whether they're brand new and need to meet with a bunch of people, or they already have book a business and they're looking to refine moving forward. Which is, who you just genuinely like, generally speaking within an industry, would be number one. Number two is, is it a profitable niche? So, let's say you're passionate about and enjoy working with school teachers, that's awesome; but based on what they're making on an annual basis, you're gonna need to work with a lot of school teachers to be able to run a profitable practice. And then the third one, which I think passion and profit are two non-negotiables, because one without the other, you're kinda, you either hate what you're doing, or you're underpaid for what you're doing. And the third one, that's more of an optional piece of criteria is, do you have a natural affiliation with this group of folks already? Did you come from that profession? Does your spouse work in that profession? Do you have influential people in your world that are part of that profession? Or do you already have a handful of clients at that profession? And over time you go from, I'll use medical professionals as the examples to end with the anesthesiologist, you go from…let me meet with a bunch of people…hey, I really like working with medical folks, let me work with medical folks. As you continue to progress…I really enjoy working with anesthesiologists. And then even a step further, I like working with anesthesiologist that I can meet with in my area perhaps. And then that's when you start getting more involved in the groups and the organizations and you learn the language, but it's almost like a funnel over time that gets refined. That way you're not spending too much time, energy, and resources on a particular niche that you don't even know if you enjoy working with yet. So I've been talking for a bit so I want to stop. But what's your take on that? Am I off? Am I missing anything? What are your thoughts?

 

Andrea Schlapia  34:01

Nope, you were spot on. I mean, because I'll liken it to starting in college. You may think you know what your area of emphasis and your degree is going to be, but then coming in new as a freshman in college university, you get to try a lot of different things in a generalized standpoint. And that's going to help you refine your degree. So the same exact thing that you likened with the medical industry. My husband is in aviation, but you can say, oh, I want to work with aviation. And then you say, I want to work with pilots. And then you say, well, I want to work with pilots of C-130s. That's a very, very unique, specific group of humans that you will, if you can speak the—again, it's about speaking the language and getting to know their community, because then you are a part of that community and you build the trust. So building that trust to be will say, yeah, we know that you know us. You're not just trying to sell us something, but you actually know our group. You know how we work, you know how we function. And truly, when you build that community, it's not selling anymore. It's educating people about what you do, and the referrals come that much easier. Because again, you're in a small community of people that turn around and start talking about, oh, you know what, this person knows, or this group knows, how to work with us, they know our language. And it just becomes an automatic of a referral generating machine because you focused. So just casting a huge, wide net at the beginning of a career is what you have to do. Explore what you like, what becomes your sweet spot is just you growing in your career, and where the opportunities are that you want to refine and tweak. To your point, that's the funnel, right? And again, it becomes a referral engine by doing that.

 

David DeCelle  35:55

Spot on. Well, I'm glad we've been sharing good information that you concur with, so that's great. So operational effectiveness, I feel like we can go down a bunch of different rabbit holes here. So I want to kind of—

 

Andrea Schlapia 

Oh, yes, you are not wrong on that.

 

David DeCelle 

There's so many aspects of that component of the business. So I guess the theme that I want to put out there, and happy to have you kind of take it whichever direction you want. But I'm a big believer in doing your best to automate non-human components of the business to then ultimately free up for the more human components of the business, to really accelerate the trust building process. So I have a saying that I don't think that trust is something that just takes time; I feel like it's based on the accumulation of experiences, and you can condense those experiences to build trust faster. So as an example, if you have four touch points with a client per year, it's going to take a while to truly build up trust. But let's say with newsletters and various touch points, you have like 50 touch points with them over the course of like a five year period. I'd be willing to bet that if you condense those 50 touch points over a 12 to 18 month period, they're gonna feel the same way about you after that 50th touch point, whether that was over 18 months, or over five years. So with that theme, kind of how would you respond with how you help folks out in that category?

 

Andrea Schlapia  37:20

The operational effectiveness is all about consistency, because this is something that we want to create a repeatable process, whether it's your segmentation, and then what's your definition of ABCD? What's the ABC get? That's your service metrics; exactly what you said. What’s the experience that I am going to get from your firm and from your team, and who is doing what? So that it's really clear. People use the Fundamental 4 language and say, oh, I'm in this part of a Fundamental 4. It becomes a thing. So create your process around your client onboarding, and what is the process? You can create your own client experience and literally give it a name. Because your clients will say, hey, when is my XYZ program happening? Or whatever, you're naming it, right? And when's my—I need my C6 process, or I need my C6 review, or I need my Fundamental 4 review. Give it a name, because it's going to have a life of its own. Everything underneath operational effectiveness, though, is about your standard operating procedures. But if you haven't checked out The Checklist Manifesto, it's another great book, because this is, again, about take all of the stuff out of your head, put it on paper, and then it takes away the human error. So remember, I said that my spouse is in aviation. And that's actually where the checklist came from. If we go back in history, 1935, there was a Boeing flight competition, and the future B-17 that came out of it, but the flight crashed. They said, well, you know, the plane can't do this. It wasn't that. It was human error, because there was too much of a plane to actually keep to memory. And that's literally where the checklist was originated from was aviation. So get all the stuff out of your head and put it on paper, and that will help you to be consistent. It will help all of the team to have the buy in, the same thing that we said from the strategic planning standpoint. But it will help your clients to really have a quality experience because it's repetition as well.

 

David DeCelle  39:29

Love it. I just bought that book on Amazon so I don't forget. Always down for book recommendations. And yeah, just to before we move on to the human element portion of it, I think it's important to—just to reaffirm what you said—it's important to document what the service is based on your segmentation or based on your niche. Otherwise, your business just isn't scalable, because what you end up doing is you're making so many different promises to so many different people and then trying to remember what those are. One of the biggest reasons clients get frustrated and ultimately leave working with an advisor is due to missed expectations. So if you're not remembering what you're setting out there for expectations and then delivering on that, typically that doesn't make people happy when they're on the receiving end. And then when you're looking to actually build a sustainable business that is attractive to a buyer or a successor down the road, the more documented you are, I think the more valuable your business actually is. As opposed to them realizing that they're walking into a dumpster fire, and there's nothing repeatable about it.

 

Andrea Schlapia  40:39

You are not wrong on that. You will be so much more valuable if you put your practice on the market by having that. Think about your business as a franchise. If you were thinking of it that way, there is a manual; there are standard operating procedures when you buy a franchise. So if you think about your practice that way, what's your SOP? This is the binder with all the tabs, if you visualize like, hey, here's our strategic plan. And here's our executive summary. And here's our profit and loss statements and our income statements. And here's how we run the business. That's what this whole operational effectiveness piece of it is. And if I can just speak to segmentation for a second, and really even more of the service metric side, because you said, yes, if it’s not consistent, they're going to leave because their expectations are unfulfilled. But building the service metric side of it, the challenge that I always hear is that advisor teams say, well, A's get everything. So what can I possibly take away to make a B experience or a C experience or D experience? Well, that's because you're building it the wrong way. I want to flip that over and say, start with the Ds and say, what across the board is everybody going to get? And D plus what is the C experience; plus what is the B; plus what is the A. If you build it from the bottom up, it's so much easier to build your service metrics and then truly give them a name. So what I mean by giving them a name, you're never going to tell somebody that they're an A, B, C, or D, you're never going to. I don't want to know that I'm a D client. But if you just change the language from anything that starts with a level, or correlates, I should say, with a level, if I said, enhanced core, custom, comprehensive, private client, wealth planning “program,” and I'm doing air quotes, when I say the word program, use the word program instead of tier, level, or segment. So if I said, David, you’re in our private client program, that could be a D and no one would know. I said, you're in our wealth planning program, our enhanced program, our custom program; any one of those could have been D, you would never know. This is psychology of selling. It's just changing the language, but then being very, very clear on paper what the private client program offers. So you're educating your client base, and again, back to business development. If you educate your client base about what you're doing for them, and you give things a name, it helps memorialize it for the client and helps them remember, oh, I'm in a private client program. Wow, what does that mean? Well, let me tell you. And then all of a sudden, you have a new prospect because your existing client values that, can explain it to somebody, and it's your referral pipeline. All because of process and system, standard operating procedures, and your operational effectiveness, because now your team knows what to offer in the private client program example.

 

David DeCelle  43:30

So I'm glad you said that, because when you talked about the process and segmenting, one of the main things you mentioned is giving it a name. And I'm glad you said what you just said a moment ago, which is, essentially it's way easier to refer you. It's way easier to refer the advisor where they can stick to and remember what program they are in and what process they've gone through. And it's a unique differentiator there, as opposed to, oh, you should talk to my advisor. Oh, what do they do? Oh, they helped me with my investments. Or something like that. It's oh, no, we do this process, and we're in this program. So I like that a lot. So to round out the conversation, I do want to spend a few minutes on the human element, specifically around culture building. And part of the reason why I want to do that is if you want to better serve your clients, I think it starts with better serving yourself and your people on the team. And if you do that, they'll better serve the clients and the interactions that they have with them and be passionate to do so. So I guess what would be two or three go-to strategies to improve upon culture within the firm that ultimately bleeds down to better serving the clients?

 

Andrea Schlapia  44:44

When we talk about culture, so many people are disengaged, but people leave people. Meaning employees, team members, leave managers, they don't leave jobs. Eighty-five percent of working adults today are absolutely disengaged, and that's because they don't have clarity and understanding of what the vision is, where we're going, how I'm a part of it, all of those things. So culture is all about a high level of communication, coming together as a team to collaborate. So back to that silly concept of storyboarding, and having a full team collaboration around where we're going, how we're getting there; the buy in is a huge part of how culture is created. One of the concepts that we use and truly believe in is what I will call a development day. Development day is when you're literally closing the doors to clients. Your phones are on voicemail, your email out of office, your autoresponder is on, and you're coming together as a team. And again, for all your listeners, I hope everybody is sitting down because I don't want anybody to fall over when I say, the teams that we work with that have the highest rate of implementation are willing to close the doors once a month. That’s 12 times out of 365 days; and respectfully, I would say if you can't find those 12 days, I really would question how you're educating your clients that you're putting them into a plan that they can trust, and they know it's getting them to the retirement goals that they want. It's not something that's a 911 that we have to check all the time. Now when I say development day and closing the doors, does that mean you can't check voicemail, or you're never gonna answer a voicemail or respond to a client? No, that's not, I'm not saying you're hardcore lockdown, but that's why we have breaks and we can check email and take care of. And the ideal for a quality development day is—I should say the window of that—10 to 3. That gives you an opportunity in the morning to do what you need to do and get into the weeds of the business. And also gives you the buffer on the other end of it of the day, after three o'clock to wrap up anything. But between that 10 and 3 timeframe, this is literally working through the Fundamental 4, talking about what the vision is, talking about what your core values are, identifying what your niche is, and communicating in depth, a lot of rabbit holes; work is all a part of it. Again, no silver bullet whatsoever. I wish there was one because I'd be a bazillionaire if there was a silver bullet.

 

David DeCelle  47:14

I feel like what I'm hearing from you is part of culture starts with, it's almost like a full loop back to vision, which is making sure that everyone on the team understands what the vision is, and is constantly and relentlessly working towards that vision so that they all feel a part of the company and the vision and not a cog in the wheel. Where a lot of firms can be structured like that, where it's like, they're replaceable, you want everyone on the team to feel like if I'm not here, this vision doesn't get accomplished so let's all work hard together, is kind of what I'm hearing from you.

 

Andrea Schlapia  47:51

That's exactly right. So I'm going to give you a quote by Thomas Edison that I love. And his quote and statement is “opportunity is missed by most people, because it's dressed up in overalls and looks like hard work.” That's what this moment is. That's what culture is. It's hard work. And it's stick-to-itiveness to that, and that's why I'm a proponent of development days. So that's my challenge to all of your listeners of try a development day, close the doors, use our Fundamental 4 as your framework, as your blueprint, and really get your team members to say what's working and what's not working in all of these areas. Because if you as a business owner are the only one answering that question of what's working and what's not working, you're not necessarily getting a 360 degree perspective of how the practice is functioning. Even if you, you know, client advisory boards is one of the things that I love to help people implement. Because again, that's getting the client perspective of what's working and what's not working. So you've got your team perspective, your perspective as a business owner, a client's perspective, and wrapping that all up, again, in this Fundamental 4 package, blueprint, scorecard, roadmap, whatever word you want to use at the end of that; it's a nice framework to help you to create a really quality culture. Everybody understands those parts, those pieces, and how they play the role within the team; that's going to lead to a higher engagement; that's going to lead to you being able to coach your team members around that fundamental. And again, every practice management tool and template outside of Ironstone’s fits right into the Fundamental 4. That’s why I built it that way, because I’m passionate about implementation. I don't care where the content comes from. We have content around each of these pieces all day long, but anything can fit inside of it. Because it's about take what you like and dump the rest. I will say that all the time. Hey, take every resource we have, take the pieces and parts that you like about it, and dump the rest. If there's any other content that you have, let's plug it in. It's about implementation success, not just proprietary content that you have to stick to. That's rigid flexibility is our Fundamental 4; rigid flexibility. It's a structure, but we can plug anything in.

 

David DeCelle  50:02

I suggest that a lot, which is, if I try and help people with things like time management. It's like, hey, this is what works for me and works for a lot of the folks that I share it with, but take what you like and add in what you found elsewhere and craft it yourself. So I agree with that mindset a lot. So before we sign off, one of the things that I had asked you in advance was what one of your favorite books is. And the reason why I do that is, I find a lot of times advisors are learning within the confines of our industry, which of course they should, to be caught up to speed and make sure that they're delivering as much value to their clients as possible. But I find that there's a lot of great nuggets in books outside of our industry. So this is my way of trying to promote learning moving forward within our community. So you had referenced this book earlier, but I want you to dive just a little bit deeper as to what your main takeaway is with it, and it's a book called Small Giants. Tell me about that.

 

Andrea Schlapia  51:04

Yes, so Small Giants, the book author is Bo Burlingham. Of course, you can find it on Amazon. What I love about it is the whole concept around and the theories that are in the book, and the ideas and the concepts are companies that choose to be great instead of big. So it's not about trying to serve everyone and everybody, but it's finding your unique sweet spot and staying true to that. Because that's going to allow you to be better, it's going to allow you to be stronger, it's going to allow you to be unique in your lane, and not necessarily having to be a massive giant of a firm. What does that mean? Maybe you don't want to be a super ensemble firm, with multiple advisors, multiple locations, and billions and billions of AUM. Maybe you want to be a one person, one advisor firm with a couple of client service team members; that's okay. And I think that's the misnomer in our industry is that this is what you have to go towards, and you got to grow to be that super ensemble. And I would challenge you say you don't have to if that's not what your passion is. Serve the people that allow you to be at your best, identify who those are, that's the community that you're going to be in, and that's going to allow you to be great. So I know I had a mindset shift when I read this and thinking I want this huge practice management firm that's going to serve all types and kinds. And it was exhausting, and really had to pump the brakes and say, you know what? I don't even want to do this at all anymore, because it's not fun anymore. Because I had so many team members and so many different directions that we could go. And we've now surrounded ourselves with strategic partners like you and your team, so that we can be a complement to each other, not competitive with each other. And that we can serve our community really, really well. I'd rather have less clients and have a deeper impact, than have a huge amount that we really don't have relationships with, because that's what it is. That's what it's about for us, is it's building quality relationships so that we can really truly see success within. Not just swoop in, give you a couple of practice management things, swoop out. I said to one of the teams that we have the privilege to work with, because they hit a huge milestone objective, several of them. And I said, this is like watching your kids grow up after these several years that we've worked together, and like you're on stage of graduation, I'm in the back of the room, like that's my kid. So that's how we feel about the teams that we get to work with. And we're very privileged to get to work with the folks that we do. So that's really the whole concept behind Small Giants. And so I would highly encourage you to pick that up, or at least pick up a summary it, without question.

 

David DeCelle  53:59

Well, I think it's cool too, because it's essentially saying that the definition of great is are you acting and doing things in alignment with what your vision is, not what other people's vision is for you. So that's pretty cool. So if folks want to touch base with you, I had plugged the website earlier, ironstonehq.com. But are there any other ways that they can reach out to you? And this will be in the show notes as well.

 

Andrea Schlapia  54:24

Yeah, absolutely. I mean, we're on social media, on YouTube and Twitter, LinkedIn, all the above. But I would encourage you to definitely go to the website, and here's why. Because every orange button that you see is an action button. So there's an opportunity to even assess your practice that's complimentary on our website that will lead you right through the Fundamental 4. And then there is an orange button in the upper right hand corner of our website that leads right to our calendar so you can jump on our calendar, we can have an exploratory collaborative conversation, and help you, point you in the right direction and give you some resources regardless of any engagement at all. That's what we're about. And to a fault, we'll give you probably more stuff than you even want. But we know we're going to leave you with some great resources so that you can start implementing today.

 

David DeCelle  55:09

Awesome. Well, as always, if you found value in today's episode, please go ahead and click the Share button with some of the peers in the industry. Any groups that you're a part of, feel free to share this episode in there as well. We appreciate that. And Andrea, greatly appreciative of your time today. I got a lot of value today, as you saw me taking notes earlier on, and I'm excited for our continued collaboration moving forward. So really appreciate you joining.

 

Andrea Schlapia  55:36

David, it has been a pleasure. I wish you the best and, again, look forward to all the collaboration that I see coming down the road.

 

David DeCelle  55:43

Awesome. See you all next episode and we are signing out now. Take care.