S2 EP02: College Planning Resources and Advice with Joe Messinger

09.23.19 | 0 Uncategorized

My guest today is Joe Messinger. Joe started his own fee-only financial planning and investment advisory firm, Capstone Wealth Partners, in 2009 after struggling at large national financial service firm to find and provide good financial advice — especially in the area of college planning. Joe is a leading authority on college planning resources and late-stage college funding. He frequently speaks to organizations such as the FPA, NAPFA, ACP and XY Planning Network, as well as parent groups across the country.

In this conversation, we discuss Joe’s College Pre-Approval™ system, a revolutionary approach to providing expert college planning advice in a client-centric and comprehensive way. With Capstone College Partners (a resource for financial advisors who want to learn more about helping families with college planning) and College Aid Pro™, Joe is on a mission to educate and empower other financial advisors to raise the bar in college funding advice — and to help end the student loan crisis, one family at a time.

Don’t miss one of our favorite moments, when Joe explains the burden that rests on the shoulders of clients and potential clients who are planning their children’s college future. Many of the service models that are alive and well in the financial industry today have no room for his type of advice. Have you said “No” to college planning for your clients’ children? What hurdles have kept you from adding this service in your practice? We hope you will find some practical ideas to try — and feel more comfortable with offering college planning resources and advice to your clients in the future.

Looking for more ideas about college planning resources and advice? Join the Model FA advisor community, where you will find expert advice on how to launch, grow, scale, and transform your firm.

Resource Links
Capstone Wealth Partners
Capstone College Partners
College Aid Pro
Connect with Joe

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Patrick: 00:05 What's the process look like to make this a profitable endeavor, but also be able to help people?

Joe Messinger: 00:09 Yeah, I think there's always a few things. I've talked about, like, if you want to look at marketing a product or service of any kind, are you the real deal? Do you know what you're doing? Education's important. This is an area we know most advisors lack education. Quite honestly, some firms just flat out say advisors can't do it, because they can't regulate it and they can't train them on it.

Patrick: 00:30 Interesting.

Joe Messinger: 00:32 That's thing number one. If you've got the ability for training, which we hope we've put together some great training for advisors to know, and then the next piece is, is it marketable and profitable? How do you go to market with it? We know that there's 16 million kids in high school today. There's 4 million that'll graduate roughly each year, and 68.4% of those go right on to college.

Patrick: 00:57 Hello, everyone. Welcome to the Model FA podcast. I am joined by Joe Messinger. Joe, how are you doing?

Joe Messinger: 01:03 Doing great, man. How are you?

Patrick: 01:04 Awesome, brother. I'm doing fantastic. Thanks for joining me here in the studio. You made the trip to Austin. You're here for the NAFA conference, speaking tomorrow, or Thursday, I believe.

Joe Messinger: 01:12 Yeah, this week for sure. Yeah.

Patrick: 01:13 Awesome, man. What's the topic? What are you talking about?

Joe Messinger: 01:15 Changing the approach to college funding advice, and ending the student loan crisis.

Patrick: 01:19 Geez, tackling big, big problems. I feel like that's a good place for us to start. A lot of financial advisers, they've talked about college planning. Some of them even want to break into that to be able to help families that are college-bound make those decisions. Then on the other side, you've got this huge mountain of student loan debt. I mean where do you feel like the problem and the opportunity is for advisors in the college planning space?

Joe Messinger: 01:43 I just think that the problem is getting so much more attention, even by mainstream media. I graduated college, for example, in 2000 from a state school, Penn State, and the all-in cost was around $10,000. Fast forward 19, almost 20 years later, it's triple that. The wages are fairly stagnant, and that ability to save for most parents hasn't really changed that much, and their ability to work and pay through school for kids like I did, took out some loans and worked my way through school with some scholarships.

Patrick: 02:10 Yeah, I did an in-state school at Delaware, so [crosstalk 00:02:13] similar deal.

Joe Messinger: 02:14 Yeah. Then you've got kids choosing to go to schools that are two to three times that amount. That's compounding it, all without knowing what ultimately the result's going to be on the back end. I think that's where people get in way in over their heads with college, and not realize what the result and what the outcome is going to be for a young adult.

Patrick: 02:32 What's the solution in your mind? Is it just providing more education to families, so they understand what they're entering into? Is it just trying to change the education system, so they're providing better outcomes and making that more effective? Where do you feel the bottleneck is right now, or maybe multiple bottlenecks?

Joe Messinger: 02:49 Yeah, I think in general, it's a very opaque process. You've got families that really want what's best for their kids. You've got kids that, all they see is that, they'll go see all the great schools that are out there, not realizing what the money impact is. If we can make it more transparent and help them be informed consumers, just like many other things we do, people are going to have much better outcomes.

Joe Messinger: 03:10 We really feel, our belief with what we're doing, we have an advisory firm, but we've kind of really doing a lot more to raise the bar in college funding advice across the country, because it is so complex, like many of the things we do as advisors, that once you actually understand how financial aid works, and policies, but understanding with 2,800 schools, one right next to another one may have the same sticker price, but what you pay out of pocket could be a 10th of that.

Patrick: 03:36 Yeah. I'm going to be completely honest. I run my own wealth management firm, too. I did financial planning for a number of years, and one of the areas that always scared me was college planning, because there is just so much information. I always felt like college planning was just a way to trick people into getting them into a room and selling them some IUL or annuity or something just to make a commission, but it seems like you've created some really good software and solutions and just a process around helping advisors get this information. Are you finding that advisors are receptive to wanting to help college-bound families with this information? Are you noticing resistance? Where do you feel we're at as an industry to help solve this problem?

Joe Messinger: 04:15 Yeah, I think advisors want to help. Interestingly, everybody that shows up to my sessions when I give talks, they themselves are in their 40s. They're Gen X, they're right smack in the middle of that.

Patrick: 04:25 Interesting.

Joe Messinger: 04:26 They are within that world. They're trying to figure it out for their own kids. Then they're like, "Oh, every parent I know also is going through this." I as a financial planner have no idea how it works. That's a scary thing to me. We're talking about a 100 to $300,000 investment per student.

Patrick: 04:43 We're not even-

Joe Messinger: 04:43 State school [crosstalk 00:04:44].

Patrick: 04:44 Educated to provide advice on that.

Joe Messinger: 04:46 Yeah. There's no training. There's two pages in the CFP curriculum.

Patrick: 04:49 Wow.

Joe Messinger: 04:50 For us, we've deconstructed it and we've got a 10-hour course on it. Obviously there's a lot of layers to the onion of figuring out, how do you comprehensively help families.

Joe Messinger: 04:59 You mentioned a good point about this. The black eye on college funding has always been these insurance folks that, nothing that there's anything wrong with selling insurance, but people that, instead of providing a good service, they're saying, "Just cram all your money in here and it solves all your problems."

Patrick: 05:13 Exactly.

Joe Messinger: 05:14 The reality is, when we look at the formula is what we see, the mass affluent Gen X communities that make 200,000-plus that advisers, CFP professionals work with, their income drives them out. Putting their money into some product doesn't really serve them well. It just ties up their money and gets a big commission for an agent. We're all about actually helping them through a process, bring the stress and anxiety and fear down, so it's not only a great way from the money aspect, but you really have to connect with people and understand where they're coming from. Because Mom and Dad, they haven't even had the conversation. It's shocking to me. They're there 45, 50 years old, extremely successful, and they have never had the conversation about, "What does paying for college look like for our three kids?"

Patrick: 05:57 Isn't that pretty insane if you think about it? You have these kids, the kids are expected to go to school for four years, you're spending hundreds of thousands of dollars, and you've got this open-ended debt on the back end of this, if you're not fully funding it with a 529 or some other investment vehicle, which most people aren't. Then, you're just not having a conversation about that. Your advisor isn't proactively bringing it up and having a conversation with you, because they're not trained on it, because it's too, quote unquote, "complex." What process would help a financial advisor become proficient or become an expert in this area, so that we can provide better advice as an industry on this problem? Can you talk me through how you've put something together and what type of success you've had with that?

Joe Messinger: 06:39 Yeah. I think we've got to take it head on. There's two things that we hear commonly in the industry is, "There's only one way to pay for retirement and lots of ways to pay for college." I tell advisors, that is not helpful for somebody that is staring down the barrel of a 100 to $300,000 bill for three kids. It's just not helpful anymore. They will do whatever it takes to get their kids and do what's best for them. We have to figure out better ways to help them and help them take the stress and anxiety and fear out of this process.

Joe Messinger: 07:13 You've got to start when they're freshman and sophomores in college. College saving is obviously the best way to get there, but only 17% of people that have kids even have a 529 plan, or a saving strategy. Yet, the number one financial concern of study after study is, "How are we going to pay for college for our kids?" There's a disconnect there. Then we've got advisors that are going to say, "Okay, you just had your 1-year-old. Save $783 a month, and you'll be able to go to a state school in 18 years." They're like, "Well, we've got 100." Talking them through not only how to save for college, but how to pay for college.

Joe Messinger: 07:51 "Paying for college" conversation includes walking them through financial aid opportunities. Are they need-based candidates or are they not? If they're not, let's focus on schools that give scholarships. Because some of our top universities, for example, they just do not have scholarships. About 300 of them, they don't have academic scholarships.

Patrick: 08:08 Is the answer ever, like, "You haven't saved enough, and it doesn't make economic sense for your kids to go to college?" Is that ever a conversation that an advisor would be expected to have? Because I know parents are going to have strong opinions generally about whether they want their kids to go to college or not, or the kid could have strong opinions about it. Do you think a financial advisor, that is their place, if they notice that the economic gap is so large from what the parent was able to save and what college costs, to say, "Hey, it's not in the cards?" I feel like a lot of advisors might be pretty scared by that. Do you feel like that's an appropriate thing to say? Or do you just try and plan around that potential reality?

Joe Messinger: 08:43 I would say, as advisors, you need to get more comfortable having uncomfortable conversations. You can't shy away from these things if you really want to be of great service to your folks. Because like you said, it's helping them see into the future, and, "What's the outcome if you go here? If you go here, how do we pay for all four years down to the penny, and what's the student loan and the resulting student loan payment?" That's where we feel like we pick up where other softwares leave off with our College Aid Pro, because it's helping them see. Because they're like, "Okay, they got in," they're like, "We'll figure it out." It's like the "hope is not a strategy" kind of conversation.

Patrick: 09:19 Yeah, that's not going to work.

Joe Messinger: 09:19 We need to figure out, what does all four years look like, because it's not a one-year proposition. It's four. Most kids don't even get done in four. It's helping them understand, "If you go here, you're going to have $80,000 in debt, and you're going to have a $900-a-month payment. You're 23. You're trying to start your life. How do you feel about that?"

Patrick: 09:36 Crazy. Yeah. At least laying out the options so they realize what the financial consequences are, instead of just blindly entering into a decision and saying, "We'll figure this out later."

Joe Messinger: 09:43 Yeah, and to your point, how do we help them see into the future? That's where the rubber really hits the road. Because I think very few advisors probably meet with 17-year-olds like we do in our practice, but that's after we've already talked to Mom and Dad. One of the first things, before we even show them some of their schools they're looking at, I'll just ask them, "What's the most amount of money you've ever made in a month?"

Patrick: 10:05 That's a good question.

Joe Messinger: 10:06 It sinks in. They're like ...

Patrick: 10:07 "Five bucks."

Joe Messinger: 10:08 "$300," a really motivated kid. I'm like, "Great. If you go to this school, XYZ University, you're going to have a $900-a-month payment." They're like, "Wow." That's where rubber hits the road, and kind of that uncomfortable conversation. It's good cop, bad cop with parents, but their parents could tell them the exact same thing, and anybody who has teenagers knows this, but if it comes from somebody else's mouth, it sounds completely different. It's just being that third party.

Patrick: 10:36 Got it. Just before we get into the solution in greater detail, what's your opinion about college and just the general sense of this problem? Do you feel strongly about the fact that people should go to college and be educated and take out this debt? Even if it is economically feasible for them to do that, do you feel like the system is doing a good job of training up America's next generation to be productive humans? Where do you stand, I guess, with your belief in the education system?

Joe Messinger: 11:06 There's a couple of things in there. I used to, and we still do, have a ton of information about the value of doing a community college for two years and transferring, the value of doing a trade, and the shortage in trade. I talked to a guy in the airport last week, and he said, "I work in Ohio, and I work with electrical folks." He's like, "I could place 10,000 of them tomorrow."

Patrick: 11:28 Wow.

Joe Messinger: 11:29 "There's such a shortage."

Patrick: 11:29 Yeah, I know. I feel like the trades need bodies like crazy.

Joe Messinger: 11:33 Yeah, there's no doubt.

Patrick: 11:33 If you go and [crosstalk 00:11:34] a plumber right now or an electrician, you charge $200 an hour, and there's a backlog of people who are ready to hire you.

Joe Messinger: 11:38 Yeah, the supply and demand there is huge. Just driving here from the airport and in Austin, I saw 17 bridges under construction in a 10-mile drive.

Patrick: 11:47 For sure.

Joe Messinger: 11:48 It's crazy. Those jobs are out there, the community college thing's out there, but at the end of the day, the communities most of us serve as CFPs, we live in nice little bubble communities where everybody makes a couple hundred grand. Those are the clients we want because they have resources, and they just envision that traditional four-year college experience for their kids. Instead of me telling them, "You can't go," I just say, "Let's understand your trade-offs here."

Patrick: 12:12 I like that.

Joe Messinger: 12:12 "Let's understand what that looks like. If you don't know what you're going to do at all, if you have no clue, we're not going to send you to Carlton for $72,000 a year. You're going to go to community college for a year, or take a gap year." It's just helping them be informed around it, and against showing them that result.

Patrick: 12:29 Like it.

Joe Messinger: 12:33 I used to be like, "Yeah, we can do these things, you can do these courses in high school and go to community college," and the parents are like, "Well, no, we want our kids to go to Clemson or UNC or Duke." It's not our job to make that decision.

Patrick: 12:43 Yeah.

Joe Messinger: 12:44 It is our job to inform them.

Patrick: 12:46 To facilitate options and facilitate discussion around it.

Joe Messinger: 12:48 Yeah. It's just helping them understand, we've got options, are they open to those things? Some parents are. Some parents really are. They're like, "Yeah, I don't know if they're exactly ready for a big university yet, but if they spent some time, get some of the gen eds done, get used to college." Some parents are more open to it than others, but a lot of them, it's just, they envision that great experience. I don't blame them. That's what I think my parents envisioned for me too.

Patrick: 13:11 I don't think it's on us to project our values onto the client. I was just curious. What has been your experience with, I guess, building client relationships, using college planning as a tool to help people make better decisions? Have you found that you introduce college planning, people are really receptive, they latch onto it, you have a couple of meetings and they become wealth management clients of your firm? Have you found it to be more of a one-and-done project-based service? Where are you seeing this fit for today's advisor?

Joe Messinger: 13:37 Yeah. We have evolved over time, how we've approached this. One is just because of bandwidth. As we've grown, we've been around 10 years now, so our current clients are more important than our next client. That's why I say, because they're very valuable to us.

Joe Messinger: 13:51 When we started, we did standalone services. We would do like a $500 college affordability session. Over the years, just because of capacity, we just said, we want to make sure that we're doing financial planning for college-bound families, not just college planning.

Patrick: 14:08 I like it.

Joe Messinger: 14:09 Because that that grows into, like you said, more important relationships. We've really just discovered that, to really serve college-bound families, a lot of times it's about trade-offs. We'll walk them through, we do what we call a Foundations plan for a small up front fee. I call it our dating phase, it's usually three to four meetings. At the end of that, we're going to propose ongoing investment management, or retainer business.

Patrick: 14:33 Got it.

Joe Messinger: 14:33 That's kind of how we've developed it. It works well for us, because we're definitely at a point where there's clients that we have no desire to work with. We can find that out though in a six-week relationship, instead of having to get them to commit-

Patrick: 14:49 A couple of years, and then they end up churning out, or you end up firing them because they're not a good fit.

Joe Messinger: 14:53 Yeah. Those trade-offs, I think, you have to nail it with college planning, but when somebody comes back and they say, "They got into American University, and we really want to do that for them," I say, "All right, let's figure it out. It's full price, but let's talk about what you can cashflow each year. Can you increase your cash flow to this by 500 bucks a month? Maybe that means we reduce your 401k down to just the match for these couple of years," but then you've got to put it in their plan, but then it bumps back up later. Right? People were like, "Oh, you can't do this." We're like, "Well, no, think about when college is done, and then they're going to save an extra 25 grand a year."

Patrick: 15:30 Yeah. They're going to have extra income.

Joe Messinger: 15:30 Into their plans for 10, 15 years. People love seeing that trade off. They're like, "Will you work an extra two years?" They're like, "Absolutely, I'll do that, if it means we can send her to the college of her dreams." Other people say, "Hell, no. I'm done at 50."

Patrick: 15:43 Yeah. It's just a black and white decision for them at that point.

Joe Messinger: 15:46 Yeah. Like you were saying, it's not our job to project, but it's just, you have that good open dialogue and feedback. One of the things about doing college planning, the ability to break down barriers in a discovery meeting, it's just not that difficult. People always ask, "How do you open conversation?" They're like, "Well, here's all our money. We've got this in 529, [inaudible 00:16:07] Grandpa and Grandma." I just go, "Whoa, whoa. We're going to get to the money. Obviously you're in a financial planning office, but let me learn a little about you and your college experience first." "What do you mean?" "Well, where'd you go to school?" You're learning their alma mater. "What did you go for? What do you do now? Is it even related?" Because you're getting context around how they're forming their-

Patrick: 16:27 Yeah, how they're thinking, their mindset around it. Yeah. Did they have a good experience, did they have a bad experience?

Joe Messinger: 16:33 "Did Mom and Dad pay for it? Did you take loans? Were you part-time?" You really get this context, but the difference between Mom and Dad, their paradigm in they're thinking about college can be completely different. One went to private school, all paid for by Mom and Dad. Another one, part-time, seven years, loans, worked 20 hours a week. Bringing those together is important.

Patrick: 16:56 It's probably hard too, because I'm sure that it doesn't line up all the time between the spouses. Usually there's probably one person who is on one side, and the other who is maybe on the other side. I'm sure in some cases it does line up, but it's probably an interesting discussion to have during the discovery meeting.

Patrick: 17:09 Hey, Model FAs, I know that you're enjoying this episode. I wanted to talk to you about a program that we're releasing. It's called the Model FA Accelerator. It is an intensive experience where we're going to bring you to Austin, we're going to help you solve the biggest problems in your practice, how to pick a niche, how to build a consistent marketing strategy, a sales process that actually converts, and how to scale it all up. If you're curious about that, go to www.modelfa.com/accelerator. Book your call and we'll talk to you soon.

Patrick: 17:41 If you're an advisor, let's say you want to get into college planning, what's the first step to becoming an expert this and to have these types of discussions? What's the process look like to make this a profitable endeavor, but also be able to help people?

Joe Messinger: 17:56 Yeah, I think there's always a few things. Like I talk about, if you want to look at marketing a product or service of any kind, are you the real deal? Do you know what you're doing? Education is important. This is an area we know most advisers lack education. Quite honestly, some firms just flat out say advisors can't do it, because they can't regulate it and they can't train them on it.

Patrick: 18:17 Interesting.

Joe Messinger: 18:18 That's thing number one. If you've got the ability for training, which we hope we've put together some great training for advisors to know, and then the next piece is, is it marketable and profitable? How do you go to market with it? We know that there are 16 million kids in high school today. There's 4 million that'll graduate roughly each year, and 68.4% of those go right on to college.

Patrick: 18:40 There's a market.

Joe Messinger: 18:41 You've got a market, and it's a constantly renewing market. That's what we see too. As our firm, as we've grown, we're like, "That's great, but we only want 150, 200 clients in Columbus, Ohio. We can do that, we're about done."

Patrick: 18:54 Yeah. Good to go.

Joe Messinger: 18:54 Now, we want to take this, and we really feel like we've made an impact with these families. We feel like advisers just have this opportunity to raise the bar on advice, CFP professionals, like, "How do we really doing this?" Because telling them, "We don't really do that," that's just not helpful anymore.

Patrick: 19:12 Yeah, no. It's definitely not going to solve the problem that we just outlined in the front end of this podcast.

Joe Messinger: 19:18 The last piece too-

Patrick: 19:18 Yeah, yeah.

Joe Messinger: 19:19 Just to-

Patrick: 19:19 Fill it in.

Joe Messinger: 19:21 Do you have education? Can you be the real deal? You know what you're doing, is it marketable, is there a market, can it be profitable? Absolutely it can be. Then the third piece is, you need great tools to facilitate those conversations.

Patrick: 19:31 I think advisors would really value that, because obviously there's some complexity around college planning in general, and most advisors aren't trained on it, as we said, two pages in the CFP. What does the tool that you've built do exactly? How does it work? How does it help the advisor provide relevant information to the prospect, to get them interested in the next step?

Joe Messinger: 19:50 Yeah. College Aid Pro, I'd say, it's two things. One is, it's a community of advisors that are looking to serve families in this capacity. We've got a backdrop where advisors communicate with one another. We do biweekly round tables. Topics are always changing, always evolving. We think that ongoing community vibe of advisers that want to serve this, just like there's a state planning focus and there's tax focus. There's lots of things you can focus on. This is just a scenario that's been I think overshadowed.

Joe Messinger: 20:16 Then the tool really helps advisors ask the questions they don't know they needed to ask. No, not a lot of advisors ask for an ACT score and a GPA.

Patrick: 20:26 Yeah, no.

Joe Messinger: 20:27 For a 16-year-old.

Patrick: 20:27 That's not a common question.

Joe Messinger: 20:28 Yeah, but we know that with our software, that is what's going to drive their scholarship estimates. A lot of software and tools that are out there, there's great tools for families that are need-based financial aid candidates. What we've found is, myself and my partners in this project, is that, there just really wasn't a great tool for these mass affluent families that really, "Okay, we're not financial aid candidates." They go to the financial aid night at the high school, it's a waste of time.

Patrick: 20:55 Yeah. It's like, "You don't qualify."

Joe Messinger: 20:57 Because they're like, "Well, great. I'm not going to get Pell grants," and this and that. Those things are great. We need those programs, we need that service, but for the communities we serve, for the most part, it just doesn't really help them. Ours is projecting merit scholarship, getting you what you need, and it also helps facilitate filling out financial aid forms on the backend, so all the questions and all the prompts you need to stay organized, ask the right questions, keep a school list. What's coming in the next evolution is even going to be triggered alerts that the advisor doesn't have to think about for deadlines, communication, an email, "Hey, your application for XYZ University is due on 12/1, don't forget."

Patrick: 21:34 Interesting.

Joe Messinger: 21:34 Some automation around that, scholarship application deadlines are going to be part of our automated process in the backdrop. It's really meant to be an end-to-end, and on the back end it's, how do you actually pay for it and compare schools side by side? What's the net out-of-pocket cost, then what's your gap, and what's your loan?

Patrick: 21:50 Does the tool do that?

Joe Messinger: 21:50 Yeah.

Patrick: 21:51 Does it calculate the net out-of-pocket and all the expenses, and-

Joe Messinger: 21:53 Yeah.

Patrick: 21:53 Forecast those things? It does.

Joe Messinger: 21:54 Yeah. We project it. There's a projected, which we found this year is usually within about a 90% accuracy. We usually try and low ball a scholarship, because it's difficult. We've got a lot of good algorithms around it, but we've gotten very close. We always say, we want to over-deliver, under-promise with those things, because they're not guaranteed and it changes year to year. Yeah, it'll project it, and then we've got a good idea going in.

Joe Messinger: 22:18 Before they even step foot on a college campus tour, they've got an idea, "Okay, this is what I learned about this school. This is the way they do financial aid. I can go in with a profile printed off from College Aid Pro and say, okay, they give scholarships to 35% of incoming freshmen, and their average ACT was a 28. We have a 32, so if we go here, we're going to have a very good chance of scholarships," for example.

Joe Messinger: 22:41 That's the kind of power we put in the consumer's hands. Advisers can just, that financial aid piece is something that, we're talking big money. We're talking 20, 40, $60,000 of scholarships, when you know how to do it.

Patrick: 22:53 [crosstalk 00:22:53] That's huge. I'm surprised high schools don't have access to something like this. Have you ever thought about providing the software to a high school who's advising on college admissions and things? Or they don't care? I don't know enough about the process.

Joe Messinger: 23:04 Baby steps, Patrick. Baby steps.

Patrick: 23:05 Yeah, okay.

Joe Messinger: 23:06 No, we do want to get there.

Patrick: 23:07 You would think that that would be a critical aspect of what they would do with the college admissions process, but I guess just, it's not.

Joe Messinger: 23:12 Yeah, and I think they're being pushed to have that conversation more and more, but as a college admission counselor, or a college counselor at a high school-

Patrick: 23:20 You don't have the background.

Joe Messinger: 23:20 You're not a financial planner. Financial planners are shying away from it, counselors at high schools are shying away from it. It's kind of like, if we can-

Patrick: 23:27 That's why we're in this situation.

Joe Messinger: 23:29 Yeah, build this tool and bridge that gap. Some employers, that's another area that we're looking into, is doing some more employer work, employer workshops and things like that across the country. It's a good way to access them.

Patrick: 23:39 I'm trying to think, who's attention do you get with this offer? I'm assuming it's the parents have the college-bound kids, and you get their attention and say, "Hey, we can help you make the right decision as it relates to your kids' college. Right now, you probably don't know exactly what you're doing, what it's going to cost or where they should go. We can just give you certainty around that." I'm assuming that's the message that the advisors come into the marketplace with.

Joe Messinger: 24:01 Yeah.

Patrick: 24:01 Then it's, "Where do I find these people, and how do I find them profitably, so that I could put them in the software and give them the advice that they need and build the relationship with them?" Have you found that that's best done just networking in the community, working through high schools, working through online marketing with Facebook and things like that? Have you noticed anything that would allow the advisor to consistently have these discussions, so that they can leverage the software, leverage this process and grow their business?

Joe Messinger: 24:27 Yeah, so a couple of things. I think the one thing that we're trying to create a groundswell with is the big idea, which for us is college preapproval. We think college should be pre-approved just like a mortgage. You need to know how you're going to pay for all four years down to the penny, including the loans and the payment. It's kind of this idea, and I tell people, if I walk into a bank and I throw up a picture, like I was in San Diego, so I threw up Tony Hawk's house. I was like, "I don't have Tony Hawk's resources and I don't need two pools, one of them that doesn't have any water because I don't skateboard." I get laughed out of there, because the bank doesn't think I can repay that, but we're having 16, 17-year-olds forced to make that decision not understanding the outcome.

Joe Messinger: 25:05 That kind of big idea that resonates a lot, and we're hoping that that is the movement, that if we can get people to understand, the reason people get in trouble is because they get over-committed, but if you have your budget going in, novel concept for college, like you actually have a budget and a maximum student loan amount that you're going to take, then that's kind of that idea.

Joe Messinger: 25:24 It's actually a very simple, we have a one-page college funding plan, so that hook to get people to come in. If you want to work through your one-page college funding plan and get pre-approved for college, after a session or workshop, that's the way to do it.

Joe Messinger: 25:37 We've tried a lot of different things obviously over the years, but I really advocate for building strategic partnerships within your community. Because in our market, we've got a lot of market participants that just don't do what we do. Our best resources are ACT prep companies, career counselors, independent education consultants, lacrosse clubs, football camps, all of those organizations. You don't need that many of them. All of those-

Patrick: 26:04 Yeah, because they're dealing with those families all the time.

Joe Messinger: 26:06 Yeah. We're wash, rinse, repeat, two, three times a year with each of these organizations. It's-

Patrick: 26:13 You're good to go.

Joe Messinger: 26:13 A hundred person each, a hundred people come through. I think the one part of what we're doing, as far as success is, what we've learned too is that, you have to be patient.

Patrick: 26:23 As with anything in life.

Joe Messinger: 26:24 With anything, right? I think people really, they raise their hand when they're ready with this. Somebody might come to us with an eighth or ninth grader, and they could totally benefit from working with us right away, but-

Patrick: 26:35 The pain is just not strongly felt enough yet.

Joe Messinger: 26:38 It's just not there. Yeah. I think a newsletter is probably the best tool we have.

Patrick: 26:41 For sure.

Joe Messinger: 26:41 We send it out weekly. Some people, you know, "Should we do it monthly or weekly?" For us it's weekly, because there's all these trigger points. Just capturing that data, continuing to add value, which I know is things you and I align on a lot.

Patrick: 26:52 Oh yeah, 100%.

Joe Messinger: 26:53 Even if they don't work with us, if they forward it to a friend, that's awesome. Or if they get good value and they can do it yourself, better with our tools.

Patrick: 26:59 For sure.

Joe Messinger: 27:00 You have to have this abundance mentality.

Patrick: 27:01 Yeah. You're not going to be able to predict in advance who's going to be the ones that are going to resonate and attach with the offer, and then come and become a client, but on average, enough people are going to have this problem. If you're relevant, you build intimacy and trust with them, a certain percentage are going to take you up on that project. They're going to go through the software. Some will see the need and they're going to become clients.

Patrick: 27:21 What is your, I don't want to say success rate, but of the advisors in the community that participate in the community, they use the software, how many of them have fully adopted this into their practice? Are using it as an arrow in the quiver? Have they completely rebranded and now they're just doing financial planning for college-bound families? What are you seeing, as far as adoption and people circling around this pain point?

Joe Messinger: 27:45 Yeah, kind of the models that we see are successful, that we've just seen evolve as we've done this, people are at different points in their practice. There's three things we would say. Be the expert, have an expert, or outsource it.

Joe Messinger: 27:58 Be the expert. If you're new, we've got a lot of fee-only advisors that are just coming online, and they're like, this is a great way, especially for a younger adviser, to go up-market. If they're 28, 29, now you can go talk to 45-year-olds about something that's really near and dear to them, instead of just working with your 28-year-old that just had kids.

Patrick: 28:15 For sure.

Joe Messinger: 28:15 You can find half-a-million to a million-dollar portfolios, and really add value for them.

Patrick: 28:19 Absolutely.

Joe Messinger: 28:20 Be the expert, make it your niche. We've got people adopting that way. Another model that's been successful is, people that, they're more experienced, more tenured in their practice. They know that, based on studies, we're not really serving Gen X, but we're going to have to, because we also know that $30 trillion is going to transfer to Gen X over the next 15 years.

Patrick: 28:39 Oh yeah.

Joe Messinger: 28:40 There's Gen X wave that's coming. We also know that 66% of money leaves the firm when Mom and Dad, Grandpa and Grandma pass away. What's your strategy to retain? They're having a 28, 30-year-old advisor right in the middle of Mom and Dad and their student facilitate and be like the laser expert, whereas they're not going to know everything about options and trusts and all this stuff, but with this college stuff, they can get dialed in.

Patrick: 29:03 Yeah, kind of barbell the practice a little bit. You've got the older clients on the right side, the younger clients on the left.

Joe Messinger: 29:09 Yeah. If you've got that younger advisor that you're kind of like, "What do we have them do?"

Patrick: 29:12 For sure.

Joe Messinger: 29:12 Yeah, that's been a really nice model for them to add value, because they want to contribute and participate. They're like, "I'm a brand new CFP," but this is an area, like I said, they really gravitate towards. That's been successful too.

Patrick: 29:25 That's awesome. How long has the software been live? Is it something that you've been running for years now? Did you just come out with the software, and it was something else before? Just more of an info product, a course? Talk me through the evolution of this whole thing, and where it's at right now.

Joe Messinger: 29:37 Yeah, it's kind of wild. We really came online in 2017, so really it's a couple of years in. Started with education and training, and then we built out some marketing support. Then, probably about a year in, we started working on the software. We've been working on it for a year and a half. We just went live with it for sale in October of last year.

Patrick: 30:01 Oh, nice.

Joe Messinger: 30:02 Now, we've got about 100 advisors on it over the last few months. Looking to [crosstalk 00:30:07].

Patrick: 30:06 Is it free for community members? Is it community-plus software? How have you structured it?

Joe Messinger: 30:14 My belief is, keep it simple. Keep it low cost, high value.

Patrick: 30:17 Nice.

Joe Messinger: 30:18 We just say, 69 bucks a month.

Patrick: 30:19 Oh, that's cheap.

Joe Messinger: 30:20 You can have unlimited cases ...

Patrick: 30:21 Oh, cool.

Joe Messinger: 30:21 For now. We will continue to increase that price because we're investing a lot into the community and the product, but for now, we're just following a lot of other technology companies and saying, "If you want it now, you get lifetime pricing at this level."

Patrick: 30:37 That's nice. That's a good deal. I've got to get with the guys on my team so that they can sign up.

Joe Messinger: 30:41 Yeah.

Patrick: 30:41 I would, but I suck at financial planning now, because I do too much marketing and sales and everything else.

Joe Messinger: 30:46 Yeah.

Patrick: 30:48 That's awesome, man. You're solving a really big problem for a market that needs the help, and you're training up advisers to be able to get on board with that mission, and to not only get on board with it and help people, but to increase their income and grow their practice in an area that has historically been hard to penetrate. That's one thing that advisors have struggled with, and I think why a lot of them haven't focused on that Gen X market is, it's hard to find a pain point that's salient enough to get them to take action. I feel like college planning is one of those things where, for the right person, you're selling a painkiller and not a vitamin. If they're actually going through that problem, they're going to take that and they're going to be like, "Wow, this is a painkiller for me. I'm going to take my medicine and I'm going to become a client."
Joe Messinger: 31:29 Yeah. I have to say, there's very few things within financial planning to have a deadline and a benefit.

Patrick: 31:34 That's a good point.

Joe Messinger: 31:34 Taxes, you've got to do every year. You never have to do financial planning, right?

Patrick: 31:38 No. Yeah.

Joe Messinger: 31:38 Because you just wake up and-

Patrick: 31:39 You can always put it off.

Joe Messinger: 31:39 Everybody's looking for the 64-year-old with the 1.5 million liquidity event, but if you can catch them now, what we see in our practice is, you can really solve that. Like I said, it's a constantly renewing market.

Patrick: 31:50 You're clients for life, I'm sure.

Joe Messinger: 31:51 Deadline and a benefit. I mean, you crush it with value in the first year or two.

Patrick: 31:55 Oh, yeah.

Joe Messinger: 31:55 Because you're helping them with, what's their most important thing to them? Their kids. I would venture to guess, most advisors don't even know their clients' kids' names.

Patrick: 32:03 They absolutely do not.

Joe Messinger: 32:06 It's a really great way to build deep relationships. What are the gifts we send? We sent graduation gifts. We send a blanket for the college they're going to.

Patrick: 32:13 Nice.

Joe Messinger: 32:14 How much does that hit home? [crosstalk 00:32:16]

Patrick: 32:15 Oh, yeah. That's super.

Joe Messinger: 32:17 Little things like that we're able to do and scale. It's like, "Who's all graduating? What blankets do we send in?" Things like that, or mugs, or stuff like that.

Patrick: 32:24 Awesome, man. All right. We've got basically a software program, a community offer that's reasonably priced for advisors that are looking to grow in the Gen X market. What are you thinking about the evolution of this whole thing? Are you trying to layer marketing on top? Are you just trying to make the best product you can possibly make, and give it to the advisor so that they can facilitate the process? Like, where do you feel like the evolution is of this whole thing?

Joe Messinger: 32:47 Yeah. What we're working on now is solidifying somewhat of a templated website, but a white label templated website for college planning of your ... It doesn't replace your website, but it'll have calculators, like a scholarship search, like an expected family contribution estimate.

Patrick: 33:03 Nice.

Joe Messinger: 33:03 A couple of free calculators with calls to action for the parents. If people say, "Where do I go," "Go to Capstone Wealth Partners, slash, college planning to go to our college planning page and get it on your website." It'll have the lead magnet, a little lead nurture sequence.

Patrick: 33:19 Nice.

Joe Messinger: 33:19 The most important thing, I think, a template for a good newsletter, and giving some information, some blogs that are ghost written, and you can pepper in your own, but we want to just get folks, give them the tools they need to be successful. Because one of the things that breaks my heart is people will say, "Oh, it didn't work." I'm like, "Well, you didn't even do it for a full year."

Patrick: 33:37 Yeah, you've got to go in on it. You can't just dip your toe in the water and be like, "I tried for three weeks, and I didn't get any leads. None of those leads actually gave me any money." It's like, okay, let's be adults here. Let's work for a full year, two years, and then it snowballs.

Joe Messinger: 33:51 Yeah. Build trust. I think advisors that have the most success, they really have a guttural passion for helping these types of families that they know are experiencing this pain. They're like, "Man, we really get to help them." That comes through. It can't just be about money.

Patrick: 34:04 You've got to commit, too. What I've seen with a lot of advisors, they want to do all things and be all things to all people. It's great if you want to be an expert in a lot of different areas of the business. The problem is, if you don't focus your marketing, if you don't focus your attention, then you're not going to be known for anything.

Patrick: 34:20 I think one of the reasons why you've been really successful with college planning is, you've just decided to be known for college planning. You're not here talking to me about, "Well, I also do retirement planning, and I help with executive compensation." It's like, "No, no. I do college planning. That was the whole episode, and that's all I do, and that's who I help." I feel like that is what advisors need to really take from this, is like, "If I can latch onto something and solve a real problem, there's an addressable market, and I can give them a solution that's going to get them to the next level. That's going to help me grow my business."

Joe Messinger: 34:49 Yeah. 100%.

Patrick: 34:51 Awesome, man.

Joe Messinger: 34:51 It does take time. You've got to keep growing those relationships in the community. You can't just walk into a high school and say, "Hey, I want to do your financial aid night." That's not how it works.

Patrick: 34:59 No.

Joe Messinger: 34:59 Those strategic partners, those folks, they'll give you all the leads you ever need.

Patrick: 35:03 Awesome, man. Well, Joe, thank you so much for coming on the show. Thanks for coming to Austin. Obviously, good luck on the presentation at the NAFA conference. Where should people find you, the listeners, if they want to get more information on the software, the solution, the process, all the stuff related to college planning?

Joe Messinger: 35:18 Well, for the next three days, you can find me at a barbecue joint in Austin.

Patrick: 35:22 Getting the meat sweats going?

Joe Messinger: 35:24 I'm going to get some meat going. Other than that, collegeaidpro.com is probably the best place to find us. Capstonecollegepartners.com is kind of our education resource. Anybody that's an FPA member, you can find us through their portal as well, so, Financial Planning Association.

Patrick: 35:38 Awesome.

Joe Messinger: 35:39 Yeah, find us online. Collegeaidpro.com is probably the number one place to go.

Patrick: 35:43 Sounds good. Joe, thank you so much for coming in and being on today's episode. I'll look forward to hopefully having you on again in the future.

Joe Messinger: 35:49 Cool. Thanks, buddy. Appreciate it.