In this Swift Chat video conversation, Marie Swift speaks with John Enright and Michael Palumbos of Custom Wealth Advisor Network (CWAN). The topic: How John and Mike use a proven process to be more productive, profitable, and powerful when it comes to attracting the right kinds of clients. John had his best year yet in 2020 and Mike also had one of his best years ever. This video reveals their secrets.
Learn more at www.CWAnetwork.com/the-system-ms
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Enright / Palumbos Swift Chat Transcript
You know, John said he was envious of me because I'm charging higher fees than he is. In this case, I charged a fee of $67,000 to do the initial financial planning for every family member and to tie it all together so that generation two knew that they could retire, generation three knew that generation two wasn't going to try to come back to the business because they were running out of money, and we found a nice, easy way for the business to be transferred." ~ Michael Palumbos
Marie Swift: Well, hi everybody and welcome back to another great Swift Chat. I'm joined today by John Enright and Michael Palumbos. We're going to be talking about how they have developed something very cool that could potentially help you with your business – this thing called the CWA Network. So, John I want to start with you, tell us your story, you know, why are you doing this network? Tell us about your practice, your clients. Just give us everything that we need to know about the foundation.
John Enright: So, this dates all the way back to 2002. We've been doing this quite some time and it really started for the same reason that a lot of people license our process and that is because I was just tired of reinventing the wheel over and over again. And not having a clear path as to what I was going to do with the clients or prospects that I was working with. So, we created a unique process and that defines everything that we do with a client through the relationship side in different phases, five different phases. It's become very exciting. We've got numerous advisors who have licensed it across the country and in a few other countries and it's great just to hear their success stories.
JOHN ENRIGHT CASE STUDY
Swift: So, you're a practicing advisor. Where are you located? Tell us a little bit about your business.
Enright: Sure thing. I am a practicing advisor. I am in Syracuse, New York. I also have a small satellite office in Tysons Corner, Virginia. Our practice is somewhat unique, just like everybody else. It's myself and six supporting team members. A few of them are licensed and do trades, but I'm the only one who is client facing. We have 103 clients we take on 10 new clients per year. So, a little bit different in some respects, but, for the most part, it's actually very similar to most practices too.
Swift: And how's it going for you? Are you growing this year? I know it's been a challenging year for many advisors, how's business.
Enright: Interestingly enough, there was a two-week period, right in the middle of COVID, especially being in upstate New York, where we were a little nervous. Things were definitely questionable as to whether or not, not only would we experience growth, but would we fall all the way back to where we were a handful of years ago. And then all of a sudden things changed and we are actually at a point where we are going to have a 30% increase over last year and this will be our best year ever. We brought in more assets than we ever have. And that is also with our, we just signed our 10th client, two days ago, for the year. So, we're extremely excited about this year and what the future looks like.
MICHAEL PALUMBOS CASE STUDY
Swift: Wow. So, Michael, tell us your story. How is it going in your neck of the woods?
Michael Palumbos: Sure. John and I met in 2002. We happened to be in the same office at the time. I watched the new guy come into the office and just really light it on fire. We partnered on a couple of case and so, I started to see little bits and pieces of John's process. You know, for about 10 years till about 2012, I thought that my process and John's were the same and we went through 2008 together and would compare notes and, you know, so 08-09 clobbered me. And after 08-09, I was scrambling. I was chaotic and you know, I was hiring coaches left and right and spending money to feel like I was in control of my practice and I wasn't. One day John and I got together and John took a two by four across my forehead and said, I have been telling you to listen to me, just do what I do and stop trying to reinvent the wheel for every client.
And so, in 2012, where I had grown my practice to 2007 to a very respectable mid six figure practice. I had driven it down by 2012 to, you know, just barely over six figures. So, I took a significant step back. Today, by just following the CWA process and the steps that are available, we're pretty excited to say we're closing in on a seven-figure practice. We’re not there yet, but this will also probably be just like John. It's going to be pretty darn close to our best year in business and a lot of that is due to the confidence that systems and processes put in place. I'll let you know.
I think it's important to understand some of the meat and potatoes of what we do, but one of the things that I think that shines through for me is the growing and the building of becoming a subject matter expert whereas other coaches say partner with subject matter experts. John's like, no, we need to be the subject matter expert because how do you know if, for instance, that's the right, buy/sell agreement, if you don't understand how to read it and how to debrief it, how would you know the difference?
So, that was something that when we started to realize how powerful being a subject matter expert was in our field gave a ton of confidence. So, when you meet with a high net worth client, they know, you know what you're talking about and you're confident in dealing with them. So that's, that's been our story and I really appreciate that 2x4 John.
ABOUT THE CWAN SYSTEM
Swift: So, John, let's go to you next. Tell us about the whole system. It sounds like in the area of becoming a subject matter expert that there's training. There's ready to use materials. Just tell us how that would work for somebody like a Michael who wants to move to the next level and take advantage of everything that you've developed.
Enright: Absolutely. So, I'll start by just saying that I don't believe in build it and they will come. I'm a big believer in letting them come and then building – it which may seem a little backwards, but the point is you can't learn everything that you need to know for every client. So, a lot of times, even today, I'm still learning from the client that I'm working with based on something that's changed in their situation, or maybe it's a new client and they're in a business I'm not familiar with. That's one of the exciting things about this industry - that we get to learn consistently. We never stopped learning and that's one of the things I love about it, but we'd take every client through the exact same process and it's five different phases.
And each phase has a very important role in the relationship and you really can't change the order of those phases. We call the first phase the Foundation Dialogue, and that's really the get-to-know-you process and we collect certain pieces of information as well as learn a little bit about their objectives and areas of their life that they're happy with and not happy with and then from there we go into our initial steps in preparing a presentation, a short presentation that summarizes where we can bring value to the table and that's meeting two or phase two that we call the Strategic Blueprint. And the Strategic Blueprint is where we present the value-add and what the investment is to engage us.
So, for us, we do charge a fee for every relationship. Our fees range for the most part from $5,000 to $20,000, some are more but that's pretty much where the majority of them fit to engage us to do their planning. And that's basically to take them through the process. We certainly have CWAN licensees who do not charge a fee or who charge much smaller fees. And Mike actually, I'm envious of Mike, because he's great at charging larger fees than I am. So, once they've committed and signed our contract and written a check for a hundred percent of the fee, we then move into phase three and phase three, we call the Goals Navigator, and this is certainly the meat and potatoes of the relationship.
And it's really important that when we go through step by step, the areas of their financial life. This can be broken into as many as four different meetings. You've got the estate focus, which is always first. You've got the investment focus, which includes taxes and so on. You've got a financial independence focus, which is any major purchase, including retirement. And then you have a business exit planning focus. So whether they own a business or they're an employee at a company, it's looking at the options that they have. Maybe they have a portability option on a group life, or maybe it's a stock options, or maybe they do own the business and it's succession planning. And how do they get money out of the business? And once we've completed the planning process in Goals Navigator what's important is that we deliver a final plan, and that final plan is unique to every client. The first part of that summarizes their objectives are what they engage the score. What was their goal in engaging us? The second part of that is a written summary of all the concerns and observations that we talked about followed by a written summary of the formal recommendations. And then we give them a snapshot of their plan as if they had never met us. And then we give them a snapshot, assuming that they have implemented the recommendations and then you can really get to the bottom of it and see what's the impact of doing these things.
And then the last part of that is very important, which leads right into phase four. And we call phase four Solutions Activator. And actually, that's the document that's at the end of the plan. Solutions Activator is a simple piece that we put together, basically a Gantt Chart, that provides a direct and catalyst to see that the things that are important to the clients that those get done and get done in a timely fashion, whether it's us, the attorneys, the accountants, or the client themselves.
And then finally and most importantly is the Custom Wealth Inspection – that's phase five, and then that's all the checks and balances. So, we do all this planning for the client. And what's important is that we revisit that planning to identify where we projected we would be, and then help us help them to identify if they're on track or if they've fallen behind or maybe they're ahead.
But what's important is if they've fallen behind, we need to reconfirm that the objective is still important to them, identify why they fell behind, and then help them to determine what needs to be done to get back on track. And having that process has not only allowed us to grow dramatically because we've eliminated a lot of the stuff that happens behind the scenes when we don't have a very defined system and process systems and processes in place, we've just saved so much time. It's given us an opportunity to not only work with more clients, but to do more for those clients. And that really comes down to our identity at a custom wealth advisor network. And that is to do more, to deliver more value in less time and to make more doing it.
CLIENT CASE STUDY
Swift: That's fantastic. So, I'm intrigued. And I'm wondering if either one of you has a story that you can tell about working with a client who had their mind blown? what's happening when you're talking to clients? I mean, I'm a business owner and I'm thinking, that appeals to an entrepreneur, a business owner. They're a little bit of a different kind of animal aren't they, these business owners, different than the average high-net-worth client?
Palumbos: One of the clients that comes to mind was a family in the construction industry. There were three members of generation two. There were four or five members of generation three and when we started to go in there and talk about things the goal was to pass the business to the next generation in a tax efficient manner. Sounds very familiar for a business owner but what they had when, before I stepped in, there were five different financial advisors involved in their situation. There was an insurance person, there was somebody at the bank, there were two different investment people and “my father” (ha!) how's that? So, when dad was in there, he never had gone in to say, you know, somebody needs to tie all this together. And that was the thing that John said to me.
So, when we did the Foundation Dialog and the Strategic Blueprint, one of the things that John and I have going for us that's different is that we serve families. All of the language that I use for the planning processes I slant to address the family business dynamic. When I put together the Strategic Blueprint for this family, we did it both for generation two and generation three and we exposed all kinds of tax issues, all kinds of issues in the investment thinking and then, you know, just going through the business documents and the estate documents, we found things that, because there was a lack of coordination, there wasn't just one quarterback in there looking at everything, we found, millions of dollars of issues. You know, John said, 'I'm envious of Michael because he's charging higher fees.' In this case, I charged a fee of $67,000 to do the initial financial planning for every family member and to tie it all together so that generation two knew that they could retire, generation three knew that generation two wasn't going to try to come back to the business because they were running out of money, and we found a nice, easy way for the business to be transferred. One of the [professionals in the original equation], we continued to utilize.
We redacted all of that planning and competed in the PlanPlus Global Financial Planning Competition. And I'm pretty happy to say that in 2019 my firm won for one of the plans that we created out of the CWA network. So, it's pretty impressive. It was humbling. I was surprised, to be honest with you, because I just never anticipated winning. And so when I went to talk to the judging people, you know, when I was at the FPA event, which is where they presented everything, what they said was, you know, one of the things that they found so impressive about our financial plan was that there was nothing in there that was sold to the client. The plan wasn't designed to sell a product. It was designed to answer the client’s objectives. And so sometimes we could answer those objections with a legal switch in their wills, or one of the trusts or the buy/sell agreement or a tax situation. And if we can answer it with all of those things without selling a product, we still did our job. We earned our fee that we charged.
[In most cases, the client does need] to purchase some different products through what you're doing. [That revenue] is going to be somewhere between four and five times what the fee is. And I'd be happy share with you that in the example above was more than that. It was probably closer to eight times the fee in revenues that had been derived from that family over the last three to five years now.
Swift: Wow, that's pretty serious money. And you guys have obviously cracked the nut on that. You've got this formula; you're proving it in your practices. And so, I'd like to switch gears and to hear how other advisors can actually become part of the network and take advantage of all this great stuff you've developed. So, John, maybe you want to take that one.
Enright: Would you mind if I added the two byproducts that have been particularly exciting about this? One is the incredible relationship you build with the other advisors to the client, the CPA, the attorney, sometimes the CFO, even sometimes the property casualty agent. That's an interesting byproduct that's come about as a result of working through this process and the details that we approach it with.
The second, and I didn't give this too much thought because my practice, similar to Mike's, does focus on high net worth. But I didn't come from working with high net worth folks. I had several hundred clients, when I first started this process and just applied this to those particular clients. And then as we became more efficient and more effective with it, we actually started to find ourselves working with higher and higher net worth clients. But a lot of our CWA licensees have benefited from using this process with their clients, which are far more typical clients, in the advisor community than those that Mike and I work with. So, I'm pretty excited that we may also identify that this CWA process does work with pretty much any client that's out there. And Marie, I forgot your question. May I ask you to repeat that?
Swift: I want to hear more about the network. So, if I'm an advisor, I'm watching this, I'm listening to this salivating, how do I get what you guys are offering, this expertise?
Enright: Sure. Absolutely. So, the network's a pretty exciting thing. And the whole idea behind the network, or the idea of the network was to bring a bunch of likeminded advisors together who are very much client centric and looking to help clients get from where they are to where they ultimately want to be. They that the clients themselves, their families, their businesses. Mike has been great and spearheading the efforts and the websites and everything to help advisors get accustomed to the network. Mike, you're much better prepared to talk about that than I am. My time is mostly spent on further creating and developing the process and Mike's is focused on the interactions with the new persons looking to license.
Palumbos: So, go to the website and just poke around. There are videos, there are blog posts, there's lots about the product and you know, what we tell people is take your time. This is for some advisors; this is a big leap of faith because everything in the industry is all focused about product and we're telling you stop focusing on product and it just will happen. So, that's a big mind shift and that needs to happen.
The other thing is to join our Facebook group. So, it's a private Facebook group, and before you are allowed to enter there's a couple of quick questions. We just want to make sure that we're only bringing advisors in or people that should be part of the group, but you can do that for, you know, for free. And it's the CWA Network there on our private Facebook group, and then they're asking John and me questions. We try to chime in as often as we can and we both run busy practices but there's other advisors that are in there. And you can start to get a flavor and a field for what we're doing. The biggest thing, like I said is that that subject matter expert expertise.
If you were to get involved in with the network, we hold a monthly coaching call for members only. And there's obviously a fee for that, but during those calls, we're tackling things like the CARES Act or tackling things like estate planning issues and some specifics in estate planning documents or buy/sell agreements. And it's fun to have those, really geeky conversations that we enjoy because we just learned to love what we do. One of the neat parts of our network is we do have so many CPAs that are also PFS and CFPs, and they, you know, have found that a lot of joy in what we do, because they're already thinking, you know, they love systems and processes built right into there. So, it really is a good fit for that. And for the advisor that's looking to go up market. If you're going fishing, you have to have the right bait. And the CWA Network is the right bait for the high net worth and the business owner client because it answers what they're looking for.
Swift: Well, this is really exciting, and I hope that the people who are watching and listening this will check it out the website and I know that we were talking before we got on for our Swift Chat that you guys are going to do something special for my tribe, for my audience. So instead of going into what that is right now, if you want to share a little bit fine, but we're going to put that on the screen right here for people. And they'll be in the show notes, in the blog, but would you like to share a little bit more about the program?
SPECIAL OFFERS FOR SWIFT TRIBE
Palumbos: Basically, what we've done is we've created a couple of different bundles where we'll bundle some of the different products together. If you're going to serve business owner clients, you're probably going to want to be really good at the 401(k) process. So, we've bundled their 401(k) process with the high net worth and business owner planning process, as well as we've created some bundles for the technical training, the wills and trusts, the buy/sell agreements and tax returns. And then there's an ultimate bundle that we've created just for your tribe, Marie, that puts all of those together. So, the people can pick or choose what they're looking for. And you'll be able to share the links with everybody. We're pretty excited what we put together for you.
Learn more at www.CWAnetwork.com/the-system-ms
Swift: Wow. Wonderful. John, any final words?
Enright: I'll just say simply, we appreciate this opportunity Marie and we're very excited about it and for those of you who we meet through Marie, we're also excited to offer a nice package for you all that will include not only this process, but also the process that we built for 401(k) plans called the 401(k) Advantage.
Swift: I know that advisors are all looking to distinguish themselves. And this sounds like a fantastic program. I really love that you guys have tested this in the trenches. You are practitioners, you're walking your talk. So that's why I was so excited to hear about your story and to have you on this Swift Chat. So, if there's nothing else that like bubbled up, wait, wait, I wish I'd said that, then we'll say goodbye for now.
Enright: There's plenty more to say, but we'll save that for next time.
Swift: Alright, that sounds good. I'll have you back.
Enright: Thank you.
Palumbos: Thank you so much.