Swift Chat with Reese Harper: Don't Call it Financial Planning

In this Swift Chat video conversation, Marie Swift speaks with Reese Harper CFP®, founder of Dentist Advisors and CEO of Elements. The two discuss how Harper built both Dentist Advisors and Elements, the importance of taking user psychology into account when building software functionality, and what goes into creating a sustainable financial planning practice for the next generations of clients.
 
To learn more about Reese and his podcasts, presentations, and consulting services, connect with him on LinkedIn:
Linkedin.com/in/ReeseHarper/.  You can learn more about Elements at GetElements.com.

Listen to Podcast/Audio Version

    This is a financial wellness platform. You're engaging with these customers, not in a big lift way, but in a, 'just in time' kind of way. And, if you've ever learned about instructional design, a lot of the audience will be familiar with this, but "just in time" is the new way that the Gen X, Y, Z wants to interact."  ~ Reese Harper, CFP®

Transcript of Conversation

Marie Swift: Hey everybody, welcome back to another great Swift Chat. I am joined today by Reese Harper. Reese is the founder and CEO of DentistAdvisors.com. He also has a very cool software called Elements, which is available to other financial advisors to use. So Reese, thanks for being here. Can't wait to hear what you talk about with me today.

Reese Harper: Thanks, Marie. Good to be with a legend in the industry. Always appreciate your insights. It was fun to have you on my show a little while ago, on Elementality podcast, and you did a great job and got a lot of good feedback about it. So thanks.

Swift: Thank you. You know, it's just great to have all this great technology. We can be together remotely across the miles, and that's been important, especially with all the lockdowns and the disruption to our lives. But I wonder just how things have been for you as a practicing financial advisor and also the founder of this budding software company.

Harper: It’s been awesome. I've just really enjoyed being able to use... I'm kind of a creative. And so the creative side of my brain is where I love spending most of my time and whether that's brand building or getting marketing campaigns off the ground, content, copywriting, demand generation-- I love that part of the advisory business.

And I love the client part. I love talking to clients and interacting with them and listening to them. But it was really nice to have-- five years ago or so I met a really great COO that has been with me since then. And he's able to run the linear side of the business, the left-brain side, and give me a little peace of mind.

So that's been nice. And it allowed me to pivot and start this software fintech platform. And it's been a blast to just... we're about to release our product on all platforms here over the next couple of weeks. And it's just been over a year of building to get to this point. So, we're pretty excited.

THE ESSENCE OF ELEMENTS

Swift: Well, so let's start with Elements and then we can backfill about Dentist Advisors and your niche practice there. So how did Elements come to become this thing? And you said it's available on platforms. What do you mean by that?

Harper: Well, we launched a beta and sold that to advisors on iPhone, to start . We didn't have a web product for the computer, and we didn't have an Android product. We started even before iPhone, I started on spreadsheets. So Elements is essentially a platform that lets you... you'll understand this better than most, Marie, but the cost of customer acquisition for financial advisors is really high.

They have to spend $3,000 or more. Some firms, they're really inefficient. It might be like $5,000 or $6,000 to acquire a customer. Some might be more efficient and it's still thousands of dollars, to acquire a client. And so what Elements is focused on is really trying to increase the top of funnel for the advisor, to get them in front of clients with a product that can be really valuable, even though someone might not be a customer yet. And it provides advisors with insights to know how to interact and what to say and how to talk to clients that have financial situations.

So, if you think of the product as like a hybrid between a piece of financial planning software and a CRM and communications software, that's kind of what we're building. It's kind of a new category. And it started just inside of my advisory firm, me trying to figure out a way, "how can I get more dentists to engage with me earlier in the buying cycle?"

And then "how can I get them to buy into a philosophy and learn and start coming to webinars and start like engaging with my content and then convert more people?" If I can widen that top of funnel and get more people in it, then my conversion rate [will improve] -- and if I can improve my conversion rate slightly, by having a better product, then I can grow faster and that's proven to be the case in Dentist Advisors. Even though we didn't have all this automation that we have now, the product through spreadsheets and Salesforce and Adobe and design and email and texting. We were able to prototype it and grow the firm. And then now we're just at the place where we can automate all the parts that were too hard to automate.

That's where the origin story was and the objective of the product. So it's meant to help you do all the financial planning that you need to do. It's a scorecard of elements that tells you where your clients are strong and weak, maybe which areas of improvement they need to focus on. And it focuses on generating insights for the advisor around relationship building insights, score assessments of their financial profile, progress monitoring, insights, data completeness, and data-aging insights.

And that way it just gives the advisors a lot of touch points to sort of interact with clients through either email or through the mobile device with push notifications.

Swift: It’s very cool. So, there are 12 key metrics. And am I reading this right, 12 monthly deliverables? Maybe you can just give us a scenario, I don't know if you can tell a story or just tell us how this would work for somebody.

Harper: Let's say I were to put all my clients on the system and the debt insights were to trigger. So, debt insights are one type of insight. It's called the score assessment insight. And the 'elements' are topics or scores that indicate a part of your client's finances.

Debt is measured by taking someone's payments on their debt and dividing it by their gross income and then giving the advisor a score, a debt-to-income ratio for that customer. And if someone's debt to income ratio was less than, let's say 5%, the system would trigger an insight for the advisors saying, "Marie's debt is atypically low."

And when you click on that insight, you'd then be able to read the communication tip and the email and the copy that is being proposed for how to interact. And then just send it right there as it generates that to you in the system. So, I spend a lot of my time doing copywriting.

Swift: I'm glad you didn't say that my debt in this scenario would be atypically high [laughs].

Harper: Atypically high would be 45% of your gross income or higher. That's what we would consider 'atypically high.' And then there's normal, there's low, there's high. There are actually six categories of debt. And then there's also an insight for an incomplete debt score when someone doesn't have enough data to generate a score.

And then we do that with a lot of other elements, like liquidity, which would measure the number of years someone could live on their after-tax assets or cash accounts. And less than 0.25 is less than three months. So, 0.25 is 0.25 years. So that's the years that someone could last, which is three months, anything less than 0.25 would be a very low liquidity score.

And so, we would trigger the "very low" insight and the "very low" client communication tip and the "very low" email to the advisor-- and let them obviously customize it. They know their clients better than we do. But what we're trying to do is just create some standardization around holistic financial planning so that advisors can follow a process.

And then also give them a way to engage prospects earlier in their life cycle so that they can get them into their funnel and then generate insights for those types of prospect insights rather than client insights. They're very different.

EMPOWERING CLIENT ENGAGEMENT

Swift: So, it seems like this would be really handy for advisors who want to spend more time with their families, say at the lake house. And they've just got their iPhone with them. Maybe their spouse said, “don't take your laptop.” So the advisor might see "Marie Swift's debt is atypically high!" and could trigger something so that Marie Swift, who's also at her lake house, could go, "holy cow, what are we doing here?" So, it makes it easy to stay in touch.

Harper: Yeah, it's great. And in that way, what we're trying to do is just empower more lightweight touches that clients can understand and value. We're trying not to be noisy. We don't want to be just noise. So, score assessments are only one type of insight. Another type of insight might be just a relationship building insight.

The system knows that you're missing a phone call to the client's CPA to build a relationship because they've just been onboarded, and it might say, "Hey, you know, this is the advisor that this prospect has, or this is the advisor that this client has. Do you have a relationship with this person yet?"

And it just reminds you to continue to fill out the client profile in a way that makes sure you're not missing these relationship building opportunities. Or "Hey, have you ever asked Marie about the lake house?" Not the value of the lake house, but the why of the lake house -- why did she buy that property, how long does she envision holding onto it? Are there any significant repairs and expenses upcoming related to that property that we need to contemplate in her plan? That's what we would consider a relationship building insight and that is triggered by the data model being either complete or incomplete in a particular field.

And we hope that it just feels really natural for clients to just get these interactions from their advisor that feel like a nice combination between missing data or aging data or missing documents, relationship building, and then score assessments that are just objective. So, we don't tell Marie, "your debt is atypically high," right?

We say, "Marie, it looks like the system has categorized you in the atypically high group. Is this right?" And you know, and it discloses to you like what that group is, it's everyone about 45% of their gross income. And that way, it's like not the advisor being the bad guy or gal, going after the client, making them feel guilty or shamed. But it creates some objectivity to where the system's the one telling me this, and I'm just checking in with you, I want to make sure that this is accurate, and how you're feeling given this reality.

We do that with savings rates and debt-to-income ratios, liquidity, retirement accounts, real estate, business equity, estate planning, taxes. There's just a lot of financial score assessments we're trying to do. And then, like I said, the relationship building and the data aging and data completeness insights.

BALANCING CLIENT CONTACT

Swift: I love this, and I'm a big iPhone user. I take my phone everywhere with me, and sometimes I run my business from my phone and I'm just kind of wishing that my wealth advisor had this. Because one of the things that is missing is a little bit of loving naggy-ness, like "where's your estate plan, Marie? Did you go and get that stuff retitled at the DMV?" Does your system help the advisor do that?

Harper: Yeah, we would consider that a "task." So, if the insight generated requires the client to complete a task, that's different than if it's just an insight that's meant to stimulate a conversation. And so, as of right now, that's on our roadmap. We don't have tasks built-in yet. We're assuming that the task management happens via email right now. And it right now stays on the advisor's radar until the task is complete, but we're planning.

We don't really think clients actually like the feeling of a task being sent to them. That's why we're hesitant to build like just a task manager inside of the client's app. Because if you start piling stuff in there, the client real quickly starts feeling like, "what are you doing?" Even though there are things that you can't literally do for them, right?

I think they would rather have you just like follow up with them and you own the task, but you're following up with the client until it's done. But like for you to put a task in the client's app and it keep reminding them, we're exploring like what the right balance is emotionally there, because this is a service that you're supposed to be providing to the customer, they didn't sign up for this so that they could end up having 50 tasks on their plate to do.

But they also want those things, like what you're saying, it's like, "I want to be feeling like I'm in a process. I want to feel like this is proactive." I think what the client wants is more of an emotional confidence that their advisor isn't missing anything. And, I think we can handle that through a more elegant way than just giving a bunch of tasks to the client. We can notify them when we do things we can tell them what the advisor's thinking about or working on or analyzing.

Like even if the advisor just reviews Marie's beneficiaries on her previous estate documents because they were out of date and came up with some questions. Just if you could know that that happened as a customer, that would be really emotionally confidence-driving, to feel like my advisor is staying on top of things. They're not missing anything. So, we're trying to focus on handling tasks with those kinds of design principles in mind, and it's working pretty well so far.

Swift: For somebody like me, I hate being reminded of tasks, but I also kind of like it because otherwise I forget to do things or... like my hairdresser's started reminding me "do you realize that it's been three months since you had your hair color done?" Oh, thank you. I've got to get in there before the T3 Conference or whatever it is. So, I love that creative naggy-ness about my hairdresser and my dentist, right? I want to make sure my pearly whites are in good shape. Yet I have this love/hate thing with it, but we're all busy people. I wish I could have a doppelgänger go stand in line for me at the DMV, but I guess I’ve got to go do that, right?

Harper: Yeah. I mean, that's what's tough. And you could handle this job kind of crudely with a blunt instrument which would be to just put a list of tasks in the client's app and have them be date triggered and they expire. But it's going to turn into a lot of red overdue tasks because that's just the nature of the way finances fit into people's lives most of the time. Some clients are like really proactive, but this financial planning kind of sits somewhere in between. Like, it's not as urgent as... for most people health and exercise would feel a little more important to them.

Because they're like, "I have to do that tomorrow, the next day." It's more of a daily thing. This is like more of a "I just want to feel like I'm making progress regularly, but I don't want it to be too heavy so that my whole life is not revolving around these tasks." Because the truth is, Marie, there's like a thousand like triggers we could queue up, right? And just bury the client with feeling like 'we're not doing this, we're not doing this, we're not doing that, we're not doing this.' And then it's just...

Swift: Piling on, piling on. So, you want to just like put your head in the hole, you know, ostrich.

Harper: I know! It's a really tricky problem. That's why clients don't generally interact with their advisors' technology, either, because it's not been designed very well. Most of these tech platforms are like spreadsheets that were turned into calculators for advisors. They were designed for the advisor the whole time, and then they put a portal on it for the client, like at the end. And so anyway, we're excited about learning and we're open to learning more than we know right now. But we're really excited about what we're about to launch with here.

BUILDING A SUSTAINABLE PRACTICE

Swift: So let's go back to Dentist Advisors. So, this is where you started coming up with the idea for Elements and you started the test kitchen for it and proving it with your own practice. Talk to us a little bit about how your clients love the whole process and how you came up with the idea and how your growth has been.

Harper: Well, to answer the latter part. I mean, it's been pretty humbling to get to the place where I'm able to sit on a board of directors for the RIA that I founded and not be in the operation anymore. Like to have started it 10 years ago, get it to the place now where it's growing at the fastest rate it's ever grown, managed by other advisors and staff and a COO. And just watching the marketing program be as effective as it's ever been. That's probably the thing that I'm most grateful for and proud of, is just having seen our team actually put together a business that functions, as opposed to, I could see a world where the extreme opposite would be like, "I've got like 200 client relationships, and I'm just buried because I never delegated."

I didn't build infrastructure. And so, as it relates to Elements, I really think one of the things that this did for me was it allowed the client to understand what a financial planning process or service looked like. And that that wasn't the same as Reese being your advisor. I was able to say, "Do you want a person that can get busy and forget about you and go on vacation and then doesn't respond? Or do you want a process that covers everything, that makes sure things happen, and just appreciate the person that you're working with, whoever it is, because the process itself is what you bought." Getting clients to buy a process and not buy a person is probably the thing that Elements did for me that was the most valuable. Getting clients to understand financial planning in a way that made sense in their brain.

I might get to use 12 scores, 12 months, it's 12 things-- even though it's much more complex than that, as advisors know, just getting them to feel like it is something that's repeatable, that's predictable, that they're a part of. And it can't be robotic. If it gets feeling robotic, then it's not helpful, but there's a lot of research that's been done on this.

One of the most popular business books, Gino Wickman wrote Traction, and one of the first few chapters of how to scale a business is getting a strong visual diagram to show your customer of what it is that you do for them if you're in a service industry. And I think that's what Elements really gave us was that it was a visual diagram that a client could understand.

They could go, "oh, financial planning is those 12 things, I can do that, that make sense to me." Instead of financial planning, being really vague. And so, I wrote a post on this on my private, like my personal blog where I just at midnight start writing. I do my best to not be disrespectful to my readers. I try to edit, but it's a lot of first drafts and so it's pretty candid.

But the post I just finished was called "Don't Call it Financial Planning." And I'm just highlighting how... if you want to go see it, it's at TheAdvisor.Substack.com. So the blog is called The Advisor. And the point of this article is just, if you can show the client, the things that you do, that's more clear to them than just saying, "I do financial planning, we have comprehensive financial planning." Those words are really vague, and you don't really know what they mean to people. And even if you both agree that you're delivering financial planning, you could be on completely different pages for your whole career in terms of what that actually means to the client.

So, I prefer a clear visual that shows them what I do. And then I prefer naming jobs, very specifically that I'm doing for people. And I just use like a verb and an object and some context and write these sentences out that are the jobs. Like you could use a verb would be like "examine." I'm going to examine. And then what are you going to examine? You've got to pick the thing that you're going to examine. I'm examining retirement accounts. And why are you examining them? I'm examining them for contribution levels and suitability for you. And you've got to figure out how to say that now in a way that's client-facing.

Because that's a little robotic and probably something that's only for your firm internally. But you look at retirement accounts to make sure that they're suitable for someone's income level and that they're making the right contributions. That's one of like 50 things you do. And if you can get real clear about all of those jobs, now your value proposition starts to get real clear.

And that's what Elements is trying to do, is break down financial planning into these real concrete jobs so that we don't feel like we're working on an unclear, undefined general thing, but a very specific thing, like review an estate planning document for beneficiary appropriateness. It starts to get more clear to the client when you can just like say things in a real concrete way.

Swift: I love it. And "Don't Call it Financial Planning." In fact, you said that with Elements, you don't call it financial planning software because... I mean, does this replace eMoney or Money Guide Pro? I don't think it does?

Harper: We don't. We think this is a new category. Those systems do very concrete jobs at very specific points in time, but they're not very good at maintaining data and updating data and triggering insights. Because there wasn't enough money put into design. That's the most expensive part is designing for the client and giving the client something, they feel like looks like it was designed for them. And then it's also a different complexity. Like I have to invest resources into prioritizing which insights come up at what time and when, and what things, trump other insights. I can't just like dump a hundred insights on an advisor.

Just like you couldn't do that to a client. You have to say, "well, a liquid term score that's below 0.5 is a higher priority than a beneficiary that's been expired for 25 months." Normally, if there's no other insight at the 25th month, we would want to do that job again for this beneficiary update.

But I don't know that I want to throw both of them at the advisor and say, "these are both the same importance level." They're not. So, we have to do all of our innovation around identifying insights and building an insights engine and then notifying the client of certain things versus notifying the advisor of certain things.

And so we can kind of create this nice loop. And so financial planning software, we need to integrate with it. We have to build APIs out to all the systems. So the advisors could run a Monte Carlo simulation off the data or import information that they want to import into whatever system they're using for a particular projection.

But we're solving definitely different problems, I think. And we think that the problem we're solving is the one that we're best suited to help with. And we think we can add the most value here.

NURTURING FUTURE CLIENTS

Swift: I'm thinking about some of the things that RIAs say to my firm when we're helping them with their marketing and their messaging and their branding and things about losing the heirs, that next generation, right?

When their parents pass the baton. So when my son takes over, is he going to stick with my wealth management firm? Probably not. Because he's going to jump out a window when they walk in with the paper binder and that he has no way to do scenario planning and they don't keep in touch with him on his iPhone.

So in the last little bit we've got, maybe you could just talk about modern marketing, how this helps with marketing. You mentioned top of the funnel and communications but give us a little bit more around how this helps with that stickiness with the next generation, the people who are going to inherit the Baby Boomers' money.

Harper: That's where we're targeting. So, like your financial advisor would buy Elements and then they would say, "let's put all of our client's kids on this and let's make sure that we get all of our younger clients that are accumulating and anyone in that X, Y, Z generation." Because the cost of customer acquisition is too high.

I know your son is probably super successful and probably has more money than most kids his age. I don't know him, but I'm just basing that assumption off of my knowledge of you, Marie. But if he's younger, and let's say generally, a younger person in this Y and Z generation, and even a lot of the gen X-ers like me. They might not have a liquidity level that generates a minimum fee, that's high enough for some of these firms to really engage. So, their cost of acquiring that customer is even higher because it takes longer for them to break even on those assets and that lack of revenue.

So the system like this allows firms to start a subscription market that you just can't do in your traditional system very easily. And instead of like having this big lift to get a "financial plan," I'm putting financial plan in quotes, like a comprehensive plan done. You do planning, essentially. You do financial health assessments.

This is a financial wellness platform. You're engaging with these customers, not in a big lift way, but in a, 'just in time' kind of way. And, if you've ever learned about instructional design, a lot of the audience will be familiar with this, but "just in time" is the new way that the Gen X, Y, Z wants to interact. They want to learn about something at the moment it's applicable. They want to have a conversation about liquidity the minute they have it, they want to talk about real estate right when they're at that point of sale. Like they're interested in learning, but you have to have a data model that can kind of anticipate where these conversations are going to show up.

And then you're going to have a lot more people in these systems. Like you're going to have like a thousand prospects sitting in your Elements nurture program. And you're going to have a hundred clients, but you'll know that of these prospects you didn't just like engage and then like cut off the conversation until they have money.

You say, "oh, let me just put you in my system. And I'm going to put you in my free membership program. Make sure you understand how to track your net worth and track some of these key performance indicators, come to my monthly webinar." And guess what -- that customer converts. And if you get that database big enough and you nurture those people through your email content, through your marketing library -- and we provide a lot of language and marketing material for all our advisors to conduct these conversations, because these are conversations around very specific elements and concepts that we think we can help a little bit in that way.

But that type of interaction is what we think... that type of business model is where the future's going. Big top of funnel, lots of prospects, lots of membership program customers, a lot of SAS fees, monthly planning fees that get offset by assets once people have them later on. But you're just going to engage a lot of people and get that funnel nice and big so that you just don't have this aging block of a business that's just not healthy when you want to go sell it. And so that's kind of the summary of how we would think about it from a marketing perspective.

Swift: I think you're kind of like the Albert Einstein of our generation or of your generation, in the planning world.

Harper: That's very generous, very generous. Thank you. In planning.

ADVICE NICHES AND SUSTAINABLE MARKETS

Swift: It's crazy smart and I love everything about it. I’ve got to get my son to sign up with somebody in your network. Is there a network of these advisors?

Harper: Yeah. The cool part is it's also, these firms are developing all these specializations, right? I had a customer this morning and it was like "associate attorneys that do contingency fee cases at large law firms." I'm like, man, I just keep hearing these niches, like Dentist Advisors that I started, they just keep popping up. And I think that's kind of where the next generation's going to be looking too, like, I'm a C-suite executive at a marketing agency, like there's to be a financial advisor. That's like, "oh, that's me." And I think that's where the additional value add is going to come in. Like as people specialize more, you're going to see more of an awareness around career advice and career mobility, which I think is a big factor in improving the value proposition.

I mean, I know at Dentist Advisors, just the fact that we are niche. And just the fact that we know how to speak the vocabulary of our customer, and we know some jobs, emotional and functional jobs that other advisors aren't aware of. Just the fact that we even position ourselves that way- - we get a lot more willing buyers at point of sale because they've already been through our funnel, essentially.

We work with dentists. You have this process called Elements. Everything seems perfect, I'm going to just sign up. So most of our sales calls are just like, their people are way down the funnel. We don't get people at the top, like we're not trying to sell somebody when they're not even aware of us.

We're just selling them after they've been nurtured for a long time. We think that's where this Gen X, Y, Z is going to be. And how Elements can help firms that are maybe-- most everyone listening to this is like, "I've got only retirees, I've got older clients" -- not everyone, but that's the industry. It's like 80% of the industry right now is exclusively servicing the Boomer generation and their wealth. And the Gen X customer is 10 or 15 or 20% of the industry, and that's just starting to shift. And we think every firm needs to make a conscious effort to go after a market that can protect their valuation and grow their revenue.

Swift: Crazy brilliant. I love it. So in conclusion, how do people get in touch? Where should they visit?

Harper: Well, I love hearing from people directly, so if you want to join my Substack, that's a lot of fun. Just my personal blog. If you go to TheAdvisor.Substack.com, I post there probably twice a month with a good article. You can follow me on Twitter @ReeseHarperCFP, I enjoy chatting with people about industry stuff there. And then if you want to learn about the software, you can go to GetElements.com and schedule a demo, dig into some product information there and then there's I've got a podcast called Elementality where we discuss a topic like this with Marie and guests every week. So those are some options, I just look forward to hearing from them.

Swift: Alright. Well, thanks again for making time today. I know you probably have to scoot to another appointment and so do I. I really enjoyed it.
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Harper: Thanks Marie.

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