Growing your business with Income Lab Panel Discussion

foreign

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we'll get going here in just a couple of minutes folks so we got a bunch of people joining

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hey Justin Hey Taylor hi I'm malcoli today because

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I was we had a little glitch so everyone called me probably no I'm

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kidding well nice to see everyone hello good to see you

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I think uh there's still a few people trickling in here but uh let's kick this

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thing off all right so

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um today I'm really excited we've got a um another uh panel webinar or panel of of

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financial advisors or firm leaders um talking about this time using income

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lab to to grow your business and we're going to take kind of the most ample vision of what that means we're going to

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touch on um on uh you know converting prospects to

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clients on retention on even kind of growing the the quality of of the

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retirement income planning experience um so this is going to be really cool uh and we're we've got with us uh Sydney

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Jones Jeff Brown and Derek dark most people know Derek he's been on a lot of our our webinars but um as you know

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Derek is uh also a a financial advisor so I thought I'd start before we kind of get to the our questions and our

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conversation um with an opportunity for everybody to just share a little bit about your your

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firm um maybe your role in it how you use income lab in your practice

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um and maybe in particular what sorts of clients you typically work with and kind of the role of financial planning and

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retirement income planning um in your practice that'll help the the audience kind of understand the range of

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uh experiences that that are on the panel here today so let's let's start with Sydney here

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just one housekeeping item we if you have questions along the way please put them in the Q a and if you see a

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question that you would like to hear answered you can like it and we since we won't have time for all questions

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um the ones with the most votes will get addressed so sorry to interrupt just wanted to say thank you thank you the Q

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a situation and back to you you can tell I've never handled the housekeeping thank you

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all right yeah so Sydney tell us a little bit about you and and your firm

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and so on sure so um my practice is about two and a half years old now

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um I am a career changer I I took the cfp exam in 2017 and then after working

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for an AUM firm for three years I left to start my own print planning practice and I am a part of cgn advisors

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um all of my client experiences or client engagements uh begin with a fixed

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view plan and most of those plans are retirement plans um I find that that's what most

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prospects are looking for and they are essentially my peers so it's a very good

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fit for me um my goal is to have a lifestyle practice so I try to do about two plans each

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month sometimes um my queue gets a little full and I end up doing more but I find two is a good

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pace for me um and after that initial plan some clients will delegate management of

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their assets and I do also get a lot of do-it-yourselfers and you know they're

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they're free to come back for uh fixed fee updates once they've had that initial plan done

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um as far as income lab and I I've used a lot of different tools at the AUM firm

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we were using e-money we were very money Carla focused and then uh once I started

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my own practice uh with cgn uh I used the approved tools there uh which are

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Orion planning and money guide Pro and then um income lab came along in November of

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2021 and I've been using it for about two years now um it has

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in that time become my primary planning tool um I I like the approach it makes a lot

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of sense to me and I I like the graphics the visuals they really helped me to

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narrate my plans um I also find that I can get into the

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weeds with income lab I can you know go as far as I need to to make sure I've done you know dotted all the eyes and

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crossed all the t's for my clients but then I can keep it very simple for them when I'm presenting the plan so

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that's great thank you um Jeff tell us a little bit about your

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your firm and and your role and and what role income lab and income planning uh

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plays in it please sure so I'm um Jeff Brown president of Stratos

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private wealth I actually just this last year I was I I sold a controlling interest of my firm to

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um Stratos Wealth Partners so I was bwm Financial um and then uh our we're looking to grow

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a national oriented firm through the through the people that are already part of Stratos by offering sort of a

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streamlined single flag process Etc and we're in the process of doing that so I'm one of the rare people that

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like sell part of the business and then end up working harder um but that's kind of what's going on right now so I have a different approach

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um to looking at um all things technology and Client Services I I started my career off uh as

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a financial planner 27 years ago so financial planning has always been at the core of the business

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I moved back even before Monte Carlo we were doing more of the typical um you know long 300 Page documents tons

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of spreadsheets so I came from that school always believed that financial planning was the most important piece of

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what we did um and the way I look at um how are currently what's important to know is

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you know I have I have multiple advisors at my firm currently so even in my local office I have 10 different 10 different

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advisors both lead and Associates and as we look to grow more nationally I believe you know I'm going to steal some

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lines from people here um Carl Richards is a friend of mine he's also um you know he also has great

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communication and he has this great analogy that we are really guides for our our clients and we we know we need

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to know the landscape very well we need to know the client very well and we're gonna have the road map of where we want

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to go we know we want to get from here to there let's say to the top of this mountain but it doesn't always work out

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that way so we need to have a backpack full of cool stuff when things go wrong and so the backpack the things that this

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income lab is a great tool in the backpack for people that are either in

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distribution phase that are within that Striking Distance I call it the retirement Red Zone that I got from one

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of my firms a long time ago or if they're making a critical decision with either selling a business or selling

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stock options to areas that we specialize in at our firm so income lab is a great tool to pull out there to

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give clients a what if scenario because okay when things are going wrong and we don't we need to get to the top a

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different direction some of the other tools out there don't tell us what you need to do it just tells us like we only

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have an 82 chance of reaching the top oh wait it's only 56 now what does that mean are we going to die on the side of

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the mountain right so this gives us a way to navigate the mountain in order to get there and that's how we've been able

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to use it to to help our clients that are in those specific uh areas of their life

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awesome thank you um Derek I know we've we've heard your

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experience with with clients on on other webinars and so on but I don't know actually if we've ever asked kind of you

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know on the financial advice practice side of your uh work life

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um what does that look like and and um yeah just tell us a bit about your practice and where income lab fits

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yeah and for me um you know definitely uh Echo a lot of

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the thoughts in terms of how income lab fits into my practice and how I use it with clients that have been shared already but in terms of my clientele it

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is does tend to be you know not so much the high net worth ultra high net worth more that mass affluent type retiree

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um so a lot of people that also tend to be that's a fairly Frugal

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um if you listen to me talk about income lab before I mean there's certain ways that I use the software I found the

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software works best for me where you know I might not run into certain scenarios so it isn't uncommon for me to

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have clients that have a lot more that upside that we're looking at maybe we can really get to the most conservative

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settings and we can really plan around um you know trying to reduce that risk of the downward adjustment but at the

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same time knowing that's going to put them on a trajectory of very likely accumulating far more than they need and

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so then having conversations around what do they want to give while they're alive do they want to do more with family like

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what do they want to do with this Nest Egg that's growing and at what points would we actually have that conversation

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about there's an opportunity here so I'd say that's um you know it just at a very

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high level uh within within my clients I do have some clients that aren't retiree and they're not in that uh you know 10

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years pre-retirement it's kind of what I really like to start using uh guardrails with people so um for those clients

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maybe more the life Hub type area that I'm that I'm really using the tool for

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but um in general most of my clients are in that kind of retirement pre-retirement or in retirement phase

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things so just so that uh maybe if there are folks who are unfamiliar with uh with

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income lab on the on the call today um I think what what Sydney Jeff and

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Derek all touched on was was kind of the the guard rails the adjustment based planning the idea that you're always

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trying to answer for somebody you know what can you spend with your spending capacity uh and and what sorts of

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changes would lead you to to adjust that either up or down so at what point you know how much would your portfolio have

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to go up or down in order for it to be prudent to either tighten the belt or to

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give you permission to to spend to spend more and then um what Derek was just

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talking about was a view of the the plan it's still the same plan but one that

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allows people to really understand all the different parts in one place so being able to dive in as deep as you

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want um or or to stay far out and also to click through years

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and so on all right maybe we'll uh we'll go in reverse order on on this next one and

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this we can kind of get to more of the the conversation aspect of this panel thank you Dan for everybody for for

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sharing a little bit about uh your practice and so on um so the the first question which really

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hits right on the uh the topic at hand is how has this having this tool in the

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backpack Jeff I love the that um affected client acquisition client retention

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referrals um I'd say in growth I also think about advisor productivity client experience

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um you know maybe even your own uh your own work processes

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um how has that affected those areas again acquisition retention referrals productivity and so on

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um maybe we'll start with you Derek yeah I think for me especially on the

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client acquisition side when I'm sitting down and meeting with a client and having something different to present to

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them because it's um I actually will sometimes too run kind of a standard Monte Carlo projection just to know kind

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of what if somebody's meeting with three different advisors right what are the two other advisors likely showing them

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and to be able to talk from that in terms of saying okay you know you've probably seen projection maybe

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probability success is around 95 or whatever it might be for their case

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um but you know here because you know I really want to paint a picture for putting together a real plan and

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actually having um you know the ability to see what your income experience and retirement might

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look like and at different risk levels and why we want to do this planning on the front end rather than reactively

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down the road and then so using things like uh the retirement stress test

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that's a a big favorite of mine to be able to go in and show okay with a

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certain guardrail strategy here's the actual income experience putting people through some more stressful times in the

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market um but then also I'd say a big one is the tax Center um in terms of being able to quantify

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you know okay here here's some potential tax savings long term um or not depends on what the the plan

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is but if there are some tax savings there to really be able to quantify that

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and you know put some kind of dollar value to that I think that's very helpful when otherwise financial

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planning is just such an abstract service that a lot of people they have a hard time you know what am I really

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getting for this if I'm going to be paying a one percent fee or whatever it might be you know what how do I make

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sure that I'm doing something smart and by being able to put some numbers to it that certainly does help

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um in situations where it looks favorable for saving them on their taxes

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because when we talk through the nuances of what that strategy involves and you know filling up certain brackets and all

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of that most of the people coming to me are not the types of people who would be doing something like that on their own

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so have you have you gotten feedback in those you know sounds like kind of prospect experiences where maybe you're

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doing more of a using a a generalized tool or more of an accumulation tool and income lab have you gotten feedback on

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oh this looks different oh this is you know more what I had had in mind or what kinds of feedback do you get from

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clients or prospects I think it's it's mostly been you know really talking through the guardrails as

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a concept and I think that really resonates with people in a way that just a probability of success doesn't I

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actually think a lot of people don't um necessarily think like you know through the nuances of

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kind of the downside of Monte Carlo so somebody just sees a plan and they see they have a 95 probability of success in

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that you know five percent implied failure doesn't scare them you know like for some people but some people it won't

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I I don't know that they necessarily question that but once they see that compared to a guardrails plan where

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where we're saying you know okay here's where your portfolio would actually need to fall to me that lower guard rail is

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actually very key communication piece um for somebody to now to know okay I've

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got 2.3 million dollars or 2.2 million dollars today if my portfolio Falls to

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1.6 million we'd be talking about cutting things back and if we're cutting

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things back we're talking about you know in this case looks like about roughly 700 spending change

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um in that particular case so being able to give somebody those numbers I think is a really big deal because when we go

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through the next downturn in the market they know kind of ahead of time where that threshold is and what the reduction

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is and particularly for somebody who says yes 700 a month I could easily cut

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that out of my my budget I think there's a lot of Peace of Mind there in having a guardrails plan that you can't have just

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from knowing there's a 95 probability of success awesome

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um Jeff does any of that ring ring true for you or how have you seen this kind

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of approach affects client acquisition retention and so on yeah so yeah all of

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it rings true it's all like spot on so I want to try to add or I think is appropriate um I think what I can bring

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here a little unique Viewpoint of someone that's been that has already a significant amount of of clients that

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have been doing it one way for a long time and it's interesting like speaking on the

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productivity piece um you know if you're using a cash flow based planning tool like e-money

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um what I would find is that myself first being a victim as a advisor and then everyone picking this up from me we

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would go so deep in some of those areas of the e-money cash flow reports

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um that it would overwhelm the client but what we're trying to do when I found ourselves trying to do is like defend

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this plan okay like you're defending the plan itself this is why it's going to be it's almost like I hate to use the word

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selling certainty because we're not doing that but that's really what the client wants and we can't sell certainty

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right so we we've changed by this allows us to really change that conversation to

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yeah things are gonna happen we are gonna likely hit one of these guard rails at one point in time

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it doesn't we used to spend so much time we liked the dynamic spending technique a while ago before an income lab was was

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around to help us with this and so we would actually create our own scenarios of failures and fixes so it was just

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amazing amount of work that would go into the pre-meeting hey if this happens then this happens and then really you

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know like taking a look at a year like last year when people are down in most cases and showing like like okay well

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what does it does it mean anything to you how do you quantify that because telling people that they just you know

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do this staying stay for the course your probability dropped from 88 to 72 the

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color changed on that the stress level goes up and we would go

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okay well here's how we can fix it we can cut the you know all we can cut your estate goal down we can cut spending all the different tools that we all know can

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fix can get a plan back on track but we didn't need to necessarily get the plan back on track so this is done this is

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done a lot for helping us as we kind of take clients through that have been doing it one way for a long time and now

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we might have been migrating this to to this newer tool it changes the full conversation and we're doing it with a

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lot less input and a lot less time spent on the mechanics of behind the scenes

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you can go that way like like Cindy said you could Cindy said you could go and go deep as you want but I think this makes

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it the visual makes it very easy for clients to understand okay I'm good you

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know we can we can focus on the more important things like oh I have I'm not going to spend that much money maybe I gifted away some of the things that

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Derek was talking about earlier because we know and I know this from how many years that I've been

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managing clients that so far no client has ever failed

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retirement yet a lot of people have passed away with

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far more than they intended to and I think that sort of helping people and it's hard to believe that when

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you're seeing 76 percent right but when you can quantify it it allows people the

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comfort of being able to okay how can I really maximize my life which is sort of how we look at things how can I maximize

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my life for myself the people I care about the Charities I care about and not get so caught up in the Weeds about

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really feeling like I have to protect against this event that may never come if that helps that helps a lot

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Sydney I know we we talked the other day I thought it was really interesting just how you talked about how this approach

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and this this tool you said has become kind of your primary planning tool how it's affected your your practice in

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general I I'd love if you could kind of share that story with uh with the panel and the audience as well

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um and and kind of the place it now uh or the role it plays in in client

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communication and so on I thought you had some really great points there yeah so as far as

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um on the acquisition piece of it um it's just really improved my

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confidence I would say that that's probably helped me in terms of conversions of prospects is just having

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the confidence that I'm going to be able to deliver um what they're looking for

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um so you know when I you know I just come into those meetings just very much like I'm going to be able to help you understand what your spending capacity

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is and things like that and then um in terms of the experience of when

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I'm presenting to them you know I you and I talked about how I spend a lot of time in the cash flows

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um graphic and a lot of times for for uh my clan clients they've never worked

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with an advisor before and so you know a lot of these concepts are brand new and

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you know there's often you know with a couple you know you have one spouse or one partner who's not even involved in

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the money and so when I bring up this this graphic and and usually what I'll

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do is I'll start in the hub and I'll I'll I'll use the Hub to just validate the inputs and you know just so that

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they know that hey these are your these are your accounts this is what you provided for me this is all based on you

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so if I you know if I start there just from a input perspective then I will my

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next step is to go to the cash flow graphic and that's where I can see the

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the light bulb go off for the spouse who may not be involved with the money so

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you know you it seems that I often find that there's one person that's kind of more into tune with the money and the

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other is just kind of there you know because they were told to participate in this meeting and then all of a sudden I see them engaged and they can now see

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with a very colorful pretty picture um they can see how their income is is

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going to be derived throughout their retirement and I can see the stages of it and I use this page to get everybody

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on the same page as far as terminology um Concepts like age-based spending and

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I find that that resonates with most of my clients unless they're you know closer to uh you know the end of their

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retirement um but we that they seem to all like that idea which you know is not handled

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very well in the other tools where you're kind of assuming the same expenses every year so they they like

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that they can see the stages you know in which their social security

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might start when their pension might start and we can see the relativity of their

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income sources for example you know one client might be heavily dependent on

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their portfolio withdrawals whereas some clients might have a lot of guaranteed income sources and we can talk about you

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know how you know look don't be so afraid to spend this money early in your retirement because look how much we

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don't we don't depend on it so much for the remainder of your uh your retirement so this picture just gives me an

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opportunity to talk about so many things I could I could go on and on um you know I talk about colas here so a

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lot of times if there's a pension we can see how the the pension is becoming you know I usually stay uh with the real

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toggle and talk about today in today's dollars they like that a lot

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um and you can see with a pension how it kind of becomes narrow as you get closer

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and so they we talk about um you know why it might be important for

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um you know to do a Survivor and a hundred percent uh option for a pension

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because we talk about how look that that bar the purple bar or maybe it's the blue bar goes away

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um so you know I really spend a lot of time here and it gets everybody kind of comfortable before I even start talking

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about guard rails and what their spending capacity is I often will say in fact pay no attention to the vertical

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bar and the numbers there let's just talk about your sources of income for a minute and then once we've got that all

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kind of understood terminology then I'll start talking about okay we're suggesting you start with an income of

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this and when I'm saying income I'm not talking about portfolio withdrawals I'm talking about an income made up of you

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know different sources based on different times then that is when I either go to the

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historical analysis to talk about why am I saying that this amount is appropriate

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for you and you know it can um talk about look

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if you if if you had had a crystal ball and you started your retirement in June

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of or wherever you are on the grab February sorry February of 1973 if you

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had had that crystal ball you would have known you would have been okay to spend about sixteen thousand dollars a month

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you know but we didn't know that so so now what we're doing is saying look

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over all these periods of time there's a pretty good or reasonable starting point

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um that would have survived all these historical periods

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I know you also mentioned to me that people that even the terminology spending capacity and a focus on sort of

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what can I spend well two things a a I believe you said clients really like that they say well

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that's what I'm looking for and also it changed your process from

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um you know initially having to focus on really in-depth expense planning to sort

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of putting that later in the process if at all yes I happily gave up asking for

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expenses um I will I when I'm asking for um documents uh before I do a plan

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um I will make it optional I'll say you can you can provide that I I have found that doing plans a lot of times that

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will keep them from getting information to me because they're like I really need to get into Quicken and get all my categories up to date and all this and

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that and I look don't worry about it you know if you have expenses if you feel like you know what you're spending

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um you provide that and we'll take a look at it um but we do the spending capacity and

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then you know I can tell relatively if they're not yet retired and and I am you know putting in their current income I

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can see the relativity between what their current income is based on their employee employer wages or you know

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their self-employment whatever they've got coming in um I can tell relatively whether that spending capacity you know if the if the

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bar is super high you know now and their spending capacity drops then I know we

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may have an issue now of course there's you know depending on how it's set up you know their spica in that bar and things like that so we make sure that

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that's all accounted for um but that's where I can have that conversation around

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um you know this is this is what you're spending capacity is we may need to think about you know what are we

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spending today and and then if I it's not my forte to work on budgeting if I

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feel like they've really got a challenge with this I will refer them to a financial coach or a financial counselor

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where they can work on that um but yeah I kind of take the uh

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you're an adult you're an adult approach and you're gonna have to figure that out here's what your resources support you

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know if you if you retire at this point in time this is what your resources are going to support if that's not going to

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be manageable for you you may need to look for a resource to help with that

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I think I saw Jeff and Derek nodding with that point of kind of during maybe

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it's an intake process or something that one of the big hurdles is the tell you

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know give me a view of your expenses um have you Derek and Jeff run into that

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before is like that's the it's one thing to say here in my statement sir here's my pension uh but it's another to get in

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and get in the weeds yeah I'll say that it's people hate it

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people do not most people do not want to most people don't have a great budget

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um it's nothing that an exercise they really want to do at least out of the gate if you're trying to onboard a

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potential new client it is a big roadblock it is however pretty easy to

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get rough numbers for folks like you know whether it's 15 a month or 17 or 19

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they're not going to be off by like you know a third of that money so what this

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does very well which is which is a complete Game Changer versus the other tools that you're really putting in the

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exact goals this is going to tell you what you can spend and I think for for

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um it's interesting I found the clients that have even more money they care a lot less about a budget they just want

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to know like okay how much can I spend based on what I have and and this does a very good job of letting people know

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what that number is and how it could change and then if they want to get in the weeds later then we can right we can

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do we have all kinds of techniques of using your credit card bills and making it easy for people so they don't have to

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get too far down and start open a Quicken account or something like that um but I think it's it's done a really

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good job of just reframing that initial conversation to where you don't you can just completely remove that

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um from the from the questionnaire if you will foreign

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I would Echo those same points and just say that for me it really

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um I just don't get accurate information oftentimes even when somebody does give me information it's very common uh if if

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somebody does give me a budget I look at it and say no this is too low like you know like you're you're missing things

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here there's not things that are accounted for um or you know the the way at the end of

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the day what I like to do is take very high level look and say okay you know if you you're really spending this much you

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should have X amount of surplus and where did that money go where where did you save it and if I can look at what

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they're saving into different accounts what they're paying in taxes um as long as I know that debt balances

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are remaining the same they're not racking up credit card debt or something like that we know uh just kind of what that total

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amount that's flowing through their expenses is then you add in the things that change in retirement right mortgage

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goes away things like that there's so many pieces that to me I would rather just

31:36

get a plan in place remove the friction to actually getting to that point and then if there's something to dive into

31:43

we can always try and get them on a budget try and get them you know sharing that information but really try to

31:50

minimize even to the point that I'll usually put together an initial plan even without it asking for statements or

31:56

anything else I'll try to gather that information um in terms of you know 401K you know

32:01

how much is there 401k if somebody's like oh and I'm not quite sure you know can they give me a ballpark is it 1.1

32:07

million versus you know 1.8 million right that's so getting that very close or that roughly close estimate we can

32:14

always fine tune that very easily once the plan is built out but I want to

32:20

eliminate any friction I can to getting that initial plan in place

32:27

so I think what I've heard everybody say is that this way of doing things has

32:32

helped a lot in the kind of client onboarding and

32:38

conversion and intake process and that the um the communication the framing

32:45

really hits hits home with them art maybe to shift to even earlier in that process are there any particular growth

32:52

strategies or initiatives that you develop you have developed or that you're thinking about developing that

32:58

are influenced by income lab or retirement income planning in this way you know so any kind of like how am I

33:05

kind of generating those those leads

33:12

because we're actually we are doing something right now on that um so it's it's not it's not live yet

33:18

we're going through uh the benefit of having kind of a firm larger firm I got a marketing person that can do a lot of

33:24

the work for me and actually we've been working with your team Justin to kind of work through

33:29

um lead magnets on our website we're really going to build out an entire section of our website around uh

33:35

retirement income planning so for us business owners uh you know Executives with concentrated positions and income

33:43

planet and we're going to be using the dynamic income uh the dynamic spending and guardrails is kind of the core of

33:49

that whole philosophy so really showcasing this particular software kind of talking about it versus Monte Carlo

33:56

not like you know the the Monte Carlo is necessarily bad it's just how this can provide more information to make those

34:01

decisions um and I think to with other sort of ideas around you know that transition to

34:08

retirement that a lot of people the anxiety around it gets so high around

34:13

that so um and then finally the the last piece of it is designing a webinar that

34:18

we're actually going to be putting out um you know via Facebook and paid social or whatever and marketing that way that

34:24

this will be a piece of how we talk through that that spending along with other strategies about you know things

34:30

you should be redoing to retire early so just stop saving maybe get used to it spend a little more money start doing it

34:35

are you ready for retirement kind of pre-retirement Readiness um mentally and not this is the financial piece of it but mentally are

34:42

you prepared to make that move or how can you kind of trim down and and get yourself kind of closer to retirement

34:47

without actually pulling the trigger or waiting till like some magic Pie in the Sky year so we're we're targeting the

34:53

release of all of that in the four by the end of the fourth quarter of this year um and pretty far along it so far and I

34:59

would once again kind of give you guys props over there for helping us with some of the the taking the materials

35:05

that we have in mind and adding some of the sophistication that you have from doing this for so long and helping us to

35:10

create kind of world-class pieces around that yeah that's been fun and I'm definitely

35:15

looking forward to seeing the impact of that um later on

35:21

anyone else have any particular ideas or strategies you've worked on or

35:29

um I'll shift then to uh the next question which is are there any kind of

35:35

examples of of prospects who became client or a client whose relationship with your firm got stronger

35:40

um because of you know this kind of retirement income planning and management process people always like

35:46

stories they like anecdotes more than stats so um anybody can can take this one if

35:53

something comes to mind so

35:59

I'll I'll give a recent okay I was just gonna say that you know I've

36:04

done a fair amount of writing obviously online related to the guardrails um and just education around that a lot

36:12

of that actually has been more intended for advisors and it's something I'm wanting to kind of pivot a little bit

36:17

more towards education towards consumers and just general um education there but yeah I mean I've

36:23

definitely had people who reached out to me and said you know okay this guard rails thing makes way more sense than

36:29

everything I've read before um you know I really want to get a plan put together how can we work together how can we do that like that's a very

36:36

real thing that's happened for me I've also had some people who go into the process thinking

36:44

they're more DIY type um planners and have gone through the

36:49

process and realized wait a minute maybe I'm not quite uh maybe there's more complexity to this

36:55

and it's not just in the retirement and complaining there's tax planning it was all the different Medicare Social Security how that all fits together

37:03

um but then there's also you know realizing that hey this is actually a

37:08

ongoing process this isn't just a I can run one plan and I'm set for retirement

37:14

like I actually need to update this and make adjustments over time and you know

37:19

maybe I feel sharp doing that now at 62 but am I going to feel that sharp doing that at 75 80 is that the time I want to

37:27

be looking for an advisor if there's a spouse involved who maybe is more or less into the finances I think those

37:34

questions start to creep up and I've had several people who really did not think they would ever hire an advisor who've

37:41

actually gone down that route of hiring me because they see it as actually there's there's value here in working

37:47

with professional on an ongoing basis that maybe I didn't realize when I was just looking at a Monte Carlo plan and

37:53

thinking you know I can do this as good as anyone else that's really interesting yeah great

38:00

point Sydney how about you well I was just going to relay a very

38:06

recent experience that I had with um a client who had just been presented with a severance

38:12

package and wanted to compare that with you know hanging in there and um working

38:19

for another year or so and I put together his plan the two scenarios and

38:25

he said this is exactly what I needed to be able to make this decision and so it

38:31

just it just really felt you know great to be able to you know get get someone to visualize you know these two

38:38

um you know distinct choices and uh and he was able to make his you know his

38:43

decision very confidently so that was a that was a very nice one I would say that clients that um that I've been

38:50

working with for two years and you know when I first started working with them I didn't have income lab or wasn't using

38:57

income lab and so it's been nice now to introduce those clients to income lab

39:02

and I I feel like they're you know they're they're much more confident about what I'm telling them in terms of

39:07

you know how they are on track for retirement and and whether you know you know we're all with the the ones that

39:13

are kind of in their 50s and we're talking about what the timing might be um I think they're seeing a little bit

39:18

more clearly um how that timing does work and um so that would be you know the two

39:25

um examples and they come to mind

39:31

so I get a good one for you just as people often think that this type of planning is

39:37

like for maybe average or slightly you know you know High net worth and not really the

39:43

very wealthy people because they're fine um so I don't manage that many clients anymore but I have a few and one of them

39:49

is uh you know he's uh he owns a mortgage company it's been very successful obviously everyone's probably

39:55

seen what mortgage rates have done uh recently so his company is not doing as fantastic as it was but his lifestyle is

40:01

is very nice if you will um and we had been running the

40:07

traditional plan because he has so many different moving Parts in there with real estate and everything but uh but his question was like hey I need to

40:13

start taking money from my portfolio to keep my lifestyle going and I was going to save before my company is not worth what

40:19

it was if I sell it so we had some big changes and he was stressed out like pretty stressed and um

40:26

so I hadn't thought about using this for him just because his net worth was so high like how are you going to be you

40:31

know but but the peace of mind that it gave him when going through this to see oh okay well I

40:38

can actually start taking money out now I didn't think through that this is how much you could take out now this is how much it could be later if you sell your

40:43

business or this amount right one one input change can how it can change it over time

40:50

um it just kind of took it to a new light because he you know he lives in dollars he doesn't live in

40:56

percentages right it's same thing on his on his on his on his money that he has invested okay I'm up eight percent what

41:01

is that how much money did I make and this takes it and puts it in the dollar terms that people understand

41:07

um rather than the percent that they can't really get their arms around sometimes so it's very helpful for him a very recent experience as well

41:14

nice yeah that's a great one um I think there's so many questions in

41:21

the Q a uh maybe we'll we'll accept to that um so I don't know if uh if Taylor if

41:27

you've had a chance to look through and kind of see which ones are the most uh upvoted but uh maybe we'll take some questions yeah we have and if you're in

41:35

the quest vote then um we have a highest voted one Derek

41:42

brought up in a recent uh guardrails webinar how the historical testing of a

41:48

guardrail strategy actually fails curious quantitatively how that compares to what we're seeing here

41:55

quantitatively sorry Derek yeah and so

42:01

for that um to reply to that in terms of the the recent webinar you know I think

42:08

that was really more focused on looking at the guide and Clinger framework and how that really wasn't a good framework

42:16

when you look at those distribution rate driven type approaches and just how sharp historically those of declines you

42:23

would have seen under a plan like that um so that's you know kind of the historical background there that we were

42:29

really looking at was if you're using one of these you know um approaches like the guidance cleaner

42:35

what is that actual income experience like and it just for most people I think you know looking at too big of a

42:41

reduction um you know we were finding numbers 50 or more real spending declines I know

42:47

Wade Val has some research where he's indicated 80 spending declines in kind of the worst case scenarios in our guide

42:54

and cleaner and to me that's that's just not a good point that's not a reasonable plan right but

42:59

um Jeff was talking about kind of mapping out the territory right where we're taking clients right if you do

43:05

that mapping exercise and you knew that there was a the the probability or not maybe stay

43:13

away from probability but the possibility of that high of uh you know spending declines was very real and even

43:20

you know very high spending declines and less drastic scenarios I think you might want to you know

43:25

rethink the the course you're on unless somebody I mean I should never say never right somebody might be truly open to a

43:32

very drastic spending cut but for most people that's not going to be um you know realistic but I think going

43:39

into the stress test like Justin has here is the perfect way to have that conversation and actually be able to

43:47

um you know talk about quantitatively what these strategies would have looked like historically had somebody use them

43:53

and you know adjust it you know you might see that uh you start a one guard rail setting and somebody says you know

43:59

that's maybe not quite uh you know too much of a downside risk for me well you

44:04

can go in you can adjust where you know the risk level of the guard rails you could bring that risk level down you

44:10

might even look at things like capping kind of The Upside putting that ceiling on the plan that's going to further

44:16

buffer on the lower end but actually having a conversation until somebody says you know what yeah and if that's

44:22

what uh going through the financial crisis looks like or going through a Great Depression looks like historically using the strategy that works for me and

44:30

if that works for somebody then I know then I feel like you've found that right strategy and you know kind of through

44:36

that mapping exercise you're you know heading with them on the right Journey as you start that

44:42

and I think uh Derek and I are going to do a webinar next month in September

44:48

that kind of recap some of the things that Derek went over in that gets this webinar um but also with some some other

44:54

materials um to really talk about why this approach to guardrails which is a

45:00

is a holistic full you know customized risk-based guardrails instead of just

45:05

focused on withdrawal rates why those work so much better thanks I'm going to combine kind of two

45:12

questions here um so one the question is how is income lab being used with prospects versus

45:17

when they become clients and with that you know what kind of materials are you

45:23

using as your like final summary or you know what materials within income lab

45:29

whether it's a report or dashboard per se that you're using with those clients

45:38

I'll jump in because um I think we've we've done it the same way for a long time

45:44

um I I have found that people very much at

45:50

least the people we work with very much prefer the interactive way of

45:56

going through the financial financial plan uh the way that Justin's been sharing a screen here

46:03

um I work with Engineers a lot of them by a qualcommun in my backyard here so I

46:10

probably have the maybe more analytical clients in some cases so in some cases that they want to see the reports and

46:16

everything and and you know you can do that you can build customized reports in income lab we have generally done two

46:23

things right we've we've defaulted to talk about it action item

46:30

that's it and not send clients away with a report or anything I'd say that's what most of our clients have wanted to not

46:37

do that we would we used to print out these reports and people just leave them there so um then we create like the basic reports

46:45

that for people that want something just a quick summary hey where are my guardrails we have like a very short report that we send to them very small

46:51

in pages and then for that engineer that might be more detail-oriented we have

46:57

the long-form report with all of the bells and whistles and I say that probably goes out a very very small percentage of the time

47:04

um and it's always always electronic in every case at least in our circumstance so I think that's that's us but that's

47:11

uh we found that the the interactive just seems to be far less you know far more conversational than it is by going

47:17

through a report in front of a client

47:22

yeah I would agree I mean it's it's all about that meeting it's all about those reviews that we do and and walking them

47:28

through the screens and and interacting you know naturally as they ask questions moving to the screen that makes the most

47:35

sense based on their question and then I will generate a report out of income lab

47:40

as a follow-up after the meeting and you know like just as they they I know on

47:46

many occasions you know if you follow up and yes I haven't read the report yet I mean they just look at that as like some

47:52

sort of you know homework assignment that they've been given or something that they have to do and they just kind of put it off and But but so much of of

47:59

the plan so much to planning to me is that interaction and and that

48:05

conversation and them getting the getting the understanding during that more so than the deliverables but it

48:12

that but there are very nice deliverables there's very nice reports to um send them home with and I do

48:18

foreign

48:24

for me really the guard rails are kind of that Touchstone I want to always come

48:30

back to here's where you're at in your guard rails um the way you present that you're right it could be as easy as you

48:35

know one of the the guardrails reports here um or even just communicating you know kind of where those levels are

48:41

especially when somebody is more of a follow-up meeting and on it the first time we're going over it as long as

48:47

somebody knows where they're at um you know and particularly for advisors that maybe have I know a lot of advisors that

48:53

have done guard rails type plans in the past have used spreadsheets to deliver those one nice thing here is right if

49:01

um it might be a little bit more manual then you would want ideal long term but for a shorter term transition if you

49:07

have some sort of spreadsheet output right you can just move the results into whatever that guardrails framework

49:13

looked like before so you could still communicate um in a fashion that looks similar to a

49:19

client even though maybe the methodology is much better than what's been done fast

49:29

okay stay here um uh Justin do you there wanna I I see a

49:37

couple of the biggest ones yeah so um this I think a few of you have mentioned that you use of course other

49:43

software right I mean Jeff you've got a backpack full of uh Cool Tools

49:48

um so folks were wondering uh do you also use more General Financial Planning

49:55

software like you money you might get a pro uh red capital for certain things

50:00

and I'm assuming the question is kind of like what's the dance there um different

50:05

tools um so I'll take it because I mentioned it uh the

50:12

yes we we use we use uh like e-money was our oh we started that when we went

50:17

independent so that's the one we picked and that's the one everyone's been using so so there's a there's a there's a big

50:22

transition cost if we move away from that as a as a you know kind of uh accumulation type of software so we use

50:30

it this way and and I'll and I you know this is just the way that my advisors have chosen to use it uh typically

50:37

speaking we will use the Monte Carlo software for people that are earlier in

50:43

their Community earlier in their accumulation phase so um people you know I would say that are

50:49

that are definitely not in distributions and that are you know further away from retirement than they they know usually

50:55

we use it within five years typically but it depends on the conversation like I mentioned earlier with the with the

51:01

the the wealthy gentleman that we work with um and the reason we use that is you tend to get different answers I feel um

51:08

and maybe Justin could debate me on this but when you're when you're accumulating like I I have a partnership we have

51:13

next-gen talent and they're in their 30s early 40s retirement to them is far away

51:18

um you know they're they're more concerned with I want to get a bigger house I want to you know there's other thing you know can I how much do I have

51:25

to save in terms of spend and I think the the Monte Carlo is fine answering

51:31

that because they have no idea how much money they're going to spend in retirement at that point in time they

51:37

want to know kind of okay here's a fun retirement today I don't see myself ever retiring so to put it in this framework

51:43

they don't know if sixteen thousand dollars is even enough but they know they want that house and they don't want

51:48

to compromise retirement so um we found it works well in in that scenario for a traditional more more

51:54

um you know kind of growth oriented Monte Carlo plan and then we've began to transition folks away like I mentioned

52:00

you're making a big change in something selling stock options selling business you're within retirement Red Zone are

52:06

definitely within in distribution bases that's where we kind of weave income lab in we will

52:12

run two side by side for a small transition period and then we drop the the even though some clients have wanted

52:18

to keep both of them it's it's a little cumbersome to keep both like for everybody so we tend to say hey we'll run this for a year as we go through the

52:25

transition make sure you're comfortable with the how this how the output looks and then we'll fully transition away

52:30

um and to add one other thing to that that I think is important depending upon where people are at with this with their teams change is harder especially for

52:39

advisors that are set in their ways um and what we we have we have a pairing here where we have lead advisors and

52:45

Associate advisors and what we're doing is we're using income lab is a way for our associate advisors to become a

52:51

specialist at something to begin to kind of take over some of that presentation of the meetings

52:57

um take the burden off of the lead advisor to lose it learn a totally different tool from scratch and it accomplishes a lot of things at the same

53:04

time so it empowers the associate gives them gives them a specialty allows more communication with the clients the lead

53:10

advisor can like begin to sometimes transition some of that clients some of those clients away from them as it moves

53:16

into a software tool that's now a lot easier in my opinion to track and use going forward to help the clients

53:23

yeah it's interesting that telling somebody that in 20 years they could spend 16-6 is

53:30

uh just not even that helpful but telling them that oh and by the way if you had this amount and a change to this

53:35

then you would change this is even less helpful I mean it's just like the even the guardrails concept is sort of

53:41

sort of silly uh when you're 20 30 years out so I totally agree with you

53:47

um um before we move on to the next question we had someone ask just about pricing and I know some people will drop

53:54

off uh as we get towards the very end but just uh just so everyone knows we do

53:59

have a twenty dollar per month for the first three months of your um uh your subscription and then we do

54:07

offer some discounts for networks and associations that folks are associated with so I want to make sure that we

54:13

touch on that uh before everyone starts to drop off as we get towards the end of

54:18

the hour here um so next question uh Justin I see there's a couple more that are kind of

54:24

equal I want to make sure you you can grab which one you think is

54:29

yeah I mean there's there's a few questions on kind of modeling very specific things that we can we can

54:35

certainly hit on but maybe also thinking about sort of Jeff you've mentioned a few times kind of scenario planning

54:40

should I you know sell the stock option should I what what if the business sells for this um so there's a question about how you

54:46

model stock options there's a question about how you model qcds and of course we could we could dive in

54:52

and show you exactly how to click and do those things but I think maybe at a broader level it sounds like you've done a lot of this kind of scenario planning

54:59

a b testing uh maybe you could touch on that yeah I'll use the stock option as an

55:05

example um the business thing would would kind of fall into the same strategy um for those of you that have uh clients

55:12

with stock options especially when they're larger than they should be and they're tied to that company

55:19

getting people to to take action on it the very first time you could take them action to take

55:25

action on it is generally the hardest and so what we've you know and I'm sure many of you have done this too right so

55:30

if you if you if you had three million dollars in your company stock okay and

55:35

you're and you know you have 500 000 somewhere else that's that's obviously really skewed and you know if someone

55:41

gave you three million dollars would you go put it all in one stock no the answer is no so what we've been able to do is

55:47

try to help people say hey look you have this thing it's worth a lot of money like what would happen and you're

55:52

considering potential retirement we look at it in one of two ways one we look at it is like okay this is very effective I

55:58

think this is a good tool for folks is like hey how much of that stock would you need to sell

56:06

in order to make your plan and your income work to where you think you need to spend and have the rest go to zero

56:12

okay some people can do that and it's pretty amazing that has helped more of

56:18

our clients take that initial action to do that initial level of diversification that's necessary and we've seen people

56:24

sell large amounts of stock to do that then they feel good about like Hey we're pretty good on the other we don't even have to count it at least at the current

56:30

price um or we've developed saying hey this is the minimum we denied a sell strategy or hedging strategy around that so the same

56:37

thing works for a business too like hey what's the business worth um you know if you have a chance to sell some to uh family or other partners you

56:45

know so coming it's the same type of exercise and what it helps people do is it helps people monetize once again

56:51

convert this thing that's just a balance sheet item going up and down into income

56:57

and I think once people can see that transition it's like whoa wait a second like I can actually make this happen sooner than I thought and it gives them

57:04

it gives them a different perspective on it and we use the scenario planning for that

57:10

I like that that's really interesting I have a quick funny story go ahead yeah I

57:15

have a really quick funny story about a dentist who was um planning to basically give his

57:21

practice to his son and we showed him how that would affect his income in the long run and he uh changed his mind

57:28

laughs

57:34

okay I think [Music] we

57:40

things wrap up we are at the very end I you know I think a lot of people drop off and

57:46

um does anybody have any closing remarks on you know what they want to share or

57:54

how they're growing their business with income lab I think we've covered a lot of great

58:00

ground I just want to thank everybody um it's just it's it's always wonderful to hear real experiences real advisors

58:08

running businesses uh and see how this um this tool really works certainly from

58:13

from my team it's always just amazing and gratifying to to know that we play a small part in these great businesses

58:20

with these great advisors so thank you so much for sharing all that um for everybody on the call please join

58:27

us again next month we have our um our webinar for kind of a q a webinar

58:34

um web talk Tuesdays and as I mentioned before the end of the month uh Derek and I will be doing something on guard rails

58:41

and different approaches to guard rails and why income lab uses this this holistic risk-based guardrail approach

58:46

and why that's scalable and and good for productivity and so on so I hope you'll join us for those and uh again Sydney

58:54

Jeff Derek thank you so much thank you thank you