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This is the Transition To RIA Vendor Profile Series where we take a look at the solution providers powering the RIA model. On this episode:
Vendor name:
Model FA
Vendor category:
Growth
Episode host:
Brad Wales
Episode guest:
David DeCelle
Vendor contact info:
Full Transcript:
Brad Wales – Hi I’m Brad Wales with Transition to RIA and this is the Transition To RIA Vendor Profile Series where we take a look at the solution providers powering the RIA model. On today’s episode, we’re answering the question “What is Model FA?” To help us with that is David DeCelle. David, thanks for coming on.
David DeCelle– I appreciate you having me. It’s weird seeing you on video when you’re so close here in Florida. I don’t know if you knew this, but I moved from St. Pete to Apollo Beach so I’m just across the bay from you now.
Brad – Okay, so for the listeners I was planning on pointing out how David and I knew each other prior to this episode. We knew each other online and I forgot how long it was before we realized the math at the time, prior to what you just told me, was probably about 10 miles tops. Now we’ll top that off at maybe 20 miles and if we could fly across the bay, we’d probably get back to 10. That’s exciting.
A lot of life events have happened in David’s life recently and sounds like a new house as well so I appreciate you carving out time. He’s a new father as well recently. So I appreciate you jumping on here with so much on your plate.
David – I’m happy to join you.
Brad – So we’ll jump right in. So if we could start at that very macro level, and then we’ll kind of get into some more details, what is Model FA?
David – So, Model FA has two different sides to the house, Brad. We have the coaching and consulting arm, and then we have the marketing arm.
So, on the coaching and consulting side, it’s coaching/ consulting around anything that has to do with growth. Now, when I say growth, I don’t just mean growing assets and growing revenue, although that is a big focus of what we do. We have referral methodologies, we have COI methodology that we coach advisors on, business development in general, but also your systems and processes need to be positioned in such a way to be scalable to handle the growth that you have.
Like I have a client I spoke with yesterday. We started working together a year and a half ago. They went from 500 million to they just crossed over 915 million. If their systems and processes were not dialed in, their business would crash and there would be so many different bottlenecks involved.
So growth also comes in the form of systems and processes. It comes in hiring out additional human talent, additional contractors, so you can continue to scale. This makes sure that your client experience model is such that it not only warrants referrals from your clients, but it’s also consistent in nature.
When you’re so focused on growth, oftentimes that can be put to the side and we never want that to be the case. Helping with growing and fixing oftentimes involves the culture inside of a firm. We help with growing advisors and other staff people in the firm as it relates to their compensation structure and model to be aligned with the firm’s growth initiatives. So when I say we help with growth, it’s much deeper than just the surface level, beyond just getting more clients.
On the marketing side, we serve as fractional CMOs for companies. So we are your strategic thinking partner. We help alongside you really develop a strategic vision for growth and what that looks like. Then we also do all the marketing things as well.
We do website development down to one pagers and everything in between such as video editing, podcast editing, email campaigns, paid ads, presentation decks. We do the whole gamut of anything that we would recommend, helping clients gather testimonials in partnership with companies like Testimonial IQ, and Wealthtender, like the client that I just shared that went from 500 to 915 off their Google reviews alone.
They’ve closed a 1.8 and 8.5, a 16 and an $18 million client directly as a result of those prospects, now clients, finding them on Google. So that’s sort of just in a nutshell as succinct as I could be in just a few minutes about what Model FA does.
Brad – How do you counsel advisors or teams that are making a transition? So one of the big benefits, the reason advisors look to transition to an independent model, is to have some of the flexibility to do some of the things you in turn can help folks with.
That can be that marketing or the growth or just the flexibility to build the team how they want and all that. So that’s a wonderful thing, but you also need to not try to do everything all at once during that transition perhaps.
So how do you coach folks that are coming to you that literally are starting on that marketing part, they need the website from the jump, but they do have these grand visions. Is the reality from your experience, hey, maybe we should try to implement this over three years, your kind of whole grand vision?
Or how do you usually coach people on what’s doable? What is the sort of timeline that this newfound kind of freedom they’re going to have is going to require to do these sorts of things?
David – Yeah, and I can actually speak through a timely case study of a $1.5 billion firm that broke off from UBS and went independent. The first thing I always say is welcome to Freedom Land, where you can actually operate your financial planning business as a business and you can market the way that you should be able to and you’re going to feel free from the restraints that you have at presumably your broker-dealer or wirehouse that you are a part of.
But then I also slap them with reality and have them acknowledge that, whether you liked your setup at XYZ firm or not, they were providing a decent amount of support for them. That’s now gone away if they’re truly on their own and didn’t join an aggregator that has some sort of centralized support.
So I welcome them to Freedom Land, but then slap them with reality that like, hey, there’s some things where you’re like, crap, I have to do that. I didn’t even think of that. I go through that list of what some of those things are.
Then really the main focus when they break away really falls into three different categories, it’s really not about growth to begin. It’s about sustainability and legitimization.
So as an example, before your clients move, you need to have a sense of legitimacy for them to know where they’re going. They need to have a website. They need to have basic brand collateral, different pitch decks, for lack of a better way to put it, and one pagers and consistency in their brand.
Typically they go through some sort of branding exercise so that they can finish that up with having a brand kit that will help ultimately drive their future marketing efforts. So one thing is they just need to be legit so the clients feel confident in the move that they’re going to make with the advisor.
Then really the second thing that we focus on is retention. So oftentimes during a move, more clients come over than the advisors planned on. Oftentimes they plan for a worst-case scenario, what if half my clients left, what if 30% of my clients left? What I find is over 90% of clients that they want to come with them, because a lot of firms use this as an opportunity to shed the bottom rung of their clientele, it’s typically about a 90-plus percent retention rate. They’re typically very pleased with that.
But in order for that to be accomplished, they need to be empowered with what is the story that we’re sharing with our clients? What does that conversation actually look like? How do we get through all these conversations? Are we dividing and conquering amongst our team? Is it going one by one? Is it email communication, conversations? What does that set up look like?
So we help them refine that to here’s best practices on how to handle those conversations, how to instill confidence in the clients that you’re speaking with and ultimately get them to make the transition with you. So really it’s centered around legitimacy, basic brand collateral and retention strategies before we even start considering thinking about growth.
In that larger firm that I just mentioned, that’s exactly what we’re focused on. It’s just some of the basic stuff. You have a business and you’re moving it, but you’re really starting a brand new business. We need to, and forgive the house metaphor, make sure the foundation is poured before we actually start putting up the framing and the finishing touches. That will come, but let’s focus on making sure you can pay your bills first, and then let’s focus on finding more revenue.
Brad – I think that’s a good way to frame it. I use the foundation analogy. Sometimes I’ll say blocking and tackling. I am officially going to steal the legitimacy verbiage, I think that’s a good way to frame it. That’s the table stakes, right, if you don’t have that then everything else you’re talking about is just secondary at that point to certainly make it a successful transition let alone instilling confidence in your client’s eyes.
So let’s take it from the beginning. Someone comes to you and your team, and we’ll circle back to about how you help existing practices as well, but for the folks that would be transitioning and they buy into this idea that okay, we need to maybe three-step this, but that first step, that legitimacy step, that website, the basic branding, how long of a process do you typically prefer to have to work with?
That transitioning advisor, for example, that again is coming from a wirehouse, for the most part there is no brand, there is basically nothing, what’s ideal for your timeline on that?
David – So the timeline is largely dependent upon them. The reason why I say that is because as they’re considering a transition or going to transition, they’re going to be arguably the busiest they’ve ever been because they’re going to be doing their regular job and responsibilities and then doing all this stuff on top of that. So they go from working 40, 50, 60 hours a week to 50, 60, 70 plus hours a week and we’ll make ourselves available. But if we’re meeting every other week instead of twice a week to speed things along, then it’s going to drag out the process.
So I would say we’ve been able to do this as quickly as maybe six weeks. Oftentimes it takes a full quarter because of the coordination of schedules, the delay in email responses there. They typically don’t have just one person who is making all the decisions. They’re running it through other team members and getting their feedback and that adds time. So I’d say the average time is between eight and 12 weeks. We could get it done in as quickly as six, but oftentimes it’s more that eight to 12, even pushing out more towards that 12-week mark.
Then also one thing I didn’t mention from a marketing standpoint is we’re not a fit for everyone for a variety of reasons. But one of the things, or one of the ways I should say, that I’m wired is I’m a connector by nature. I mean, I just recently connected someone to you so that you can help them transition. I love connecting with people or connecting people. It gives me a shot of dopamine and psychological income.
So if for whatever reason we’re not a fit for you or you’re not a fit for us, we have other marketing and consulting partners in the industry that we’d be more than happy to pull in and introduce folks to. So it’s not a take it or leave it with Model FA. It’s let’s have a conversation, feel each other out, determine what the scope of the engagement could look like. If we can help, we will. If we can’t, we’re not going to say goodbye. We’re going to say, talk to this person.
Brad – Maybe we could expand on that, but I’d dovetail it ahead of time just to say as you did on the timeline, I forgot how you described it, there is a lot of work, particularly down the stretch in the final months, final weeks before transition where advisor teams are juggling a lot of stuff all at once.
This part of it is certainly work. I would argue it’s some of the more enjoyable work, if work needs to be done, that this is exponentially more exciting to be building a brand and seeing your business come to life than getting the E&O policy in place. Guess what? Getting the E&O policy in place is important. It’s not sexy, it’s not exciting necessarily. This is one of the most enjoyable parts of it. But still nonetheless, it is work to get through that.
To go back to what you said about making sure it’s a good fit, I do always like to set expectations and we’ll wrap at the end with how folks can get a hold of you and your team. What does that first conversation look like? So if someone’s listening or watching this, we’ll use that example of a transitioning advisor, and they say, hey, maybe I need this. Hopefully they’re concluding they need it, but hey, maybe Model FA is the right provider. They reach out, schedule a call, what exactly is happening in that first conversation?
David – So the first conversation is fairly brief. Typically 30 minutes or less, you could consider it an intro call, a qualification call. Do we vibe together? Do we enjoy what we’re saying to each other based on our business model and their business? Could we be a good fit? Share sort of what I’ve shared so far in this podcast to help set the stage of what our capabilities are.
Then typically in towards the end of that call, we’re able to figure out within a 30-minute time frame, does it make sense to spend more time together? If so, we then go to our version of a discovery call, where our job is to show up basically with a bunch of questions. We’re being very discovery-oriented, we’re not being prescriptive or we’re not diagnosing anything in that call.
We’re helping the firm try to articulate what it is they want to build, what the message is that they want to get out to the marketplace that they’re serving, and what their particular needs and priorities are, because their needs may be this big but their priorities are much smaller because there’s certain requirements, so to speak, of we need this, we want these things.
So really the first two calls are intro, feeling each other out, and then a deeper dive discovery to get a good understanding around what the engagement is going to require and what it could look like together.
Brad – So we’ve kind of been talking about that transitioning advisor and that sort of conversation but I do want to throw it out there for any existing firms, independent firms, I presume even independent broker-dealers, situations that are a little more challenging from a compliance perspective for folks to do some of this stuff.
An already-existing RIA might be watching this and they reach out and they want to learn more about your services. What are you typically seeing as that existing RIA’s motivation for reaching out to someone like you?
Is this, they’ve historically kind of been a do-it-yourself with all this sort of stuff and they’re realizing that’s not the best way to do it or maybe they’re using some other provider that just doesn’t have the full range of services that you guys do. What do you typically see in those existing RIAs that are reaching out to learn more?
David – Yeah, it’s less of a do-it-yourself. Sometimes we win business from other folks where they either didn’t get results or they were stuck with them for a little bit and didn’t really enjoy the time with them. Since there’s a lot of great providers and vendors in our industry, more often than not, they do have a good experience.
But sometimes those folks have a particular package in which that package has a definitive end date. But they like coaching and they like consulting. They like having that thinking partner. Like most of our relationships, we’ve been in business for eight years. We have a 90-some-odd percent retention rate with our clients over that eight-year period. So people are working with us for two, five, six, seven, eight years because our breadth of knowledge is wide enough to keep the relationship fresh.
So oftentimes, to answer your question, they come to us because what got them here won’t get them there. Yes, that’s a ripoff of a book title. But they’ve gotten as far as they can on their own, and they’re looking to break through whatever that glass ceiling is that they continue to come up against.
Oftentimes, like let’s say someone has a couple hundred clients and they’re getting 20 client referrals a year, they know intuitively that there’s a massive gap there and they can harvest that business. They find themselves in a situation to where they have “COIs” when in reality, they’re just resources for your clients because you’re not getting any referrals back and that’s very, very common in our industry. They want to help refresh their COI relationships and figure out how do we make this a two-way street.
They also appreciate that the size firms that we work with range from call it a 100-million-dollar practice to a 40-billion-dollar practice. People are willing to pay and spend time to learn from a firm that has worked with other firms that are where they want to be because we’re able to use that hindsight and that experience in working with those larger firms as the other folks’ foresight.
Hey, I know you think that you want to do that and you believe it’s going to work. Here’s four examples as to why it doesn’t and what you should do instead. Hey, that thing you’re thinking about, you should do that yesterday because I’ve seen that play out positively time and time again.
People are willing to pay for that insight into whether some of the roadblocks, challenges and opportunities that we’ve seen in firms that they want to be like and how can we shortcut our learning curve. That’s all they’re doing is they’re paying dollars to shortcut their learning curve, consider the tuition payment.
So usually in summary there, they want to grow, what got them here won’t get them there, and they don’t want to spend the time figuring it out on their own. So they come to someone like us that can shortcut all that stuff for them.
Brad – You’ve made my job difficult here. So in the Vendor Profile Series, I put these episodes out and kind of put them in categories, right? So in some regard, I could put you on the marketing bucket because of the necessities, but I wouldn’t call some of the stuff you’ve just been mentioning as fitting in that bucket.
The latter part, is that practice management or are you just under the growth bucket? If you’re me and I’m forced to put you in a bucket, maybe I can’t get you in just one. I mean, how do you typically try to sum it up?
David – Yeah, I think the bucket that you can put us in is the best bucket. Just kidding.
Brad – Good, we’ll create a new one. We’ll create a new B-E-S-T bucket for Mr. DeCelle.
David – Yeah, I do think if there isn’t a bucket that is growth, I would not put us in a practice management bucket. We focus on growth and by the way, we can help with practice management. If there was a growth bucket, that’s where we should be. If there was a business development bucket, that’s where we would be. But I would say our focus is growth and we do all the things to support that. So it would be tough to put us in just the marketing bucket. It would be in a growth bucket, so I may have added a new category for you by default.
We want to position ourselves as people who can help, and that help comes in a number of different forms, and we don’t want our capabilities to be limited to the point to where we say to someone that we can’t help. We do everything in our power to be able to help someone, and if we can’t, we pull someone else in, but more often than not, we’re able to help.
Brad – Along the lines of the scope of that help, it’s hard to answer but could you at least help us bake the cake here. How do you price something out like this? So we’ve ran the gamut here from the necessities to that growth to that business development coaching so I’m sure it’s not a simple answer, but just for folks at least that don’t want to come in blind, how can they expect you to bake that cake and kind of put something together from a pricing perspective?
David – Yeah, so as you can appreciate, there’s a number of different variables involved in coming up with that. What I can share is what our lowest price point is, what our current highest price point is, and then what our average tends to fall around. But after the intro call, after the discovery call, we’re able to really hone in on pricing.
So our lowest engagement that we accept is $2,500 per month. The highest engagement that we have is just north of $25,000 a month, and that’s with a massive, massive firm. Our average engagement, I would say, is between five and 10, maybe five and 12 on a monthly basis if someone is implementing more than just coaching and consulting and they’re layering on some marketing support. Maybe they have other advisors that they want to be coached. So I’d say our average engagement is between five and 10.
Brad – I appreciate the transparency. I appreciate you kind of framing it so folks at least have an initial expectation on that. Obviously the best way, from a pricing standpoint, from a service standpoint, that you can help them is just to literally have that first conversation like we talked about. So what is the best way for folks that are listening along here that want to have that first conversation, see how you and your team might be able to help them, how should they go about doing that?
David – Yeah, so they can email me at David@modelfa.com. I respond to all my emails myself, typically getting back to someone within a few minutes, but certainly within 24 hours. But I would encourage folks before they do that, do some due diligence first.
I would point them in three different directions. I would point them to our website, modelFA.com so you can get a sense of some of the work that we do. I would Google us and find our Google My Business page and take a look at the reviews that clients have left us of their experience in working with us. Then, shameless plug, I would go and check out the ModelFA Podcast. We have 160-, 170- odd episodes. We’ve had great guests on there, Brad included.
Just get a sense of, from this podcast, from our website, from our reviews, from our own personal podcast, do you think you’d like working with us based on your due diligence? If so, then shoot me an email and book a call. There are contact forms on the website as well, but I’d prefer just a personal email so we can personalize things right away as opposed to filling out a form.
If I can help, I’m more than happy to. If I can’t, I’ll pull in someone who can, or at the very least, if it’s out of budget at the time I’m happy to share some resources with you and get you pointed in the right direction.
I’m a big believer that what you put out in this world comes back to you tenfold, either directly or in an indirect fashion. So I am willing to help, I’m willing to spend time, and I’m happy to share as much as I can with you, whether or not we decide to work together.
Brad – I appreciate that. I appreciate the honesty and transparency. Again, we’ll put the email address and the website for the ModelFA podcast in the show notes. Not to set expectations David, but I think it was two days after the birth of your child I had emailed you, not realizing that the birth had arrived, and you emailed me back. So we’re not trying to establish that that is the new standard!
David – Well, I did, Brad, because my wife would have my head if she knew I was on work email. I did pretend that I had to go to the bathroom so I could respond quickly and hide in there.
Brad – I appreciate the courtesy of a response. I would have absolutely given you time to get your new world figured out. I think it does show that you’re quite responsive. You’re not just saying that. So for folks that are interested in reaching out, again, we’ll put all the website and whatnot on the show notes. As is the case with the email address, David is clearly receptive and responsive to emails coming his way.
Brad – David, with that, I appreciate you coming on and helping us understand what is Model FA.
David – Thank you, and I also do appreciate how you’ve helped a number of my clients and personal friends in their transition, and they always have great things to say about you. So selflessly, thanks for helping them. Selfishly, thanks for making me look good. I never hesitate sending someone your way, so I appreciate the care that you have with all the folks that you work with too.
Brad – I appreciate those kind words and I would reciprocate right back to you. So thanks for all you do and thanks for sharing this story with us here.
David – Of course. Take care.
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