Fast Growth As A Career Changer With A High-Touch Service

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth, a turnkey wealth management services provider supporting thousands of independent financial advisors.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

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Full Transcript:

Michael: Welcome, Ryan Townsley, to the “Financial Advisor Success Podcast.”

Ryan: Thank you very much, Michael. It’s good to be here.

Michael: I really appreciate you joining us today, and I’m looking forward to the conversation around interesting niches in specializations and the way we find them. One of the themes we have often here on the podcast is just the different ways that advisors are trying to either specialize by their expertise or specialize by the particular types of clientele they work with. And for some of us, that’s just a thing we want to do because it’s out there. Historically, advisors have spent a lot of time with niches in areas like doctors and dentists because they tend to be relatively high income professionals, so there’s usually enough dollars there to make it a good business opportunity. But some of us have niches that tie to something more directly for us. Maybe it’s a profession our family is in. I know a lot of advisors who specialize in teachers because their spouse is a teacher and their parents were teachers and their siblings were teachers and they were the one person who didn’t become a teacher. They went into financial services, so they go and they specialize with teachers. But, for a lot of advisors that come into the industry as a career changer, one of the ways that we find our specialization is I’m going to go serve the people from the industry that I left. And some people do that because they’re coming into the profession from technology and they form a niche with tech professionals, or they come from a particular company and they go and form a niche back to that company. I know you have a particularly unique path because as you listed on your website, “The only wealth manager exclusively serving the nuclear power industry.”

Ryan: That’s correct.

Michael: And we’ll have a link out to Ryan’s website in the show notes, so this is Episode 285, if you go to kitces.com/285, we’ll have a link out to the website. But seriously, the homepage says, “The only financial planning firm for nuclear professionals,” and it’s a picture of a nuclear power plant. And I love it. I know you’ve had a journey of coming from the nuclear power industry, going back to serve professionals in the nuclear profession. I’m excited both to talk about what, to me, is a really cool niche that I have not seen before, but also just this journey of what it’s like to go from a profession, career change into financial services, and then try to take that back to your former profession, your former professionals and build a business around that.

Ryan: Yeah, it’s been interesting. The transition has been amazing. Like I had mentioned, I didn’t think that, financial services was not my initial career and nor was it a thought. It wasn’t something that I, let’s say I always wanted to do or anything. It was something that came much later in life, so yeah, making that transition from nuclear power plant professional to financial services to a financial advisor has been a lot of fun, very challenging and hopefully I’ll get to tell how interesting it was as well.

Ryan’s Journey Into The Financial Advisory Industry [05:54]

Michael: So, for those of us just who are not really that familiar with the nuclear world and the nuclear profession, can you just fill us in a little bit more? What was your background in the nuclear world? What were you doing that eventually led to moving into the financial services industry?

Ryan: I started in nuclear power when I joined the Navy, right out of high school. I grew up in Baltimore. I really was kind of lost, I’d say, when I was growing up. I did not know what I wanted to do for a living. I had no intention to go into college. I thought only people who could pay for college could go. I didn’t even really know that you could take out loans. I know that sounds crazy, right, but even more reason that drew me to educate other people about finance. For me, it was right after 9/11, I was in 11th grade when that happened, so I was looking for a way to do a couple things. I wanted to better my life. I wanted to serve my country. I think that’s important. I have other people in my family that have done the same, so the combination of that was me joining the military. And it wasn’t like I went into the recruiter and said, “I want to be a nuclear power plant operator.” That wasn’t it at all. When you join the military, you go and you take a test and depending on how you do, they kind of offer you different jobs. And I took the test, I did well, it’s the ASVAB test, it’s the entrance exam, and they asked me if I wanted to be a nuke, and I had no idea what that was at all. And I asked the recruiter, I said, “What is that? I don’t know what that…” He said, “I don’t know, but I know they work on nuclear stuff and they make pretty good money.” So they offered me $8,000 to do the job as a sign-on bonus and I could not have signed the paper any faster. Next thing I know, I was off to the Navy, six-year commitment in the Navy, so two years of training in nuclear power school, which is in Charleston, South Carolina, and then four years in actual serving, which is I was on the USS Harry S. Truman. The reason why is because aircraft carriers and submarines are nuclear-powered, so I was trained and then operating a nuclear power plant on a U.S. aircraft carrier.

Michael: I’m just curious, going back, so you had a high school degree, had not gone off to college yet. And so, the military’s giving some kind of aptitude test to you when you’re fresh out of high school and has figured out you’d be a good nuclear engineer?

Ryan: Pretty much, yeah. They give you a test. It’s called the ASVAB. It’s pretty standard. And you have to score, and I can’t remember what the exact numbers were, I think you had to score, like, an 89 out of 100 and above to be able to be in the nuclear program. Don’t quote me on that. But I scored pretty well. I scored above that, and they just kind of offered it to me. After that, like I said, it’s a lot of background checks because there’s security clearance and things like that involved. And eventually, I ended up going down to Charleston to train at the Naval Nuclear Power School, which is about an 18-month long program. It’s kind of like a college degree, minus all of the up front things, like English and Humanities and things like that. It’s pretty much just your sciences, physics, calculus, things like that.

Michael: You spent six years in service, and then what happened next?

Ryan: I finished my degree, my bachelor’s degree while I was in, and it was at Thomas Edison and it was a nuclear engineering technology degree. And I was really fortunate because one, the military paid for it all, which was a fantastic benefit, but also all of my training, so all of my schooling at Naval Nuclear Power School counted towards a degree. So really, all I had to take was the things I just mentioned. I finished my degree and then I got out and I went to commercial nuclear power. My first stop was a commercial nuclear power plant in New Jersey, and then I eventually, after working there for a couple years, I settled at my final plant, which was in Pennsylvania. I worked in the commercial nuclear power, so pretty much the same thing I was doing before in the military, but now it was to power homes and businesses rather than to power a naval ship.

Michael: Okay. And so, what do you do? What was your actual work in the power plant? Is this a management job? Is this a…my sheer ignorance, doing nuclear equations to make sure that nothing’s going to blow up? What was the nature of the role?

Ryan: Sure. There’s a lot of different departments and roles and things like that, just like at any power plant, but nuclear, even more, right? It’s a special and unique technology, so it’s treated much different. When I first got into commercial power, I was in radiation protection, which means I was in the department that measured and controlled radiation at the plant and also to protect the health and safety of the public, the neighbors and the people that lived within the surrounding area of the plant. After that, so I had kind of moved up through various different roles and then I was offered a chance to go become a senior reactor operator. A senior reactor operator’s a supervisor that works in the control room of the power plant. It’s another 18 months of school. Out of the, let’s say, 800 to 1,000 people that work at the power plant, only a few dozen have what’s called a Nuclear Regulatory Commissions license. It’s a license from the government saying, “You can operate this plant by law.” I went through that training, so that was another 18 months. It was 18 more months of training, a lot of testing, written testing, testing in a simulator, which is basically a mock control room where they run all kind of different…

Michael: I was going to say, so I’m envisioning, let’s pretend there’s a meltdown. Go!

Ryan: Absolutely. Absolutely, right. You start off slow, when you’re learning to do this, you start off with book work and you’re learning how systems work and things. But then, when you work under the simulator, you go anywhere from, “Hey, this little minor thing broke” and you have to combat that, all the way up to, “Hey, by the way, nothing works.” And that’s the theme when you’re in the simulator is, you try to start a pump, it doesn’t work, you have to go to the next one. You try to use this system, it doesn’t work, you have to go to the next one. Oh, by the way, this just caught on fire. All of this training is to basically make you not only be able to think on your feet, to be able to follow procedures, because there’s a procedure for everything in nuclear, everything, to be able to follow procedures and to be able to do what you have to do no matter what, to protect your neighbors and your stakeholders, the health and safety of the public.

Michael: I’m just envisioning, and I’m totally nerding out here, my head is going to Star Trek and the Kobayashi Maru exercise, where you have to save a disastrous scenario that’s a no-win scenario because they just want to see how you deal in stressful, no-win scenarios.

Ryan: Absolutely.

How Ryan Transitioned From Nuclear Power Plant Supervisor To Financial Advisor [12:52]

Michael: So, what was it that got you to a point of you’re moving up through the nuclear power world, you’ve spent 6 years in service, 10 plus years in a power plant, getting to the point where you’re in a leadership position in the control room and have your NRC license and we’re on the “Financial Advisor Success Podcast,” so there was a hard left turn here someplace. What changed or moved that we’re having this conversation today?

Ryan: It was interesting, and it was very gradual to some degree. I had a GI bill from the Navy that I wanted to use. I did not want it to go to waste. GI bill was your, they will pay for your education. And since I got my bachelor’s degree while I was active duty, which was paid for, my GI bill could be used for anything, so a graduate degree or whatever it might be. And just for the sake of broadening my horizons and bettering myself and not getting, say, rounding yourself out a little bit more, I decided to go back for business and finance and economics and get an MBA. Because I had done so much technical work to that point, I figured I needed to learn the business side of the business, right, to be able to be better at it. I went back to night school. Basically while I was working, I would go to school at night or take online classes, and I started getting an MBA. And I’ll be honest with you, Michael, that did it for me. That’s when I realized that I loved everything about finance.

Michael: You didn’t realize you had an interest in finance until you started the MBA program, then went, “Oh, this is really neat?”

Ryan: Yeah, so that at least sparked the interest. Then, that would carry over into conversations with people at work. We would be talking and talking to much of the more, let’s say, seasoned employees, the people who had been there for a very long time, and got to talking with them about their retirement and what they were doing financially and how much they had saved. And coming out of the Navy, growing up poor, going through the Navy where you don’t make a whole lot of money and then coming out and hearing what some of these people, the fortunes they had amassed just by saving. They make good money, but not astronomical. The industry pays very well, but just by saving, just by putting away that X amount of dollars every paycheck in their 401(k) and just being disciplined and things, the money that they were able to save by the time they were in their 50s and 60s and ready to retire, that fascinated me. I was in hook, line and sinker and I said, “This is incredible.” Especially coming from a background where my parents weren’t savers. We didn’t have any money. Like I said, we didn’t have money for college, any of that. And I said, “I can break that cycle just by taking what I’m learning, not only in school, but what I’m learning by all these really smart people here, and I can make my life different and I can make my family’s life different in the future.” It was kind of like a ping pong ball. I would go to school and I would learn something, and then I would come in and I would tell someone about it and we’d talk about it, and then they would tell me something and I’d go back and it was just a thirst for knowledge at that point where I could not get enough. I just wanted to, much like all of the different learning I had done to that point, but it was all technical. Now I was as involved as learning in finance and investing and that whole side.

Michael: But I’m struck. It’s not like you were doing an MBA that was crossing over for a financial planning program or a dual MBA financial planning degree. This was just general MBA school but you were liking the personal finance side of it?

Ryan: Loved it. Yeah, exactly. It was general MBA. It was not for financial planning. And at this point, I really did not have any intention of making it a career. It was really like a really cool hobby. I said, “If I can have a hobby where I can also make money or help other people, I think this would be great.” That’s the best kind of hobby. Doesn’t cost me any money. Investing, doesn’t cost you anything, it should, in the long run, pay you dividends and pay you exponentially. What happened is basically at that point, I kind of was wrapping up my degree and I kind of just on my own then, took it to a whole new level. I was reading at one point, a book or two a week, and I would be watching seminars and speeches, and I was just engulfed in this world of just learning more and more and more about personal investing and finance. And a lot of it was, I wouldn’t say selfish, but a lot of it was for me to be able to plan for my own. But that just naturally carried in the conversations with people when I was in nuclear, right.

So, what would happen is people would come to me. I kind of became the finance guy, the go-to person, unofficially, right. It was not a business at this point. It was really just, “Hey, Ryan, what do you think about this?” Or “What do you think about that?” And just being able to help people. And that comes back to a theme of just service, right. Service is important to me. It was important when I was in the Navy. It’s important for me to be able to help people with really no expected return or anything like that. This went on for years and years, and eventually, Michael, somebody said, “Why don’t you just do this for a living? Every time you talk about this, every time we have a conversation, you don’t ever get this excited about splitting atoms. You get excited about this, why don’t you do it for a living?” And it was kind of like in a movie scene, where the DJ stops the music and it goes…

Michael: Record scratch moment.

Ryan: That was my big moment. That was my big inflection point where I said, “This could be possible.”

Michael: It was someone else saying to you, “Have you ever thought about just doing this for a living?” And it was like, “Oh, no I actually hadn’t thought about it. But now that you mention it, hmm.”

Ryan: Exactly right. Exactly. It was, I had not thought about it to that level. I didn’t think that I had accrued that much expertise or that much good information yet, or definitely just not enough. I figured that financial planners, they, number one, went to school for it, two, they had done it for a living for a very long time. Most of that is true, right. Yeah, when somebody said, “Why don’t you do it for a living,” I kind of went home and I thought about it for weeks. And I was like, is this possible? Do I have enough expertise, or could I obtain enough? I know I can learn at this point. I had been through multiple different nuclear power training programs that were very demanding, and it wasn’t because of any natural intelligence. I can study. I’ll put in the hours. I’ll do whatever it takes to pass because that’s important to me.

Michael: So, what came next? How do you get from someone has suggested this and you’re kind of thinking about it, to actually doing a transition and make a leap. What was your path or process to figure out, okay, how do I actually do this if I’m going to do this?

Ryan: I’d say it was months and months of research, just looking at what’s the best way to make a transition? Who are the most transition-friendly companies? How much can I afford? Because obviously, it’s going to be a pay cut, right, as it should be. I have been doing nuclear power at that point for, let’s say, 12 to 13 years and I had multiple licenses and a degree, and I deserve to get a pay cut going to somewhere where I’m not as educated and don’t have as much experience. Am I able to do that personally for my family? And after going through all that, I really just decided to do it. I went ahead and I joined a firm. It’s one of the large ones. I’ll leave the name out of it, but one that they’re pretty famous for career transitioners. And I started going through their training program in learning and getting my Series 7 and 66 licenses and going through all that process.

Michael: So, talk to us more about just how you prepared the transition or when you decided it was time to actually do the transition.

Ryan: I think the time, when I decided it was time to do it was when I had validated what this person had kind of, the interest or what they had brought up to me. They asked me if I had ever considered doing it for a living, and I had thought about it for a long time. I kind of tried to be aware of that, like am I happier when I’m talking finance, when I’m talking about investments, when I’m talking about saving and being able to retire? I was really maybe watching myself for a long time to see is this true or is this just one person’s observation? Because in the nuclear power world, or any engineering world, you never go off of one datapoint. You always have to validate, right?

Michael: Right.

Ryan: This is not, especially being an engineer myself, is not a decision I’m going to take lightly. It’s something that I am going to probably put myself in analysis paralysis for a very long time before I can actually make the leap. But when I do, if I do and when I do, I’m going to know that it’s right.

Michael: I guess that’s part of what I’m wondering. How did it not just get stuck in analysis paralysis forever? Why are you not in the sixth year of analyzing whether this career change would work?

Ryan: My wife is the anti-engineer and she told me to just do it. And I trust her. That’s it.

Michael: Interesting.

Ryan: Honestly, she is every…we’re polar opposites in a very good way and when I need a nudge, she can give me a nudge. And when she needs more information than she would have ever wanted, I can give her that. We’re a good combination. In all seriousness though, she was the motivation because the support of, “Hey, I don’t care what happens. Do it. Chase your dream. Give it a try. We can always go back. You’re not going to be banned from the industry, so just follow your dream.”

Michael: It’s an interesting point that particularly in a profession like yours, where you were coming from, you’ve got all these credentials, you’ve got all these licenses. There are not a lot of people who have accomplished those. Worst case scenario, you go and try to start an advisory business and it doesn’t work out, you can go back to the nuclear industry. You’re still highly employable.

Ryan: Yeah, absolutely. And I believe very much in keeping up relationships and not burning bridges, and those things are important. Yeah, I knew I could go back. But I didn’t, in a way, that may have been something that was a deterrent a little bit because I said, “I don’t want to have to rely on that,” or “I don’t want to have that in the back of my mind because that means that it’s okay to fail. And I don’t want to fail. I’m not going to fail. So therefore, if I’m going to commit to this, I’m going to give this everything I have and I’m going to do it the right way from the start, and I’m going to be successful.” And it really wasn’t a question after that. It was just a, how long it would take to get there.

Michael: So, then talk to us a little bit more about how did you get going in the transition. How did you decide what firm to join or where to go when you wanted to get started?

Ryan: When I went to the firm that I started with, I didn’t know really where to go. They seemed to be the most friendly for people who were making career changes, who were making the types of transitions that I was making. It was a decent salary to start with. There was what seemed to be a good amount of training. It was an easy decision at that point. And I’ll be honest, there weren’t a whole lot of people knocking down the door to say, “Let’s hire this person who has been working in the control room of a nuclear power plant for all these years, to go be a financial advisor.” And I don’t blame them because typically, the engineer types are introverts, right, and that’s not the kind of person that’s going to walk up and try to start a conversation or talk to a new prospect or follow up as often as they should, because naturally, engineers are the type of people who have minimal conversation with the least amount of people. And there’s definitely extroverts in the field and things, but I’d say the vast majority of people are introverts. I don’t blame any firm for not taking, just because I had all these credential in nuclear does not make me an automatic candidate to be a good financial advisor.

Michael: So, you went for the training and the salary base, so did that come to fruition for you? Did it work out as expected?

Ryan: No, I knew very quickly that it was not the right move and that’s no disrespect to where I went or anything. It was really just, at that point, that’s the first time, and it was early, right? It was early in the journey, it was the first time where I started questioning my decision. And I said, “Is this it? Is this what I really wanted to transition into?” And the reason why really it was very sales-based, it was very investment-heavy, not a whole lot of planning. And it just had all of the things where I did not want to run my business like that. There was a lot of reward, let’s say, for the number or accounts you could open rather than the quality of the accounts or the quality of service you were providing. And that just didn’t resonate with me. That just did not sit well. Not long after, very soon after I said, “You know what? I’m just going to do it myself and I’m going to start my own firm,” with really at that point, still generally no experience in the industry.

Michael: I’m just curious, can I ask, where was it that you had landed for this journey, because I’m sure others are going to be going through the same journey and trying to figure out where should you start or where at least should you not start, if those kind of metrics are not the metrics you want to be working towards?

Ryan: Yeah, of course. It was Edward Jones. I’ve seen more and more offices pop up, especially over the past couple of years. It might be that I pay attention more now, right, but I definitely see more and more offices. I see more postings. I see more people out. Edward Jones is famous for door knocking. They love to go door-to-door and knock on doors, and that’s how you get prospects.

Michael: I guess I’m just wondering, were you thinking about starting your own firm originally? Did that only become apparent as an option later? How did you end out in the path of, “I’m going to join a large firm,” and then not long thereafter saying, “Maybe I’m just going to hang my own shingle as opposed to going to find a different large firm” or some other environment?

Ryan: Yeah, that’s a great question. I’d say that the thought never crossed my mind at first. I said, not only am I trying to get into a new industry, but I’m going to just start a firm myself, that’s crazy. No, that never crossed my mind. But what I realized was in going through and going over to Edward Jones, was that a lot of the things that we were learning in the processes and the tools that there were, were not the ones where I could, the things I could have used to provide the most value, based on all the conversation I had had with people. Very light on planning. It was more, “Hey, here’s some great stocks and here’s some great bonds.”

Michael: Whereas your colleague conversation, when you were talking to people in the nuclear industry, it was not the what stocks and funds are you buying conversations. It was other more planning style conversations?

Ryan: Yeah, it was like, “How much should I be saving? Should I be doing Roth traditional or a mix of both? What do you think about insurance? Do I need this much…” Those were the types of questions. What’s better, a will or a trust? Those are the types of questions that we were talking about and the things that I would go research to nauseam at that point, after we would have the conversation, and come back and talk about it. And we talked about none of that when I was doing…

Michael: So your training was much more just focused around investment accounts, stocks, bonds, mutual funds, what are you putting in investment accounts?

Ryan: Correct. And it was at that point where I started researching. I said, “Okay, I need to learn…I think I know all of the things I need to do for people and I think I know all of the touchpoints we need to have and all of the areas of their life that we need to evaluate and talk about. I think I do, but I’m not sure. So I need to go research again,” that’s the theme to this, right, “and educate myself and learn.” And that’s kind of where I threw my search to the end of the internet, found XYPN and kitces.com and podcasts and blogs and webinars and all of the things that the great content that’s produced.

Michael: Okay. And so, that was the point where you decided, “Okay, rather than go to another larger firm, I’m seeing other people who’ve just hung their own shingle and done this on their own, maybe I can just go that route?”

Ryan: Exactly. I knew I was teachable. I knew I could learn and I knew the resources were out there. All I had to do was find the right ones and then commit it to memory and pretty much adopt it as my own, and put the nuclear spin on it and develop procedures and processes and things to recreate these great experiences for people. At that point, starting my firm, it was more of a possibility, it was the only option.

Michael: Interesting. Then what came next? You’re still at Edward Jones but realizing that you probably need to make a transition and do something different. Were you already getting clients from the nuclear industry or had you not even really gotten going yet? I don’t know how long you were…

Ryan: Not a single client. Not a single client while I was there.

Michael: Because you weren’t there that long or just because it took awhile to get going?

Ryan: No, I probably could have. I don’t know. I think I had already known that I did not want to bring anyone there. I made the decision quickly. I did the right thing. I didn’t just hang out for the pay. And I left and I dedicated the next couple months to starting my firm and learning and putting in place all of our policies, procedures and the way I wanted to do business and the way I wanted to…the experience I wanted people to have come there and a repeatable process. I spent months and months coming up with basically nuclear power plant type procedures and things like that to where this is exactly the workflows that we’re going to go through. And here’s all of the things that’s going to be included in a comprehensive financial plan. Since I knew I wanted to do that from the beginning, I just knew that the most value was given to people not by investments. Investment’s part of it, it’s an important part of it, but value comes in many different areas and when you add it all up, when you add value and taxes, when you add value into estate planning, when you add value in education and all these different areas, the compound effect and the stress relief that you can take off of someone, knowing that they’ve made some really significant improvements for their family and their financial future, it was key to me.

How Ryan Structures His Planning Process For Nuclear Power Professionals [33:17]

Michael: So help us understand a little more. What does it mean to have a specialization back to nuclear professionals? When I think at a high level, oversimplifying a little, there’s two styles of niches that are out there. One is, this is a group that has some really specific needs, so I’m going to do things that are really specific to them and their issues. And then, there’s another version of niching that is, look, their needs aren’t necessarily that different. They’re going to retire. Everybody retires. Retirement planning is retirement planning. But, I know the group that I know their language and I know how to talk to them. The planning might not be that different, but I can talk their language or relate to them, and so that’s what drives the niche. When you’re doing this back to nuclear professionals, is it actually a different planning process and planning issues, or is it more of I know how to relate to them and talk their language and that’s what’s making it work?

Ryan: Well Michael, it’s definitely both. Every company out there is reducing benefits, it seems, in one way or another, but most utilities have or have had some form of pension, whether it be a cash balance or your typical defined benefit pension. Utilities, also some of them do have, like, a retiree medical program, so being able to particular in a medical program pre-65. If someone wants to retire at 59 or 60 and participate in basically like a cost-sharing medical program…

Michael: Okay, so they’ve got basically a bridge program from early retirement to age 65, Medicare is common for them.

Ryan: That’s correct. Then, some also do have some sort of stipend to help out with post-65 with Medigap costs and things like that. There’s definitely logistics to it. There’s specifics, whether it be the pension, the medical. But then, there’s also, I understand more than what I believe any other advisor out there, and I’m sure one day I won’t be able to hold the title as the only financial advisor serving exclusively nuclear power.

Michael: If there’s any other advisor out there also working in the nuclear industry, I’m sorry. The two of you are going to have to get together at some point.

Ryan: I’m okay with that. I would love that. There’s also, I know what it took for you to make your money. I know how difficult it was for you to do what you did for 30 or 40 years. Because I’ll tell you, it’s a demanding industry. A lot of it is, nuclear power’s a 24/7 operation, so it’s shiftwork. I worked years and years of shiftwork, weekends, night shifts, holidays, birthdays, Christmas, you name it. That’s not easy, and although it does pay well—the pay is very good—that’s still hard. That doesn’t make it less hard when you’re away from your family on a holiday, because you have to be there to, the plant that I worked at powered two and a half million homes. That’s a lot of people and hospitals and businesses that depend on you. And it again, goes back to my theme of service, where I understand what it took for you to be able to save the money you saved and what you had to endure, and I respect that because I did it.

Michael: And at the same time, just it is an industry with above average pay, relatively stable pay, people have very long careers earning that good pay, so just I’m envisioning, fairly naturally conducive to people who actually accumulate some pretty good size dollar amounts of wealth savings by the time they’re ready to retire.

Ryan: Absolutely. If you look at not just 401k, the benefits are great, you have your different types of pensions, but it is a place where a person without a college degree, because a lot of the operators didn’t have college degrees, they are starting to require it a little more for anyone coming into the industry, but could amass a multi-million dollar fortune just basically by working and saving. And that, to me, is amazing, and that’s what keeps me going.

Michael: Walk us through what the process actually looks like, as you’ve done this and built it out with the focus. And I’m sure I’ve iterated on it in the years since. If I’m becoming a client of the advisory firm now, how does this actually work?

Ryan: My wish from the beginning was to never make someone feel like they were in any types of sales process. And I’m confident that I achieve that. When people come, we don’t even talk about becoming a client for many, many meetings, and really I try to wait for them to initiate it. I know sometimes, just with the nature of people that are engineer mindsets and things, you do have to at least encourage making a transition or whatever. But, for me, I always wanted people to feel as if there was really no other choice. I always encourage them to go talk to multiple other advisors. I’d even hand out a sheet that says, “These are some questions you should ask them” and “Hey, here’s how we feel about those questions. Here’s our take. Here’s our thoughts. Here’s what you should ask them.” And I’d meet with people four, five, six times, maybe four over the course of months and things before we ever even really talked about the logistics of becoming a client, because I really wanted it to be a natural progression. It was easier than I think most to build trust because when someone came in, they typically were a referral or someone that was from the industry that we knew. It’s a very small industry, so even if you don’t know the person, you know someone who knows them. The trust was already there more than, let’s say, starting with someone just off the street, but I never took that for granted. I never wanted that to be, well, I’m going to rely on this. Therefore, I can speed up the process because the trust is already built and I can bring in assets quicker. It was never like that.

Michael: What does the meeting process look like, all the way back when they’re prospects if you can have four, five, six meetings with someone before they’re a client, what are you doing for them that early on in the process? Maybe even just taking back to the start, I reach out to say, “Hey, Ryan, I’m a nuclear professional. I’ve heard from everyone else in the plant that apparently you’re the go-to, you’re the guy, so I’m calling.” What happens? What happens first?

Ryan: It all starts first with discovery. So really, have a meeting, have them in-office, or as we all learned during COVID, to do virtual, which was just that part of it was a bit of a blessing because it definitely opened up my ability to serve a broader audience. But, just discovery at that point, and really the first meeting is, I don’t ask for statements or anything like that. You can bring them if you want to because at some point I may need them if we decide to progress. But it’s conversation, conversation, conversation, and it’s just natural, let’s just talk. Just tell me about your life. Tell me what scares you. When you think about retiring, what worries you? What keeps you up at night? When you think about retiring, what makes you happy? What are your aspirational goals? If you could have anything in the world, what would it be? And that is…

Michael: And those are literally the kinds of questions that you’re asking? Like, tell me about what scares you about retirement and when you think about retiring, what makes you happy?

Ryan: Absolutely. Absolutely. And it doesn’t have to be down to a level of detail at that point, right, because really I’m just trying to learn about them and trying to see what makes them tick, what concerns do we need to address prior to them making a major life change. Because retirement’s probably the biggest life change people make after having kids and buying a home. Then they go many, many, many years of working, and then this big life change comes. So, expecting someone to be comfortable with that after a meeting or two, I think is unrealistic. Just learning about them and what they want to do and what they’re scared of is the most important thing of our first one or two meetings. That also gives me an opportunity to triage what I think is the most important thing we should work on, so where do we start.

Michael: We go through the first meeting. You’re asking me these questions about retirement and what’s going on with, it sounds like, sort of a focus of trying to get to…I always think of this as the why now question. Something made you decide to reach out to a financial planner such that we’re having this meeting. Something’s going on in your life that you want to deal with. To me, the focus of this meeting is basically to answer the why now question. What is going on that has made you feel like you need to get help that we need to make sure we address first and foremost?

Ryan: Absolutely. And then also, and I learned this, I’d say relatively recently, is why now? Why are you asking now? Why not six months from now or why not five years ago, but what made you finally pull the trigger and at least make a call or send an email. Why do you want to talk about this now? And that question brings up a lot of different answers, right? Anywhere from “I’m just tired of working,” to maybe, “My health isn’t so great anymore and I don’t want to spend my time at work.” There are so many different possibilities, but that really opens up the why behind anything in life, in my opinion, is important. The what you’re doing, yes, that matters, but the why behind it is just something in my life that I’ve always either wanted to know for the decisions I was making, but also for other people as well. Because if you know the why behind something, you really, really can make an impact by addressing that why rather than the what.

Why Ryan Incorporates Redundant Financial Analysis In Financial Planning [43:37]

Michael: So, how does this meeting end? Because it sounds like you’re not necessarily asking them to make a decision and become a client at the end of the first meeting, but there are follow-on meetings. How does this end? What are you communicating or setting as expectation or explaining as process for them to know that there’s supposed to be another meeting or what they’re supposed to do in the next meeting?

Ryan: Sure, so at that point, I think if we think it’s worth moving forward, when I say moving forward, I don’t mean becoming a client at that point either. Basically moving forward as in you’d like to see what the next part of the process looks like. At that point, it’s a little bit of logistics, right. Let’s exchange some information. Let’s do some risk tolerance questionnaires and things like that, most of which I send and let them do on their own time. Just instead of using valuable meeting time to exchange documents and things, technology allows us to do it much more efficiently now.

Michael: And what’s your risk tolerance questionnaire of choice?

Ryan: This is where Michael, things get a little interesting. The nuclear power plant professional in me requires redundancy because nuclear power plants require that. So, if a nuclear plant needs one pump on something…

Michael: There’s more than one risk tolerance questionnaire, isn’t there?

Ryan: There is. There is. Clients are a fan of it. And when I explain to them why, if I told that to anyone outside of the engineer type, they’d probably think I’m crazy. But, redundancy, I need that and they need that. We all need that with that kind of mindset. I use two. I use, it’s now TIFIN Risk, it was Totum, and I also use Riskalyze. I use them both.

Michael: How do you distinguish between them of why those two? I mean, if you’re going to do two, why those two?

Ryan: That TIFIN does risk capacity, so it kind of puts you in a band, rather than this is your risk number and this is it, it maps your risk tolerance and your risk capacity and then gives you, okay, this is a band where maybe you should fall in between. And then, I like Riskalyze because it’s a little deeper and a little easier to maybe enter a portfolio. If I enter in, let’s say, someone’s portfolio that they have now, it’s very easy for me to see where it falls compares to their risk tolerance and are they out of line. I think the interesting thing comes up is when they don’t agree.

Michael: I was going to say, do they ever not agree? What happens when they don’t agree?

Ryan: Sometimes, so then at that point, I like to dig in and this is super nerdy, and see which questions they answered differently, because they’re similar but they’re a little different, to see where the deviation started. And this is probably the engineer and the analysis type in me that wants to see why, so I’ll dig in. I’ll open up their actual questionnaire and see, “Okay, they answered this for this question, but on this one they answered a little different. Why? Was it asked in a strange way?” And then we’ll talk about it, right, because the risk tolerance questionnaire, for me is a starting point. The conversation about it and the presentation of different portfolio options and what their pros and cons are, is the only thing that matters. The risk tolerance questionnaire gives us a place to start, to have a conversation, but we almost have like a whole meeting just on this alone. And that’s more important to me.

Michael: I’m struck by your comment that the goal is, you send this between the meetings because you want to get this stuff out of the way between the meetings, so in the actual meeting, you can have the conversation about it and focused conversation.

Ryan: Exactly.

Michael: What other information are you exchanging or collecting, because you said after this first meeting, there’s the let’s exchange some information. So part of this is doing a risk tolerance questionnaire. What else are you collecting or doing after meeting number one?

Ryan: I’ll send out a PreciseFP, basically a quick data gathering for logistics stuff, name, address, birthday, things like that. It also has a place to upload, so I ask for pension statements, 401(k) statements, any life insurance, any estate planning docs, things like that, and basically, get a lot of the data gathering done prior to that second meeting. So that way, I like to have meetings be all about the client and talking and have them talking, instead of let’s share this or let’s look at this, your portfolio on paper. I like to have things ready, so when they come in, I’ve already done the work and I can just present rather than trying to analyze something live time, which is just not a possibility for me.

Michael: Right. I presume the engineering genes kick in at this point.

Ryan: Correct.

Michael: Must have thoroughly analyzed before I ever have a conversation about this.

Ryan: Must have, exactly.

Michael: Okay. Is that the priority piece is in this between meeting number one and meeting number two, data gathering with PreciseFP, two risk tolerance questionnaires with TIFIN Risk and Riskalyze because you explained we do things with redundancies here. You all understand this is nuclear professionals, so everyone’s on board. Is that everything that happens between meeting number one and meeting number two?

Ryan: It is. It is.

Michael: So then, what’s meeting number two? What are you doing or covering in that meeting?

Ryan: It is different for everyone because based off of what we talked about in meeting number one, there could be different priorities. If somebody has a burning question or priority or a problem that they need solved immediately, we’ll work on that, but those are the one-offs. Generally, at that point, let’s say we’re talking about retirement, which is why most people come. At that point, the second meeting is for me to show them different options. And this is what I love about the process is I tell everyone, “I’m not prescribing you a retirement. I’m not telling you, ‘This is what your retirement is, this is how much you can spend and this is what you can do and here’s what it’s going to look like and thank you very much and are you ready to become a client?’ It is, ‘Let’s go over some different options and you tell me which one you love the most or the two that you love the most, and we’ll get rid of the rest and we’ll focus on that one or two and we’ll refine that and make that one better and better.'” Those options might be retiring early, retiring later and what the spending differences are, what the trade-off for that is, moving to a different state or staying in the state where you are right now, spending more earlier in life, which is really the…and we can talk about this for hours and hours. Realistic spending plans rather than you can spend X amount of your portfolio per year for the rest of your life adjusted for inflation. But at that point, the second meeting is all about presenting different opportunities for the client and letting them tell me or show me, whether it be through body language or smiles or whatever it might, which one that they’re leaning towards.

Michael: Does that mean in addition to gathering data with PreciseFP and doing the risk tolerance questionnaires, that you’re actually plugging a bunch of this data into some financial planning software to start doing this analysis work?

Ryan: That’s correct. That’s correct. I’m plugging it into…

Michael: What are you plugging it into?

Ryan: It’ll get interesting again. I use MoneyGuidePro, but I also use Income Lab, so I use both because I think they have different strengths. Them combined…

Michael: Okay. Tell me about those two. What’s going on with each?

Ryan: MoneyGuidePro is fantastic at having a very, very comprehensive picture of their plan. You can include life insurance and it does life insurance analysis, it does estate. I use the Elite version, which is a little more detailed, so you can model annuities and there’s a lot of things you can do with MoneyGuidePro. But, one thing that it lacks, which I thought Income Lab fills the hole for, is actually coming up with a cost of living or a income increase or a guardrail approach to someone’s portfolio.

Michael: They’re the actual cash flow distribution strategies beyond just I’m going to take $80,000 a year?

Ryan: Absolutely. We go very, very deep into cash flow because in my mind, this is all one big complicated math equation. The better equation we use, the more detail, the more accurate data we put into the equation, the better result we’re going to get. It’s not just you can spend this much money this year and 3% raise next year and so on and so forth. It’s let’s talk about the first 10 years of retirement. Tell me everything you want to do and let’s build a realistic cash flow plan for that, because I want you to spend the most money in your first 10 years, because statistically that’s when you’re going to or at least want to. You have your health, you have your energy and statistically you’re just going to start to slow down in your 70s and then even more in your 80s. Let’s front load this retirement so you can get all of these things going that you want to do and take these trips or buy this beach house or whatever it might be, if you can, if we can make that happen, instead of just, “Hey, you can spend this much money per year and I’ll see you next year.”

Michael: Help us understand a little more, because a lot of advisors are familiar with MoneyGuidePro. I suspect relatively few are familiar with Income Lab because they’re a bit of a newer player. Can you explain this a little bit more, what does Income Lab do? What does Income Lab do that MoneyGuide Elite is not doing?

Ryan: Sure. Income Lab, it takes and it projects, based off of research, a realistic retirement spending. Instead of just using the 4% rule and adjusting for inflation, it actually takes a look at and uses basically, they call it retirement smile or retirement hatchet, you’re very familiar with those, and front loads the retirement so you can theoretically look at spending the most money in your early years when you want to. On top of that, it runs those through different historical analyses. Let’s run your retirement as if you retired in 1872, and then let’s do 1921, and every year in between, and all the way up through the ’70s, and you get to see what the actual withdrawal rates that the client could have sustained had they started retirement in that year. And for me, showing that graph has had the biggest impact on my clients and their comfort level going into retirement.

Michael: Showing them the actual, with this retirement spending plan, here’s what would have happened if you retired in 1921, or I’m presuming more like, or 1929 before the Great Depression and in the 1970s during the stagflation, showing them those kinds of, here’s actual historical scenarios?

Ryan: Absolutely, because I tell everyone when they sit with me is we cannot predict the future. But what I can tell you is that the future probably will look somewhat like the past, so if we can use math and recreate retirement scenarios that your retirement over the course of different pieces of history, we at least know that you could have been fine during those, or these were the adjustments that needed to be made during those different historical time periods. If some event comes in the future, we’ll at least have a plan for it. We don’t know exactly what the future’s going to bring us, but we do know that it will probably be something like what this graph that we’re looking at. Knowing this, if I can show you that had you retired in all of these really bad time periods, you still could have spent this much about amount of money and you still could have spent way more in your 60s and down to this level in your 70s and down to this level in your 80s, you could see the relief. You can see the weight come off the shoulders and, “Oh, wow, so this really is possible. This isn’t just a hypothetical math calculation, this is actually going through history and showing me that this could have been possible for all of these really bad times.” And that has made an impact in comfort level for my clients.

Michael: Income Lab relative to MoneyGuide, it sounds like the big distinctions here is ability, easier ability to do not level spending, just front loading it more and having it dialed down later. I guess you could sure doing that MoneyGuide by having a goal for retirement, and then an extra goal for the extra spending the first part of retirement. But I’m presuming just Income Lab is making it easier for you to show that and model that. And then, having output that shows here’s how you would have performed in various actual historical scenarios.

Ryan: Absolutely. And those two combined, again, it’s the redundancy built into the plan that anyone from nuclear would love. It’s showing those two combined and showing how they interact and how the plans are. I build the same plan in both of them, so if both of them are saying that it’s going to be successful, that just builds even more confidence. And I do exactly what you’re talking about in MoneyGuide. I do a base level of spending, I do a medical cost, but then I’ll add in, let’s say, for the first 10 years, heavy travel. And then, I’ll add in fun money. And then, for the following 10 years, so let’s say they retire at 60, at 70, I’ll make it medium travel and I’ll reduce that amount a little bit. I’m building exactly that in there, the realistic retirement projections, and then using Income Lab to back it up. I know that sounds crazy and advisors are probably out there, like, “Why are you doing all this work?” Basically, it’s because not only do my clients expect that, but I need to. The way that I’m wired, I have to do that. I have to convince myself. If I’m going to tell someone that they can stop working, I want to be very sure. So, if that takes two programs to do that and that takes me extra time, I’m 100% okay with that because that’s just the way I am.

Michael: I’m presuming this is just sheer double data entry for you? You have to build two plans?

Ryan: Basically.

Michael: They don’t integrate or anything? The data doesn’t flow from one to the other?

Ryan: They don’t integrate, but as far as being able to use, let’s say, account aggregation software to automatically bring in the accounts and the asset allocation inside of them and things like that, that saves a ton of time. It’s not as much time as you may think because a lot of it can be brought in automatically.

Michael: And they both have account aggregation?

Ryan: Correct.

Michael: That means you still have to tell the clients to do their aggregation to two different systems?

Ryan: You can use Yodlee with both of them. I don’t know about, for anybody who uses ByAllAccounts or anything, I’m not sure, but I know that that works with both.

Michael: Okay. The other thing I’m really curious about is, do you still use and leverage the Monte Carlo analysis in MoneyGuidePro? Because I’m cognizant, Monte Carlo came from the nuclear industry originally. The original application was…look, basically they were trying to figure out if they set off nuclear chain reactions, if the whole world was going to blow up. They were modeling it with Monte Carlo. That’s the origin. Is Monte Carlo analysis used, not used? Does that actually resonate with nuclear professionals? How do you think about Monte Carlo analysis for MoneyGuide versus this Income Lab, specific historical scenarios?

Ryan: I like them both and the reason why is because it fits the personality of a nuclear worker perfectly. When you are working in that industry, you learn to always have a parallel path for anything that you’re working on. You have to look at contingencies ahead of time and be prepared for them. You have to look at, imagine yourself in the control room of a nuclear power plant during an emergency and only looking at one gauge and not validating that assumption prior to taking an action. That would be a big failure because that gauge could be broken and you could be doing a very consequential action based off a broken gauge, so you use two or three or as many as you can find to validate your assumption. Being able to use both Monte Carlo…and by the way, when I share that fact with people and I do, they love it. But, being able to use Monte Carlo alongside with historical, to me, is fulfilling that need to be able to, that nuclear need to look at multiple indications.

Michael: Interesting, and I like how you frame that, just that mindset of, yeah, when you’re in the nuclear industry, you literally have to get down to, “Oh, that gauge looks fine. Doesn’t matter.” You need a second gauge to corroborate the first because otherwise, I’m sure I’m oversimplifying a little, but otherwise you pull a lever and really bad things happen because it turns out the gauge was broken. You have to operate with a certain level of redundancies because the stakes are too high. If that’s the mindset you spend your whole career with, then yeah, I guess I get it. When you go to a nuclear engineer and say, “Well, we’re going to give you two risk tolerance questionnaires, and then we’re going to run your retirement plan through two completely independent sets of software,” that they would say, “Wow, that’s great. Thank you.”

Ryan: They love it.

Michael: Which is not what most other clients and probably advisors would think of. But, this is a way you show up for your specialized clientele is, that actually resonates for them in how nuclear professionals have to approach things.

Ryan: Absolutely. And like I said, it fills the need in them and it fills the need in me because I’m built the exact same way as they are. And just knowing that, in nuclear, there’s some certain traits. It’s basically the fundamentals that are inherent in everyone who has to work in the industry. And if you don’t embrace the fundamentals, you don’t belong there. But, one of them is a questioning attitude. Having the type of attitude where you question everything because you have to. You question if that gauge is broken, should I look at another one. You question when you go out to do a job and it doesn’t look the way that the procedure tells you it looks, so you question, “Am I on the right thing? Am I doing the right thing? Should I stop and ask someone?” Because the consequences are too great to make a mistake.

It’s funny, when I had conversations with people about where I came from and where I’m now, so I went from a nuclear power plant supervisor over to financial planning, they say, “That’s a big leap. That’s crazy.” And to me, it’s not. I think the transferable skills are unbelievable. Just what I brought from that industry, it taught me to be a good financial advisor before I even knew I wanted to be one. Because it taught me attention to detail, it taught me how to analyze data, it taught me how to manage risk, it taught me how to be conservative, it taught me a lot of things that really I just brought to life in a financial planning firm. This is a nuclear power plant basically running a financial firm and I love that.

Michael: We got to see if people are on the phone and let them know, “You’re missing a cross-over opportunity here in marketing CFP programs to nuclear professionals.” I did not realize the mindset alignment, that’s really cool.

Ryan: Just imagine the attention, you’re taught to have attention to detail and to check everything two, three, four times before you actually take an action. If you’re going to turn a switch, you make sure that you’re on the right one and then you stop, you think about it, you look at it again and you make sure you’re on the right one, and then you take your action because again, the consequences are too great. So, when it comes to me doing planning just as simple as filling out somebody’s account paperwork, I’m looking at their account number three or four times before I hit submit. But it keeps me from making the types of mistakes that I’d say the maybe, not the average person would make, but I’d say the err rate is lower just because…now it takes me longer. It’s a little inefficient, but I’m okay with that.

How Ryan’s Prospects Convert Themselves To Clients [1:04:28]

Michael: So, coming back to your meeting flow now, we’re in meeting number two, so now I’m following. You’re presenting back results from two risk tolerance questionnaires and talking about the implications of that. You’re looking at retirement plan scenarios possibilities and showing them versions in Income Lab and in MoneyGuide to understand which works or hopefully both work, because we like the belt and suspenders approach to risk management. What else happens in meeting number two and how does this meeting end?

Ryan: It depends on how long because you can only, let’s say, have a good meeting for about an hour to an hour and a half. After that, it’s just diminishing returns. If we get to it, I also like to present different portfolio opportunities. For example, and that doesn’t mean an opportunity for their portfolio to change or anything. What I mean by that is, we take the risk tolerance basically questionnaire into a personal meeting. And for me, the best way to gauge someone’s risk tolerance is to present multiple different portfolios, and then what their pros and cons are, and then show them exactly how their retirement would play out with those different portfolios in both good times and bad. And then, allow them to choose their own portfolio. Now, because we all know there’s multiple ways to get there…

Michael: How are you modeling that? How do you show how will their retirement play out with each of these different portfolios?

Ryan: There’s features inside MoneyGuide and Income Lab that let you do that, so you can choose different portfolios. There’s basically a feature in MoneyGuide where you can show the probability of success using the entire spectrum of portfolios, all the way from 100% fixed income to 100% equity and everything in between. And then, you can run a bad timing scenario on each one of them to show what the bad timing would be, and bad timing is basically you retire and, oh, by the way, the next day, 2008 happens all over again. That’s bad timing, right? Then in Income Lab, you can do the same. You can show them basically by using, let’s say, a sliding scale, you can slide the portfolio towards more aggressive or less aggressive and show them how that changes the historical analysis and how it changes the potential for raises or decrease in income over the course of retirement. And by showing them that, because everybody wants to pick an aggressive portfolio when things are going fantastic, and everybody wants a conservative portfolio when things aren’t going great. But, by presenting them all like that and then narrowing down to different options, and eventually coming down to one portfolio that gets them to the finish line, that matches their risk tolerance and that they actually chose, all I do is really just empower them to choose their own portfolio by showing them the data they need to know.

Michael: How does this meeting end? Do I now get to the… “And if you’d like me to help you actually implement this scenario that we’ve chosen, then I’m happy to work with you as an advisor?” Or are we still in other pre-client meetings? What comes at the end of this meeting number two?

Ryan: It depends because sometimes, and this is just the nature of working with engineers and analytical type people, sometimes I will have the client in by themselves. And that’s not by choice, right? Their spouse is always welcome to join. But, I know and they know, we’re going to get into a level of detail that may put their spouse asleep. What I mean by that is we may have another meeting and go over the abridged version of the retirement for somebody who’s not wired like an engineer. Now, if their spouse is in some type of industry, they’re an engineer or they’re analytical, they’re from a STEM career or something, they’ll probably want to be in the first or that second meeting. But if they’re not, they may not want to, so we may have another kind of a recap meeting. Okay, why don’t you go home, digest this a little bit, think about it, email me your questions. I’m going to send you over a copy of what we talked about, so I send you either a copy of the plan or access to MoneyGuide. I send you the different portfolio things and think about it. Digest it. Go over it. Do what you do at work. Look at your data. And then, let’s get back together and talk about it, because you did not absorb everything in this meeting because we talked about too much. I might have them in a third time, ether with spouse or just to have them back, to allow them to ask me all the things that they didn’t think about in that second meeting.

Michael: Okay. Meeting number three is the come back to ask questions, bring your spouse for kind of an abridged presentation if they weren’t in the prior meeting. And then at that point, they’re generally making a decision about whether they want to move forward or not?

Ryan: At that point, they are usually bringing up…I like to at least give them the opportunity to bring it up themselves. At that point, at the end of the third meeting, I may say, “So, if we decide to work together, here’s all the other things that we’re going to work on. We’re also going to, you have no estate plan or guardianship documents for your family,” or “You don’t have a will, let’s work on that.” “There’s some things we need to look at with insurance,” or “I know that you have kids going to college in a few years. We’re also going to look into this.” I kind of name all the other things that we’re going to cover in future meetings just to show them that this wasn’t it. This process is a lot deeper than just having…

Michael: Okay, just to make it clear, it’s not as though you’ve gotten everything, so now we don’t need to work together because you’ve gotten everything. This is still only part of the picture.

Ryan: Correct. Right. And this is hopefully a lifelong process of us working together. And here’s all the things I can do for you on a continuing basis. Year to year, we’re going to look for opportunities for Roth conversions. I use XY Tax Solutions for taxes. We’ll take care of your taxes and that’s included in my fee. Or I’m going to hook you up with an estate planning attorney so we can make sure that your family’s protected. There’s a lot that leads to touchpoints for an ongoing relationship. At that point usually, people are ready to either say that they want to move forward and become a client, or not long after that. Maybe they’ll go home and think about it again and then come back and we’ll talk about it.

Michael: Okay. A couple of follow-up questions here. I’m just struck, you do a lot of planning work before they decide to become a client, not only doing the whole plan analysis, but doing the whole plan analysis twice, since you live in MoneyGuide and Income Lab and nuclear professionals, redundant gauges, etc. I’m wondering, is there a charge if they don’t end out becoming clients? Do you worry about the risk that they engage in all these meetings and you do all of this work and then they don’t end out working with you?

Ryan: Absolutely not. There is no charge. I would never even ask for that or think about it. I very much believe that you earn someone’s business and if you’ve done a good enough job at it, then working together should be not even a question. It should be a matter of when and not why or… I’m not scared of giving all this information or putting in all this work because all that work that you put in will pay dividends, if the person ends up becoming a client. And if they don’t, there’s a few reasons why they didn’t. One of them could be you did not present enough value, which that’s my fault. Two is, they’re potentially going to attempt to do it themselves, which they might not be an ideal client anyway if they’re thinking in that manner, right? At that point, it’s kind of a problem that solves itself. I’m happy to do all that planning work up front to earn business, and if someone decides not to become a client, I tell everybody, “There’s no hard feelings. If I do all this and you end up picking somebody else, I’m always here if you want to come back and talk again. Don’t feel obligated whatsoever by the work that’s being done because this is just the tip of the iceberg for us working together. I have not done that much in comparison to what I’m going to do for you over the course of the next 30 or 40 years.”

Michael: And just in practice, have you had clients that go all the way through this and then don’t end up moving forward? How often does this actually end out being an issue that turns out they weren’t a fit after you did that much?

Ryan: I have, and it was probably one of my lower points after starting the firm is, I built all these, what I thought were these amazing processes and these things that would resonate with people from nuclear power and found a way to present it in ways that would make sense and were familiar to how they worked in their career. And occasionally I’d get a client, especially in the first year, that would come through and go through the whole process and it was great. We’d have fantastic meetings. I’d walk away and say, “Man, this is going to be awesome. It’s going to be incredible.” And then, I just never hear from them again. And I didn’t know what to do, and my engineering analytical brain could not get out of a funk that that created. That literally would cripple me at some times because I said…Michael, you know this, you know how much work you put in. You know the value you can bring and you know how much you learn and are always trying to get better and how much time…you know all these things. The client sitting across from you can only make an assumption. They don’t know. When someone chooses not to become a client after you’ve showed them all these amazing things, and you know in the back of your mind, I’m going to do the best job for them, it can really be a demotivator and it can really take the wind out of your sails. And it did for me, it did for me a couple times.

Michael: Ultimately, did you change anything? Did you do anything differently in response? Have you just gotten more used to it now, it doesn’t bother you as much? What did you do after having some clients who go through all this with you and then decide not to hire you after all the stuff you did for them?

Ryan: I would go back and replay the meetings in my head and just try to identify maybe a place where it went wrong or something I said that they didn’t like or this. And really at the end of the day, what it came down to was a person making a choice goes off the data and the information that they have at the time. And part of that might be, he’s new in the business. He’s not as experienced. He is a one-person firm. There’s a lot of different data points that are going into this that I’m maybe not thinking about because those things are not deterrents for me, because I know that I have a plan for all of those things and I know even though I’m new in the business, I’ve put in 10,000 hours in studying and learning how to do this. But they don’t know that. Really what I decided to do was just to always try to refine my processes and get better, but not to dwell on the fact that if somebody chose to make a different decision for their family, then that was the right choice for them.

Where Town Capital Stands Today, And How Fees Are Structured [1:16:09]

Michael: For those who do become clients, what ultimately is the business model? How do you get paid when they actually decide to move forward and work with you and pay?

Ryan: At some point, right. We do have an assets under management model, and it would be basically your standard, you bring your money over and will management, and all of our comprehensive financial planning services are all included. Anything we offer you, we offer you at one fee and that’s it and it’s transparent. If you have to pay another professional, you pay them directly. We don’t want to see it. We do want to know about it to make sure you’re getting the price that we think is fair. But, over the course of 2021, I really, really embraced helping the clientele that don’t have that opportunity. I implemented it in 2020, but 2021 really took off was working with people who have the money to pay for financial planning out of pocket but don’t have assets to transfer, and that has become a sizable part of this business, much more than I ever thought it would have.

Michael: Tell us more about that. What’s that model and how does it differ?

Ryan: It’s not much different. It’s similar process. I’m not afraid to give away a lot of things in the beginning to earn someone’s business, because basically I’m showing them, “Hey, these are all the things I’m going to do for you. You could go do them yourself, absolutely. But do you want to? Is this how you want to spend your time? Is this the right opportunity cost? Are there other things you should be working on rather than trying to do all these things and learn all these things yourself, when we could do it?” The model’s not any different, it’s just really the way they pay. It’s not a different experience. It’s not a different prospect process or anything like that. It’s really just at the end of the day, how do I get paid and I like to try to keep them very similar, if the fee would be very similar to as if they were an AUM client and vice versa.

Michael: Then what are those fee levels? What’s your AUM fee and then what’s the planning fee for non-asset clients?

Ryan: My typical AUM fee is 0.75% and that’s no tier or anything like that. I did recently raise at least the option to have it higher, and that was to give me some flexibility to be able to do some different things. But, if someone is from the nuclear industry, if they are an ideal client, which means they fit not only…the demographics as far as net worth and things like that, but if they have the mindset that we’re looking for. I love people who are inquisitive. I want someone who’s going to question me. Now, that doesn’t mean I want them to question me every day because at that point…

Michael: At some point, that gets to be a little tiring as a client.

Ryan: It’s tiring and it’s also, well, why do you want me to do this for you? At that point, you should probably do it yourself, right? But, I do like people who take more interest than your average person in their own plan, their own finances and things like that, and that’s for a couple reasons. I love talking about this, everything financial planning to a very, very, very great depth. I like clients who like to hear that, that like that level of detail. But, it also keeps me on my toes and it makes me, motivates me to always learn. I have to be on top of my game. I have to educate myself on new laws and tax codes and things that are coming up because I know that they’re going to ask, because they’re not the type of clients that are just going to come in and do whatever recommendations I give them or things. They’re the type that are going to challenge because that is what they are used to. That’s how they have operated in their careers to challenge and to ask questions and to be knowledgeable. That carries over and I like that. I really like that type of client. If they’re that type, I still give them the 0.75% of AUM.

As far as flat fees, I have a couple different options. Some people only need really a one-time plan and depending on the complexity, I’ll basically price it on the amount of time and think that I think it’s going to take. Or I have a retainer model as well, where you can basically have me at your disposal and we’ll meet on some kind of recurring basis. But I definitely don’t like to put people in plans that they don’t need, so I don’t think someone just starting out needs a retainer model. They just don’t need that level of service. They need someone to put them on the right track, to show them some things to do, and then maybe we’ll meet when you have a life change that happens. You get married, you have kids, you want to buy a house. Let me help you with that, but…if you’re just saving in your 401(k), I don’t need to advise you on that because if you’re 22 years old, your asset allocation should probably stay the same for quite some time.

Michael: Is there a typical fee in the retainer model? What does that usually add up to for you?

Ryan: Sure, I’ll give you a few different options. For someone who is, let’s say, relatively uncomplicated, young, maybe just married or not married, no kids, no complicated situations, it might be around $1,200. For somebody who’s mid-level, has maybe some insurance to look at, is buying a home, in that part of life, it’ll probably be around $3,500. And then, for somebody a little later, retirement planning can go all the way up to $7,000 to $8,000.

Michael: Do you ever an issue of AUM clients who say, “Actually, I’ve got $2 million on your fee schedule, it would be $15,000, but I think I just want the $7,000 a year retirement planning retainer model.” Do you get clients that are trying to move back and forth between the systems like that?

Ryan: No. I’ve never had that before. I think my clients like the simplicity of AUM and knowing…I charge on average, I’d say lower than most firms and that’s by design. Part of that was, I’m not going to lie, was trying to attract clients when I had none, because part of that as a value part. But a lot of it is I served this very specific niche, they happen to be of higher net worth than your average people. They happen to be, they catch onto concepts and things very quickly.

Michael: Do you have an asset minimum?

Ryan: No, no. That just happens to work out. Just with that niche and the clientele that I work with from that industry, they have enough to make it worth it 99 times out of 100.

Michael: What’s the typical clients in practice then?

Ryan: Typical clients is somewhere around a million and a half dollars of investable assets, most of them minimal if no debt, and I’d say moderately conservative from an investment outlook.

Michael: Just the nature of, “I specialize in retirement for nuclear professionals and I’m attracting people who have had long careers in the nuclear profession,” there tends to be assets. You don’t have to set minimums or targets because it’s just who you attract given who you’re focusing on.

Ryan: Exactly. It’s a natural fit and even if they, let’s say that they were not the best savers or whatever it might be, they most likely still have a pension and some other things. And they’re on average, they just happen to be a good fit. I’m able to charge less and spend…the most important thing for me was, I wanted to build a firm where I could spend more time with people, because I was kind of doing the math and looking at some other firms and how much AUM they had, how many clients, and I’m like, “How much time are they really spending with each family?” It doesn’t seem like it could be a lot. I might be missing something, but I wanted to be able to spend more than that. I wanted to be able to have fewer clients, charge less and spend more time with each to be able to…obviously I have to if I’m doing double planning all the time, right, but be able to spend more time with each client.

Michael: When the average client’s 1.5 million, you do get a good amount of room to charge “less” than the average fee. Because a $1.5 million client, even at “just 75 basis points,” it’s more than $11,000 of revenue per client. That gives you a lot of room to be profitable and provide a lot of service to clients.

Ryan: Absolutely. And Michael, I’ll tell you I’ve always taken the…this is probably debatable as well, but I’ve always been the type that if you are a client and you call me on a Saturday, I’m going to answer. If you call me at 10:00 at night, I’m going to answer. Maybe that goes back to the theme of service and that’s what I’m used to. Maybe I’m just used to working nightshifts and weekends, so it doesn’t bother me. But I’ve taken that stance that I chose to be an entrepreneur, so that’s the decision I made. And my wife agrees with it. She never says anything to me about it. We could be sitting poolside or on the beach on vacation and I might have the laptop out and she knows that, well, the reason why is because that’s how by doing that, that’s how I paid for the vacation, so I don’t mind that. I’m 100% okay with being completely accessible 99% of the time. Now, I’m not going to walk out of my daughter’s dance recital to answer the phone, but I will call you back right after. And that’s just one thing I did to differentiate myself from people who were the bigger firms with more experience and more advertising and more, is that I want that personal experience with you and if you need something, I’m going to be there.

Michael: How big is the firm now, you’re a couple of years into building into this niche?

Ryan: It will most likely cross over $50 million next week, so it’s in the high 40s right now, about 65 households, about 10 of those are friends and family, so about 55 actual clients that have gone through the entire planning process. We also do about an additional $100,000 in revenue on planning, just fee for planning, not AUM.

Michael: Okay. The 55/65 clients are specifically AUM model clients, then there’s another segment that are one-time planning or planning only clients?

Ryan: That’s correct.

The Surprises Ryan Encountered On His Journey [1:26:50]

Michael: Okay. So, what surprised you the most about building an advisory business?

Ryan: What surprised me the most, and it probably relates to the story that I had about the clients or prospective clients who came through and went through the whole process and everything went perfect, and then ended up not becoming clients, what surprised me is that it is not easy. There’s nothing about building any business, yet a financial advisor business, that’s easy. Because number one, you said, it’s a low trust industry, so most people have some type of assumption about who you are and what you’re doing. Now, I get a little bit of leeway with that because when I talk to someone from the nuclear industry, there’s a little bit of implied creditability because I had certain jobs and held certain licenses in that industry, so that helps. But it doesn’t make it automatic. And maybe that’s what surprised me is that I thought that if I opened this firm that catered towards this super specific niche, that it would be $100 million firm in the first year. It would be automatic. Nuclear professionals will be flocking from their power plants to my door and it just wasn’t like that. It still takes a lot of work. It still takes a lot of meetings and a lot of convincing and a lot of presentation of value. It still takes all that. Just having these amazing processes and doing a great job and having motivation and knowledge and all these things that you’re supposed to have, does not make business success automatic.

Michael: Thus, the comment of I did all this work for a prospective client, and I showed them all my value, and they’re in the nuclear industry and I’m from the nuclear industry and we have all these connections, and I’ve done all this stuff, and they didn’t say yes.

Ryan: And it would break my heart. I’m not lying. Michael, I would lose sleep over it. I would replay meetings in my mind and go over every piece of every email and every piece of documentation that we had, and just trying to figure out where did I go south. Where did I mess this up? I never blamed the client. I always looked at myself and said, “There’s something I did or said during this process that made them not choose me and I’ve got to figure out what that is.” And there was really never a smoking gun or anything, but that did bother me. At one point, I remember in the first year, the first year we brought in $8 million in AUM and I was like, I thought it was going to be better. I had very high expectations. At that point, I really thought about, should I continue this? I can’t do it at this pace. It’s just not getting the response that I thought. I had a lot of second guessing. I had a lot of doubt. I had conversations with my wife about them, did I make the right choice? Should I revert back and forget all this happened and just kind of chalk it up to a life lesson? Yeah, I had a lot of those days especially in the first year.

Michael: What led you to not just go back to the nuclear industry and say, “I guess this isn’t working out.” What led you to stay?

Ryan: A couple things. One, I’m not a quitter. I don’t have it in me. I can’t do it. It’s not a competitive thing because I’m not competitive with other people. It’s really just a, maybe comparing me to my formal self or being competitive with myself, but I’m not going to fail that easy. Even though I had hard days and even though I had clients or prospective clients that chose not to come to the firm after these amazing presentations and conversations and everything that every relationship that we had could not have been better, I still had a lot of wins in that first year. I came from knowing nothing, changing industries, teaching myself by using the best resources I could find, starting a firm and a very niche firm, and then gathering a decent, I think a decent amount of assets. And most importantly, really providing some help for people because that’s what we’re supposed to do at the end of the day, right? Then, I looked back after the first year and I said, “Well, I was able to help this person do this, and this family avoid this, and these other things,” and that’s what kept me going. It was I got into this to serve and it’s working. And just because the occasional person that comes in and goes through the processes chooses not to be a client, does not mean that this is a failure.

Michael: It reminds me, there’s a recent book out from Dan Sullivan, a strategic coach, and Ben Hardy writes with him, that’s called “The Gap and the Gain,” that a lot of us tend to stay really focused on, I wanted to be here, I’m not there yet. There’s a gap between the two. And that doesn’t feel good. And that we tend to be a lot happier when we focus on the gain. Don’t look at where you are relative to where you want to be. Look at where you are relative to where you were 6 or 12 or 24 months ago or however far it was in the past. And when you look at what you’ve gained from where you were, it starts feeling a lot better. Like, “Hey, I did bring in $8 million from 0. That’s a big deal in the first year. And hey, here’s all the people I did help and serve in the first year.” And staying focused on where we’ve gained and the progress we’ve had can give a lot more of a lift than looking at it relative to where you wanted to be, where if we set high expectations for ourselves, you can end up really beating yourself up for it.

Ryan: Yeah, you can, and it can really take a toll. I mean, it can stress you. You could become exhausted. You can become bitter. It could drive you away from your passion, right? It could have easily driven me out of this and taken me out of the game before I even gave myself a chance, if I would have let it get the best of me. It’s like the Buffet thing. You don’t look at the scoreboard, you just keep driving the ball. You keep on playing, you keep on working, eventually it’s going to work. And if it’s not working, it’s because you’re doing something wrong, but you have to give yourself some time because it does take time. When you meet a family and you go through financial planning process with them, and you do an amazing job, and you help them do some great things, that does not mean that they are immediately going to get on social media or rent a billboard and put your face on it and say, “Hire this guy.” They still need to have some time together to allow the trust to really sink in, because referring somebody’s a big deal. I know if I send my friend to someone for any service and they get a bad experience, I feel horrible. Horrible. Having someone refer you is a great compliment, but it’s also not something that should be taken lightly, nor expected, especially early in the process. And I think that’s what I didn’t understand, was it takes time for even your first client to get to the point to be comfortable to start referring. And I had almost no clients in the first year, so there really that many people referring even a couple years down the road. So then, that snowball effect, right, finally here in year three, the referrals are really starting to roll in, but it’s really only the people that came in early, because now they’ve gotten to that comfort level. And that’s a natural progression of business and it takes time. You need to give yourself a chance to be able to experience that.

The Advice Ryan Would Give His Former Self [1:34:48]

Michael: So, what do you know now about building a firm that you wish you could go back and tell yourself four years ago when you were getting started?

Ryan: Exactly what I just said. Relax, work the process, allow things to happen. If you know that you are doing a good thing, and you’re doing it for the right reasons, and you’re charging a fair fee for it, and you’re doing all of that, I do believe that things will always work out. Now, there’s always one-off and scenarios that happen to people that are unfortunate, but the average person who really connects with people, who’s able to have a conversation with someone and learn about them, because that’s the most important thing in this business, and to provide a genuine service will always come out on top. They always will. If you just keep doing that. I wish I would have been easier on myself in the beginning, because I think I could have used a lot of my time to do more productive things or put myself out there more or whatever it might be, and not always be analyzing all of these bad things that I thought I was doing, and having to go back and replay and figure out what I did wrong. I could have used that time so much more productively. And that is a part of coming from nuclear because we have critiques about everything. After every time you run something in the simulator, you sit around and you talk about it, and you talk about all the things you did bad. You rarely talk about the things you did well, so maybe that’s a byproduct. But, I would use all this time to try to figure out all these things that I did wrong and why didn’t this client end up, have a good experience, or this prospective client ended up becoming a client or whatever it might be, where really I should have just been more positive and, okay, let’s just keep going forward. I did it, but I could have done it better.

The Advice Ryan Would Give Newer Advisors Looking To Use Their Former Professions As A Niche [1:36:43]

Michael: Any other advice that you would give career changers that are coming out of a profession and then want to niche back to their old profession?

Ryan: Yeah, I’d find a way to make it super relatable. Think of the things that make your industry special and different, and it doesn’t matter what it is, and build around that. Make your flyer reflect, or your website reflect that industry. Make it super niche. Make it so niche, it’s annoying. There’s nothing wrong with that, because there’s one or two things. Someone’s either going to really, really love it and they’re going to say, “This is the place for me,” or they’re going to say, “This is crazy. I don’t want anything to do with that.” And both of those are okay because you’re going to end up being able to talk to your ideal client at the end of the day. Don’t be afraid to go super niche. And I almost made this mistake. In the beginning I remember, I was going to make the website and make it kind of generic where, “Yeah, we kind of work nuclear, but we’ll also work with you to if you want to work together,” because I don’t want to exclude you because I’m brand new and who am I to exclude someone at this point, right? But, I think don’t be afraid of that. No matter what industry you come from, there’s plenty of opportunity in your industry and your industry alone. There’s more people in that industry, no matter where you come from, than you can serve, so go after them. Talk to them. Help them. It’s going to be a better experience for you and it’s going to be a better experience for them. So don’t be afraid to go super niche.

What Success Means To Ryan [1:38:23]

Michael: As we wrap up, this is a podcast about success and one of the things that always comes up is just the word, success means very different things to different people. You’re on this wonderful success path, as much as you’ve beat yourself up about it over the first few years here. Being at $50 million after barely over three years is an incredible achievement. The business is going well. How do you define success for yourself at this point?

Ryan: Success for me is I do want to grow the firm, but I will never grow it at the detriment or at the expense of the quality experience that people are getting. I have no AUM goals. I don’t have revenue goals. I don’t have any of that and I know that that’s, in traditional theory, that’s poor business planning. But what I mean by that is, I will continue to grow this firm and serve the people and the niche that I can serve best, and I will do it all the way up to the point where I feel like if I take on one more client, the service and the experience they’re going to get will decline. And then, at that point, I’ll either stop growing or I’ll find a way to grow the firm by hiring people or whatever it might be, to be able to keep that level of service. Because that, to me, is success. It is not what you put on your ADV at the end of the year and it’s not what you put on your W2 and it’s none of those things. It’s how much impact can you make to people and still be able to have a good life yourself?

A really, really smart person who was a mentor to me and just somebody I really looked up to, his name was Tommy, he was a Vice President when I worked at the plant, when I just started there, I was a nobody. And he said, “The key to being successful in this industry,” and he was talking about nuclear, but it applies anywhere, is “the key to being successful is being pleased and proud, but never satisfied.” You should be happy with what you’ve done. You should be proud of yourself for the accomplishments you’ve made, but don’t ever think you know it all. Don’t ever think you’re smart enough. Don’t ever think you’re successful enough. Don’t ever be satisfied. Keep trying to be better and even if being better doesn’t mean more AUM, being better may mean giving your clients or the next client a better experience than the one before. And then, the next one an even better experience, and you just keep doing that. And that is success.

Michael: I really like that. The key to being successful is being pleased and proud, but never satisfied.

Ryan: Absolutely

Michael: Awesome. Well, thank you so much, Ryan, for joining us on the “Financial Advisor Success Podcast.”

Ryan: I got to tell you, this was my pleasure. And when I say I was searching the end of the internet to learn how to become a good planner and everything, I can’t tell you how much of a role that XYPN and kitces.com and all of that played in. I mean, that was my resource. I watched so many webinars and read so many articles and was on the planning boards using the forums and asking questions to advisors…

Michael: That’s awesome.

Ryan: …and I could not have done it without it. And I don’t know anything else. I don’t know what it’s like to work at a wirehouse or to work in insurance or to work at a broker-dealer. I’ve never done any of that. I was homegrown as a fiduciary and a comprehensive financial planner by using your tools and I thank you for that, sir.

Michael: My pleasure. My pleasure. Thank you, Ryan.

Ryan: Absolutely.