Breaking the Succession Crisis: How to Build Future-Ready Advisory Practices with Gary Sinderbrand

Sam Sivarajan: 00:01

Hi everyone, I'm your host Sam Sivarajan. Welcome to today's episode of the Future Ready Advisor. Today, I'm joined by Gary Sinderbrand, a former top producing advisor turned strategic coach who now helps advisory firms across North America think more deliberately about leadership transitions, client continuity, and cultivating the next generation of talent. Gary brings decades of experience on both sides of the advisory business. And today we're going to dig into what it really takes to build a future ready practice in an era of increasing complexity and looming advisor shortages. Gary, welcome to the show.

Gary Sinderbrand: 00:45

Thanks, Sam. Good to be here.

Sam Sivarajan: 00:47

Good to have you. I think I'm really, really interested to get your take on some of the current and recent developments that we've had, particularly as it affects the wealth management industry. So maybe we can dive in just to give the audience a bit of context. You've had a long and varied career from being a top producing advisor to now coaching firms on growth, succession, and practice management. Issues that I think are definitely relevant to, you know, to the audience for this podcast. Can you walk us through your journey and what some of the pivotal moments that shaped how you think about building, shall we say, enduring advisory practices?

Gary Sinderbrand: 01:34

Sure. So my journey started shortly after I graduated college. I knew I wanted to be in a role where I didn't have any preset hours. I didn't have any quotas that I had to meet and I wanted to kind of go my own way. Initially, I looked at joining my father and his property and casualty insurance business and then realized pretty quickly it really wasn't for me. I didn't necessarily find the ability to generate a feeling of, I've really made a difference for this person, especially since I'd be selling a product that most people would hope they never use. So I knew Merrill Lynch was opening an office in Atlantic City, New Jersey. Casino Gaming had just passed and they were opening an office right down the street from a company called Beche, which is a name some of you may remember. I applied, I was lucky enough to get hired. I was hired at age 24.

Gary Sinderbrand: 02:46

And went through their training program and for the first year literally had no idea what I was doing. Fortunately, most of the clients I was able to bring on board understood that they weren't going to give me a lot of money because I didn't know what I was doing. And at the end of the year, I didn't like it at all. I had not really helped anybody. I had done some strategies which were recommended to me, which didn't make anybody any money. And I think I probably made more in commissions that first year than my clients earned.

Gary Sinderbrand: 03:02

So I got on somebody's radar somehow. In the midst of thinking about quitting, I was fortunately, identified by a regional manager who started to develop me and mentor me and give me the kind of training that I needed. And by my second year, I was on track, for first quintile type numbers by my sixth year, because I stopped selling what Maryland was asking me to sell and started listening to what my prospects and clients were concerned about, I had punched through a million dollars in production, which was by then considered kind of the gold standard. In today's dollars, that would be about 2.5 million. So, I started to again, get noticed a little bit more. I was asked to go speak at a few other offices to talk about what I was doing. And I say a couple of years later, senior management approached me and basically observed, you know, we don't see you doing what we trained you to do, but whatever you're doing seems to comport with the direction we want to go. And it was kind of, yeah, keep doing it. It was kind of at the forefront of financial planning, which to me was always outcomes based investing. You're here. We called it point a, you want to go here to point B. What do we need to do in the middle to accommodate the things that we know, the things that we don't know, and the things that we don't know, we don't know. So I put together a training program with another financial advisor. They ran a pilot. It hit more so than we thought, and it ran for about 12 years. And I had the privilege of training over that period, about 10,000 Maryland financial advisors. Many of whom I still work with today. I stayed in the business, up until about eight or 10 years ago, did a small startup and then was going to come back in the business in 2018, 2019. And I was trying to decide, did I want to come back in and produce or. Was I more interested in possibly continuing to teach? I approached Merrill Lynch. They were very interested in bringing me back as a contractor, which I was fine with. And then COVID hit. So I was like, well, I don't think I'm going to do that. So I developed my consulting business, which I continue to promote today, working with usually pretty experienced advisors. And we're so more and more their next generation potential successors. And that's where I spend the majority of my time.

Sam Sivarajan: 05:06

A lot of fun, I can see, but a lot of wealth of knowledge that you're obviously sharing with your clients and with the industry. Let's shift to the big picture, Gary. So you and I talked about it before, but a recent McKinsey report projects a shortfall of up to 100,000 financial advisors, primarily in the US, by 2034. Now you've worked with firms, just talked about navigating the next generation succession, practice growth. Does this looming gap resonate with what you're seeing on the ground?

Gary Sinderbrand: 06:09

You know, Sam, I see it every day when I talk to other advisors, but there is, especially among advisors of my vintage, there is almost a denial. You know, when you're growing up and you think there's a monster under your bed, don't look and it won't be there. That's how a lot of advisors are approaching succession. They know it's coming. They're trying to make certain moves that they believe will help them get there. But mostly they're identifying successors that would not qualify as advisors if they had to exist on their own. To me, the essence of being an FA is the ability to go create a relationship based on empathy and trust with a perfect stranger in a short period of time. And it takes a long time, as you know, and your audience knows, to develop that skill because your prospective client and your client Well, they'll never arise to the level of your industry knowledge. They just want to know a that you know, and B you're going to take care of them for an extended period of time. That is a degree you can only get from the school of hard knocks. You can't get a designation. You can't get initials after your name. And all of sudden have the same skillset that an advisor running a billion dollars for 200 households has accumulated over 35 years. So there are significant challenges ahead and most of the firms out there have lost focus as to how to really develop that next generation. So if you think about it, most firms kind of abandoned their training programs after 2008. Very few people were coming in the business. It just wasn't looked at the right way. I think very few people understand what the job's about to begin with. But we had kind of a dearth of advisors. There weren't a lot of people coming into the industry. The ones that were were being placed on teams. And these teams had senior members who were extremely fortunate, making a great deal of money, thinking about what would happen down the line. But they would bring these advisors on and pay them probably three or four times more than they ever would have earned in their first few years on their own.

Gary Sinderbrand: 08:29

So it created what McKinsey refers to as a motivation gap. And when you look at what these advisors are doing in preparation for taking over a book of older clients that have a great deal of assets, complex needs, and a trust with the senior advisor, then you bring a 28-year-old in. They might be smart and perfectly presentable and really understand the industry, but they're not going to be able to deal with that particular financial advisors, 68 year old client has been with the advisor for 35 years when that advisor retires. So I agree with McKinsey, you're gonna see about a third of those people seek help elsewhere. Over the next, between now and the next probably eight to 10 years, you're gonna see trillions of dollars in assets looking for a new home. And I don't know that the present vertical model of a senior advisor and a next generation advisor is going to be able to keep those assets in place. I just don't see it developing the way it needs to.

Sam Sivarajan: 09:34

I want to explore that a little bit deeper because I think you make an interesting, if, you know, controversial point. I like this concept of motivation gap. If I understand you correctly and correct me if I'm wrong, but like the 68 year old advisor or the, the senior advisor that has built their billion dollar book over, you know, 30 years, you know, who's been through the school of hard knocks, who's been through the training programs that were offered before had as you said it in your own career had some very early quote unquote failures in their development where they weren't getting the results that they wanted either for their clients or for themselves. And I take your comment to mean that they had to do a deep soul searching to understand why are they in this business? What is it going to take them for them to be successful? You know, what are they willing to put in and invest in the time and effort and blood and sweat and tears and everything else that they're willing to put in to get there? And it was that kind of thinking and process that made this 30 year veteran advisor successful. And you're saying, if I understand it correctly, that the succession candidates, as smart as they are, as polished as they are, you know, perhaps, productive as they are, they haven't gone through that same kind of U shaped journey. Is that fair?

Gary Sinderbrand: 11:06

No, I think that's exactly correct. Yeah, I think that's right. Any advisor that I talked to, it started, let's say anytime between 1980 and, you know, call it, you know, 1999, when you ask them if they can remember what their first few days were like as a producer, they can tell you in great detail, almost everything they did. They can remember emotionally how they felt, usually scared to death. They can remember the feelings of kind of impending doom if they fell behind because no one knows they're going to make it for sure when they start. You get a desk, a phone, and a small salary. And that salary is only there to cover the benefits that are mandated. So you have to go out and try and figure it out. You start out with a list of potential prospects that you show your manager before you start. That usually takes you about two days to go through and they never end up as clients going forward. So you go through a period of stops and starts primarily driven by fear. There's no plan B. I mean, if you don't get it done or figure out a way to get it done either by, you know, emulating what someone's teaching you to do or eliminating as many mistakes as possible early on, you're not going to be there. So that's why the failure rate in this job when you start is somewhere in the 80 % range. Just making it out of your second year. It's a very, very difficult business to break into. But if you're built for it, it's the greatest job in the world. The problem is you don't know that until you push through those early things and start to figure it out. With the people coming in today, they're not motivated the same way. They negotiate extraordinary compensation before they join a team. And on average, the model I usually see if we've got a producer with a billion dollars in assets and they're producing, let's call it $6 million for the firm. So, and getting paid out a significant chunk of that, they may cut their junior producer in the first year for 10%, maybe 12%, and then maybe 15 % by the third year. So by the third year, that underlying producer who's never brought in any assets on his own is making several hundred thousand dollars, which if they had to do that on their own, probably wouldn't even have made it. So it's very demotivating. And then the junior producers are going to sit and wait for the senior producer to retire, maybe five years down the line, try and maintain a position in that book. But they lack the experience of being able to go out and form those empathetic relationships, especially with the heirs of that producer's older clients. There's no connectivity whatsoever. So a lot of these books are going to run off. And since most of these firms retirement plans are dependent upon, this is speaking the broker dealer community, are dependent upon payout after the producer, the senior producer retires. As that business tails off or goes down, ultimately the amount of money that producer is able to monetize and retire is going to go down as well. And it's a tough problem to solve.

Sam Sivarajan: 14:32

But I think it's, you, you identified something that I can totally see as being an issue. And I get that there's always this, you know, the older generation always thinks that the next generation isn't ready kind of characterization, but I think you're right that the, you know, it is a tough business in the best of times and you develop your resilience and your skillset and your toolbox by going through those tough times to figure out what works, et cetera. So how are you dealing with this? How are you dealing with your clients, your consulting clients that you're talking to, these advisory practices? What are you telling them to do to get ahead of this problem and how are they reacting to that?

Gary Sinderbrand: 15:21

So I would tell you that initially when I go in and do my analysis, most of these books come out the same. Let's stay with our billion dollar book doing $5 million in top line production with 200 households. 40 or 50 of those households are probably doing 80 % of the productivity. So I break it up, I don't just do the 80, 20, but I break it up into tiers. I've got a top tier, a mid tier and a low tier. Every financial advisor, has the same pattern when they develop these large books. In your first few years, you're gonna bring on board anybody that can literally fog a mirror. You need the assets, you need the productivity, you're gonna take on anybody that will take you. And you make these people, absolutely, you make these people all these promises, and you're spending, rightfully so, in your first several years, the vast majority of your time hunting for new money, hunting for new relationships. You're out there. But most of the relationships you're bringing in are probably not the kind of relationships you would bring in as an LOS 30 FA with a billion dollars. You wouldn't go after them. The problem is they're still in your book. They're your friends. You've promised them certain things. You don't talk to them very frequently. So that bottom portion of the book, which probably comprises 75%, is probably responsible for no more than 20 % of the overall productivity, but you've still got a 75 % nugget at the bottom that has to be taken care of. So what it does is it takes a lot of service capacity away from that senior advisor and their team.

Sam Sivarajan: 16:54

Right. I just want clarify, Gary, 75 % you mean of number of households, right? Not assets. You're talking about the number of households.

Gary Sinderbrand: 17:03

Correct. Yes. That's correct. It might be 150 households, but only 10 or 15 % of the assets. So you hit, so there's a plateau that occurs as the advisor then has the ability to get bigger and bigger accounts. It's kind of that weight, that induced drag of all of those other accounts that you've taken on in your first five, seven, eight years that don't look like the last 10 accounts you brought in the last 10 accounts, this advisor brought in. Probably we're all north of 20 million But there's all this weight underneath so now we've got an issue Where you've got a lack of service and connectivity to the lower tier of your book You're trying to focus more on the upper tier of your book But the problem is your entire book every single household has the same desire they want You to treat them as if they're the only client on your book You made them all these promises, you know 20 years ago. Where have you been? So what I try and propose is this, instead of the senior advisor paying a flat percentage of the overall productivity that they're generating to the junior advisor who will not have the ability to drive his own income or their own income, will not have the ability to set their own hours, will not have the ability to learn on their own to figure out a develop a business. My recommendation is, is that we rebalance the numbers to keep the compensation. Equal for a year whatever deal you had great keep it for a year Let's do this instead You've got a hundred households here. You talk to maybe once a year or not at all when they call in You know these people you like these people Some of them are still in pure brokerage. Some of them have mutual funds. There's no directionality whatsoever to what you're doing. So let's do this First thing I do is get them to agree that clients that follow their guidance, usually using managed advisory programs, outperform clients who are self-directed, who are only listening some of the time. Every advisor says, absolutely correct. I fine, let's write a letter to this group of clients. Let's tell them about your junior partner. Let's tell them that you seek to improve the level of interactivity, service, and want to make sure you can get them to the goals that are most important. to them as a client because they're most important to you as the advisor. As a result, going forward in the letter, we're only going to be dealing with clients who can clearly articulate their future goals and allow us to oversee their assets using a strategy that involves a fee instead of a commission where we can give you advice instead of having to depend on transactions, which we think inherently conflict us. Or my junior guy will be following up or in a day or two or whenever it might be to discuss this and we hope you stay with us because we know it's the right thing. So two things happen. If you've got 150 households down there and let's call it on this particular book, you've got $80 million down there. You've got 150 households. You're probably going to lose 20. You're going to keep 130, but those 130 all of a sudden you're the primary financial advisor because part and parcel of this.

Sam Sivarajan: 20:13

The junior one. Correct. You've redefined the relationship.

Gary Sinderbrand: 20:25

Absolutely. And we train the junior guile. There you go. And as a result, you get a book where you have a higher fee based revenue. So at that lower tier, maybe that 80 million was generating 20 basis points, overall return on assets. All of a sudden that 20 starts lifting to 70 or 75. And we start to share that segment of the book more aggressively with the junior advisors. So instead of them just being dependent on the senior advisor, he's relieved the senior advisor from worrying about that lower tier of the book. The lower tier of the book, things happen over the years. All of a sudden they're going to find more money. The ROA is going to go up and the FA is going to get not the experience of having to source these relationships from scratch, but it's kind of the next best thing. because clients you're not talking to that sit on your book, they're essentially either gonna leave or they could actually cost you a really important referral if someone asks them, should they use you? Maybe it's a friend that just got a huge divorce settlement. And well, I never hear from them anymore. It all sounded great when we started, but Tom never calls me again. So this takes care of the clients who deserve to be taken care of and gives that younger advisor an opportunity to get that experience one-on-one and develop the skill set that's essential if they ever hope to rise to what the senior advisors do.

Sam Sivarajan: 22:00

I love it. I think it's to your point, it solves the biggest challenge that the senior advisor has got, which is time and attention. It redefines the relationship with those clients that have evolved. or may not have evolved as the practice has evolved to say, okay, this is what we're focused on. If we can't add value for you now in our current incarnation, I'm sorry, but you're not well-served here. But to your point, you might lose 20 % of it, but those are ones that we're probably gonna go at some point. But the ones that are staying have now recommitted to the relationship. And, we'll do more, but I think most importantly, I love your characterization of this. I think this is the closest thing that that junior FAA is going to get to building a book from scratch, right? It's now on them to look out for these clients is now on them to keep those clients happy. It's now on them to get the referrals, increase the share of wallet, what have you. It's on them because it's also clearly defined that the senior advisor isn't necessarily stepping in, you know, to save the day on any of these, but more importantly, because their comp is directly tied to what is happening in that subset of the book that they're taking over. I think you've got the closest thing to the, you um, the, the, new joiner training program that, uh, you know, Merrill's or other firms might've had 20, 30 years ago, right?

Gary Sinderbrand: 23:27

No, I think that's correct. One of the, one of the bigger challenges is not necessarily the junior advisors, cause they want to learn the craft, but the senior advisors, there's kind of a pretty deep psychological connection to a lot of those clients. They remember what they promised them and they almost feel badly that they haven't been there for them over time. And as a result of that, They again, it's kind of that don't look under the bed. You know, we don't want to see that monster down there. It's like, if we don't pay attention to it, it's, not going to happen. And when I used to teach this at Merrill, you know, we had FAs that would have, you know, three, four, 500 households. And the normal excuse I would hear would be, well, you know, I've got C shares in there and they don't really bother me all that much. And it's still X amount of dollars. And you know, it's, is what it is. And I could go after them 15 different ways from a fairness issue, you know, from a time allocation issue. What would your top 10 clients think if they knew how much time you were spending on people that weren't paying for it? And then in one of our training programs we had in Chicago, we had a story that an FA shared with us who had probably had 500 households. He worked in downtown Chicago. He was in line at Starbucks in the morning to grab his coffee. And he was overhearing a conversation between two women, a couple of spots up. And one of them was literally congratulating the other on finally settling this super messy divorce. And she apparently, I didn't get the number, but she inherited, it was a multimillion dollar settlement, probably an eight figure settlement. And she had never had this kind of money or responsible for it, but she knew her friend was an investor. She said, you know, I don't know what to do. I don't know where to go. I don't know who to ask. I know, I think you told me at one point you deal with Merrill Lynch, should I go talk to your person? Now all of a sudden the FA perks up. Then he hears his name mentioned along the lines of, I deal with so and so and so and so, but I haven't heard from him in over a year. And the only time I'm in contact is when I call and I normally talk to his assistant. So I don't know that I can recommend him in good faith. And this FA was two people back in line. And he was like, took him an hour when he got back upstairs to figure out who the client was that wouldn't refer them. And the entire room just went, Whoa, okay. We get it. Yeah. They may not be bothering you. They may not call in a lot. They may not take a lot of time. Exactly right. And when I looked at my group and I would say, if you think this is the only time that's happened, you're kidding yourself.

Sam Sivarajan: 26:08

but you don't know what it's costing you, right? You don't know what it's costing you.

Gary Sinderbrand: 26:21

So you need to get serious about it. Back then, we didn't have the necessary, the teaming issues. So you would find other FAs in the office that were good people and they would service them. They weren't really growth oriented. So you could always find things to do to associate and do the same thing. But the opportunity now is acute as is the need, especially with what's happening in retirement and what's happening in the current market.

Sam Sivarajan: 26:48

That's a powerful story. I think you're bang on that it's a good way of thinking about it. It's not so much what is it called, you know, you know, it's not having those clients, you know, you're serving them, quote unquote. But I think it's like anything else from, you know, from economics 101, it's the opportunity cost. What are you giving up by, you know, having those clients and not servicing them properly? You're not creating a great experience for those clients. You're taking away time from your own efforts to kind of, you know, go after the type of big clients that you're used to serving. But more importantly, I think you're potentially hurting future business because those clients are that you think that you're being loyal to and serving don't feel, you know, that you are serving them and they're not going to, they're going to vote with their feet eventually, right?

Gary Sinderbrand: 27:42

It's exactly right. And it doesn't matter how large the book is. It still segments the same way. And FAs will come up with a variety of excuses as to why they won't do it. But what's incredibly frustrating is they turn their next generation FA into kind of an indentured servant. You know, they're good with planning. They run my plans to help with my presentations. They're good with tech, this, that, and the other thing. And that's not in the job description. The job description is empathy, trust. and discipline. That's in the job description.

Sam Sivarajan: 28:16

No, and I think to your point, even from a pure self-serving point of view, you know, if you think about eventually retiring and having a successor take over that book, if your payout or your reputation in the community or even just your sense of, you know, job well done, you want to make sure that that next generation is as ready as possible to kind of do the type of work that you did to the level that you did it, if not better. And you know, you need to prep them properly for it. And I think to your point, like it's easy enough to sit there and say, well, like I've got this indentured servant or whatever, even if I'm paying them a lot of money. But if you're not developing their capabilities, their empathy, their, their ability to serve the clients, I think you're doing yourself, the client. And quite frankly, I think the industry and the, you know, the, the, name of a financial advisor, you know, you're, you're doing a bad service, right?

Gary Sinderbrand: 29:10

There's no question about it. And so the model of taking an individual that has no production experience whatsoever and plugging it into a team for something that may or may not happen someday, I think is fundamentally flawed. FAs, senior FAs have a tendency to get married way too quickly. And it's easy to get married and put yourself in a partnership. Divorce is incredibly difficult if you're going to break up one of the partnerships. I've been on both sides of that with clients I've advised. So one of the things I recommend is if you haven't really designated a successor yet, why don't you try out several people? Why don't you create joint production numbers and give 10 or 15 of these lower tier relationships, less contacted relationships to two or three different advisors and say, here's the mandate. And you lay out exactly what you want them to do. We want to get full profiles. We want to convert them to an outcomes based approach. We want to gather supplemental assets. We want to make sure that we're in contact with them on a regular basis. And we want them to view us as their primary financial advisor. And we want them to refer you additional business. And let's see of the two or three advisors you're trying out who can meet those standards, because that's the role of that. The senior FAA is playing. If you want to be successful as an FAA at the level of lot of the people of, of my vintage, if you will. You've got to really want it. You really do. And you've got to put yourself out there and you've got to take the risks and you've got to take the hits. You're going to get knocked down. Just keep getting back up and moving forward. Let's see if we can always.

Sam Sivarajan: 30:50

doing the right thing, right? And I think that your, I think your point about, you know, I love this idea of having two or three people that you're carving it up. And if I understand you correctly, and I totally agree with that, I think being very transparent about them as to what you're doing and how you're going to evaluate them, et cetera, because they should know, you know, because they should know on what they're being evaluated on, right? And that's the way that you, if it's not measured, it's not done. I think if you're trying to sit there and say, look, look, I want you to develop into, you know, the advisor that I think that you can be. And this is how I'm going to measure it. And that's going to make you a better advisor, not just to serve your clients and to be successful in the profession, but it's what I'm going to be looking for in terms of giving you more of my book. Right.

Gary Sinderbrand: 31:41

No question about it. And what it does is it imposes an overlay of accountability. And there are many, many things you can put up with as an advisor, but failing to live up to something you committed to, especially in front of your peers, isn't one of them. You will live up to that. If you even think about the concept of these mastermind groups that are out there now, these mastermind groups, it's not like these people that are at the top of their profession are going to learn systemic knowledge that's brand new. But in these groups, they're trading wisdom nuggets. They're trading, reflecting on their own experiences. And then to move up, they'll form little accountability pods. I'm going to try that. Okay, fine. You're going to report back next month to the group. We did the exact same thing in our training programs way back in the day, 30 to 40 days later, you would have to come back and take what you learned in the two days. And we give you what are called gateway activities. And we would say, look, we're never going to convince you of this. We can stand up here for two straight days. Thanks for coming. You'll think it's a great idea. Everything's going to go in your good idea drawer when you get home. Right. And then you're going to forget about it a week later, but you're coming and tomorrow's credit, they agreed without followup training is pretty useless. You're coming back in a smaller group in 30 to 40 days. We're to go around a U shaped table. We're going to ask you what you did. You've got five activities. All right. We can't convince you. Let your clients and your prospects convince you. So try one, because you don't want to be the person that shows up that didn't do anything. And that was more powerful than we ever anticipated. And that's really, I think, where that transformational change took place. You've got to put yourself out there and take the risk to begin to see what the possibilities actually are.

Sam Sivarajan: 33:15

I love that. I think accountability is huge and I think this peer accountability is probably among the best.

Gary Sinderbrand: 33:42

you

Sam Sivarajan: 33:44

So Gary, so I think you would agree with this statement that clients today are demanding probably more holistic human centered advice than ever before. But the reality is that advisors are stretched thinner than ever. So how can firms and practices balance, I guess, the rising expectations of their clients with the operational realities of their own time and capacity?

Gary Sinderbrand: 34:10

You know, that's really a great question, Sam. And it's not going to happen at the firm level. All the firms are going to tell you from an institutional standpoint, this is what we believe in and we want to leverage best practices. And it's just, it all sounds great. It really is. But from a financial advisor standpoint, financial advisors are like free agents all the time. So the firm is trying to balance the concept of compensation, keeping the FAA happy. but not leaning on them too hard. If they're productive and they're doing a clean business, the firms are just going to kind of look past it. They're not going to mandate what they need to do. So it comes down to the individual. Now, the interesting thing is, and this was also cited in the McKinsey study, there is a very strong movement in the age 50 and over demographic for that enormous group of people. seeking more holistic advice and willing to pay a fee for it. So if you're an advisor that has always gotten by on kind of maybe doing some planning or, yeah, we did a plan four years ago and you're not doing the things that help mitigate risk and you're not keeping the clients plugged into that specific outcome that they need. Those types of clients are incredibly susceptible to an overture from a client that looks at planning as a verb. It's an active, active, ongoing thing that you have to do, especially when markets become volatile. So it's unfortunately not, not anything a firm can mandate. Now Merrill, I think did a pretty good job. And I think the reason Merrill did a good job is that they were able to allow peer-based training to emerge. So it wasn't just myself and my partner who were teaching. There were probably eight, 10, 12 other FAs that were always talking to other groups about the way they did business, which was consistent with what we were doing. And you learn best when you learn from your peers. That's really not happening anymore. You might see a peer speak at a, at a, at a conference or even a small training program, but without that accountability follow-up, there's not going to be any change. And the training, programs or training departments. that existed in these firms for the most part are basically staffed by people that either never really produced or if they did, they didn't produce at a very high level. So the FAs, especially the senior FAs, they might listen and nod their head, but they're not really going to take it to heart because the person that's telling them about it is telling them what they've heard from other people instead of what they've done on their own. So it's a real challenge. They're all dealing with it. In fairness, the only firm I work with that's really going after it is Morgan Stanley, who has made a decision that they will now only hire new FAs if they strongly believe they can act as rate makers, which I think is the right way to go. And they're backing that up.

Sam Sivarajan: 37:30

So meaning that they can bring their own clients in and stuff, how do you mean? Okay.

Gary Sinderbrand: 37:33

Yes. That they would have the ability, whether they're on a team or on their own, to generate their own business from scratch. And they're supporting that. They're supporting that internally with practice management coaches. They're supporting that with external coaches like me. But I think that what they're doing is they're focusing on, here's what we need to have. If we not only want to keep the assets we're currently running as our FAs retire, but we want to capture the other assets that are out there. We need to train our next generation of producers to look like our multi-million dollar producers right now from the get. We can't wait for them to hopefully pick it up. If they can't get it done, we can't keep them.

Sam Sivarajan: 38:13

No, I think that's smart. I remember years back, crossed paths at UVS many, years ago, but at UVS in Canada, we were hiring any FAs that we would hire. The first thing that we'd ask for them to do is to create a business plan. How were they going to build their practice? What were their channels to market? What would their ideal client look like? What was their unique value proposition? And the reality of it is not that, you know, we expected that business plan to be executed, you know, per se, what we wanted is two things. Number one, like what you said, this mindset that they're bringing in, that they're coming in thinking, yes, I am responsible for my own development and for my own practice development. But secondly, I think it's the thinking that was going on about for them to actually give some thought as to how they're going to go to market, what channels are they going to use? You know, how are they going to. I remember having many conversations. It's invariably the business channel. I'm going to go finders. I'm going to have centers of influence that are going to, I know these lawyers or these accountants and I'm sure you've had this many times. And my answer always back was, well, you and the 40,000 other advisors are all talking to the same 10 lawyers and accountants. So yes, it's good like...

Gary Sinderbrand: 39:34

You you You know, you you remind me of so many different stories and interactions I've had with advisors You know one of the things I look at when I do the initial analysis is I do what's called an ROR return on referrals from professional networks and if the advisor has an outside Attorney that's in a state planner. They were they they work with I'll ask them. Well, how many clients have you referred? I don't know, eight, 10. Is this person any good? Yeah, my people are pretty happy with them. How many has he sent back your way? None. Have you talked to them about it? Well, kind of sort of, but they didn't promise me anything because they have a lot of people after them. And I just look at them and I said, so essentially, you're creating one side of a transaction. Your transaction is you're walking in someone who's going to spend money someplace else. with someone you're introducing them to and purchase a service and there's no pre-established relationship of what it's going to take to send the next person. Well, you know, I was trying to tell them about my investment style and they want to get more comfortable. And I'm like, I'm just looking at myself. I'm saying they can't advertise. Where do you think they get their business? Well, I don't know. I guess from guys like us. Correct. Why aren't you in the same position? So the best referral source I ever had, I went up, I was introduced to by a local gentleman that owned a bank locally, didn't need my help, very sophisticated. I went and I used something called the advice model, which is something I teach. And basically I said, Dick, here's where I am. Here's what I'm trying to do. What's the, if you were me, what would you do? goes, well, you need people that can send you business. I said, okay, great. Who are going to send me? And he would kind of laugh. It's like, not yet kid. I mean, I was 25. He said, I want you to go see any, he referred me to his attorney in Philadelphia, who was a senior partner to a very prestigious firm. He goes, I'll call him. You go meet him. I think you're going to be okay. He introduces me to one of his junior partners who's 34, 35. He's got an LLM. He's a CPA. He's got a law degree. He's brilliant. And basically. I'm talking to him and I said, So I'm interested in establishing a relationship where I would send you business as long as you'd be willing to reciprocate. He says, yeah, what else would I do? I said, great, I have your first referral. He said, no, I said me. And became our personal attorney, we've known him forever. And we traded business back and forth for 35 years. And it was a tremendous relationship. I had others like that, but I would never enter into any of these relationships. where I would initially give a client a referral unless that accountant or attorney had told me they were willing to reciprocate. Well, not only did I do that, I would usually give out three names and I'd call each one of them and say, you're going to be hearing from so-and-so. I gave them your name. I have to give others. I hope it all works out for you, but I just want you to know I'm thinking about you. Hey, great. So I had referral sources coming in constantly as a result. It worked.

Sam Sivarajan: 42:40

Yeah, I think that's a point. Yep. Look, I love that. I think you're absolutely right to have that very clear, not this implicit, know, of course, you're going to send me business if I send it to you. I think, you know, we're both, we're all in the business of generating business. So I think there's nothing wrong. I like the way that you put it is like, I'll send you business. I need to know that you're ready to do the same. mean, and you know, it's not that you to do one for one, et cetera, but that you understand that this is a two way relationship. I think that's very powerful.

Gary Sinderbrand: 43:26

you Yeah. Yeah. And that, worked out.

Sam Sivarajan: 43:38

it did work out for years. So we're coming to the end of our podcast. And so I have a few rapid fire questions that I ask all of my guests. So if you're ready, number one, professionally, what is the most important lesson you have learned over the years?

Gary Sinderbrand: 44:04

Question your own conclusions. Even when you're absolutely certain you've got it all laid in, back away, take some time, look at it, and rethink it from a different angle.

Sam Sivarajan: 44:16

That's brilliant. Powerful. Difficult to do, but absolutely bang on advice, I think. And I think that never changes, right? The older we get, I guess the more that we have to do that probably because we've got a lot of assumptions that have been built in. Second, what is one practical tip you would offer listeners keen on applying your insights?

Gary Sinderbrand: 44:27

That's true. Be very cautious about becoming emotionally involved with your professional decisions, especially in times like this. As an advisor, your job is to not only absorb the news that is out there, but understand what's not being written as well in light of what you're trying to accomplish with people. So the concept of drawing your news sources from, let's say a singular idealistic point of view can really just anchor biases like confirmation bias and recency bias. And as in as humans as individuals, we're very susceptible to that as an advisor, you can't be you have to step away, remove everything and get it down to what does this client need to do to accomplish the reason that they hired me. And that can't be emotional. That's got to be pretty dispassionate.

Sam Sivarajan: 45:34

I love it. And I think it ties in so wonderfully to the first answer that you gave on the, you know, questioning your assumptions and everything else, et cetera. But I think you're right. You know, like, I think we owe it to our clients to be, you know, an objective source of advice, you know, whatever our own personal feelings or emotions around it might be. What is the right, what is the right thing for this client at this time in terms of what they're looking to achieve? Right. Gary, this has been, as I was sure it was going to be, this has been a great discussion and I think very timely for all of the things that are happening specifically in our industry, but also, you know, in generally in the markets. So thank you. If listeners want to learn more about you or find your work, where do they go?

Gary Sinderbrand: 46:26

So a couple of different places they can come up to my website, which is better path training.com. And from there, they can make their way to my podcast, which I've created for both, kind of, the middle distance or the middle ground between an investor and an advisor. It's titled if the public only knew where I'm trying to kind of demystify what the advisors are saying to their clients and trying to clarify what the clients are trying to say to the advisors. So I'm pretty, pretty excited about that. I'm also, in the process of, and I'll launch it in the next few weeks, creating a Patreon. I realized I've got several hundred hours of videos I've created that are broken up into nuggets that are both timely and timeless. I'm going to put that out on Patreon. It's going to be free. All I need is an email. You'll be able to make your way there. Just following the links in my website. that'll take you there as well, but I'm pretty excited about that. And then I'm going to. Basically leave it out there for free for the time being so I'm pretty stoked about getting a lot of that content I've created over the years out to the advisor community

Sam Sivarajan: 47:35

That's amazing and very, very, I think I'm sure insightful. So it will be, put it in the show notes so that listeners can find it. Gary, thank you so much for joining us today on the Future Ready Advisor.

Gary Sinderbrand: 47:49

Really a pleasure, Sam. Thanks for having me.