Editor’s note: In this edition of What’s Working Now, an AdvisorRADIO feature in which Horsesmouth members tell us about recent success they have had running and growing their businesses, we hear from advisor Justin Cramer, who is having success again with dinner seminars—after a hiatus due to the pandemic.
The following article includes edited excerpts of this conversation, or you can watch the full interview below.
Guest: Justin Cramer
Myrtle Beach, S.C.
Years in business: 10
Firm: Pyle Financial Services
What’s working now: Direct mail and dinner seminars for HNW clients
The one thing that continues to work is seminars
My partner and I teamed up about five years ago, and we had some pretty lofty growth goals. There’s a lot of things that have come and gone in the industry, but it seems like the one thing that continues to work is seminars. Getting in front of people, presenting on a topic, and educating people shows competency, drives urgency, and it just grows assets. So we kind of fumbled our way through the first couple of years, and then I got serious about it and went to a Chad Henry masterclass—it would have been two-and-a-half years ago, maybe.
I had really gone and got the playbook, so I highly recommend it. I came back and he highly recommended Horsesmouth. At that point I was able to start my membership and I did a trial run in November. Just 60 days after getting back from the masterclass, I filled up three restaurant Social Security seminar dates and had 211 people on a wait list.
So we said, “OK, we’ve struck a chord here in the area. In order to create some diversity, let’s do retirement income, the Savvy IRA seminar, and Social Security, just kind of ham and egg them back and forth.” Spaced out about two to three weeks apart so we could get in front of more people, but on different topics.
Working out the kinks
(Listen at 3:20)
We’ve got probably a 45-mile area up and down the coast and about 20 miles inland. And so we rotate. Last year, we were really working out a lot of kinks, but we brought in a large institutional account for $35 million. And aside from that, we brought in another $20 million from seminars—and we started cold from a standstill start at the end of January. We didn’t even bring in our first client until April. So really that was in probably eight months.
So we were all geared up and worked out all of our kinks in December and January. We were ready to fire on all cylinders this year, and obviously we know how things turned out, but fortunately it didn’t slow us down at all.
We’ve got some pretty lofty goals. We expect to bring in $36 million a year, every single year, from seminars. And then also on the referral side of our business, we need to be bringing in about 10% of our assets under management. So we’ve got some pretty straightforward goals and our team knows it, and that’s what we operate towards. We did our first seminar in February, and we’re right in what our friend Bill Good would call the “seminar success zone.” We usually have about an 80%–85% appointment request rate coming out of that.
Give me your best idea
(Listen at 5:08)
When March 2020 hit, I sat down our team—we’ve got about nine folks on our team here. I said, “OK, we can’t get into a restaurant, but I want everybody to give me their best idea. I’m willing to spend time, money, energy, and effort on anything, because I can tell you in this moment, assets will be moving. They’ll either be moving to you or away from you.”
And so we tried everything, from mailing out invitations and doing Zoom events, to giving people $50 gift cards just to show up and give us 15 minutes on the phone. Actually, what we ended up doing for our clients drove the most urgency, because last year we brought in a certain number of dollars in clients. But we’d also developed a several-hundred-person prospective database, just from 2019 into October 2020, about 15 months.
Clients love pre-recorded videos
(Listen at 6:10)
So for our clients, in 26 states and four time zones, we started doing two to three high-definition videos every week on what was going on, where we were, the data we were seeing, and what we expected moving forward. Our clients have loved it. We started pushing those out to prospects as well.
Those videos are pre-recorded; 85% of the time, it’s me talking. The other 15%, it’s me and my partner. The videos were on what was happening in that moment. Stock market goes down 10% in one day—we’re on a video within 24 hours and our clients have that in front of them. These are two- to six-minutes long.
We broke down the CARES Act for them; we talked about tax planning. Anything to stay in front of them! And we started having our clients send those out to their friends, their family. So we had a dead period down here from about March 2020 to probably June 2020 would be my guess, where we couldn’t meet with prospective clients in a seminar setting, but we were still bringing in assets.
For the videos, we just got a little lapel mic. We use an iPhone and we bought 50 bucks’ worth of software and we just do a couple of small edits. They’re very simple, very straightforward. That’s as easy as they are. The videos are on our YouTube channel, and we would email them out to clients and our prospect database every time we made a video. We also uploaded them to our website—there’s 60 videos on our website, www.pylefinancialservices.com, right now.
And what that allowed us to do is we ended up picking up about $6–$10 million of prospects that we had engaged with, but weren’t ready. They saw how their advisors handled the crises, and chose us instead.
Going back to dinner seminars
(Listen at 10:25)
That really got us through that moment, and I told the team, I said, “I want to cut on the engines in July. I don’t know if anybody’s going to show up. We may waste five grand on mailers, but we’ve got to know.” We did try direct mail to drive people to a Zoom webinar, but we have a $1 million account minimum, and we just couldn’t get that kind of family to attend and then follow up with us.
We mailed out invitations in June 2020 and had our first dinner in July. We just made a note on there that we wanted to be respectful, because obviously down in Myrtle Beach we have a large retiree population. So wanting to be careful and sensitive to that, we just said, “Hey, Ruth’s Chris has a great room. They’ll let us put 20 people in a room. Everybody’s at their own table, six feet apart. We put hand sanitizer on, people wear masks.” We packed out three dates on our first invite.
And what’s interesting is, and I love going back to our team, we’ve heard over and over from new clients. We’re now at $24 million in new assets through the year, eclipsing what we did last year, even with the virus. With what we’ve got in the pipeline, we’ll finish at $36–$40 million in new assets this year. We’ve got five dates in October that are completely sold out.
We also added in another venue, a high-end restaurant. So it will be 20–30 people per event, but because of what we talk about in our seminars, it caters to a higher-net-worth prospect. Our average new client account balance this year is $2.2 million. And you can get to $24 million quicker that way. Again, we expect to be at $36–$40 million, and we just feel like we’re starting to find our groove on what we deliver in a meeting, what’s our process, onboarding.
We use 100% old school direct mail, no digital advertisements. We use LeadingResponse, who used to be RME. They’ve been wonderful. We usually mail out one postcard and then have two or three dates on that, and we fill them up.
Tax planning is attractive
(Listen at 12:33)
I haven’t done Social Security in 12 months. Instead, it’s taxes. We’ve got a team member that does all that, I believe it’s how to lower or eliminate taxes in retirement. We use the Savvy Tax Planning presentation, and some good stuff from the Savvy IRA side on IRA planning.
What’s fascinating is it’s almost like taxes have leprosy. Nobody wants to talk about them, but if you have money, you have questions about it. And the conversation always is, “We’re not tax advisors,” and we’re not. Unless you’re a CPA, you’re not, but you do give tax advice and FINRA has said that if you recommend a rollover or you recommended distribution from an IRA, or you recommend a Roth conversion, or you recommend selling a capital gain, you are giving tax advice.
There’s plenty of ways that we advise our clients within the bounds of being only financial advisors and not tax professionals. We’re not preparing tax returns; we’re not doing anything like that. But when you’ve got $3 million and two of it’s in a taxable account, and we simply talk to you about, “Hey, why don’t we own structures that produce qualified dividends at the 15% rate, rather than ordinary dividends at the 29% rate for you?” They perk up, and say, “Nobody’s ever talked to me about this before.” And so we’re finding an incredible amount of traction with high-net-worth families, basing it off of the very things that Jeff and Debra talk about in the tax planning program.
One of the things that has been an incredible success is showing folks how to get Social Security tax-free. As Elaine talks about, and I’ve been to her class as well, there are multiple sources of income that are not counted in the provisional income structure. So I’ve really taken the IRA structure, the Social Security structure, and the tax structure and blended that into a conversational perspective.
These are high-net-worth, savvy people saying, “My CPA never said this. My tax attorney. Nobody’s ever even mentioned this to me before.”
Offering a free tax audit
(Listen at 16:52)
This is right out of the Chad Henry playbook. He comes out of workshops with a Social Security report, but we offer a tax audit. We say, “Are you 100% sure that you’re paying the least amount of taxes possible?” Everybody’s answer is no. “Well, we designed our tax audit to look into your investment structures. Could you be getting Social Security tax-free? Are your dividends in the right location?” And, again, we’ve got an 80%–85% appointment request rate and that’s over 80 seminars. So it’s been pretty consistent.
We tried all of those tax planning software and we just couldn’t find what worked for what we wanted to do, trying to blend the whole structure together—estate planning, Social Security maximization, income and cash flow, IRA distribution management and conversions, and those things. We created our own proprietary spreadsheet. It took one of our staff members about 100 hours of work and programming. We use that, but any one of those other software could probably do a pretty good job.
Be proactive—people are scared
(Listen at 19:36)
We’re still doing one to two videos. You turn on the news, there’s still plenty of stuff to talk about. We just got such an overwhelming response from our clients. And everybody’s experience is certainly different. I think we had less than six incoming phone calls regarding the market and accounts during the entire [month of] March, because we were trying to be, and this is just who we are anyway, proactive, over-communicating. Our clients have just loved it. And I can tell you it’s a great way to be in front of your clients without blocking up your day with three to four meetings, leaving the schedule open for prospective clients.
People are scared and they don’t know who to trust. And there’s two things generally that are more important to anybody, outside of their religion if they have one. That’s their health and their finances. And right now they turn on the T.V. and it’s hard to make a distinction between fact and fiction, partisan and simply news.
We say to folks, “The wealth accumulation phase of life is fairly straightforward. Make money, save money, live below your means. But the wealth distribution phase has potholes everywhere, and the attorney’s pointing to the CPA, and the CPA is pointing to the advisor, and the advisor is pointing... And nobody’s willing to say, ‘the buck stops here.’”
Take the posture of educator
(Listen at 22:50)
We’ve spent tens of thousands of dollars on competency structures, whether it be memberships at Horsesmouth or conferences or books, because we felt like competency is and was, and will continue to be, the great neutralizer. If you know something that the guy down the street doesn’t, you immediately have an advantage.
If your clients and those prospective clients aren’t being educated by you, they will go somewhere else to get educated. And there’s no such thing as swimming in place. You’re either floating upstream or downstream, and we want to grow. I get not everybody’s in that season of life.
We have a seminar tonight, 30 folks coming in, packed out. We’ve done it so many times, I literally show up five minutes before I do it. And then we’ve got a staff member that calls everybody. It’s not a big deal to commit the time, energy and effort to educate people. And oh, by the way, if you can grow your practice, you can be more selective with those relationships. Isn’t that what everybody wants in this business, the ability to do that? The freedom of choice there.
I cannot recommend Horsesmouth and the educational side of growing your practice enough. I just cannot recommend it strongly enough. I’ve subscribed to three memberships and attended three of the live events, and I’ve gathered that you need to step aside and you take the posture of educator. Everybody says the word “holistic,” but how many people are actually doing that? You neutralize the need to fret over performance and fees. We never have clients talk to us about performance and fees, because we’re doing estate planning and tax structuring, the things that last beyond a good year or a bad year.