Dave Cain: Welcome to unsuitable on Rea Radio, the award-winning financial services and business advisory podcast that challenges your old school business practices and their traditional business suit culture. Our guests are industry professional and experts who will challenge you to think beyond the suit and tie, while offering you meaningful modern solutions to help enhance your company’s growth and leadership. I’m your host, Dave Cain.
Dave: In this line of work, the term trusted advisor is thrown around a lot. But what does it actually mean? Furthermore, what should business owners look for to determine the overall quality and effectiveness of their existing advisory relationships? We’re going to get some insight on today’s show. Fortunately, we have some great guest to guide us on our journey. Marc Rosen and Judy Bodenhamer are the founders of the Client Experience Institute, a Cleveland based firm that helps professionals think differently about their relationships. And they’re here to talk about the advisors of the future and how business owners can better leverage their existing network of advisors to move beyond their advisory relationships, beyond success to significance, to quote their tagline. Welcome to unsuitable, Judy and Marc.
Judy Bodenhamer: Thank you. Great to be here.
Marc Rosen: It is awesome. Thank you for hosting us.
Dave: Thanks for taking the trip down 71 from Browns territory to Buckeyes territory.
Judy: We’re big fans of both of our teams.
Dave: And can you give us a tip on, from an entrepreneur, give us a tip as what our entrepreneurs would like to hear from you guys.
Marc: David, thank you. As far as the opportunity to talk to people that are actually making things happen in the community and building businesses and creating wealth and opportunities for others, our philosophy is very simple. We want to rise the tide so that people that are developing their legacy businesses and the succession plans that many companies are still struggling with and how they’re going to continue to perpetuate themselves, we’re helping them think through those strategies. And part of that is their advisors that they use, so we also have the opportunity to chat a little bit about that because it’s an ecosystem approach. And as we go through that, you’ll get a chance to hear a little bit more about how we rise the tide.
Judy: And to kind of build on that, one of the things I think that’s really important as far as the professionals and the advisors that serve these business owners is, they’re a group of wonderfully talented professionals. The challenge is, they’re great technicians and they’re great technical resources. The advisor of the future is different. Everything that we’re learning, everything that the AICPA, that all the various organizations that are out there as thought leaders about the professions are saying is, “The world is changing and we need to change with it.” So that’s some of the things that we’re going to talk about, Dave.
Dave: Great. Great. A lot of my colleagues here at Rea & Associates around the state of Ohio, we get all kinds of technical training. We know the debits and the credits in the new tax code and the new Nexus court case with South Dakota versus Wayfair. We get all kinds of training in that. But when it comes time to being the trust advisor in advisory relationships, we don’t always get that type of training. And I understand that your company develops training programs for companies like Rea & Associates and other industries. Marc, can you comment on that?
Marc: Yes. Thanks David. Once again, as we talked earlier about the opportunity to rise the tide, we have created a five stage model that is beyond the trusted advisor. And the fifth stage is becoming an indispensable partner. And indispensable partner is something we can talk about because it applies to people in your daily life as well as it does in your professional life. And so we will talk a little bit about how those next levels are going to change the way that not only the service is delivered, but how it’s appreciated by the clients that you serve and others.
Dave: Judy, go ahead. I think you want to jump in.
Judy: I do.
Dave: You’ve got a lot. We talked off mic.
Judy: I’m a live wire about this.
Dave: You’ve got a lot of information.
Judy: The thing I think that is really important for everyone to recognize is this whole concept of relationship capital. It’s the new way of looking at how relationships are earned, how they can create value, and how you can leverage them. And I think that is everything. Dave, we were talking about that whole trusted advisor element. And that’s been around for quite some time. And achieving that level with your client is amazing. But as we’re moving toward the future, moving to the indispensable partner that Marc was talking about, is what’s going to make the difference in the rain makers of the future.
Dave: Was it Bob Dylan that penned the song, The Times Are A Changin’? And I guess our advisory skills have to change with that.
Judy: I think I need a guitar.
Dave: We have one. We can get you one. We have folks on staff that play guitar.
Judy: Perfect. Bring them on.
Dave: But beyond the trusted advisor, that meaning just resonates across our firm and with our clients and our listeners. And let’s start with a couple ideas that you can share with us. How do I become a better advisor? Business is changing. How do I become a better advisor?
Marc: One of the first things, David, that we see in the articles we’ve been writing in Smart Business Network and other things where we try to educate business owners and advisors, is this idea of what now is a true client champion. One of the things that many people in the profession sometimes forget is, they have to invest time and effort off the clock to learn about their client’s business. And a lot of times now, especially with the next generation coming in, they did a survey I read that almost 65% of the people that were surveyed for next generation would not use the same advisors that their matriarchs and patriarchs were using.
Marc: The point of the story here is, there’s got to be a relevancy where you’re invested in the client. And that comes in a lot of different ways. And so I won’t elaborate in all of that. But the client champion, and we can talk about what they means maybe in another chapter or episode, it’s really important that you’re a fearless promoter of your client’s business and helping them with referrals and helping them achieve other things that otherwise small business owners just don’t have the time to do. That’s another example of being a client champion if you’re an advisor.
Judy: And both Marc and I grew up in families that had businesses, so we understand what advisors can do for us. But what we challenge our advisors to start to think about is: How can they create greater value for the business owners in today’s world? Because they’re too busy, they’re busy with worry about succession planning and asset protection planning and every form of compliance that’s out there. What they don’t have enough time is to figure out what their team is, how their team can help leverage greater value for their business, and take that and use those advisors to help grow their business. And that’s, I think, what we are really passionate about doing, is helping both the business owners understand that, and the advisors stepping up to it.
Dave: Marc, you had mentioned that a lot of these advisory skills, they’re learned, or you study, expand, after 5:00. It’s the nontraditional day that’s beyond. And you’ve got to study. You’ve got to work with your client. And sometimes it’s those after hour conversations you have with your client that are crucial, just very special. And I’ve seen, and maybe you can comment, a lot of advisors aren’t doing that today.
Marc: I think it’s a challenge because people that have other expectations of work/life balance, the rain makers of the future may be doing it very differently. And I see very quiet leaders that are now emerging in their 30s and 40s in professional service firms, where they have a work/family balance. And they’re getting things done because they’re learning more about the client through LinkedIn. They’re learning about all other aspects of their business, who’s on their advisory board, who’s their passions and causes. And we have this concept called PROOF, which is, if you’re going to learn as an advisor, you want to know. What is your client’s passion? What are their recreational interests? What are their obstacles? What are their occupational goals? And what are their family matters?
Marc: And if you can understand PROOF as a great acronym, it’s wonderful way to build capital, as Judy said, relationship capital with your clients. Again, for the listeners out there, take the time to invest. Some clients I know that we coach have it in their CRM systems where they’re actually putting P-R-O-O-F as tabs in their salesforce.com. This is an asset of the company, not just the individual advisor, who might leave that company. And now, all of a sudden you don’t have that relationship capital harnessed.
Judy: And what you’re utilizing with that is not just the concept, but the technology. What we’re seeing with the 20, 30, and 40 year old professionals is, they have learned how to leverage technology resources to help make them better advisors for their clients, and take that information and utilize it in a variety of different ways that are really going to be able to help build that business.
Dave: The Client Experience Institute that, when you’re training and how to keep me focused on becoming a better advisor, you guys do coaching. You have workshops, consultation agreements, I assume. And we’ll talk about your website a little bit later. But is all of that data listed on your website?
Judy: Absolutely. And it’s at clientei.com. And you’ll be able to see what kind of workshops we offer. Marc and I got together about 10 years ago. And we’ve been friends for a long time, and we really started going back at this about two years ago. And we’ve had a blast in this process because what we’ve been able to do is really help professionals and business owners get better. We are the biggest proponents about growth in business. And we know that what’s going to help build our communities is the ability to have great jobs with great people that are working there. And that comes from a lot of work in business. Everything we do is about helping to rise the tide.
Dave: Before we leave the topic of beyond the trusted advisor, from the advisory perspective, you had talked about all of these things and ideas to do with your client and questions to ask, and get really involved. But that involves a great deal of trust. You’ve got to build trust, I believe. Where does trust fit in the equation? Judy, I’ll throw that to you. I trust you to answer that question.
Judy: Well Dave, thanks for trusting me to answer.
Dave: Yes.
Judy: Trust is the foundational element of any relationship. Think about your personal relationships, your family relationships, your business relationships. If you don’t have trust, you don’t have anything. And trust is earned and trust comes from a willingness to understand the proof of your clients, and them understanding a little bit more about you. But trust builds. It comes from authenticity. It comes from relatability. It comes from the fact that you care. And that is not always easy to project from a professional’s perspective when you’re talking about a tax return or an auditing situation. Right? It’s kind of a tough way. How do you weave that in? And you do that at every interaction you have with a client. Every interaction, you understand it is a moment of truth, that you get the opportunity to say, “Hey. I’m with you. And I am beyond the trusted advisor. I am a person that is a true partner, an indispensable partner to you and your business.” And I think that’s what helps to build trust.
Dave: Okay, Mark and Judy, call to action. I want to be a better trusted advisor. First of all, I can have you guys on speed dial in coach. But what are some things I can do in the next week, next 30 days? What’s the call to action?
Marc: Yeah. David, the first thing that we recommend is, in your network, someone in your social network, find someone who’s really good at helping people beyond just the area of their expertise, where they’re using an ecosystem approach, where they have plenty of different ways to connect people. And just interview them and talk with them and find out. What is it about them that allows them to flourish, knowing that you have your own personality style and you may not be the outgoing, vivacious type person? But yet, you still want to do this. So part of it is, know your style. And we suggest people do some sort of assessment of their own self through tools that are available.
Marc: But it’s finding not just a mentor. It’s finding someone that you like that can help you see this without … Because it’s not taught in the firms. This is not part of your curriculum going through your certifications. We suggest, please, please, please, find someone. Don’t wait until the firm gives it to you. You seize it. Own your career. And make a difference by learning these things. And if you do it in a quiet way, that’s fine. But build this value and you’ll learn how much more enriching your job can be by giving back and creating abundance for your clients.
Judy: And then I would add onto that is, take an inventory of your clients and your advisors, your referral sources, your centers of influence, and kind of categorize them from the perspective of, hey, I’ve got an awesome relationship with this client and with this referral source or center of influence. What can I do to leverage them more? The ones that may be lukewarm, what can you do? And do you even care? Some of these people are not going to be people in your business going forward, and that’s okay too. Understanding what works for you and understanding what works for your firm, I think is a really important component. Be true to yourself too, is that work with clients that you enjoy because you’re going to be a better professional that way.
Dave: Great advice. And before we switch over to the conversation about the business owner and how they can flourish and with their experiences with their advisors. I understand Marc, that you did a TED Talk not so long ago. Can we get the topic on that? We have a lot of listeners that listen to the TED Talks.
Marc: David, thank you for the opportunity to share something. I had a personal story where I lost my wife about five years ago to cancer. And my life was very, very much about success. And significance is a very different term. Significance is about what you do for others. So the title of the TED Talk is From Success to Significance. And it’s my personal journey story with crying and a whole bunch of other things sprinkled in, as it was hard to deliver, but very cathartic when it came out. And it’s about how business owners, woven into my story is the succession planning of 3.5 million businesses that are baby boomer businesses right now that are going to perpetuate and how that gets done. It’s eight minutes of pure joy, so if anyone would like to listen to it, I would be honored to see those views go up.
Dave: Okay. We’ll shout out to our listeners. Give those TED Talks a try. There’s a lot on there and we’ve heard from you that you do TED Talks, so let’s look up Marc Rosen from the Client Experience Institute. I think you’ll enjoy that. We talk a lot on the podcast and within the podcast community about succession planning. And I think that’s a good segue to talk about owners and their advisory relationships. You guys obviously are both owners of the business, as several in the room here. Talk to us about: What are ways that you teach and consult on ways to enhance the advisory experience?
Judy: Well, I think that the first place we start with business owners is for them to sit down and say, “Really, what do you want as far as knowledge, resources, access to information, from your professionals? What is it that you don’t even know that you’re not getting?” And we really help the business owners start to see. Hey, there’s a real opportunity for me to get better, for me to teach my next generation and my kids how to take on this business, how to be better business owners than we are.
Judy: And the people that are in the best position or should be in the best position is their group of advisors, their accountants, their attorneys, their insurance brokers, the people that surround them and should be taking really excellent care of them. And they do. But now how do you take that knowledge and how do you harness those resources to elevate everybody’s skill at a higher level? And I think that’s the thing that we spend a lot of time working with business owners because frankly, they don’t even know it’s possible. We help them see the future about what this can be as it relates to their advisors. Want to take some more on that, Marc?
Marc: Yeah. The essence of what you were kind enough to bring up the TED Talk is, there $7 trillion of potential succession planning transfer of businesses, $3.5 million at $2 million a piece, $7 trillion. And our national debt’s $20 trillion, so just to put into perspective how important this is to the world is no small matter. And so as a result of that, the ideas of giving up a business, giving up your identity, having a life after your company, is very hard for a lot of matriarchs and patriarchs. Part of this isn’t Xs and Os. It’s psychology. It’s all about having advisors like REA that can guide an owner through all the other parts of the planning that go into it, including who inherits what if you’re going to sell it, and all those things.
Marc: It is really a conversation that most owners avoid because it makes them vulnerable. They’re not in control, so for them to go to the business advisory community and ask when they don’t even know themselves what it’s like, requires sometimes people like us to create that jigsaw puzzle and put it together for them so that the owner realizes there’s so much more there than the vulnerability. And you’re already paying for their services. Now the question is: What’s the synergy?
Dave: Do you run into ego issues when you’re trying to develop an owner’s thought process to, hey, take advantage of these tools, your advisors?
Judy: Well, all of us have ego.
Dave: No.
Judy: Imagine that, but we all do. And some are more willing to listen. Others, may be a little bit more resistant. The challenge in our role is to really help them see the future. Right? Help them see that the greatest obstacle they have in some ways is themselves, and to really let their advisors help them work through that at a higher level and a much more sophisticated level, and to also be that leader and that role model for their kids or the people that are the ESOPs, all the people that are going to take over their business. They have to demonstrate that leadership. And that comes not from hubris, but from honest, transparent vulnerability. That has to happen, which is not an easy thing for many business owners.
Dave: Here comes the most difficult question of the podcast and your challenge for the podcast. You guys ready for this?
Judy: We are.
Marc: Absolutely. Bring it on.
Dave: Okay. As a business owner, I am so wrapped up in the day to day, the whirlwind of my business. I’ve got to do the bottom line. I’ve got to hire talent. I don’t have the time to do this. I don’t have time to meet with my trusted advisors. How are you going to develop a program that forced me, or have me sit down with your team and just put this together?
Marc: It’s a great question. And as you know, just like you ask people. How many individuals in this world have their own personal will and plans on that side or whatever? The answer is very few. Here it is. It’s will of force. Unfortunately, it is taking the strength of their convictions and all the excuses that are legitimate as to why they can’t do it, and say, “Look. David, this is your legacy. The most important thing that you have is what you leave behind, and you certainly wouldn’t have your financial services tied up and not know how to plan for that and have someone to help you with that. So why would you not do it with your business? But you’re doing it with your personal money that you’ve got invested with somebody that takes care of that.”
Marc: It’s really more about logic and talking through and staring them down a little bit and having that conversation and being a strength of conviction without being arrogant. Because you find out, once you peel away the layers of vulnerability and challenge, they’re scared to death and don’t know what to do, so they can’t choreograph with their advisors. So we help them get the courage of conviction, but someone needs to not just do their job and stay in their own swim lane and not mix it up, because if you don’t do that, all what will happen is great advisory work, but it won’t be done in a collective one. It’ll be done individually. And then the business owner has no synergy for all his different advisors.
Dave: Judy, along that line, as a business owner, if I adopt this thought process, is the value of my business going to go up?
Judy: Well, in all reality, if you do this, the value of your business will absolutely go up. And why is that? Because you’re getting advice about growth. You’re getting advice from the professionals that know your business, that you trust, that are committed to your success, and committed to the successor’s success of this business because they have a vested interest in that too. They want to see the next generation or the next owners be successful too because that’s their business going forward. When you’re asking the question: How do you get a business owner’s attention?
Judy: You do talk to them about everything Marc said. It’s the will of conviction and it’s the ability to try to connect with them on both a logic and an emotional basis. But at the end of the game, it is about growth. It is about the money that they’re going to be able to transfer to their children, that they’re going to leave as a legacy to the ESOP, the people that bought that business, and to the next owners. And from there, that’s when you can really start to get them to say, “Okay. Maybe you’re right. Maybe I need to spend about 10 minutes a month talking to my advisors at a different level.”
Dave: Different level. Okay. You know I’m going to ask this as we bring this podcast to an end. What’s the action plan for the business owner? You’ve got to get it. I’m not letting you out of here without the action plan.
Marc: Thank you again, David, for that kind request. As far as the reality of this, the action, if I’m sitting out there and I’m a 20, 30 year old business, or I’m a 15 year old business, is you have to adopt a new mindset. The first thing you have to decide is, do not look at your service providers, your accountants, your lawyers, as an expense. They must be a return on investment. You have to speak to your accountants and lawyers and say, “First of all, before I worry about succession planning, what ideas are you bringing me that can generate revenue, reduce costs, reduce risk, or make my business easier to process and do business with? And if you’re not bringing those ideas to me, you know what, maybe I’m going to consider some other option because you need to be a value creator.”
Marc: And Judy and I spend a lot of time coaching professional service providers on how to do client reviews with their business owners about value creation. And so the first thing you need to do is, you need to have a higher expectation that if you’re spending $100 to $50,000 a year on professional services, what are you getting out of it besides compliance and making sure that you’re minimizing your taxes?
Dave: Bringing the value.
Judy: Right.
Marc: That is the first call of action, is have a higher expectation, do it in a gracious and humble way. But make sure that you look at it as: Have you referred me a client? Have you brought me in a potential employee? Have you looked at some other aspect of my needs in human capital and you’ve referred me to someone you know because it’s a client of yours that’s already put together a system that I’m about to embark upon, so it reduces the learning curve? It’s all about leveraging the networks of the advisors and forcing the advisors to go back into their own hometowns and where they’re based out of and letting all the client experience that they have with their other thousands of clients be utilized to help me as a business owner in Columbus, Ohio.
Dave: Judy, bring it on home.
Judy: The thing that we talk to the business owners quite a bit about is, you call the family meeting. And the family meeting is your advisors. It’s not just your family. They’re your extended family. Call the family meeting. And what happens, have an agenda for the family meeting, talking about a lot of the things, value creation being number one as it relates to: What has this family done to create greater value for the entire group? And you do that, as business owners we say, “At a minimum, once a year, you have the family meeting with your advisors.” And you start calling them that, so they feel like they’re part of your success. And they feel like a part of your family. And they’re going to work harder.
Dave: Great. Great. Our guests today have been Judy Bodenhamer and Marc Rosen from Client Experience Institute. I want to give you their website. The website is clientei.com. That’s clientei.com. Did I get that right?
Judy: You did, absolutely. Dave, thank you.
Dave: Thanks for joining us, Marc and Judy. It’s inspiring to see that the role of the trusted advisor is not only still alive and well, but it can be just as effective as ever. And business owners are looking at the rate of return at even a higher level these days for their trusted advisors. Listeners, check out the Client Experience Institute’s website. You’re going to see a lot of information regarding programs, consulting, and coaching, and the services available in the industries they serve. We also have a link to their site from our website at reacpa.com. If you enjoyed today’s episode, let us know. Like it, comment on it, share it. And don’t forget to check out videos of our podcast on YouTube. Until next time, I’m Dave Cain, encouraging you to loosen up your tie and think outside the box.
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