FEATURE HOLISTIC TECH A paper-based financial plan took 20 hours at $500 an hour, totaling $10,000. Now it takes two hours, costing $1,000. “All of a sudden, we could take on clients who didn’t meet our historic $1 million minimum,” Edwards said, adding, “That was important for the HENRYs.” HENRYs are high-earners, not rich yet and an important new group for the firm. They’re important enough that Edwards has an advisor devoted to them. “These are individuals and couples who are making $200,000, $300,000 a year designing web apps, and they’re still paying off 80 grand of student debt,” he said. “If we say to them, ‘Hey, Billy. Hey, Jamie — we would love to work with you, come back when you have $1 million,’ we’re never going to hear from them again.” The group is particularly important because they are younger, in their 30s rather than in their 50s. “You have a significantly more valuable process, because now, your lifetime connection with that family is not from age 55 to age 75, it’s from age 35 to age 90,” Edwards said. “That is a very satisfying sense of protection on the client’s side. And it’s very valuable for the advisor because that’s a very long income stream.” SOPHISTICATED ADVISING: The firm can quickly play out scenarios so clients can decide what is really important for their future. They can even peel away the dollars to uncover true value. “Because we can model all the clients’ cash flows for the next five, 10, 25 years, and because we know that things change, we can show clients not only the likely path that they have, but also alternatives.” For an example, Edwards described a client family with about $10 million in assets. He’s a law firm partner and she is a managing director at a bank, both making $600,000 annually. But they hated their jobs. So, they wanted to retire now, at age 52. The problem was that they owned two expensive properties. The advisors were able to show them that if they kept them both, they would run out of money by age 85. But if they sold one and put the money in retirement accounts, they could retire today. If they worked for five more years, they could keep both. “So now, it’s no longer a numbers question for the family,” Edwards said. “It’s 22
a values question. Which do we value more? Retiring early or keeping the big country house?” During the meeting, the advisors can instantly model any scenario the clients might imagine.
GOING PAPERLESS AND BUILDING PROCESSES
Edwards began his career a little on the geeky side. He started with Morgan Stanley in the early 1980s in systems, bringing his math degree to bear. Although he had a head start in computers and had done programming until the early ’90s, he was relatively late to digitizing his practice. His office went paperless three years ago, as he was adding staff and ramping up business. He instituted processes for new business and worked backward to digitize existing records.
Edwards’ early career at Morgan Stanley came in handy in figuring out how to systemize his processes. It also gave him an opportunity to assess the value of tasks and eliminate the unnecessary ones. It was a heavy lift, as going paperless always is, but the work paid off exponentially in the freedom he gained to focus on clients and growing his business. The system and dependable staff made it so he doesn’t even have to go into the office to work. “I’m not much of a manager — I hire only self-managing people,” Edwards said with a laugh. “We have two offices. I talk with the Midtown office once a day by phone. I don’t need to worry about what they’re doing, because I can see through the CRM, the task management system, exactly what’s going on.” Now he can travel and still access the tools and data he needs. But even with
4 Questions for Effective Tech These are the four questions that David Edwards used as a guide to adopt technology effectively.
1. What is the service you're selling? 2. Who is your target market, your ideal prospect?
3. What processes will enable you to find,
to identify and successfully sell this ideal prospect?
4. What technology can make the process you use easy, cheap and repeated?
The first two questions are key to guiding the process. Edwards said he has found that many people fail to answer these and go right to processes. He said he learned an important lesson early in his career when he was in the systems department of Morgan Stanley: “Never automate a stupid procedure.”
InsuranceNewsNet Magazine » November 2017