An inside look into Heritage investing….

This is a secret meeting inside Heritage Financial Investment group. They manage over a billion dollars of money. Don’t ask me how I got this just enjoy the content and learn to invest like a pro. There is audio and a transcription of the meeting.

Facilitator: We want to make sure that everybody for Heritage is fully involved in the conversation and not taking a break from it to make notes or whatnot we can review those later. What it means however is that if we can try to keep one conversation at a time. There are a lot of times where you might want to lean over and say something to your partner or launch another comment, these are all transcribed after this and I get all kinds of nasty emails and stuff if we have lots of crossing over in conversations and what not. Feel free to jump in but if we can try to keep it one person talking at a time that would be a great help. Bob let me turn it over to you to get it started.

Male: Of course so I didn’t realize everything was screwed up this early [laughter]. Do you want me to shut the door? So I just have some follow up notes from my last meeting. We have a few agenda items and I want to update you all on what we’ve done since the last meeting. One of the items was reviewing our cash flow planning spreadsheets and a suggestion came up about having what’s called in our industry Monte Carlo simulation to see the probability of success rather than just showing a straight line a pretty black and white version throw some probabilities on it, a scenario analysis, and the update to share with you for our research in software that is available out there and we will probably be going forward with a trial and getting client feedback in meetings. So that is where we are with that. Also with the financial planning software there was a question about seeing how the present day plan that we are reviewing compared to historical plans that have come up in the past. We talked about that and it would be too complicated for us to do overlays on one spreadsheet but we keep a historical tab and historical spreadsheets so what we can do is pull up the spreadsheet we reviewed last year, three years ago, and five years ago. Five years ago we projected you to have a net worth of x and here it is this is where you are. Here is how you’ve exceeded it or missed it so we can do comparisons with the question about cash flow statements. We released the web portal for clients to log in to that was over a year ago. The portal I think was released 6 or 12 months ago and I think that’s been a success we’ve had some fairly strong reviews from clients so let’s take a pause right now and just hear now that most of you have spent more time on it is there any other feedback anything we can do to improve it? The portal on our website where you can log in to your accounts and upload documents, anyone have any thoughts?

Male: How many of you have used it? Okay cool, that’s great and what do you think of it?

Male: It’s easy to use. Very easy.

Male: Great

Male: It’s a big big help getting all the information together in one place.

Male: Cool, who else?

Male: I use it all the time.

Facilitator: Great. There’s a lot more capability with our client portal then most of you are probably using at the moment. There is a private vault where you can store electronically any document and break it down by category and attach it, NSA documents, your passport, insurance policies, you name it. You can upload it on your end, or we can take data that we already have and upload it. It’s a two way street. It’s all encrypted and the firewalls offer plenty of security and it looks to be a system that we would more often utilize to communicate important documents with you such as network statement, update of initial plans, or for confidential information. We would like to use that vault for those documents and not transfer them by email, even though we have an encrypted email system those things can be hacked unfortunately these days. Would you make more use of it if maybe you were trained on it and understood more what the portal had to offer? It’s a repository involving your important documents, something that has value or not.

Female: [inaudible] having everything in one spot is a very good idea.

Male: It would also be beneficial to have an app for your mobile device to easily access the vault.

Female: Yes

Male: Yes

Facilitator: What’s the infrastructure on that? Is it hosted is it a cloud based thing?

Male: Yes it’s with a firm called Tamra, they are an industry leader with that software. We also use them for our trading systems.

Female: I’m concerned about security.

Male: Everything seems to be hackable.

Male: Any other questions or thoughts about that. It seems like everybody is interested [inaudible 5.20] [laughter]

Male: Okay go ahead.

Male: I use it for bringing up current information like for example before a meeting the week before I’ll go through and see where things are. Is there historical information there as well? What I do now is I put it in a spreadsheet and keep my own is it possible to have historical information there as well?

Facilitator: The question again Paul. Is it possible for you to upload your spreadsheets?

Male: I’ve done that already. In other words I’ve been able to take your current information and load it into the spreadsheet and keep track historically what’s been happening ever since we’ve been with you guys. What I’m wondering is could I save myself that trouble? Could you save for me the historical information on the website? In other words what happens to the investments that I have over a period of time or is that not possible to do?

Facilitator: So the investments that you have your tracing back to inception, are you talking more about the planning documents?

Male: I’m talking about maybe on a quarterly bases maybe seeing what’s happened to the investments.

Facilitator: So we upload the quarterly performance report electronically to every one of your portals. So you can go back since the inception of time and look at each quarterly report.

Male: Right it’s just to see what I, maybe it’s there already and I just haven’t been able to use it. I sort of take the current information and load it into a spreadsheet and keep track of it myself. I’m wondering if there is anyway the portal can automatically do that so I can just look there and see what’s happened to my investment.

Male: I’m not sure maybe we can follow up on it.

Male: It’s not critical because I take care of it myself, but I thought if it was something simple to do that it would be great.

Facilitator: We will look into that Paul and see.

Male: Okay.

Male: Jon raised a great question in regards to security. We have received from Tamara, a very in-depth written statement of both the type of security and as financial advisors it’s a little bit over our heads, but we’d be happy to share that with you. I have another client who is very technology savvy. He had the same concerns you did. We sent him this and he was much more at ease once we sent it to him. I’d love to hear from you though.

Facilitator: Okay, excellent. Anything else on that Joe? Bob you want to go next.

Male: This last update we had a new employee since the last meeting. Tim joined us from the builder group. A financial planning firm. He was in a planning role so he is helping us plan out the team approach we have, so he helps your wealth manager and wealth advisor prepare for your client meetings. That’s a topic we’ll continue on today. How to build that team approach and how our growth is afforded us to do that. With that the strategic plan is also something an agenda item that we have prepared today. That was as a result of feedback we received at the last meeting as a requested item. I will review that right now. I think we will jump into the strategic plan. I’m going to reference this document it was emailed out to you all. You should have it. Somewhere around your dinner plate. So there are five points on here and the first one is about growth. Since I’ve been at Heritage for the last ten years the firm has grown at about 15% a year. Some years higher, some years lower, and we want that growth to continue at about that same rate. There are 3 components to it. One is asset growth, hopefully the market helps us but our assets do appreciate with investment performance. The second is net client deposits. We have some clients in the working years for our [inaudible 9.13] some clients in their retired years for our [inaudible 9.17] but we are slightly net positive. Then the 3rd, actually the biggest component is through referrals from existing clients and all their trusted professionals, the accountants and attorneys that we work with. I could recommend a few in this room for those referrals and that’s something that were looking to continue to work with our clients as well in the future. Any thoughts on the growth rate and how we are looking to improve it?

Male: What does growth mean here? Is that the dollars under management, it dollars under management plus fees? What is growth?

Male: Dollars under management. So right now our assets under management are ~930 million. So we are looking to cross the billion mark in early 2015.

Male: Is the 7-8% in line with historical, is that what you are basing it off of or is that a target?

Male: It is, it is in line with historical.

Female: How does that compare with other firms if you look at kind of best in class?

Male: It’s consistent with best in class. We’ve done market studies and the top preforming firms, the top quartile is about 15%. There are a lot of studies with professional services firms not even our industry. We need to be growing at about 15% to create career paths and opportunities to keep you younger staff around and growing. So the firm can continue to expand and keep talent. We’ll move on to the second point.

Facilitator: We had one more point, the last point we are expanding geographically as well. Many have been to the western location, and we are negotiating some space in the same building around the elevator bank 3000 sqft that will give us some opportunity to grow. [inaudible 11.22] two and a half years ago we had some break and we really didn’t budget that. So getting some new office space that is one area of expansion, we are gaining more and more of a presence in the south shore. We’ve got about 60+- clients down in the south shore now. That warrants having a physical presence there so we are negotiating some office space right off exit 13 in Norwell. Is that the Norwell/Hanover exit? [laughter]

Male: That exit that you come off is actually 128, that’s the old 128 that ran all the way to Holland. They moved from social medical center. [laughter]

Facilitator: So we are getting another 3000 sqft building and we are finishing up the design in the next month or two. So sometime early 2015 we will have presence there as well. So we already have the location up in the north shore, it’s the hub for most of the internal operations, research staff, personnel, and another office down in Norwell.

Female: How many of your clients still live in the area?

Facilitator: That’s a great question. It’s a relatively small percent but we have clients in I believe 22 states. California, Texas, Florida, they are typically referrals from clients that have colleagues or relatives up there. I’d say as a percent it’s under 20% in a geographical area that they can drive to physically.

Male: I do have one question. I noticed that a big percentage of your growth here is referrals from new clients and guys like us. I remember a discussion we had here where you showed some statistics where we would be referring a lot of clients to you but it turned out that not a big percentage would actually sign up. Is that still an issue or is that something that you have figured out how to get around?

Male: That is still an issue we are trying to figure out how to get around. Just to refresh you to Paul’s point. Steve you may remember this issue even better. We ask our clients in the client survey if they have referred us any clients in the last 12 months and about 50-60% said yes. Then we looked at the numbers of how many referrals actually came in and it was a fraction of that. So there is a disconnect there. It’s actually like 5% but less than 10%.

Female: I’ll just chime in here since I’m a new client. I knew about Heritage, we do a very close friend and he talked about you for a few years and part of it is just being at the right time and being ready to make a move. So I don’t’ know how you increase that but somebody can say I’m very happy and this is why buy you have to be at a point where you are ready to do something with it.

Male: When you and your husband got to that point, what was it that, what did you do when you got to the point that you realized you were going to need to look for a new advisor, did you go through some process?

Female: It’s very personal. So my husband and I have been having this conversation for a long time. He’s in technology, you’ve heard his story. Bob and Chuck know it. He believed in the ability to choose individual stocks. My financial experience has been a very different one and so it was a conversation that occurred over a number of years that I didn’t believe that what we were doing made sense, but it was finding someone that we both felt really good about. That’s huge, so somebody telling you they are happy doesn’t necessarily convey why they are happy and why it would be relevant to you, and so I would just say, I remember leaving the first meeting with you, I’d describe as a process, it’s pretty intense, and demands a tremendous amount of effort from you and information. Ralph said to me oh my god we should have done this like 10 years ago. If you don’t find the right person you’re not together motivated to do that. So why am I happy? I’m happy for the following reasons. I think that it would have helped accelerate moving to Heritage.

Facilitator: That was very helpful thank you.

Male: The next point, continue to institutionalize the business. Institutionalize can come off as a scary word but it is important. It is something we have been doing. It speaks to building a team approach that we have around each client. A smaller firm you may see on client one advisor and that’s the nature of their relationship, we’re looking to, with the hire of Tim recently, insure every client has a senior wealth manager, a wealth advisor, a portfolio manager who has a presence there, a para planer, a planned service manager, and then while we have the teams around each client, see that the teams communicate together as well. The teams communicate together and the Heritage investment committee, the Heritage financial planning meeting. We have other group meetings as well. We have peer reviews so each team is comparing each other’s work, reviewing the financial statements like we did last meeting to see that we are delivering the best product and see that all teams and all clients are receiving that the end product as well. That all speaks to institutionalizing the business and even in this room the advisory board is to some extent you can say institutionalizing the business, how we’re getting good feedback from our clients. So any thoughts on that?

Male: How has it been for those of you that have been with Heritage for a while now, how has it been working with a team as opposed to working with an individual?

Female:  It works well. Just citing my last meeting. I think I did meet Tim.

Facilitator: What do you like about Tim?

Female: Please don’t take this out of context. Not only are they kind of my team but they are a team for each other as well, which is really nice because as your client base grows and people become busy and overwhelmed, you know you sit down and it’s kinda like oh okay, remind me to, don’t forget to talk about this or talk about that, and it’s got a good cop bad cop because if you get off on some tangent or whatever. It does it works very well.

Male: So does this mean that the teams will be more than the two there are now? There will be 3 or 4 people every quarter when you meet with someone or will it just be 2 as you have it now?

Male: You will primarily have two client facings, but you will have a big team behind you as a resource. Did you want to say something?

Male: When you have a group of people who are always looking at your finances I guess there is just this feeling that someone is there and they all really know you as opposed to you just being part of 30 people. You have these 4 or 5 people that know you and your investment strategy.

Facilitator: Any other thoughts?

Male: I was wondering if there is an opportunity in the vision to create sometime of differentiation from others. That aim comes through quite a bit. The personalized touch.

Male: Do you think the teams separate them from other firms?

Male: Yes, is there a differentiation strategy? You seem to be different right so can you bake that into the strategy and also the second part of that would be how do you take that differentiation, how do you create sort of a vision statement that gets everybody with in your organization aligned on it. How to behave, what you want to be. Also you can play that out with customers. So it doesn’t seem to be this. It seems like in this vision there are a lot of things that happen, you know getting new customers through referrals, growth by market. Things like that, but it’s, there’s not a vision statement on how you want to get there. Does that make sense? Do you do that internally?

Male: To some extent, but what you bring up Jon about the team approach and communicating that. I don’t think we do a good enough job of that so I think that’s good feedback and we will talk about that. You will see in the next item with the 13 page presentation, I don’t think it talks to much about the team approach.

Female: So how do you think you are different from others?

Facilitator: I think we differentiate ourselves across a number of important points. One clearly is the team approach, we need to better articulate that with our clients. We’d like every member of the firm to recognize that there is a business team of professionals that are catering to all of you needs and we are not finding that to be consistent with any of our peers. Typically you have one advisor, maybe a portfolio manager, I see the JP Morgan model where you have one senior relationship and they pull in the investment as needed. We’d like to make sure that each client meets with their portfolio manager at least once a year to have a little more sophistication with regards to what’s going on with the investments and how they are preforming. That portfolio manager is a resource for you. You can call them at any time. I think the frequency of the review meetings that we have with our clients is a differentiator, we meet every 3-4 months seems to be widely amongst most of our peers that they meet with their clients once a year. That client could have 50 or 100 million dollars of investments managed by that firm and they are checking calls throughout the year. So I think the team approach, the frequency of the reviews, the comprehensive approach that we take trying to cover all aspects of your initial puzzle. Those seem to be the things with our clients that most differentiate us from our peers.

Male: What you are describing Chuck seems like it could somehow be crafted into a vision statement. That could be used with the clients as well as long with internally with your staff. If you are a member of Heritage staff how do you behave, what’s our vision? There’s no doubt. Likewise you can play it with the clients.

Male: I’ve been taking notes over here [laughter]

Male: The third point is pretty simple and it follows up the second. We’re trying to maintain a small company feel both of our clients and our employees. We don’t want our clients to come in and feel like they are walking into the bank of America or JP Morgan, and we want our employees to not feel like another spoke on a wheel, so with our employees we are trying to do more team events, both at the small client team so you know your individual team, and at the company level at least on a quarterly bases to get everyone out together and try and stay a close group. Also from the client side having nice office space where you feel welcomed and warm. So that’s the third point in the long term plan. Just to make sure that we don’t lose focus of the small company feel.

Male: I noticed you had bowling on there [laughter] two or three times a year.

Male: Yes it’s an exceptional team building experience. It’s very productive. It’s something anybody can participate in.

Male: In regards to the groups and building that team spirt in the company we also just initiated a volunteer program where as a group in the afternoon once every 6 months we get together to have a local charity and volunteer our time. It’s a team building event as well as a volunteer commitment from the part of our firm which was received with great praises from the overall public face which is great.

Female: I just want to have one comment on Kathy. It’s like when you go to a hotel like your experience with a hotel is the person who greets you at the desk and how they treat you. That’s huge. She knows everybody, she’s incredibly gracious and warm, she remembers if you drink water or coffee. That’s the right first step for people who are entering your offices. I applaud that not everyone has that. She is wonderful.

Female: Even if you walk in and you standing there, she gets with you and is like oh someone will be right with you. So you never feel [laughter] it’s a very welcoming comfortable environment.

Male: Her image has been growing over the past bunch of years as Bob says so for those of you who have been with him for a while do you still have the same feel? Do you still feels as big of a fish as you did when you first joined the firm? Lacy you’ve been with him for a while now right?

Female: Yes, for sure. We feel welcomed likes it’s a comfortable place to be. I was saying to Harvey it’s like the high point of the court for us to go and sit with these guys [laughter] that has nothing to do with it. Of course it has something to do with how your money is doing. It really has more to do with the idea that Joe and Jim are taking care of us. That they understand where we are that they are anticipating our needs. That they’re keeping us on track with our homework. That they are doing a check point for us. It’s like a wellness check. It feels good, it always feels good. I would say I haven’t seen that change at all. It will only get better I think.

Facilitator: Anybody else? Do you still feel like with the growth as intimate as before?

Male: Yes I still do. You had a bit of a transition there, it used to be Chuck and Jasmin were the guys we met every day Sam and it’s still fine. We still have the same feel that they pay attention to us. That our needs are being taken care of. We actually do look forward to the meetings [laughter].

Male: With this being a business plan the next point maintain ownership. The company was changed to an LLC recently as a legal entity so it will be a partnership. Right now Chuck, Jim, and I are the partners of the firm and we have a structure in place for existing employees and new hires to grow and have an ownership interest in the company so with the point being maintain independent ownership and not get wrapped up into bank of America because then we lose this meeting and we lose the deal we are trying to bring to our clients.

Female: Do you guys get approached a lot? How touch is that to resist I’m just curious?

Facilitator: It’s very easy. We’re not interested to be honest. We are entrepreneurs at heart, we love being business owners. We love with your input creating our own strategic plan and mapping out the future. There’s been no discussions about selling the firm or merging with a larger firm or anything along those lines. We like to have more partners in the firm. We’d like to have more owners, more strategic thinking and principles, we’re actively pursuing that as we speak. Okay.

Male: The last point, and this is an interesting one, a long term plan so looking at the future this is more bouncing ideas and throwing them up against the wall and seeing what sticks. As we’ve been growing we’ve been hiring more resources and now the research team has 3 cfa’s as an example. A couple ideas we have. One expanded into the retirement plan business, 401ks, 403bs, we see a lot of those on our side of the desk that aren’t very impressive and we know we can add value but it’s not something we would be doing today or doing tomorrow but it is something that we’ve talked about a little bit and the second is what they call institutional money management and working with endowments and foundations. I think we’ve build a strong investment management team and that can be applied to institutions, endowments, and foundations that have similar needs just as you all in the room. Saving and on spending plans so that’s something else we’ve talked about looking into in the future.

Male: So refresher for those of you who are new let me say there are two perspectives that I’m going to ask for your feedback on at different times. Mostly what we are going to ask you is you’re experience as a client. What’s your personal experience of the firm? What’s your personal response to some of these questions? Everyone in a while I’ll step out of that and say, now give us some advice from the perspective of lets’ say Chuck just hired you to be a business consultant to Harry what would your advice be as a business consultant. I’d like to get some feedback on this particular one from both perspectives. So first as a client what are your feelings about them getting into these new markets?

Male: I think regarding the 401ks I’m not sure how you guys do it right now

Facilitator: Small number.

Male: There is a fair amount of time risk reward that you need to access. It can be a lot of work as far as…

Facilitator: You’re taking it from the perspective of a business consultant. Let’s take it from the client perspective. As a client what is your opinion of that goal. To get into the retirement plan market, and the foundation, and endowment market.

Female: Is you reason for looking at that obviously because you build assets pretty rapidly when you do something like that. Is that a motivator?

Facilitator: A lot of our clients hold influential positions throughout their companies and we take a look at their retirement plans and we see they are getting fees, not getting the best product, service, there are lots of opportunities to improve and adopt the fiduciary transparent model that we work with all of you into these institutional world. There seems to be another form of market in the 401k business for total assets of 50 million and below, the big retirement plans would be competing with much larger firms and we couldn’t necessarily be competitive. Today’s world we need to hire a staff dedicated to this that wouldn’t detour or distract the folks that you are working with now, but there is a market there and could we play a more practical role in the market with the services systems and investment expertise we have.

Male: What are your thoughts about that?

Female: I’m a bit in the straddling because in the investment management side I was involved in the 401k market and there were a lot of consultants involved and I don’t know actually if the assets are smaller.

Facilitator: We are just scratching the surface as a potential idea for down the road. We’d just love to get your pulses or what your thoughts are, your reservations or concerns.

Male: As a client, anybody have a thought about it as a client?

Male: I guess for me the thing that always attracted me to Heritage is a little statement right here you said don’t lose the small company feel. I think for us that’s very important. What that really means is I feel that our needs are being taken care of and they are very foremost in Heritage’s mind. So I just want to make sure that when you start branching off and getting bigger and bigger and bigger that that doesn’t change.

Facilitator: That’s our number one priority is to maintain that small intimate highly collaborative feel.

Female: I think Chuck that the important thing that you just said is there would be additional staff to be hired to care for this segment of your business.

Facilitator: Yes

Female: I do believe it will be a very profitable segment of your business. It would be something good to grow. Who else is in that market today? You’re talking about 401k’s that people start in their career that in my case the Verizon’s, the fidelities, the big telecom companies all have 401k’s.

Facilitator: We wouldn’t compete for that business.

Female: No however I wish I would have known all those years ago because I never would have saved a penny on my own, why would I? So you don’t compete with that type of business then what are you going after? So independent business owners?

Facilitator:  Ask your question Beth?

Female: Is it other firms like Heritage?

Facilitator: We’ve found many other competitors similar to our size and scale that have a retirement plan department dedicated to this sort of business. It’s really the cross referrals from the business owner and the HR director and getting across table from the decision maker in those types of calls. Is this something you would deem as a positive or a negative, why go in a different direction stick to your focus?

Male: I don’t know what your focus is. I certainly wouldn’t be against it. Business are by nature profitable and I think like you just said it wouldn’t take away from your core tenants of your business ethic. You just pick up a new line of business if you want.

Male: You certainly have the infrastructure to bring a separate group to handle this as to not take away from your core. The thing that I hear a lot from professionals in this field that delve into the 401k world is that it’s almost a loss leader to get the executives. I don’t know how true that is I just hear it a lot.

Facilitator: I was going to correct it’s not a very profitable business. It’s a low margin high volume type of business. It does gain exposure to more business owners, more executives.

Male: So as a business consultant what would be your advice to Chuck based on that?

Female: I would have to say. If it would grow your overall business then go for it.

Male: Dave you started down that path do you want to give any more feedback from business consulting perspective.

Male: Actually hearing Chuck reference it he answered what I was going to bring up.

Male: Anybody else from a consulting perspective? Do you have any thoughts for Heritage about these markets?

Female: I always think about at the end of the day you don’t want to be the biggest in the world, which you don’t. You want to be the best. How do you balance asset size with profitability and feeling like I really made a difference with that organization? I can’t answer the question for you because I haven’t dealt with plans that size, but I would think those are things to think about as you go into that. You want people to respect what you bring to the table and I know from the big 401k side we worked really really hard to make that respect what we did with the 401k.

Male: So what was your suggestion? I wanted to write it down.

Male: Stay away.

Female: No it wasn’t stay away, it was you know when you think about how do you measure success? You talked about asset size before that’s an important component of it but it’s not just that. It’s the fact that you are doing something in a way that really separates you from other providers of services in wealth management because of the holistic approach and the quality of the team. And profitability is always a driving component of any business, how does that all fit in to that?

Female: Clearly the objective is to expose yourself to potential new clients. Is that sort of the underlying win for you? What I’m wondering what are the other things that you have thought about or would think about that clients could help with before you need to create a separate line of business in order to support that ultimately. If that’s the end goal what are the other things? It’s just a question it would seem like a whole other business entity it’s not the field I’m from so I don’t know. It would seem that way.

Facilitator: So we are getting mixed reviews on this topic. No consensus on way or the other so we need to be very thoughtful and very careful if we go down this path that it does not detour from the high quality relationship and service that we have developed for each and every one of you. We are getting more and more request for proposals on these qualified retirement plans, were getting lots of increase so it’s being asked of us can you help us out, can you take a look? Physicians at Children’s Hospital are like look at the 401k here can you help us out?

Male: What’s the down side? One of the things, some of the notes I made as I was reading through the strategic plan, what are the risks in the layout there? The activates that you have going forward what are the most risky and what can potentially happen and how do you think about mitigation so like with this plan in particular if you are going after this different type of business what’s the downside? What can you screw up as you go on?

Facilitator: I think if we are to be successful we need to hire a team of dedicated staff and experts with great experience and wisdom in that particular industry that can plug right into the culture of our firm and our investment philosophy and adapt it to retirement settings.

Male: Is that expensive to do that? Are you talking how much?

Facilitator: I don’t know the answers yet. To be honest we have just been kicking this around the last year or so and we thought this would be a good topic to bring to you folks and get some feedback we have not gone through the analytics of the pro’s and con’s and costs. It’s going to take some resources and effort to get up and running.

Female: If I could ask a question. A new line of business the 401k business which one of these metrics are you trying to move? Is it the 7-8% from new clients?

Facilitator: It would be all three of them. The retirement plans are sticky. There are more inflows than out flows. There are no tax ramifications for rebalancing and changing swapping out one management for another. It’s easier business to manage and operate to be honest.

Male: Is it more fiduciary based?

Facilitator: There is definitely more fiduciary risk. You’re presenting to committees and boards of trustees. So there is more risk there. So we are on the fence too. We don’t know which way we are going with this so we solicit more of your feedback and spend a little time on that issue.

Male: My standpoint, I actually function as a CFO of our company. We have a little under 100 employees and partners, I’d be thrilled if you could run our retirement plan. Assuming you would do it with the same degree [laughter]. My reservation that the institutional side doesn’t overwhelm your private client.

Facilitator: We can separate those two things

Male: That would be great.

Facilitator: We’d have new resources segregated from private wealth management.

Female: Who makes the decision on that with your group you do?

Male: Yes

Female: In really large cases it’s the HR area. Not the CFO. That’s a whole different ball game.

Male: So just about the division over all. What do you think of these as strategic goal? Do you like them do you think they are the right one?

Male: I think goals are very very important. Is there any other stretch objectives that you have and I know you talk about you hired people and the team approach? Do you give the employees the stretch objectives for things?

Facilitator: What kind of a stretch objective would you like to see?

Female: Anything that’s moving those metrics.

Facilitator: So anything beyond these numbers because these are historical.

Female: Yes, I think it’s important, I think growth is important. I think being very clear with your employees is important, yes if you can hit this, but what are we really trying to do here. I think it’s very good to get people who work for you excited, does everybody in Heritage Financial understand in great detail what your objectives are. I think that very important too.

Facilitator: They do we have many…

Male: We’ll just get to questions and we can talk about it afterwards. Who else? Any other thoughts about this decision overall?

Male: I think to speak to the minority partnership, I don’t know if you do this but we do this at our firm with myself and two other guys, it’s provide a work chart maybe five ten years out to show x numbers of partners here’s how they existing vs the projected look. We found that to be powerful because now they have an image.

Male: Yes good idea. Who else?

Male: Are there goals that you think should be there that aren’t there?

Female: I actually admire your goals. I think having been on the institutional side its growth growth growth and I think sometimes quality gets subjugated in that process. It’s how you balance those two things because size doesn’t necessarily mean greatness.

Male: Cool, thank you.

Male: Do you do customer satisfaction surveys?

Facilitator: We do, we sent one out 9 months ago. We had a 50% response rate from the survery.

Male: Your response may be so positive that you can’t use that as a metric to improve, we look at it we, not just deal with the quality interaction, but the time, the food quality, the noise, whatever it might be and then look at where we may fall off on a local or national level. To improve.

Facilitator: If I could ask a question. What does the board think about us asking the questions of our next client survey to all of you and helping us edit them and having things that you prefer being asked?

Male and female voices: Sure, yes, sure.

Facilitator: We tend to try to customize these surveys as best we can, but asking the questions to the board. [inaudible 47.08].

Male: So Chuck what did you hear from everybody. What are your thought about what you heard and what you’re going to go back and talk about?

Facilitator: I think growth is good as far as the board is concerned, there is an old saying if you’re not growing then you’re dying. More manageable level to maintain that small company feel and a high level of quality and consistent service we deliver. We are able to add more professional personal. Our investment research group is exponentially better than it used to be, the quality of the personnel that are serving each and every one of you is expanded dramatically over the last 5, 6 years. 5 or 6 years we didn’t have 5 people serving you either face to face or behind the scenes. The general overwhelming response that I’ve received back from you folks is that growth is pretty good. It’s manageable growth.

Male: Great excellent. Thank you all for your ideas on that and your feedback. Next thing we want to turn to the wealth manager presentation and for that I’m going to turn it to Jim.

Male: Many of you I believe when you were original prospects of our firm, had your wealth management team review this with you. To pinpoint with Kathy, first impression is everything, since this is really the first thing that we review with perspective clients when they come into the office, we feel as though it is very important to review this with this group and get some feedback. So did everybody have the opportunity to review this a little bit prior to the meeting? I’m not going to go over it slide by slide but the general just is obviously in the first page we want to just give the prospective client a general understanding of who Heritage is and what our commitment is in a very surmised fashion without listing bold point after bold point after bold point. In regards to Heritage just going over who we are as a firm or 24 years in the business approximately 900 million dollars of assets under management. Do you find that to be important as a potential prospective client? Is that something that you want to know in that very very first meeting?

Male: If you could sort of give us a real brief highlight because you ask that question on every page everybody’s going to say yes to everything. Let’s get sort of the overall one and then find out from people what they find is the most important.

Male: So the next page, page 4 is letting everyone know the depth and breath of the practice. Everybody’s designations among all the various personnel in the office. As we go through this we want to let clients know about all the various recognition that we’ve received through many different avenues. Also as well as some various articles that members of the team have been quoted in. Then the next page, page 7 is a very important slide. In listening to this group today I feel as though we are missing some things in this presentation, however this is a very important sheet that we want to relay a lot of information to the client and let them know everything that we can do for a client but more importantly that everything revolves around that client. Where yes there is a wealth management team that is going to be supporting you but how does that wealth management team work? We try to lay it out in this flow chart here that has a lot of information, we spent a lot of time on it, but is that the best way to present it?

Male: Put the client in the middle [laughter]

Male: That’s the kind of feedback that we need. We’re going to focus on slide 7 in a little bit so hold on to that because we will talk about that. That’s fine I’m glad you threw that in there.

Male: The next page that we feel is important to let clients know the type of service commitment that we have that as Chuck mentioned before the thing we feel that separates us as an advisory firm is that we do meet with our clients very regularly, more so than most of our competition. We want to stress that fact. Next page is investment philosophy and investment construction. I don’t know if you want to touch on that real briefly?

Male: Keep going.

Male: Okay, then slide 11 is the introductory  new client process that I know Chuck is going to touch upon in a little bit and then we go down into why we feel as though you should choose Heritage as a prospective client. Because of our independence, the size, the service. Then lastly is just some contact information.

Male: Okay, let’s start at the high over all level, over all is Heritage emphasizing the things that are most important?

Female: Totally, we actually met with a few firms and so what was different about our meeting with you? It was you outlined an approach that was very disciplined and it was two way. It’s like if we want to go through this process you have to commit to the process and we’re going to ask a lot of you and this is why. That was very important because it’s real. Also we threw out a couple or really odd questions to you, they were just something that came up about long term care insurance, and you gave this amazingly logical answer to it. It took about 60 seconds, I was like okay, that’s how I should look at it. So part of it is you’re looking for somebody who you think knows about this, they can think about it with me, and be there to help me through it. You gave that. So that was important and I think the team and the meetings, Ed and all his follow up. Bob coming in and having an investment philosophy that I agree with. It all kinda fit together and it wasn’t salesmen. It was nice you asked a lot of questions about us, and a lot of people don’t.

Female: I think it was the opposite of salesisy. My experience was a little bit opposite. I felt like I was going through a trial. [laughter] It was a good thing because you wanted to make the team, so I think that there was that. That process creates commitment that it’s a two way relationship, it’s not a one way which I think out of the gate sends a message that you are willing to not be in a relationship with someone when it’s not going to be mutually satisfying. I think that’s really important otherwise you become one in a million or one in a whatever and I think that made it even, that part of it is really important.

Male: What part of that meeting made you feel most like you wanted to be part of the team?

Female: Well let me frame this, I was going to say this about this, these guys we had never worked with anybody before around financial planning. So it was a first time for us but things like how long have you been with your accountant is an example of questions that came up. How loyal are we as consumers of a product. Those kind of things made us feel like we want to be with people for whom loyalty matters. I matters to us, we’ve been with our company for 20 years. SO I think that part of it made it feel like this is a both hand, this relationship is not going to work, it’s not going to be a purely transactional relationship, it’s going to be about working together. I think when you’re trusting sort of a very important thing to people I think those kinds of expectations being made upfront are really critical. Even though no one ever said you must do the following ten things in order to be here, it was the message and the way that this was created that this was a partnership, and that’s really what we were after as I would imagine most people are.

Male: Chuck did you want to add something?

Facilitator: My curiosity is based on the personal experience and relationship we developed early on does this material properly articulate what the actual result was that you’ve seen?

Female: It does but the beauty of it is that you didn’t give a power point, you just talked to us. That is so much more powerful.

Male: That’s a great question.

Male: My question, what was this going to be used for? Is this like a new client, I think it’s difficult to talk about weither we like it or not.

Facilitator: It’s a take home piece, after meeting one. Our goal as advisors is to express this in a verbal communicative conversation and highlight most of these points in the discussion that this is in yoru binder that you take home.

Female: Okay so after a meeting. I didn’t know if this would be something that would be posted to the website. People google financial planners and Heritage comes up, something like that. I wasn’t sure where this was going to be.

Facilitator: It’s meant to be a little advertisement for who we are, what we do, our team approach, investing philosophy, all kind of wrapped up in an easy to read and understand document that we discuss in meeting one and you take home as part of the material.

Female: I know, I think it’s valuable to have something like that.

Male: Given what Chuck just said do you think this works for that.

Female: I think we are putting the client in the middle you know because you do need to advertise yourselves, the industry recognition is important, if you google Heritage a lot of that stuff comes up. So that’s an after meeting one, okay. I think that you guys are so far heads and above your peers from all the conversations in the room. I think a very powerful, something very powerful is one page. People tend not to look at things this long.

Facilitator: So you’re thinking if we can boil it down a little bit.

Female: Yes and I would take this information and I would multipurpose it into a one page that’s almost us vs them. Everything that you do so well, the key differentiators, you kick off 3 to 4 meetings a year. I think that is perfectly appropriate to name your competition, like if it’s bank of America or fidelity.

Male: What are some of the main points that you would put in here? While you’re doing that, Pam you are a fairly new client right.

Female: Yes

Male: Is that how that was used with you, you talked with Chuck and then he gave this to you to take home.

Female: He talked to us, we had a very constructive conversation, and said okay here’s the next steps and off it went. You articulated here are the three steps that we are going to go through to find out if we can work together, so you said it very well. It is a mutual interview process and I like that vs somebody talking at you and smiling at you and you think okay where do I fit in the overall scheme it’s different.

Female: They articulated here are the three steps that we’ll go through to find out if we can work together. So you know you said it very well. I mean it is a mutal interview process. And I like that. Versus somebody talking at you, and smiling at you, and doing all that. And you think okay where do I fit in the overall scheme. And it’s different and it’s…

Facilitator: Okay great. Thanks.

Female: So isn’t this…

Facilitator: Yup, did you figure

Male: Well I just, the things that I think the…rather than to multi-purpose this document-

Facilitator: Yeah.

Male: To put the client in the middle.

Facilitator. Mhm.

Male: To take the points out of the meeting minutes. And to come up with two documents. One that yes you reference in a Meeting. And then another one that just in one page. Because really if you talk about differentiation. Between differential and growth. All of this discussion, you begin to get a real idea of what differentiates heritage. And that having had a one page is huge.

Male: The question that I’d like to ask is: typically the way that we would do this for that very first meeting we would never go over this with the client or have that conversation. Potentially we were thinking of using that or using this presentation in our initial prospective client meeting. I’d like to find out is that…would you like to see that, or would you not like to see that?

Female: You don’t need that.

Facilitator: You know what let’s do a real quick public vote. Who would like to see it used that way? 1, [laugther]. And then would not like to see it used that. K. 5,6…6. Okay. Well…

Male: I just went through this thing right a couple times to try and get an impression of what does it leave with me about heritage. And there are two things that were missing. And we’ve talked about this before. One is the very personal quotes that you guys give us as clients. I didn’t. It’s in here somewhere, however it didn’t come across. The second thing is something that I think I’ve mentioned in other meetings, and that is one of the things that impressed me in our meeting was…that Chuck laid out for me the strategy for investment, which basically was this idea of investing in different categories of investments that are uncorrelated. And that really rang a bell with me, because it made such perfect sense. And I don’t see any of that thoughtfulness in here. So those are the two things I felt-

Facilitator: The thoughtfulness and what?

Male: The two things were one: this issue of personal contact. Okay, and the second was this issue of what is the investment strategy. They had this idea of breaking your investments into various uncorrelated categories and so that things kind of all work together. When one goes down the other takes care of itself.

Facilitator: Okay. Yup.

Male: Okay.

Facilitator: Okay. Thank you.

Male: This is just semantics. But I’d like to see the client at the top. Because that’s where the client should be. In the hospital industry I think we’ve lost sight of that to some extent. And we need to put the patient first. And I think you guys put the client first. And so I’d like to see the clients at the top. Number two is one of the things that Jim does so well for us that is articulated to some extent in this…page nine. Is that he says that he will allocate our portfolio based on the risk we all…we want to take. It’s sort of stated here to some extent. But I think if it’s given in a more personal way it would be more effective.

Facilitator: Okay. So let’s if we can, let’s go to that…well first let me ask. Debb brought up a couple of points that I would like to over this feeling, but I’m too sick. Fewer pages. Like one would be ideal, two would be okay. That really just focus on differentiation and growth. What’s the? What’s the rest of your opinions about that?

Male: I don’t know…I think it’s precise. It’s a reflective document. I wouldn’t look at this as we’re gonna through it in the meeting at all. Something after the first meeting. You know.

Facilitator: Do you agree with Debb having that redone, or are you like it the way it is?

Male: I happen to like it the way it is.

Facilitator: Okay. How about the rest of you?

Male: I like it the way it is too.

Male: I like it the way it is.

Facilitator: Okay.

Female: And I laugh. At big company persons so power point by paralysis, so I like short. [laugther]

Facilitator: Okay. Anybody else?

Male: I’d probably change it…

Male: I like…I researched up a little bit I guess before I met him and so I know he’s [Inaudible 1:04:35-1:04:37] and so forth. But the [Inaudible 1:04:40] was personal contact.

Facilitator: Okay.

Male. Trust this person. And secondly the safety, security of the venture. So, I believe feeling that this is a strong person. They’re here, they’re honest, and I can trust my financial future.

Facilitator: Okay.

Male: To that…and so…

Facilitator: Okay great.

Male: This looks at it a little differently. That’s what I would want when I was leaving that company.

Facilitator: Felicity did you wanna say something?

Female: I don’t know if you could do it in shorter. I mean what everything that they wanna communicate, but.

Facilitator: What would you wanna hear, that’s the more important thing.

Female: I think the only thing that this is missing is the team focus.

Facilitator: Okay.

Female: So, this talks about all the people but it doesn’t say how they work towards the team piece that you dropped on earlier that you want. So I might either change this or add a page that’s about who’s our team.

Facilitator: Let’s jump to that page 7. Because we wanted to ask a little bit more. And Debb said the client should be in the middle and Harvey said the client should be at the top. What do the rest of you think of that graph? Or that chat?

Male: Initially I’m gonna say business but I look at it as put the client in the middle. It pretty much haunts me to think I have to direct this process. I don’t wanna do that. I’m not sitting here telling you what to do.

[laugther] [Inaudible 1:06:04-1:06:05]

Female: Harvey station that I friend requested.

Male: You’re the expert you tell me what to do here. Alright sorry. [Inaudible 1:06:12]

Male: I put it on the internet, but ya know.

Facilitator: How about the rest of you? What do the rest of you…Not just interested in where you think clients should go, but I’m also interested in ya know what does this graph communicate to you? Okay…anybody wanna give me sort of an interpretation…anybody wanna explain this graph to me.

Female: this explains who works for you. But it doesn’t emphasize that personal approach.

Facilitator: Okay.

Female: It’s almost like there could be ya know kind of like concentric circles where you’re surrounded by your team. And then that team is surrounded by experts in a variety of areas.

Male: I think to that point and people ask a lounge and care question because plain English answers…I think one of the things that resonates about Heritage is that they don’t push proprietary product. So if  you ask about insurance it isn’t about they’re going to get a commission.

Female: Right.

Male: It’s that they utilize their resources around them and they stay true to not pushing proprietary products. Their competitors I can tell you, it is not the case quite often, and it does rub the clients wrong.

Facilitator: Is it?-

Male: And then I don’t.

Male: How do you know…?

Facilitator: You don’t see that in here, is that what you’re saying?

Male: The…it’s on page twelve, is it?

Male: Twelve, I think it was twelve. And we shortened it… [laugther]

Facilitator: So this is basically hands conceptive of that graph that we put the client in the middle. How would you change this? What would you do to it?

Male: I like the idea of the concentric circles. if the client’s in the middle and then like other, like the first people to touch the client. Ya know what I’m saying? And then you know another group of bubbles outside of those.

Facilitator: So you have, like this?

Male: Yeah, but those little bubbles you’re drawing would actually come into the client bubble. Ya know what I’m saying? And then have…-

Male: Venn-diagram [laugther]

[Inaudible 1:08:42]

Male: So those are the people that actually touch the client. And then you’ve got…so for example and the long term health insurance, that’s a good one. So your financial coordinator then be able to reach out to whomever. I have a list of services. But then somewhere I did read. It was not in proprietary. So it wasn’t like you have to get long term health insurance from ya know…everybody who goes to Heritage gets their long term health insurance from the same company, whatever it is. And that’s a very important point. And that’s the reason people love Heritage versus [Inaudible 1:09:24].

Facilitator: How would you express that on a page, do you think? So we’ve got the client, and we’ve got the advisers who touch them directly.

Male: Yeah…

Facilitator: Would that just be this, or were you thinking about like another level? Or another-

Male: Well when you list it all off, there’s probably another level there.

Facilitator: Okay. So, have it here some place?

Male: Yeah. Well, it’s trans professionals, baggers, family members. So those are all the services. That if you needed help with any of those, if you didn’t have them. They could suggest them.

Facilitator: Okay, who else? Who else has a idea?

Female: Don’t call it experts, the people around the advisers. Because I expect these guys to be the experts. They may be weighing in for a pinch hitter on something, but they’re still the expert. So I would be careful about that. Calling anybody in this diagram expert other than this team.

Facilitator: Okay. Any other thoughts? Any other ideas?

Male: Oh, I guess a question. Do people prefer: Cause some people like to read things, and some people are visual. Do people prefer do you think looking at a picture of things, or a kind of diagram of things.

Male: A picture’s worth a thousand words. [laugther]

Male: How many people like pictures?

Male: I like pictures…

Male: Pictures.

Facilitator: List? Words? Okay, it’s unanimous. [laugther]

Male: I wonder if we have to do both though, because people are different, you know. Some people like to read-

Male: Because once you get the basics down it’s very easy to take a picture and turn it into a diagram.

Male: I agree.

Male: That’s important because you’re right. People do like to look at things differently. But I still think that one page on what differentiates Heritage from your competitors is out there.

Male: I have a question. A lot of people talk about the advertised more frequent meetings. What gets delivered there? So, why? Right? What comes out of that? Is there anything tangible that comes out of that? What are the tangible things that come out of that? You know I’d like to get somebody that meets once a year.

Male: It’s the level of detail. How comprehensive we are.

Male: And then it converts into…so can you like take that…how does that convert? Better portfolio? Or, You know is there anyway that you can make that tangible.

Male: It feels better. Right? Intuitively I think you know it’s better.

Male: But how…you know what are the key things…you know like we meet with you more frequent and these are the outcomes, right. These are the tangible outcomes.

Male: Include the attention to detail. You know we have the time and resources, and staff to meet with our clients as often as we do. Or we’re turning over every financial stumble we can find. Every management tool, every…all our peripheral pieces of the puzzle are addressed with us. We have an extensive checklists. [Inaudible 1:12:58] last meeting we tried to have an internal checklist broken down by category from taxes, state, management, investment, retirement.

Facilitator: Is there a question wanna ask…So does that lead….-

Male: Okay I have a question.

Facilitator: Does that lead to more meetings, more increments in development with the client, which leads to more potentially increments in-

Male: What kind of outcome do you think would differentiate Heritage? Having experience.

Male: Well it’s the tweaks that you make along the way.

Male: Alright, so how do you capture this? Not captured here. Alright so we’re meeting with the client 3 times or 4 times a year, versus once a year. How do you qualify those tweaks that you make along the way. That over five years adds up to a lot, right? Or how do you avoid mistakes, by those more frequent meetings-

Female: Isn’t it also…I mean…as much as we buy into the approach, there’s a re-education process that goes on in each of those meetings about why we’re doing what we’re doing. I mean people can’t. I mean you react. You can’t help but have a visceral reaction with a market that’s swinging in such a wild way and I don’t think that’s gonna change…I think it’s gonna get worst. And so it’s like stay in the course, stay in the course. Here’s why we’re doing it and having an opportunity to ask questions about you know what are other approaches that we’re seeing. Without that…I told you there’s a group called Tiberon, and it’s this guy who brings people together, and they’re all institutional booker dealers, and institutional asset management groups. And they always have a group of individual investors. And one of the things the individual investors always say to these people is you do not speak our language. You use like indexes and performance measurements that have no meaning to us. We’re looking at money we started with, money we have right now, what we’re trying to do…and that’s what you do. You can speak that speak. You can do the…ya know you can go into all the depths about the different models. But mostly it’s here’s what we’re doing. And here’s what we agreed upon. Does that still make sense? I think if we do it once a year, it’s really easy to forget why we’re there.

Male: So, just to play that out a little bit. How do you put that advantage to those more frequent meetings? It doesn’t seem to come through. It doesn’t seem to come through the advantage to it. How do you sort of boil that down to a…

Male: There’s a metric that’s taken.


Female: Because I think it will do what you’re saying.

[Inaudible 1:16:06]

Male: To answer the question I guess. Is there a metric that’s taken within Heritage? After each meet 3 or 4 times a year with your adviser. What change comes out of each one of those meetings? Or are people staying the course? Because that would probably be valuable information to gather at your corporate level. And maybe it boils the information down certainly to each adviser.

Female: Don’t you think it must be your attention right? There must be benchmarks on retention right. The clients…I mean I think what it does is provide a sense of security. You may change nothing, but why? It’s a great question. I mean it’s all about asset allocation, right?

Male: It’s a lot more than asset allocation.

Female: But-

Male: It’s actually…a lot of it is about financial planning and reviewing a checklist of fifty items.

Female: Yup.

Male: That the planning team go through.

Female: Then that’s the convergence, because everybody else focuses on asset allocation.

Male: It helps the client also understand where you’re going as life changes and as you’re dealing with things. Right? Whatever it may be. It helps the client think about the pathway and how the finances are impacted by that pathway, by touching in. You’re managing your life as you go through the year. It’s not once a year right?

Female: Mhm.

Male: As you manage your life…For those clients that have a lot to worry about. Ya know, that gives a lot of peace of mind. You know this is not a personal situation.

Facilitator: Do you folks think we should invest in planning resources? Come up with better material to capture and articulate our two valued opposition.

Male: Yes.

Facilitator: It sounds like we’re not doing the job we could be doing. Based on the comments and feedback I heard.

Female: I think you’re actually doing the job.

Male: Yeah.

Female: I think we’re just saying…it’s fine to document them. You can. But the document isn’t gonna sell you.

Male: It’s…It’s the personal.

Female: It’s the sale.

Male: So how much of the power point do you want to…

[Inaudible 1:18:27]

Male: Right.

Male: The material-

Female: It’s a tool.

Female: But I think it does need some more emphasis on the personalization.

Male: Yes, because that’s lost. It can definitely improve a lot.

Facilitator: Okay. Nice feedback. Yeah it’s great feedback and related to this we wanted to also talk about not just the presentation, but talk a little bit about that first meeting, what goes on there. So I wanted to talk a little bit more about that three meeting process that new clients go through. Chuck did you wanna cue that up for us?

Male: Sure. I think it was on page eleven…I think everyone in this room has gone through the new client process. Phone call get to know each other a little bit. Figure out aspirations, goals, and objectives with working with a firm such as ours. We could do commercials about what differentiates us in the market places, and we commit to…mutually commit to meeting with each other before decisions are made. Meeting one is all about discover. Learning about your goals, objectives. Gathering data. Uncovering what the major challenges are, what the focus is. You get to work with the advisory team. Looking at each other in the eyes, and starting to build a relationship. There’s that trust factor there. We move on to meeting two. Meeting two is a State of the Union meeting, where are you today. We have documents as to where you stand in the present time. Your check stub, your income, your expenses, your resources, your business interests, life insurance, real estate. We have a road map. What the present situation looks like. A balance sheet with the network statement, with all the details uncovered. We do a current analysis of your existing portfolio, executive high level summary of our findings, and pin point where we can add value and improve. That’s all meeting two. In between you know we give out homework. The whole process, it’s important that we gather all the data so we can provide sound advice. Meeting three is when we truly get into the recommendations. That’s the first time you have an opportunity to see the quality of our work. Outlines, tax lined issues, investment management related issues, ext. And we have found that if we mutually agree to go through this process and we get through meeting three, there’s a 93% probability that that person will become a client. A bunch of people drop out after meeting one. Who aren’t engaged, who don’t wanna fully participate, and put both feet in the ring and collaborate with our team. But after meeting three we make a decision to work with each other or not. Is that a differentiator? Is that an opportunity for you to get to know us and for us to get to know you to a level where three meetings is enough to make a big financial decision. Joining a team such as ours? Did you enjoy that process? Was it too much, was it too little?

Male: I thought it was just a wonderful process. Because I walked out of there knowing that my whole life was going to be organized and in one place. And out of all the insurances. The taxes, you know…everything was going to be looked at! Where prior to this we went to a financial advisor and that’s what he did. You know all the other things we had to take care of ourselves. And they were in various states of good, bad, or indifferent.

Facilitator: Would you change it at all?

Male: No, not at all. It was a wonderful process.

Female: It’s a test. It’s a test. I mean…you can’t do your job effectively if you don’t have that information and level of commitment. And I haven’t been to anybody else that asked for that. And it was painful. I mean it was and oh my God moment. I just remember giant spread sheets and revealing moments about ya know about what we were spending on why. Ya know, but you felt so to your point, you felt so good at the end of it. That you knew it. And we came to the third meeting and we said so can we like…do we have to like sell our cars? And ride around on a bike. [laugther]

Female: They didn’t know because we just didn’t have the methodology for doing the projections. So I think it’s a huge differentiator. I think if people don’t wanna sign up for that then that’s a problem.

Facilitator: Chaz did you wanna say something?

Male: No.

Male: Then we’re the wrong people to ask you have to ask the 10% that got away.


Male: So what we’re saying I mean…I agree with everything that’s been said. It doesn’t come through. So really the focus is trying to create a…new customers come in….new clients come in. It’s sort of. It’s hard to get it though. Intangible things. But it doesn’t feel like that when I go through.

Facilitator: What are your thoughts about this process? This three stepped process itself?

Male: I think it’s good, it’s good, it’s great!

Facilitator: Chuck, I imagine it works for you. I mean you wanna weed out some of those people.

Male: They’re chewing you just as much as you’re chewing them. It’s a two way street. Chemistry has to be there. And mutually valuable on both sides. It’s a commitment on both sides.

Male: As Dr.Taylor could say the worst thing operate on someone the first time you meet them. You wanna make sure that you understand what their goals are, what their expectations are, and I think that’s a fantastic way to do it. I mean you could have…make it look better. You could have a couple puzzle pieces join together, and say do we fit? You know…-

Facilitator: Specifically we’d like to find out about that process. So you think that’s the right length? You think that’s the right number of steps?

Male: You know…me…second time, I’d say these guys know what they’re doing. I trust them.

Facilitator: Okay.

Male: I have to go through the mechanics here. I have to prove myself. But I think in any situation where there’s uncertainty in whether you qualify. It makes that endeavor something that you want to be a part of. So that’s why you want that. It’s a discovery process that you go through, as a client right. When you first come in it’s like, eh…there’s a process. You play the game, you put some effort in. And as you go through…I think start to discover how it fills everything in…it’s a process. We didn’t get it at first. And so maybe the question is how do you get the customer to get that more in the beginning so they don’t drop out. Or maybe they drop out of one because they don’t understand the benefit going forward and what that will deliver. You know…

Female: And there may be people who don’t wanna reveal all of that as well.

Facilitator: That’s a question I lost track of. I think before the first meeting you get a packet. It’ll ask your social security number, your financial statements. Is that a little too much? At first?

Male: Before the first meeting I think it is.

Male: Yeah.

Male: Yeah.

Male: Because you’re not committed yet.

Male: It might be.

Female: I don’t know. This isn’t a trial for when you’re going to buy your furniture. These are financial planners. How are they supposed to give you a taste of what they can do without the information? And let’s assume to get to that first step. Don’t forget there’s some process that happened there. Right. Somebody referred you to them. Somebody probably I’m guessing most people didn’t just Google you. Is that right? Do you guys collect information about that first

Facilitator: 95+% are referrals.

Female: Are referrals?

Facilitator: Are referrals.

Female: Okay. So out of the gate you have some sense of trust and you know what services you’re after. I would imagine…I don’t know. I guess I would be surprised if you didn’t ask me for some sort of piece of information. That’s not just the personality in the first one. And I get the privacy thing


Female: It’s everywhere. And if you’re gonna do diligence in managing my assets you have to have all the information I do, I think…that’s what I think.

Facilitator: [Inaudible 1:27:20] do you wanna say something?

Male: I would back up what [Inaudible 1:27:33] says. It’s a medicine in all paths of life. You have to sell yourself. As a surgeon you have to get the respect and the confidence of the patient. I’m taking a course in Leadership at U.N.S. And one of the things that they stress for leaders is to be confident. Confident, kind, and compassionate. And I think. I think you guys are selling yourself at first. And this is all important. You have to have this. For sure, but I also think you need that personal touch, which you have, which differentiates you from the rest.

Facilitator: What’s an example of that personal touch our financial advisors may not demonstrate?

Male: I think it’s the team approach that Jim and Joe have where they’re both working together as a team and they’re thinking of things I never have thought of. Where they’re talking, they’re bringing in all kinds of financial goals. And we’re going where we are, and it’s that kind of thing that differentiates them.

Female: I think the other thing that I always think differentiates people is the quality of the questions. They just kind of set the tone for a meeting. Whether it’s a medical situation or financial. And again that’s where I go back to people going into a sales mode. Which is so obvious…or one where there seems a very real curiosity about who you are and what your goals are. And why you’re there. And to see if it’s a couple. You pull from the same lane or not.

Facilitator: Right. Okay. I think to learn this approach she used the word organized. The structure of a three meeting shows you that they’re thorough. I can tell you. I’ve seen it. I’ve seen other investment advisors spit out X amount allocations. After the first meeting, via email. I don’t know how they could have that comfort level. But it shows a commitment to their organization and their internal organization skills that resonates hopefully over to the client.

Facilitator: Okay. Anybody else have any thoughts about it? So it sounds like the three steps is the right number of them and they’re doing the right things in those steps. Doesn’t sound like anybody would make any big changes to it. Okay? Good.


Facilitator: So we only have just a couple minutes left so let me just run through a real quick summary exercise here. So we put a whole bunch of stuff in front of you tonight. So as these guys all go back to the office and try to figure out what to make of all this stuff I’d like to get recommendation from each of you. Something that they should think about when they’re thinking about these wealth management presentations. If you would make one recommendation to them. About something they should think about what should they do when they consider how they may want to update it? What would be? I’ll give you a second to think about that. Or if there’s any other recommendation you’d like to make generally feel free to do that. Lightning rod real quick, and then we’ll wrap up. Debb can I start with you?

Female: I’d say that the consensus is personalize it. Because there’s something you do that is different because of who you are, that you probably don’t even know how different it is.

Facilitator: Okay Len?

Male: I would say how do you convey small and personal, but show big.

Facilitator: Great, Excellent. Thank you! Jen. Oh, I’m sorry. Skipped over you.


Female: It wasn’t my turn yet.

Facilitator: I missed you there.

Male: I’d add more to I’d say organizing the chaos, have that resume through the document.

Facilitator: Okay, great! Thank you! Sorry about that. Now it’s your turn Jen.

Female: Thanks. I’d fill up the length of things. Depending on what the presentation is meant for. I think shorter is better than longer.

Facilitator: Okay.

Female: And as I was looking, and listening to the comments I was looking back you know Barrens and the Wall Street Journal and that’s all fine and well. How about some statements from your customers

Facilitator: Prohibited.

Female: Prohibited. You can’t do? Team approach.

Facilitator: Team approach. Felisha?

Female: I was gonna say team. And change the screen color. [laugther]

Facilitator: Okay, fair enough.

Female: To emphasize it’s a dedicated team to just you that really maintains this personal relationship.

Facilitator: Great. Thank you! Paul?

Male: I’d have to agree to that. But maybe in addition to convey the, let me find some way to say this…the thoughtfulness of the structuring your investments. I’d imagined this before in terms of different categories to uncorrelated investments as an example. Clearly they’re giving a lot of real deep thought to how to expand your. Stretch your investments over your portfolio.

Facilitator: Great. Thank you. [Inaudible 1:34:06]?

Male: I guess expand the personalizing. Learn the family. Learn the background of the client. Understand their interest and I think that’s your major selling point. Make them feel like the person is the focus.

Facilitator: Sure, okay.

Male: Of the allocation…

Facilitator: So you guys. What are some of the things you heard today that you’re most excited about going back and talking about when you go back? Let me start with you.

Male: I honestly think we can talk just toss this thing and communicate our story personally.

Facilitator: Okay.

Male: That’s exactly what I was gonna say, which was: get back to basics. Just have that nice conversation with a client and really get to know them. I think you do a pretty good job at that. And use this as a tool. As a leave behind.

Facilitator: Mhm. Okay. And what did you hear today?

Female: Oh, goodness. I didn’t know you were gonna call on me I wasn’t prepared.


Female: Well what I heard…for me…because I’m coming in new to all of this was just the deep relationships that you guys built and the trust that you built with all of these individuals. Which I think is amazing. Your comfort level with sharing this level of detail and this level of advice is just extraordinary. So I find that great.

Facilitator: And Chuck it’s your turn again.

Male: I thought this was an awesome meeting. I appreciate everyone’s candid, very genuine feedback. I feel like we’re going more closer together as a result of this board. Especially those have known us for a while. Maybe those others will feel the same way someday down the road. I’m sure there’s some things that will come to mind post this meeting that you forgot to share will come to light, a day, a week from now. Please reach out to us, email us, call us- let us know what’s on your mind. And we’ll construct a candid feedback that we get. The better experience you’re going to have in a future class. I can’t thank you enough for spending the time with us this evening. We’re gonna meet twice a year. We’ll have another one in the Spring. And then next Fall…And so forth. We are going to continue rotating some board members.


Male: Yeah, I mean we did run up against the end of our time but we did want to say that we recommended to him that Heritage take sort of structured approach to rotating people through it. You know we’ve had a bunch of people at these meetings now, and they really have been tremendously helpful. You’ve given us some awfully good guidance and so we wanna keep doing it. We also don’t wanna over stay our welcome with you folks. So we’ll be rotating members gradually at a three year term. And before the next meeting we’ll sort of publish a schedule on what graduating class you’re in.


Male: So we’ll look to see that before we get together again. I hate to see food go to waste. Please take a napkin of these. Take some with you.


Male: Thank you, thank you. Enjoy the rest of the Fall season.


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