So often when we think of advisors utilizing technology, we think of the gadgets and gizmos they carry around and use in presentations with clients. While those are important, we've told that story before. In Joel Johnson, managing partner at Johnson Brunetti, we found an advisor who uses new technology and systems behind the scenes — so when he meets face-to-face with clients, the focus is on that person across the table and doesn't get lost or overwhelmed by spreadsheets and Monte Carlo simulations.
Johnson's business model is based on the tenets of simplicity and efficiency, and we recently had the opportunity to talk with him and gain insights on what has made him the anti-technology technology advisor.
Daniel Williams: Simplicity, efficiency — how did these become core ideas, core values for you and your practice?
Joel Johnson: When I started this firm with Nancy Brunetti, who has since retired, we wanted to set it up so we could serve families like we were raised in, which are average families. Although we have some very wealthy clients, we're not one of those firms that has decided we're only going to service the ultra-wealthy. And because of that, we tend to attract a number of clients from all different kinds of backgrounds. We realized early on that we need to keep things fairly simple as far as the way we speak to clients and the way we educate them. Also in the way we provide solutions and the way we communicate the solutions and strategies we're using need to be easy to understand.
DW: Does speaking in too much jargon play a role in communication or miscommunication?
JJ: Jargon is a huge problem in our industry, and we've tried to be everything opposite of that. There are so many people out there working with real high-end firms that don't understand what they own, and they feel like they're going to talk to a chemist or some other scientist when they meet with their advisor.
DW: So simplicity is a key?
JJ: Definitely. Simplicity is in the way we communicate. It's also in the way we run the firm behind the scenes, where we want to make sure that every process we do have we simplified it down to the simplest form so that we get to the end result without too much complexity and therefore, we can afford to deliver that to average families.
If we're highly technical in everything we do, now all of a sudden we can only serve the wealthy because we've got to have very large accounts, and that's just not who we wanted to be as a firm. We wanted to be a firm that can serve everybody, that can afford to serve all the households out there. So simplicity is not only important in our communication with clients and what we do, it's also the way we set up things behind the scenes at the office for us to function.
DW: Do you have an example of something you're doing that may be technical or complex behind the scenes, but once it's presented to the client it really connects or resonates with them?
JJ: One example is the way we present our financial plans and proposals to clients. Before we present to our clients, our proposals have all kinds of technical analyses going on by myself and by the other team advisors to decide if we're going to use annuity products, or which annuity products to use. We do a fair amount of managed money, a significant amount of managed money and so behind the scenes we're using portfolio building tools, Morningstar and a tool called HiddenLevers to build those portfolios.
But when we have that discussion with a client, we use a very simple one-page diagram. We call it our one-page plan that just shows the client where they are today and where we suggest they move and it's just a very simple conversation.
DW: That's good to hear. When I talk with advisors, I'm always channeling my parents as a potential client, wondering if they would understand what this advisor is talking about.
JJ: Exactly. That's why we don't get into illustrations and technicalities and Monte Carlo analysis on stocks and bonds and what the market could do. We just have a conversation as if I were talking to my mom and dad. We use words like, "reduce risk," and the "rollercoaster ride of the market." We want to reduce a little bit of that, but at the same time you need exposure of the market, because we know that over your lifetime the cost of living is going to go up so we have to own some assets that appreciate with inflation.
DW: So tell me, when did the light bulb go off as far as making this process simple for clients?
JJ: For me it really evolved over time. I got my securities license in 1989, and I was just on the stockbroker side of things. But in 1993, I added life insurance to the business and I was working with young families.
I was a young person. My wife and I had just had our first child and so my peer group was my potential clients. You know, visiting folks in the evening, at the kitchen table, making sure they had the right life insurance and disability insurance, and maybe they were saving some money for college.
