Advisor Coach Reveals the 5 Challenges He’s Asked About Most

by Jane Wollman Rusoff April 16, 2024 Are clients worried they’ll outlive their money? If so, they’re surely not alone.Indeed, Allianz Life Insurance Co.’s 2024 Retirement Study found that almost two-thirds of Americans are more afraid of running out of money than they are of death.To help assuage clients’ fears, create a retirement budget for them to practice on. That’s the approach taken by Derrick Kinney, a financial coach and longtime financial advisor.“Often three or four months into it, [clients] would say, “’Oh, my gosh, we can actually do this and retire comfortably!’” he tells ThinkAdvisor in an interview.Kinney, a keynote speaker for Fidelity, among others, completed the sale of his Ameriprise retirement-focused practice in 2023, after morphing into a podcast host and author of “Good Money Revolution: How to Make More Money to Do More Good.”In the interview, Kinney reveals the five big challenges advisors ask about most, and he discusses how they can “decommoditize” themselves and position their practice to sell at a big profit.“Think of it as a franchise model,” he recommends.He also talks about clients having a hard time absorbing the idea of investing for the income gap.Here are highlights of our conversation:THINKADVISOR: When you were an advisor, what did you find to be one of the biggest predictors of success in retirement?DERRICK KINNEY: Six to 12 months before the client wanted to retire, I’d have them live on a practice retirement budget.For example, if they said they needed $20,000 a month, we’d take out that exact amount and put it in their checking account. They’d have to live on it while they were still working.Often about three or four months into it, they’d say, “Oh, my gosh, we actually can do this and retire comfortably!” without the threat of running out of money.And often they would need less than they’d thought.One of the biggest retirement mistakes is failing to invest to create income to fill the income gap, you write. Please elaborate.Clients understood the accumulation model, but income was something that was more of a mystery.I told them that if you don’t invest for income and rely only on stocks and aggressive things, should they lose a lot of money the first year after retirement, they won’t be able to make it up.What do advisors need most, and what do they ask about mostly?Advisors have five big challenges they’re struggling with.Perhaps the most common is that they feel stuck hitting the same revenue ceiling every year.Secondly, they question their current strategy: They’re working hard and trying new things, but that’s not getting the results they want.What are the other big concerns?Third: They worry where their next client will come from. They need to be thinking a few clients down the road to make sure they’ve got their pipeline of quality clients built up.Fourth: A lot of advisors don’t feel they’re the go-to advisor in their local buying community. You should be known as “the advisor of choice”: If something [major] happens [in their lives], people will automatically think of you.Fifth: When advisors sponsor events hoping that will lead to meeting their next high-net-worth prospects and it doesn’t happen, they feel they’ve wasted their money.What’s your advice about selling a practice? What were your assets under management when you sold yours?Just under $300 million. It’s a model I use in coaching.When advisors are growing their practices, so many focus on scaling and building revenue. What they need to be thinking about is: How do I position this business to possibly sell it down the road?The best way is to think of it as a franchise model: Put a process in place where you can literally step out of the business and someone else can step in and run it exactly the same way,Because: If the business is overly dependent on the owner, the multiple someone is willing to pay for the practice goes down dramatically.There are numerous financial advisor coaches. What’s something special that you bring to the party?Step 1 of our coaching model is to identify a concern that the advisor cares deeply about — say, an injustice they want to right. So you need to have “generosity of purpose.” This will [help you] stand out and decommoditize yourself.When you promote a cause you care about, you’re helping to solve a problem, and it attracts people that have money who’ll want to work with you.You started out at American Express Financial Advisors and sold annuities. Did you continue to do so as an advisor?In certain cases, if appropriate, an annuity as a small portion [of the portfolio] could be an option.We took a highly customized approach and let the client know that there were other options as well.I would often bring in family members and the client’s attorney to [make sure] we were all on the same page and that the client was getting high-quality advice from all stakeholders.How did you nab Oscar winner Matthew McConaughey to be on the “Good Money” podcast, aimed mainly at financial advisors?He had a new book out [in 2021]. I didn’t know him. So I contacted his PR firm and told them I would promote him and his book after the podcast too. I also bought 100 copies of the book and said I could make a donation to his favorite charity.On the podcast, he talked about the difference between his bank account and his “soul’s account.”What’s an insight that another guest, Marc Randolph, co-founder of Netflix, gave your listeners?He said you have to lean in — you think you’re going to fall, to fail. But by doing that, you don’t.His point was that in business and in life, there’s typically about three seconds when you have a decision to make: whether to approach something in fear or to approach it firmly in faith, believing that a positive outcome can happen.The original version of this story was published on ThinkAdvisor.