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Tune in to "What Works" hosted by Don Patrick where we tap into 2,500+ years of experience in running financial advisory practices. In each episode, Don sits down with an experienced financial planner, uncovering the unique insights and experiences that have shaped their careers. From navigating market fluctuations to building successful client relationships, Don and his guests share invaluable business tips and strategies for financial planners looking to thrive in the industry.
Join us every other Thursday, as we explore the wealth of knowledge accumulated from over 2500+ years of combined experience in financial planning.
Hi, everyone. Welcome to What Works. This is a show for consortium advisors that taps into over 1,000 years of experience shared by our consortium advisors.
I'm your host, Don Patrick, and I'm here to guide the conversation with guest advisors and lift the hood on what works for them in business and life. It's all about learning and growing.
So let's go.
Don Patrick: Hello, everybody. Welcome to episode number 29 of IFG podcast, What Works. And today we're joined by John Franklin, Franklin Watkins Financial Group in Raleigh, Durham, North Carolina. John, welcome.
John Franklin: Thank you. It's good to be with you, Don.
Don Patrick: Yeah, that's great. We're gonna have some fun. So let's kind of start with your journey and just tell us a little bit about your family and your background.
John Franklin: Yeah, sure. So my family's just my wife and I. Her name is Rachel. We've been married for 16 years. She's just the absolute love of my life and I could go on forever about how smart and kind and amazing she is. But I don't think that's the point of the conversation today. So I'll keep it moving from there. We do have two Australian labradoodles and so they are very spoiled as well. So they're our fur babies.
Don Patrick: I love it. Yeah, nothing like fur babies.
John Franklin: No kidding.
Don Patrick: Tell us a little bit about kind your background, going to school, growing up, and really kind of how you got started in this profession.
John Franklin: Yeah. Yeah. That's kind of a great story, I think. So we are located in Raleigh, our business. I've been in Raleigh since I was two. So before that it was just down the road in Burlington, about an hour west, but we came here when I was two for my dad to finish his electrical engineering degree at NC State.
So once he did that, he got hired by IBM and obviously that led us to stay here. So, been in this area ever since. In terms of how I got into this business, so I started in college at Wingate University, so kind of a smaller school just southeast of Charlotte on Highway 74.
So mostly I went there to play baseball, but I was also studying sports management at the time, which is essentially a business degree with a little bit of emphasis on sports because I thought I wanted to work for the front office for a professional baseball team. So the dream job was kind of work for the Atlanta Braves and, and help run the team and things like that.
And as I got into that, I realized there's not a lot of those jobs available, number one. And number two, a lot of them go to professional baseball players. And I knew I was not getting to that level. And so quickly, I started to look around and think about other job opportunities.
So at that point, I was actually taking both an accounting and a finance course. And so both of those professors had come to me separately and said, “John, we think you're really skilled and talented in these areas. You should think of a career in one of these.” That was the second semester of my sophomore year of college.
Kind of all concurrently at the same time, I ended up tearing my MCL in a baseball injury, and I had some family stuff happening, so, yeah, to kind of keep it short, my dad left my mom at that point, and so I had two younger sisters. They were 15 and seven at the time. And so I was really looking for a way to get back to Raleigh to be able to be more involved and to help out at home and do some of those things.
So I had a longtime family friend who was in the business. I'd always admired him. I liked the flexibility he had in his schedule, and it looked like he made a pretty good living. And so this business was intriguing to me, and so I had reached out to him and asked if he knew anybody who was looking for an intern for the summer.
And about a week later he called me back and he said, “John, I need an intern this summer, but actually I need somebody 30 hours a week. So if you will transfer back to NC State and you work 30 hours a week for us, we'll consider you a full-time employee and therefore you are eligible for continuing education and we will pay for the rest of your education.”
Don Patrick: Wow. Holy cow.
John Franklin: Yeah. So that was tuition fees, books, obviously room and board wasn't included, but you know, for a 20-year-old kid, it was like hitting the gold mine. So I told him, “Sign me up, give me about a week once I start to make sure I don't absolutely hate this, but I'm signing those forms and we're doing this.”
So that's how I got started in the business. So I was 20 years old in between my sophomore and junior year of college, so started as an intern doing operation, client service, kind of learning this business from the ground up. I pretty quickly then kind of moved into their financial planning department.
So yes, this was 2005. Every client had a MoneyGuide Pro financial plan. This firm had been doing managed money and advisory assets since the 90s with SEI and so they were very ahead of their time. And as I look back, it was the best possible way I could have gotten into this business. And it's how I wish everybody was able to get into this business, because I was able to, like I said, start work my way from the bottom, learn the client service operations, do the financial planning, and then in 2008 get licensed and start working as an advisor and kind of progress from there into a lead advisor role over the coming years.
Don Patrick: That's just amazing. So you had two good professors who kind of took you under their wing and then you stumble into a real financial planning firm. Mostly everybody kind of stumbles into where they are today and that's fantastic. Oh my gosh. So you've been doing this more than, a couple decades now.
John Franklin: Yeah. May was 20 years since I got in the business.
Don Patrick: You must be pretty good by now, huh?
John Franklin: Some might say.
Don Patrick: That's fantastic. So how long were you with the firm you started interning with then?
John Franklin: I was there seven years. So was there from 2005 to 2012. There had been a lot of changes at that firm. So at the time that I joined, the original owner, that family friend I mentioned, he had sold the business as part of his long-term succession plan. And so they were a part of a small broker dealer out of Atlanta, and so, I don't know if Reliance Trust Company, but they were loosely affiliated.
Yeah. So they were loosely affiliated with Reliance. And Reliance had bought up, I don't know, eight or 10 kind of financial planning practices like theirs across the country. And they had combined them into a group and they were finding successor advisors. But the great financial crisis hit, Reliance decided, “Hey, we really don't wanna do this anymore.”
And so all of those businesses actually ended up buying themselves back. So it was kind of a fascinating process to be there and to see all of that happen in such an early stage of my career. But while I was there, that family friend, he had a couple of his children in the business and it kind of became clear that it was gonna be theirs going forward.
And so for my career aspirations and what I wanted, it was just not gonna be a good fit. And so in 2012, we decided to part ways.
Don Patrick: And where'd you go?
John Franklin: Well, it happened a lot sooner than I expected. And so, I was left a little bit out to dry, and so I took a couple of months trying to figure out where that next spot was gonna be.
I ended up joining Woodbury Financial as my broker dealer and was connected with an advisor, wonderful guy. But I was kind of very loosely affiliated with him. Essentially his whole role was no broker dealer would touch me because I really had no assets and no clients that I could show I was bringing with me.
So I needed somebody to sponsor me and say, “Hey, John can do this. I'll take a cut of his production and kind of sponsor him and get him over here.” And so that happened in 2012. I was in that relationship for a couple of years. And then in 2014, Eddie Watkins, my partner and I decided to partner up.
So that's kind of an interesting story. So I'll share a little bit of that if that's okay, Don?
Don Patrick: Absolutely.
John Franklin: Okay. So Eddie and I originally met when I was at NC State. So I actually played intramural softball with his oldest son, and we were in the playoffs and I don't know if it was the year we won the championship or not, but we were in the playoffs and Eddie and his wife Betsy, came out to watch his son play.
And so we met for the first time. He actually knew my boss at that first firm. And so it was just, I would kind of regularly see him around town and at different financial advisor functions and things like that. So in 2012, when I joined Woodbury, that's where Eddie was. And so we began to see each other more regularly and kind of build a relationship.
And so in February of 2014, we were at a lunch that was put on by the National Christian Foundation. So this was a place where they had all their local CPAs and advisors and attorneys and people they work with in to talk about, you know, all the giving that they were able to help our clients with over the last 12 months.
And I don't know if you remember this, Don, but it was actually the day that we had a crazy ice storm in Raleigh, and in about 30 minutes, just the roads went from drivable to completely impassable. Everybody was stranded and it was taking eight hours to get home and all this stuff.
So it was just, it was one of those crazy days. But we're sitting there at that luncheon, and Eddie's walking out the door. He taps me on the shoulder and he says, “John, gimme a call next week. I wanna talk to you about succession planning.” So the next week I call Eddie, and to give you a little bit of his background, the majority of his, so he started in this business in 1975 with Prudential Insurance.
For the first 30 plus years of his career, pretty much everything was insurance and employee benefits. So he started his own general agency and in 2014, he was actually selling that agency to a company called One Digital, which is based out of Atlanta as well. So as part of his deal with them, he was gonna get a portion of the revenue from those clients for as long as they were clients.
But if he got hit by a bus, his wife would get nothing because she was an insurance licensed. And so the beginning of our relationship was, “John, can, I want to do a buy sell so that this revenue will continue on. You pay my wife out a fair amount and then kind of you get to keep everything that's left over.”
That was what started this partnership 11 years ago. So about six, nine months after that, we were just continuing to build on our relationship and we ended up moving in together and starting to share office space. The next year, we launched the Franklin Watkins Financial name, and then it's just kind of been a fun ride for the last 10 years.
He and I have both had some negative experiences on the partner side of things and the succession planning, so we purposefully took it very, very slow. But one of the things I can say about Eddie is he is one of the wisest, most generous, kind men you'll ever meet. And so having him as a partner the last 11 years has been one of the absolute joys of my career.
Don Patrick: Yeah, I would agree. He's tremendous. I mean, both of you are, and it says a lot why the partnership's been so successful. So when did you start actually adding assets and building advisory business? Was that prior to the partnership?
John Franklin: Yeah, from day one. So for Eddie, because he had been that employee benefits insurance guy, it's kind of that old story that whatever you do first for a client, that's who they think you are, whether that's just a tiny bit of what you actually do in the grand scheme of things. And so I think in a lot of ways he had been pigeonholed into, “Eddie's the insurance guy. That's what he does.” So Eddie's been in Wake County and the Raleigh area his entire life. He has so many wonderful, great relationships.
And so the thought process was my background is in wealth management, I have the CFP, so let's kind of use me as a, “Hey, here's my new partner, this is what he does.” And try to create opportunities from that. And so that's how we started, that's how we began building together.
Don Patrick: That's fantastic. That was great for you too. So primarily his existing insurance clients is, and you start offering wealth management, financial plan, that sort of thing.
John Franklin: Exactly.
Don Patrick: That is great. Now, what is his succession plan?
John Franklin: That is a work in progress. I just met with Andrews yesterday. and we were actually talking about that. So Eddie's plan is to retire 12-31 of this year. So originally the plan had been August 12th because that was his 50th anniversary in the financial services business. But due to some other things in life that has been pushed back a little bit, which is great, right? It's totally fine for us. I think it makes it a little cleaner from a tax and legal standpoint as well.
So yeah, so the goal is 12-31. He'll be really cutting back. I will say he has a handful or so of clients who, these are the people he's known his whole life, or they've literally been clients for 45 years. And they kind of give him the, “Well, you're not allowed to retire speech.”
Which of course he's coming back with, “Well, you get to retire, so I get to retire too.” So those people will have probably about a two year phase out is what we're thinking at this point. And so he's starting to have that conversation of, “You have two years. Either we start building the relationship with John so that you feel comfortable and work with him going forward, or you start looking for another advisor and we'll help you transition everything out.” So that's kind of where we are.
Don Patrick: So if any of you ever met Eddie, you would never ever guess he's been in this profession 50 years. He's got a face.
John Franklin: Well, Eddie is at the YMCA every day. He takes great care of himself and I think it comes across in a lot of those ways. So he's very young and energetic and passionate and he just has a lot of other things he's passionate about and wanting to spend time on. And so we're very supportive of that.
Don Patrick: Yeah, he's always got a smile. So are you basically running the practice now? Is that, how's the setup now and what's it gonna look like when Eddie retires?
John Franklin: Yeah, our setup might be a little bit different than some others and similar to some, but when we worked, when we started working together, we created the Franklin Watkins Financial name. That was essentially the entity that we ran our business expenses through. Our employees were employed by all of that. But he and I both kept our separate entities. And so essentially, that's what our advisory and commission revenue gets paid into, and then we both dump money into the Franklin Watkins bank account and cover everything from there.
So that's how it works operationally today. It's been great for us just because he and I, you know, especially at the beginning, both wanted to be paid different ways. He wanted more salary to max his security. I wanted less salary to max profit distributions from the business. And so it just, it kind of worked for us at that point.
What it will, I think, look like going forward is, as part of this, I will merge my entity in Franklin Watkins together. And use that to essentially buy Eddie out. So yeah, so that's how it will look from this point forward. But in terms of the day-to-day operations, yeah, I run most of that. Eddie, his take has been, you know, “John, every decision we make is going to impact you a whole lot more than it impacts me. So you need to be the one to make that final decision then to kind of have that, have that final control.”
So when I talk about him being generous, it's been in many, many ways throughout our relationship and that’s one of those. There’s a lot of people in this business with ego, who would not have allowed that happen, but that's not Eddie
Don Patrick: Good idea. I was gonna ask you how the decision making process worked with partners, because that can be a challenge sometimes.
John Franklin: Yeah, I mean, we are fortunate, I guess, I will say, in that we have never really had a big disagreement. There's been certainly things where maybe I wanted to spend some money on this and he didn't want to, but, or vice versa. And we just come to an agreement together and, “Okay, this is important for you with your clients,” for this is what, you know, “And your part of the business. Let's do it.” And so I think both of us are pretty laid back. so it's worked fine for us. We certainly had people give us advice at the beginning, “You shouldn't be 50-50 partners and that can create options.” But it's worked for us. And so yeah. So I haven't had any complaints.
Don Patrick: That's fantastic. That's wonderful. Partnerships are tough. We have a bunch of really successful ones in the consortium. Ironically, a number of them are spouses, husband-wife teams. They're still married and the partnerships are going strong, so that's not the norm. So that's fantastic. So you've been doing this a long time. What do you like or love about financial planning profession?
John Franklin: Well, I feel like this is gonna be a similar answer to a lot of people, which is no surprise. But I think most of us get in this business because we love helping people. And so that is kind of number one.
Number two, I love that it's always, every day is different. You have a client walking in with a changing situation, a new situation, a life change, whatever it may be. So I love that. And then obviously, we have curve balls, like the big beautiful bill that change taxes, and those are new things we have to learn and work through and figure out strategies to implement and to help our clients.
So, those are the big things. And I'll tell you a little story here, but three weeks ago, I was delivering a financial plan to a, to a new client. And this is a couple who has had a financial advisor for a long time, but all they do is investment management. If you look at their website, you think they do real planning, but they don't.
So they are approaching retirement and they're trying to figure out, “Can we retire?” and part of this is the wife was recently treated for multiple myeloma and the husband actually, I don't know if much about multiple myeloma, but it's a blood cancer. And so as part of the treatment, usually they do a stem cell transplant.
And so that was being done at Duke. And essentially, they wipe out the immune system, heavy dose of chemo and do the transplant. So in prep, she has to basically be in isolation for 30 to 45 days. And so as part of that, they wanted him to get the updated COVID vaccine. And so he got the new COVID vaccine and he had a horrific experience with it.
I mean like in and out of the hospital multiple times. And it has just really affected his health. And so about two weeks before I deliver the plan, he calls me and he says, “John, I got to retire. I'm in this high stress job. I don't know how long my wife is gonna live. I need to be here to take care of her.”
And so three weeks ago, I'm delivering this plan. They live down at the coast. And so I was doing it via Zoom. And we go through their eMoney plan, we confirm, write all the assumptions, the goals, the inputs, all of that, and we get to the end, and they can retire. And I could tell that it didn't sink in because he was just kind of sitting there and I said, “Mark, I'd like to take a second and just reiterate what we just went through. You can retire, you can leave your high stress job. You and your wife can move back to Texas and be with your kids and your grandkids.” Right? And I kind of went through all of these things of what they wanted life to be, and he just broke down, I mean, sobbing on our Zoom call.
And we sat there for three minutes with him just sobbing and taking it in. And then he composed himself and we were able to move on. But to be able to have that type of an impact in somebody's life is incredibly powerful and something I'll never take for granted. So I just think of all the times we've had those conversations and you see the worry and the stress just literally fall off of people's shoulders.
And a lot of times it's not even that the news is what they want it to be, it's just that now they know where they are and what they can do. And that clarity is so important. That's why I love what I do.
Don Patrick: Yes. I mean, that is such a great example of the joy of this profession and it is. It's a weight off their shoulders that they didn't know they had. And in my experience also in delivering that message, “You can retire.” Sometimes it takes weeks or months to really sink in and to take action.
John Franklin: Yeah. the fascinating thing, Don, you're gonna think I'm joking here, but literally three hours after that Zoom call ended, this client, mark gets called in and he gets laid off.
Oh my what? Dead serious. So it had, yeah, so it, he manages a loan portfolio and it was a bank, it was a smaller bank that was getting into a new line of business and had decided to pivot. And so, literally having that conversation made him be like, okay, well I was gonna work for another couple months just through the end of the year, but I guess it's happening today.
let's get this go, let's get this moving forward. So, obviously that news would've been a lot more, I think disturbing and shocking for him if we would not have had that conversation just a couple hours prior.
Don Patrick: Absolutely. What a game changer. Well, that, that is such a great example.
That's powerful. It's so powerful. So, let's kind of transition to the business of the practice a little bit and how it's running today. And just, kind of just give us a high level look at the practice and the client base and that sort of thing.
John Franklin: Sure. We have, about 165 ongoing clients we're working with regularly.
We do not have a specific niche. I'll say we're kind of more of a generalist type practice just with the area that we are in here in the Research Triangle Park. I'd say most of our clients kind of fall in a couple of industries. So tech's a big one, right? We got Cisco and Dropbox and, Amazon and Right.
all. All those big tech companies are here. So we have a ton of those types of employees, a lot of people in sales, in the medical profession with Duke and UNC, and also a lot of business owners. So that's, that, that's kind of how the, our client base looks. I'd also kind of categorize it in two age groups.
So a lot of my clients are in kind of the 35 to 50-year-old. These are, people who are, growing in their careers. They're planning for kids in college and a lot of them are sandwich generation where they're taking care of parents and also have kids at home. And a lot of Eddie's clients, are more of the, just about to retire or in early retirement.
So that's kind of the other way I classify our clients.
Don Patrick: So you have good demographics, that's great. But so you, but you have real, you have complexity. If you've got, tech employees with, I assume some complexity in their benefits, and you're dealing with business owners,you're doing some complex things. I imagine.
John Franklin: Yeah. We've had to, had, have had to learn a lot about, equity, compensation and, our issues and options and things like this. Just 'cause we run into that a lot, especially with the, with the tech and the sales and, and that side of the business.
Don Patrick: See, I'd call that a specialty that's not a generalist.
John Franklin: Yeah. Yeah. It's,I think when you're in it every day, you just lose track of that sometimes. But when somebody's looking at it from the outside, it maybe jumps out a little bit more.
Don Patrick: Yeah. So in terms of, the team, the staffing, what does that look like? What kind of roles, responsibilities, things of that nature?
John Franklin: Yeah, so we're, we're a team of four. Obviously Eddie and I are the advisors. We also have Holly and Kelly, on our team. There are, let's just say they're the people who keep us in line and keep the office running smoothly. So Kelly's been with us, it'll be 11 years in October. and Holly will have been with us six years in October.
So, yeah, so, so Eddie and I handle most of the advisor roles, or the advisor responsibilities. And Kelly and Holly handle all the operations, client service, administrative tasks, everything, like I said, to keep the business running.
Don Patrick: Let's talk about maybe your tech stacks. Obviously you're using E-Money.
You started off Money Guide Pro. How did you make the switch to eMoney?
John Franklin: Yes. That first company I was with was a Money Guide Pro company. And then when I came over, when I left and kind of loosely was affiliated with that other group, they were an e-money team. And so. I was starting over from scratch anyway, so it was, I can use it for free essentially through them.
So I'm gonna use eMoney rather than pay for money I pro for myself. So, that was 11 years ago, and as you build, it just becomes more and more prohibitive to jump to a new financial planning software. Just having to rebuild, client plans and things like that when you have, I don't know, a hundred and something in there, it's just, it'd be a lot to do.
So, yeah, they
Don Patrick: all have different flavors for sure. And they all do a good job. So what else is in your tech stack? What other kinds of tools are you using?
John Franklin: Yeah, I'd say a lot of the same as kind of other consortium members, but obviously Redtail as our CRM, use nitrogen for the risk scoring. We use HIA plan for tax planning, one hub for scheduling, jump for meeting notes.
we use AllBridge for performance reporting, advice, pay for, client, advisory fees. They're paying directly, obviously Zoom and just kind of all the other assortment of things. So.
Don Patrick: You got all the good stuff going and jump is just like everybody's jumped on jump and it's a time saver.
John Franklin: Yes. I, when I was meeting with Andrews yesterday, he said, John, last year, this time you told me you were about at capacity. how have you grown over the last year and brought on more clients and, you're still okay and not over capacity. And I said, jump is the reason. it's because it's, that's a great
Don Patrick: testimonial for all these note taking companies.
John Franklin: Oh yeah. I mean, in with most of the clients that I work with, I'd say 80, 80 plus percent of my meetings are still via Zoom. Very few clients come into office anymore. And so being able to use, jump on something like that and recording all the notes and just having to make little tweaks.
I mean, I don't know the exact time savings, but it feels like it's. On average, for a client. And so you look at that over hundreds of meetings a year, and that's a lot of time savings.
Don Patrick: It's, and what I've also experienced enjoyed about it, you're really able to be truly engaged in the meeting.
And not taking notes 'cause it's being done for you. Agreed. So tell us a little bit about the money management side of your business and what your philosophy is and what that looks like, how you execute that sort of
John Franklin: Yeah, that's a great question. So I think one thing that we do maybe a little bit differently here, than a number of other consortium members is we have a portion of our money management where, we employ more of a kind of a momentum tactical approach.
And so we licensed some technology from a group out of Ohio for that. We've been working with them for about seven years now. One of the big draws, and I might be jumping ahead a little bit, but one of the big reasons, we joined IFG was the trading team. with these models, I was waking up in the morning and having no idea if I'm trading zero client accounts or if I'm trading 200 client accounts that day.
And that was just, that was not a place I needed to be spending my time. but obviously our last broker dealer just did not have a solution where I could offload that. And so being able to work with Bryce, and shout out to jal, he's amazing. They have just been fantastic to work with on that side.
So that's about, 25 to 30% of our, of our client money. it's not something we want everything in just because I kind of joke when you have tactical investment strategies, I always tell clients some of the times you're gonna look at this, you're gonna say, John, why in the world do I own this thing?
It stinks. Some of the times you're gonna think it's the absolute best thing you've ever seen. And then most of the time it's gonna do exactly what we want it to do, right? It's gonna be kind of right in line with everything else. but it does give us some diversification in terms of management style.
And so, so yeah, so that's one piece we do. And then other than that, it's usually just a very, core strategic type of portfolio, either ETFs or mutual funds, a combinations of the both. We utilize the investment solutions team for this and use a lot of the LPL models. So, so yeah, that's kind of the core of what we do.
Don Patrick: So would you call that kind of like a core satellite approach?
John Franklin: Yes, very much so.
Don Patrick: So you were obtaining a number of clients from ME'S book of business. Where do your clients come from today primarily,
John Franklin: pretty much all referrals and. And just general relationship building. Eddie and I joke that we are the worst marketers in the world.
So to be in business this long and to do as well as we have, we are very thankful for. So I think that's a testament to kinda our team and how we service and how we build relationships and things like that.
Don Patrick: It is, absolutely.
John Franklin: Yeah. Donna, I'll tell you a funny story here if you don't mind.
So I told my mastermind group this a couple weeks ago on our, on our bimonthly Zoom call, and they told me I had to tell you here on the podcast, so about a year and a half ago, I had a client, reach out to me and he said, John, I post on Reddit all the time and there's somebody who's asking for a good like financial advisor in Raleigh.
Are you okay if I put your name out there? And I said, well, obviously I can't do it for compliance reasons, but yeah, if you want to, that's fine. So over the last year and a half, I've probably had five or six people, call me from that. And most of them have been somebody who's just wanting kind of a one-off analysis of, Hey, am I doing a good job?
What do I need to tweak? things like that. But about two months ago, a couple reaches out and they say, John, we found John Reddit. we're 70 and 72 and we just sold a business and have $5 million sitting in cash. Oh my gosh.
Don Patrick: First of all, I didn't think 70 year olds were on Reddit.
John Franklin: I didn't think so either.
Yeah. And so, apparently they are. And so that kind of began this process, of, or, building out a plan for them. one of the thing that's a little bit unique about their situation is they have 10 children, all biological and, the, just the two of theirs that, you know, that they've only had one marriage.
And so, so they, their goal is, hey, 5 million is a lot of money, but if we split it 10 ways, it gets a lot smaller. And so, so it's been an interesting process. So, Paul Peeler was speaking to our mastermind group that day about some of the client, events that he's doing, and he said, well, apparently I just need to, put my name on Reddit and I'll be fine, and I'll get $5 million client.
So obviously that's a crazy story. That's a one-off. But I thought it was funny and wanted to share.
Don Patrick: Well, I never would've thought I, Reddit, there's some crazies on that thing. That's amazing. That's a great tip.
John Franklin: Yeah. you never know where people are gonna come from. That's all I know.
Don Patrick: So with your referrals,and I agree with you, it's a testament to the work you're doing, the team you're doing, the team, the work, the team's doing, that sort of thing.
Are these passive or do you proactively ask for an introduction and say, Hey, I can help your friends? How does that work?
John Franklin: Yeah, it's more passive. We have been, I'd say, a little bit more active at points in the past of just being specific of this is who we serve, this is who we serve best. so if you come across somebody, please connect us.
When I went out on my own 13 years ago, the first thing I did was kind of call up anybody who I knew would go have a cup of coffee with me. and my thinking was just tell 'em. What I do, and it's okay if they don't need it, they likely will know somebody or come across somebody that will need my services.
And so the fun part of that was as you go through telling people, I don't know, somewhere between a third and a half of them said, well, I'd like to work with you. And then, the rest of them you end up kind of getting referrals from over time. So, so yeah, nothing real proactive today.
It's, just organic.
Don Patrick: Yeah. I just call that actually I still do friends, helping friends. Yeah. People like to help their friends. Okay. They don't necessarily know their specific financial situation,
John Franklin: but
Don Patrick: Yep. They know you, they know your team. So, so you've gotten a referral, now you have a new prospective client.
Walk us through what that looks like. What kind of steps are along the way?
John Franklin: Sure. So typically we'll do about a 15 minute intro call just to kind of get a better feel for, their unique financial situation, maybe what they're looking for, and make sure that it's at least a good fit to take the next step.
if it's a really warm introduction, sometimes we skip that and go just right to kind of the first meeting. An example of that is, existing client, her parents are late seventies and now live up here in North Carolina, and they wanna move their assets from advisor in Mississippi up here, to make transition easier, in the years to come.
And so, somebody like that would just skip right to the first meeting.
Don Patrick: So what's the first meeting like? Is it a, is it typically face to face and then it goes to Zoom? Or does it start off Zoom? What does, and what is discussed? Is this like a data, a gathering or what does Yeah,
John Franklin: it's so, it's both, right?
I'd say it's, dependent on the client. If there's somebody who likes in person, it'll be in person. If it's,if it's somebody who prefers Zoom, then we'll do Zoom. But I mean, like, I'll give you an example. Yesterday I met with a 30, or I had this intro call with a 37-year-old. He's a former college soccer coach who has now got into, medical recruiting, right?
So he's recruiting physicians, for hospitals. And over the last few years, his income has gone from 75,000 to 200,000 and he's about to get engaged and his girlfriend makes 150,000, right? So people who really great incomes and are gonna be, good long-term clients, just don't really have assets today.
And he's somebody who I thought would choose a Zoom meeting all day long for this first meeting, but he says, I wanna come in and meet in person. So we give him the option of whatever they prefer. Okay. Yep. But that first meeting will definitely be really the data gathering of,digging into their finances.
This is usually where they'll bring, all their documents, the, the statements, the pay stubs, the tax returns, right? All the things so that we can dig into it. This is where we go through and talk through goals and,kind of the, how do you define success when it comes to our relationship?
So, that's one of the questions I always love asking is just, If we're sitting here a year or five years from now, what needs to happen for you to say, man, I'm so glad I worked with John. And I love that because it kind of tells us exactly what we need to do to meet their expectations and for them to be really a really happy client.
And obviously happy clients stay with you and they refer people, so,
Don Patrick: so you don't make them fill out a fact find, you just have 'em bring all the stuff in and you organize it and figure it all out for them.
John Franklin: Yeah. Yeah. I, I've tried using the fact finders in the past. I just find that most people hate 'em.
or they fill out only part of 'em. And so it's just easier to kind of have that, get organized meeting together because then we have a dedicated time. They have a deadline, they have to get 'em by. And so it's just, I found it to be more successful. So that's what I stick with.
Don Patrick: Yeah, we, I mean, we have folks that are successful using a fact finder and they actually use that as a screen process, but, right.
My, my view is our clients, typically, they're delegators. They don't wanna mess with this stuff. And I know if I were engaging a financial planner and they ask me to fill out a fact finder, I wouldn't even start it.
John Franklin: Well, I'll tell you a brief story here. When we,we just moved into new house we've built, and when we engaged the architect to help, they sent a 25 page questionnaire.
Oh my gosh. And this was everything from how do you want to feel when you look at your house from the outside? What do you want it to feel when you walk in the front door? I mean, this was everything from very specific things to, feelings and vibes and stuff like that. And so, my wife is.
the amazing one when it comes to that stuff. So she filled it out and they came back and they said, John, we need you to fill this out too. And I said, my answers are her answers. Whatever she says is what's right. Just go with that one, because I'm not spending 25 or like hours of my time filling out 25 page, questionnaire on what I wanna feel like in my house.
So you're a smart man, and yet
Don Patrick: your wife is always correct.
John Franklin: well, she's brilliant at that. She's got a gr, a fantastic eye. I mean, she could be an interior signer if she wanted to. she's a ceramic artist. I forgot to mention that earlier. So, so she's a ceramic artist and just incredibly creative and great eye and all those kinds of things.
So she's much better suited to that than I am.
Don Patrick: I totally understand. Yeah. So now you've had the data gathering, fact finding. What are your goals, aspirations? What do you want our relationship to look like in five years? what's the next step in the process?
John Franklin: Yeah, so it's gonna be starting to work on kind of the plan.
So usually depending on the person, we're gonna go kind of one of two ways. So either I go kind of a one page financial plan type of route, or we do kind of comprehensive financial planning and e-money. So typically the comprehensive financial plan and e-money is gonna be somebody who's a little bit older, who we have a little bit more focus on retirement.
the one page financial plan is usually gonna be a younger client. I don't know about you Don, but if I'm meeting with somebody who's 35 years old, we really have no clue what the future's gonna look like. That's correct. Right? They might have more kids. We don't know where colleges are gonna go to. We don't know how many different jobs they're gonna have, or even, what a utility bill is gonna be in 30 years.
And so for somebody like that, we take a little bit more of a high level approach of just how do we maximize what you're doing? So like, I'll give you a an example. a, a new client who came on earlier this year was a, she's a doctor at Duke, and kind of the analogy I gave her was, if somebody walks in.
Your patient room and you know exactly what's wrong with them. Do you spend all the time and effort and money of going and doing all this complicated testing, or do we just treat what we know needs to be done? And so that, that really resonated with them. For the one page financial plan, usually depending on it, we may charge for that.
We may not charge for it. The price point's usually a little bit lower, than if we're doing the comprehensive plan. So,
Don Patrick: so you charge separately for the planning, whether it's a one page or comprehensive?
John Franklin: Correct. Yeah. So we, we typically have an upfront fee to do that the first time, and then on an ongoing basis, usually that's wrapped up into our advisory fee.
But if they, don't have a lot of assets for us to manage, then we'll just, charge 'em a quarterly, financial planning or advisory fee.
Don Patrick: So this new client, the ex soccer coach, who now is recruiting, so how are you charging them and how do you come up with the
John Franklin: fee? Yeah. Yeah. so we have not done that first meeting yet to really dig into, what they need.
My guess is for them,they just need somebody to get 'em started.
Right? And so for somebody like that, I don't want to bring them on as an investment client because they really don't have much assets to. To work with. And so I find if, if they have such a small portfolio, we actually kind of lose money serving them.
so for somebody like that, I will do kind of a one-time consultation, just to get 'em set up. And then what I'll say is, Hey, in six months, or a year or three years from now, when you have that next life change, call me and we'll do this again. Right? And we'll start making that, we'll pivot based on what the life changes have been.
So you buy your first house, you get married, you have that first kid, right? Those are all things that are very likely to happen to this individual in the next three years. So they're gonna have a lot of life changes and need a lot of advice. just they don't have really any. For us to manage. And so that's how we'll usually do that type of relationship.
Don Patrick: So you don't put them on a subscription, it's just a kind of project based.
John Franklin: Right. Yeah. Usually I find that works best for our clients, just be for those people who don't need ongoing work. but another example of that is a client I have who, he's a 3-year-old at Amazon Web Services, so he's in sales over there.
His normal income is 400. He'll make $800,000 this year. Yeah. He signed a $270 million contract with a Fortune 100 company for AWS services. So, that was a good commission day for him. So for somebody like that, we do have it on a subscription basis just because he's somebody who has RSUs vesting regularly.
He has big commission payments coming in once a quarter. Right. So we wanna be proactive in having conversations and planning around that together, because we all know, like, if we don't have a plan for that money, it just has a tendency to disappear. It gets spent some way. And so we don't want that to happen.
And that's, that does allow us to be proactive. So kind of the way I've approached this, Don, is people come into our lives for a reason. So we wanna find a way to be able to serve everybody, whether it's a project base, whether it's an ongoing subscription base, or it's kind of a more traditional, wealth management approach with being paid through advisory fees
Don Patrick: and you're using advice pay.
Yes.
Yeah, that's a great tool.
John Franklin: it's it that's a lifesaver. So the clients don't have to write checks, and send them in.
Don Patrick: So, so what kind of, what is, what's the range of your fees for a plan? initial plan?
John Franklin: Yeah, so I mean, if we're just doing kind of an hour consultation for somebody, I usually charge us a flat 500 for that.
If we can kind of wrap most everything up there. If it's gonna need some, prep work and some analysis afterwards, it may be as high as a thousand. But for most planning fees we come in the three to 5,000 range. So that's, yeah. We've obviously had some that have been a little bit lower just 'cause they were very simple and we've had some that have been, expensive 'cause it's, crazy estate planning and multiple businesses and, 10 real estate prop rentals and things like that.
So, yeah.
Don Patrick: So, yeah, so three to 5,000 may sound like a lot, but $3,000 is eight a day. It's about a Starbucks coffee. That's how I look at it.
John Franklin: Yeah, I mean, I, it is kind of the old adage, if everybody says yes, you're probably not charging enough. and nobody really ever says no to that. And so, so maybe that needs to be a little higher from a, practice management and profitability standpoint.
But it's,it has made sense for us. It's, it's something that is profitable for us and allows us to really get in and help that client and have that plan built out so that they know that path forward and they can feel really confident in working together.
Don Patrick: Great. So you've either done the one pager or the comprehensive plan, then the next meeting is kind of presenting the findings and recommendations, that sort of thing, or what it like.
John Franklin: Right. And that's kind of morphed a little bit into used to, I would feel like I had to have everything perfect and put together in that meeting. and what I found is that's not really life, right? We get the plan done, we start going through the scenarios and it's, oh, I forgot to tell you about this.
Or, well, well, I think this is actually more likely, right? So we end up, doing it on the fly together. And so a lot of times that will be, especially if we're doing the comprehensive plan, we will just be going through the plan and kind of talking high level about some of the implementation or recommendation and then coming back after that with kind of the, Hey, here's the, here's on paper the recommendations.
Let's get started on these together.
Don Patrick: So then, let's say they're gonna be an asset management client. When does that begin? Does that begin at this meeting or another meeting? How does it work?
John Franklin: Yeah, so usually once they commit, we will have a, a, usually it's a call just to gather any remaining information we need, to set up accounts and start transfers and do all that kind of, do the operation side of things.
So. Obviously we try to be really good and communicative through the whole process. Here's where your money is, this is where we are, this is what we're waiting on, whatever it may be. And then kind of once that money comes over, usually when we get that first statement so that next month, about five days in, we'll reach out and schedule a kind of a 30 day check-in just to go through the website, go through their statements, go through all the, millions of pages that they've gotten from LPL and they have questions about.
but we go through all that stuff together as part of that, and then that starts our kind of normal cadence from there. And so for most of our clients, assuming they're, half a million or above in assets, we're gonna be meeting with them twice a year. So more of a semi-annual process.
so that kind of starts the clock for, six months until the next review date. And then, for those clients will always be checking in between there us and also kind of as things pop up. So, but we have kind of regularly scheduled so that those clients are hearing from us at least quarterly.
Don Patrick: So you're twice a year meetings. Does the agenda item, do the agenda items change? John? How does that look?
John Franklin: Yeah, usually, in one of those, we're gonna do an update of the financial plan. One of them is going to be more. kind of working our way through financial planning items, of Okay, let's review your life insurance again.
Let's review your estate plan, right? And kind of go through those just to make sure we're staying on top of those and kind of have a regular schedule of talking through those important topics.
Don Patrick: Do you segment your clients?
John Franklin: Yes. I'll say it has been more informal in the past, but we are moving more towards that.
So, at the retreat back in January, one of the things, like the main thing I wanted to walk away from that retreat with was where does my service model really need to be? Because when I look back, we have been overserving for a long time. and I think that's one thing that has allowed us to, grow.
Nicely and be where we are today. but you know, kind of as you reach capacity, that can't be the same going forward. And so the big delineation point that came from that was kind of clients with half a million or $5,000 a year in recurring revenue. Those are the people who are getting semi-annual going forward, the people below that.
We need to transition more to an annual, kind of just one big annual review. And so that's what we are in the process of doing right now.
Don Patrick: Yeah, that, I mean, that's very common. And, as you start reaching capacities of, wait a minute, what do I do? So segmenting is huge. Which kind of leads to some of the next questions in terms of growth, any obstacles, any challenges you're facing?
Obviously you've got a capacity issue, so now you're trying to solve that with client segmentation and segmenting service. any other. Big challenges you're facing?
John Franklin: Yeah, I think we certainly have Eddie's transition. so that's the, that's something that's kind of big, staring at us with the way that we work together.
And so many of our clients’ already being joint clients. That's not gonna be, I think, as significant a transition as it has been, for maybe some other consortium members in the past. But it, being near capacity and having this transition, obviously the next thing is kind of, I need somebody else who's licensed on the team.
'cause I would like to be able to go out of the country and have somebody here who can give advice and trade accounts and make sure our clients are taken care of. and,not have any compliance issues come up. So, so that's, I would say the other ni big thing that's on our plate and what we're trying to do is gonna, is figuring out.
What is that role? Who do we want it to be? What are the characteristics of that person? and then starting that process of finding, who that I think we're calling him a service advisor,To start. So
Don Patrick: I assume you're working with Andrews on this
John Franklin: developing? Yeah. Yeah, we had to. that was our other big topic of conversation yesterday.
So,
Don Patrick: so, in terms of the consortium, you told us a big reason why you joined. I fg When did you join the consortium?
John Franklin: It was March of 22. So it was a fun time. As markets were starting to melt down a little bit, it always feels like anytime you make those big, changes in business, there's always gonna be a market fun event that happens for us.
So
Don Patrick: That's part of our business. Yes. So you mentioned you're in the mastermind group and what's the impact been for you, your practice in terms of being in the Brain Trust consortium, that sort of thing?
John Franklin: Yeah, it's been, it's been huge. So maybe given a little bit of a backstory here is I met Lan back in, I think 2010, when he was wholesaling for Wells Real Estate.
I love it. And so we kind of bonded over a love of baseball and, a number of other things. And so when he joined, IFG back in, well, I guess in 2014, he was kind of making a trip through North Carolina, seeing the other advisors, and he and I met for coffee and that was the first time I heard about the consortium.
And it just, it wasn't the right time, right. Eddie and I were kind of just coming together and figuring out what that was and then, kind of. He and I kept in touch, here or there. And then in, in 2021, we really reengaged. and it was just the time was right. So as I was looking forward, we knew Eddie's retirement was gonna be coming here soon, and I felt like when that happened, I was gonna be out on an island by myself a lot.
and that was something that wasn't comfortable. Right. And so the, the benefit of, having. The consortium, the mastermind, like those people who we can then build great relationships with and really grow with. It was just, it was exactly what we were looking for and what I needed at the time.
And so when I approached Eddie, about it, obviously as somebody who was nearing retirement, he was not excited about having to repaper all accounts and learn a whole new sy tech system and, all that kind of stuff. But,this speaks to who Eddie is. He looked at me and he said, John, this is your business going forward.
It needs to be the right place for you. So, if that's, if this is what's right, let's do it.
Don Patrick: So land under promise and I have over deliver. I'm gathering.
John Franklin: Well, you guys nailed it. That's all I know. is that, you guys have. More than we thought you would be. And we already had very high expectations going in.
And so it has been everything we wanted and more, the practice management with Andrews, the mastermind group, which we just have a, a really engaged, fun group and we just all really like each other. Right. And so, I mean, it's constantly throughout the week our, LinkedIn group chat is pinging.
And whether it's somebody asking for help or somebody making a joke,we have a really good time together.
Don Patrick: That's fantastic. that's what it's all about. I love it. Yeah. So, couple, few quick fun questions before we wrap up. Use three words to describe your talents and strengths.
John Franklin: Alright. so I, I crowdsource this a little bit, Don.
I ask the team just to kind of get some feedback because as you see your, yeah, sometimes I see yourself as maybe a little different than others. So, yeah. So the things that came back. Most frequently were, kind of building relationships, slash connections. Two was kind of problem solving slash adaptability.
so I think that's something just we kind of always need in this business is because it's right. Things are always changing. The client situations are always changing. So those are kind of the first two. And the final one was, was leadership. I'd say that might look a little bit different for me than some people, right?
I think a lot of times when we think of leaders, it's kind of the, the person who's standing up front and speaking the loudest. And, I think I, more try to lead by example in it maybe a little bit of a quiet way. but that is something that's important to me.
Don Patrick: that's a style of leadership.
I like Kim. That's true leadership. So share with us something that's, surprising that other people may not know about.
John Franklin: Okay, so, so when I was, when I was 12 years old, my, my dad started his own business as a professional photographer, right? So something he'd always done on the side. So just about every other weekend for, my entire teenage years, I would be at a wedding with him carrying photography equipment around.
So I joke that I've been to more weddings than a teenage boy ever wanted to go to.
Don Patrick: Oh my gosh. Oh, that sounds like punishment.
John Franklin: Yeah, it was. I mean, at least sometimes you got some good food. one time, one wedding we did was, I don't know if you remember, but Marian Jones, she was the sprinter, had gone to UNC, ran track, played basketball, and then she was on the US Olympic team and won gold and all that stuff.
And then, she ended up actually having medals taken away for, steroids and doping and stuff like that. but we actually did her wedding and her husband was also an Olympic athlete. so that was kind of a fun event, 'cause the, president of Nike was there and, and stuff like that.
So there, it was definitely some fun experiences that came from that, I'll tell you that. That
Don Patrick: is cool.
John Franklin: And again, I, one other thing that came, from it is one, I gotta spend some great time with my dad, which is always good. and two. Our deal was he would pay us for each wedding, right? Based on the amount of time it would vary what, what our, what we got paid.
and half of that money went into a savings account. and our deal was we had to pay for half of my brother and I had to pay for half of our first car. And so that was a way that we kind of learned to save and to, to build money for the future and delay gratification and, help to buy our first car.
So, so there's a lot of great things that came from
Don Patrick: that. That is great. So share with us your favorite book.
John Franklin: Oh my gosh. I, I don't even know where to begin with that. I have been, I will say I've been reading a lot more fiction these days. life in other areas has been kind of intense and so I've been kind of enjoying more, escapism, more fiction.
Don Patrick: Yes.
John Franklin: So, yeah, I don't. I don't even know how to answer that, so I'm gonna skip just 'cause I, there's so many, so, yeah. I'm gonna skip that question, Dawn.
Don Patrick: Well, the last question for Sign off is the best piece of advice you've ever received.
John Franklin: Always. I did think of this one. And so it's always do its best for the client.
That's the only thing that matters in this business. And so, like I said, I was very fortunate in how I got in this business, the way they did business, but their integrity and their approach. And so I learned that from day one and got to see the benefits and the fruit of that. and so that's just kind of the integrity I wanna live my life with.
So that's the best piece of advice.
Don Patrick: So ironically, I just shared with Land and Andrews, a piece from Warren Buffet. And he would tell his team, you lost money, eh, that hurts a little bit, but, and our reputation, our integrity is everything. So that's ironic. He said that. John, this has been fantastic.
What a journey. Oh my goodness. And what a business you have and you've built. And yes, you're the leader. I wanna thank you so much for taking the time and sharing with all of us.
John Franklin: You're welcome, Donna. I appreciate it. And, just thankful to be here.
Don Patrick: Well, that's it for today's show.
Well, that's it for today's show. Thanks for listening.
If you've got something to share, send an email to dpatrick@thebraintrust.net. We want to know what works.
Until next time. See ya.