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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: Welcome everybody to the IFG podcast, What Works, and we are
welcoming Karen Lee, who's the founder of Karen Lee Associates. This is
Episode 21. Welcome, Karen.
Karen Lee: Thank you. Good to be here, Don.
Don Patrick: Yeah. So Karen is a founder over a little over 21 years ago,
one of the original founders.
We all went independent as a group and you've been on the advisory board for
20 years, which is a hell of a commitment. I mean, it's four times a year,
four hour meetings, typically, and you always have great ideas, suggestions,
questions, comments. I mean, the advisory board has been one of the best
things.
That's a lot of dedication and commitment to the consortium, and you also
end up volunteering for other side committees that we put together
periodically. You're a volunteer.
Karen Lee: It's because I care so much.
Don Patrick: I know.
Karen Lee: Yeah.
Don Patrick: It's for all of us.
Karen Lee: It is.
Don Patrick: So let's talk about your family a little bit to get started.
Karen Lee: Sure. Sure. Well, as you know, I am married to Ken. We're coming
up on 36 years. We met in college. I feel like that's kind of like the lucky
ones that get to meet in college and actually make it work out. We were 19
and 20, and we started dating maybe the next year and we took our sweet
time, getting around to getting married and then took our sweet time again,
starting our family.
But again, as you know, we've got Daniel is now 32 and Julia is 28 and Ken
is already retired and we're living full time at our lake house. Life is
good.
Don Patrick: That's fantastic. Yeah. So, what college?
Karen Lee: Ken and I met at Tulane, which is always fun because Lan went to
Tulane and you just don't meet a ton of people from Tulane.
Like when I see someone with a Tulane shirt, which I did last week at the,
Kroger, I stop them to talk to them because it's not common, right? Yeah, so
that was New Orleans, and that was a very wonderful, fun time of life. It
was a great chapter going to school down there.
Don Patrick: I would think so. Very memorable. Very. Well, actually, maybe
you don't remember a whole lot. I don't know which.
Karen Lee: Well, we make the joke that we had to get out of there to save
our liver. So yeah.
Don Patrick: So you were an architect major, correct?
Karen Lee: I was. It was sort of a weird thing in my family. There was never
a question that you were excelling in high school. All advanced placement
classes, you better be at the top of your class.
So I think my brother graduated second and my mom wanted to know who was
number one. Right. And he was only 16. Right. So I came in like a mere fifth
in my class. I was like, yeah, whatever. But I was never questioned that the
three kids in my family and I'm the youngest of those three were going to go
to college.
And then my parents, they were Yankees displaced to the South through my
dad's affiliation with Tennessee Valley Authority. So when I was nine, I got
moved to the Southeast from the Northeast and that was the beginning of my
craze of loving football because they kind of mentioned that that was a
prerequisite for making friends in our new town.
And they moved us to Knoxville and with each kid, though, they expected us
to pick a profession before college and have our major, which is very
difficult. But my brother's one of those people who knew his whole life. He
wanted to be a doctor, so it wasn't a problem for him. My sister, who was a
little less aware of what she wanted to do, said that she would go to
engineering school, which is what my dad did.
And I was a bit lost. I really loved my creative brain, drama, creative
writing. But I was mostly book smart at math and science. And so I did not
want to be an engineer or an accountant, but I did have to make a decision.
And I was reading about architecture and I knew nothing about it, Don.
But It said it was a mix of the creative and the science and that you would
be helping people by designing the space in which they lived in and I
thought I'd always been motivated by wanting to help people, wanting to help
people, right? So I thought, well, maybe that's it. So I went to
architecture school.
I was pretty clear within the first year that I was probably not a fit. I
was literally too good at math and not good enough at the visual design, the
drawing part. But I didn't know what else I was going to do. So I went
through and it was a five year—mandatory five year program. And once again,
I graduated fifth in my class, but it was not on my studio scores.
It was on my math skills. So there I was an architect and you want me to
roll right into the story of how I got into architecture and quickly right
back out?
Don Patrick: So you did five years, which is crazy, so you finished it up
and you finished fifth?
Karen Lee: Right in my class, like I was saying, not due to my design
skills, just due to my math scores, right?
Ken and I actually briefly broke up after college. I moved to Atlanta with
an architect girlfriend and got a job as an architect.
Don Patrick: In Atlanta.
Karen Lee: In Atlanta, yeah. And Ken and I were not good at our breakup. And
I discovered a few things about myself at that job. I discovered that the
salary that they had given me made me lazy.
I didn't try harder than the next guy. I just did what I needed to do to get
by and sort of equated that to the one time in high school and one time in
college. I took a course where you could get—normally you could get an A, B,
C, D, or F, but you could occasionally take a pass-fail and I always would
go for the A.
Not when I had a pass fail. Pass fail, I would do just what I needed to get
by. So that kind of stuck with me as an insight into myself. And then Ken
and I got back together. But he was in Chicago. So I looked for the second
architect job in Chicago. And I promptly moved to Chicago. And Ken and I
moved in with each other and made plans to get married eventually.
And at that job, I learned that my earliest, sort of, getting an actual
example of male female inequality. I had come across a job report, they had
run out of stuff for me to work on, and so I was just filing some things,
and I was reading what I was filing, and I saw what the hourly rate was for
the male designers, and the lower hourly rate for the female designers.
I could see what people were getting paid and was sort of appalled at that.
And then some of the architecture women at that firm who were a little older
than me and starting their families would have their babies and then come
back and approach the powers that be about working part time and two a one,
they were told no, and every one of them quit and went home to raise their
kids.
And I saw that I didn't see this till later in life, but the majority of
them really never went back to work or never did full time. And I remember
it was in the second year of architecture and I looked at Ken and I said, “I
can't do this. This is not gonna work for me.”
I want to get married and I want to have kids, but I'm gonna want to work.
And so I started a—it was about a nine month quest of researching different
careers, seeking some career counseling, trying to find something where the
number one would be helping people, number two would be using math, but
number three would be creating a flexible lifestyle for myself so I could be
a working mother.
And I was 24 years old doing that research and basically picked financial
service representative out of a want ad under sales. Yeah.
Don Patrick: So that was with what company?
Karen Lee: I guess that would have been back then it was State Mutual Life
Assurance Company of America, which demutualized in the, it was in ’95 and
became American Financial.
So that's where I met you and many of the people that. You know, are in my
study group and have been long term career friends of mine, but I really
look back and think that I just lucked out and fell into. This most
wonderful career I've got, but I mean, I guess I didn't. I did a lot of
research and I did a lot of informational interviews and I listened, a lot
of people I met with were telling me I should try sales.
And I was really offended to be honest. I was like, “Hey, my dad's a nuclear
engineer and my brother's an MD and we were doctors, lawyers and whatever,”
but I listened, it's one of the things we'll talk about, I'm sure, but I
listened and I looked for signs and clues in the world.
And I had probably five or six strangers meet me. And after 30 minutes, tell
me I should go into sales. And whether you think it's God telling you
something or just the way the universe works, I listened and God, maybe I
should start looking in sales. And so that's how I ended up finding that ad
in a paper and thought, what the heck, you know, I'll just send him my
resume and go on an interview.
And they were very interested. And I remember thinking that for one thing, I
had, of course, you know me, I had a checklist of everything that the
perfect job would be and it checked off like a ton on that checklist and I
just sort of threw my hat in and said, I'll give it a year, I'll try it for
one year, what's the worst that happens, I'm looking again, right?
Don Patrick: So you had no natural market and typically in the old days,
you're supposed to have a hundred names. Right.
Karen Lee: I came up with a hundred names that included like the people at
the grocery store in the corner diner. I mean, I knew no one. I was living
in Chicago. I knew the people at my architect firm. I don't know if you know
much about architects, but they don't make much money and they certainly
don't save a lot.
They're creatives. So I did start trying to work in that market. And of
course, I'm sure I sold some life insurance policies to some people, but
none of them were part of my original client group. And back then, we were
doing something very different than what we do now. We were really selling
insurance products.
And so I sold enough insurance products to make more than I did as an
architect and to make the company All America Financial happy with me. And
then, of course, we decided to leave Chicago after two and a half years
being up there.
Don Patrick: That's very impressive. You're selling what, probably life
insurance and disability insurance, I guess.
Karen Lee: Pretty much. Pretty much.
Don Patrick: That's hard.
Karen Lee: Yeah.
Don Patrick: I mean, typically, if you survive five years, that's great. And
you're killing it your first year.
Karen Lee: Yeah, I was the rookie of the year up there in Chicago.
Don Patrick: I guess you were meant to go into sales.
Karen Lee: Which is really funny. I still kind of look back at that and
like, okay.
So then what happened was Ken had the whole reason to be in Chicago was that
Ken out of school with his economics degree pursued trading in the markets,
right? And it was either New York or Chicago. This is back mid eighties was
what doesn't exist anymore, but they called it the open outcry system where
the guy stood in pits and made hand signals back and forth to sell options
and commodities and bonds and securities and et cetera.
So he had gotten this job right out of college and worked his way up the
little ladder to where he was actually trading on the floor of the Chicago
Mercantile Exchange, which is why I ended up moving up to be with him. And
he did great. I mean, in a weird, funny way, I thought, wow, I'm the guy I
dated was like this kind of like me, just a poor guy, you know, or we
weren't the rich kids at Tulane.
We were the poor kids at Tulane just with our bicycles, no cars. And I kind
of thought, I struck gold, this guy's doing great until all of a sudden,
1987. The crash, that's right when I went in the business, I went in the
business on the 16th of October ’87 and when was the crash was October 29th.
Don Patrick: That's correct.
Karen Lee: Ken shorted the market that night, went home and made a boatload
of money for the firm he was with.
Don Patrick: My gosh, that's crazy.
Karen Lee: Like a boatload, like half a million dollars, but he only got to
keep 125. He was on a 25% split, so he became my first biggest client. I
made him lump sum money, like 50 odd grand into a retirement account.
Back then you could fully, like, you know how you have on life insurance,
Tamra guidelines. Well, there are no Tamra guidelines back then. So he put
like $45,000 into, I think it was $100,000 life insurance policy. We have
had that our entire life over the years, increased it to $500,000. Never put
another dime in it.
And it's now it's like the cash value is like 150 grand. So anyway. He was a
big sale for me in those years, but he slowly burned out. Computers started
coming in, changing that system. Companies were going under and he went on
his own and then it got too real. He was trading our savings account and
both he and I did not do well with that. So we ended up looking for where
are we going to live and actually looked at Denver, looked at Atlanta,
looked at Charlotte and ended up in Atlanta.
Don Patrick: And you stayed with the…
Karen Lee: I stayed with Allmerica Financial, started with the old Pereira
& Associates, had to start over, same thing as—Chicago, I knew three
people in Atlanta, but in this case, they weren't architects. They were kids
I knew from Knoxville or one guy was from Tulane and he was an attorney. So
that got me into the lawyers, kind of a niche of lawyers. One guy was an
accountant or soon did something with numbers and he introduced me to an
accountant who helped me with a few clients.
And one was my childhood friend who's still—she’s still my childhood friend.
She lives here in Atlanta. And so those people helped, once again, launched
me with referrals. I did my little, I'm just getting started. I'm not asking
you to introduce me to anyone that I'm going to try to sell. I'm just trying
to get my name out there.
If I can tell them what I do, give them some cards, eventually they'll meet
someone that, and they'll think of me. And you know how it works. Some of
those people actually did become clients. And still are, which is amazing.
And a lot of them did not, but they passed my name along. And before you
know it, you've got a little base and you're really asking people.
At that point, I was actively asking for referrals all the time because I
had learned about cold calling and the direct-mail approach that we'd been
taught early on, and quite frankly, I just didn't have the stomach for it. I
could not take the rejection, cold calls or direct mail.
Don Patrick: So you built your business primarily on referrals?
Karen Lee: 100%.
Don Patrick: That's amazing.
Karen Lee: 100%. It's only recently that there's an occasional person will
find us via, say, the internet. It's very rare though.
Don Patrick: Yeah. So when and how did you start transitioning into
financial planning and investment management?
Karen Lee: I feel like it's not that we weren't doing financial planning
back with Allmerica.
I feel like it was kind of financial planning light. But I think it was
actually very appropriate at my age, I'm 25 to 35, 40 years old. And
basically all my referrals are 25 to 35 to 40 years old. And, and we're
building the foundation together, right? We're getting their insurance in
place. We're helping them.
Get focused on saving money, getting an emergency reserve, maxing out
retirement. And so even back then I did a little bit of non-qualified
investments for people using a share B share mutual funds. So I still was
doing, I think, financial planning light, but the real shift for me happened
when we all realized Allmerica was going under and the group of us that was
left, what were the 10 or 15 of us and maybe 10 really serious that hadn't
left and gone to other firms and were sticking around to see what would
happen.
And we started really evaluating lookalike firms. The Provident Nationwide
back then, Prudential’s, Guardians, MassMutuals, and then we were looking on
the wire house side. There was ab, never a feeling of a fit there. Um, and,
and I don't recall if it was me or who, but I know I knew then around 40
years old, so 21 years ago, maybe 22.
I learned about the fee-based approach and learned about the
independent-broker dealer. So I don't know if any, if our listeners know,
but we were, many of us were very caught off guard when Allmerica went
under. Not just because, this 160 year old insurance company was like going
under, like going under.
But that the book of business that we had built, and in fairness, I have to
mention, It was 10 million that I had back then when Allmerica went under,
okay? But what we didn't realize until it happened was that those
proprietary products that we sold would not move with us. And our clients
have penalties in a lot of cases to get out.
And so as we were doing our due diligence to figure out where, and we were,
again, we were doing it as a group, but we were also doing it individually.
When it hit me, the issue with these proprietary products, I do remember
saying to the group, “I'm never putting myself in this situation again. So
I'm going independent. And I hope you guys would go with me.”
And it happened, enough people came to the same conclusion. Rich, and David,
and me, and Kim, and Cindy, and the people who were still around then. We
said, Connie, we said we should go independent. And simultaneously, we
should transition to this fee-based approach.
And we'd had a little insight into that because over the years with some of
the annuities we sold with Allmerica Financial, during the majority of the
16 years I was with them, if I sold an annuity, I had to take the commission
up front. And right before they went under within the last, let's say two
years, they came up with like this buyback program, remember?
Don Patrick: Vaguely.
Karen Lee: Yeah, okay, so you could buy back, loan the money from Allmerica
to pay back all your commissions and they would start paying you this trail
commission, which was what the newer annuities were now coming out with,
hey, you can take it upfront, you can take a trail, you can take a big
trail, right?
So they did that with us. And of course, you know me. It made sense, I did
the loan, and instead of just paying it out over 10 years, which is what the
old note said, I fast-paid it. So by the time they went under, I'd paid them
all back, and we'd lost our trails. Those trails went away quickly. So I
learned so many lessons through that breakup.
But anyway, back to going independent and then transitioning to fees. For
one thing I have to say, and I always give you credit for being a decade
ahead of the industry and a decade ahead of me in life, which is helpful to
have friends like that you were already knowing that this was the wave of
the future.
And I was always a person who was happy to delay gratification. So it
doesn't take a math whiz to realize that if you start taking trails, it's
gonna hurt initially.
Don Patrick: Yeah. So that's how I started in the profession.
Karen Lee: Yeah.
Don Patrick: It was fee based from the very beginning.
Karen Lee: I see. We didn't have that.
Don Patrick: And by the way, I wasn't shocked at We. I actually incorporated
Integrated Financial Group in June of 2003.
Karen Lee: Yeah.
Don Patrick: But what I didn't do is start—
Karen Lee: The plan B, the plan B.
Don Patrick: The hard work.
Karen Lee: The hard work for a couple of years there. The focus was getting
the new, the clients that were already with me that I had created brokerage
accounts for to realize there was a better solution for both of us that I
would get better performance, better talent, better research by letting a
money manager manage this model, and they were already paying this internal
fee that I could lower it little.
And it might overall cost a little bit more, but we'd never have this
upfront commission thing again. And the vast majority of those people did
make that move. And of course, then any new client that came aboard, you
went through, did a fee-based approach. But somewhere in the first three to
five years of that, I think the most important thing about fee-based
financial planning hit me, which was this: my existing client is more
valuable than the next new client I'm going to get because I already did the
hard work to bring them aboard.
Now I keep them happy and they're with me for life. Doesn't mean I'm not
going to look for new clients, but the focus became take care of these
clients. And so the shift that's happened for me back then and now my team
now is that we just keep getting better and better at what we do because we
want to justify our fee.
We are real clear that the fee can't just be for the money management. We
have to do more so that clients won't leave us. And so that was the hugest
shift for us.
Don Patrick: You're doing true comprehensive financial planning.
Karen Lee: We are.
Don Patrick: And providing great service.
Karen Lee: We are.
Don Patrick: So during this transition, you still continued asking for
referrals. How did that go? Did you shift from the old insurance thing about
I'm growing my business? Did that conversation change?
Karen Lee: I think in the early years I still probably did, ultimately I'm
going to get paid in three ways, which was my old script from the insurance
thing. Yeah, the one is that I trust because we weren't charging a fee for
the plan.
So one is that, I trust if we go through this process, build out this plan
for you and you do uncover a need for any of these kinds of services, you'll
place that with me. You'll let me do the money management, get the insurance
for you, et cetera. But, and then the second thing would be that—there used
to be three things, but I can't remember them anymore.
But the second thing would be that I am not going to spend my time and money
marketing myself through advertisement. I only want to work with people who
know other people that I work with because money is such a high trust.
Personal, private topic for so many people, I just rather work with people
who know someone else I'm working with.
So the greatest help you could give me is if you get benefit out of this,
you'll introduce me to friends or like-minded people that you think can
benefit. I did that for, I can't tell you when I stopped saying that, but I
can tell you right now that I have stopped saying it for at least a decade
and we get 35, 40, 50 referrals a year.
And we don't take them all on, but we don't have to ask anymore.
Don Patrick: What I've observed, once you get past the 20-year mark, that,
that tends to be what happens if you're providing the great service, the
great advice, the business just kind of feeds itself and grows itself.
Karen Lee: Right. And not everyone, because, I've always said, not everyone
can be a referral source.
Takes a certain personality, I just love the psychology of everything, so,
takes a certain personality type to refer. But those people who do, they're
not doing it to help your business.
Don Patrick: They're doing it to help their friends.
Karen Lee: They're doing it to help their friends. You have provided so much
help for them that they want to spread the word, share the wealth.
That's exactly it.
Don Patrick: Raving fans.
Karen Lee: Yeah. Yeah.
Don Patrick: I was going to ask you what you like about the profession.
You're very clear about it. You've always wanted to help people, but you
also, I know you, you are very clear about managing money, saving money,
budgeting, living within your means, using the financial planning pyramid,
starting from the bottom. And you wrote a book.
Karen Lee: I did.
Don Patrick: And tell us a little bit about it because you're absolutely
passionate about it. And I'm guessing if clients don't follow your advice, I
don't know if they stay around or not.
Karen Lee: Yeah. So maybe a little bit later, I'll talk a little bit more
about my extended family and my mom and dad and their story.
But I'm going to tell you that my number one value in the business is I
practice what I preach. I come by it honestly because I was taught this
stuff. Now I know a lot of people don't get taught money skills or values
around money, but I was. So I practice what I preach, and so one of the
things that I always could tell clients is there's nothing I'm telling you
that I'm not doing myself.
My goal is to be one of my top clients all the time. And if it's insurance,
I own it. If it's investments, I own it. If I'm recommending it to you, I
own it. All right. So I'm passionate about helping people, but what
happened, it really revealed itself to me in the ’08, ’09 crash. Everybody's
portfolios were in the tank.
And people who, you know, occasionally some people lost jobs and when they
did and they came to me and said, “Hey, I'm in a pickle, I've lost a job,
we're in this great recession.” I said, “Well, don't worry, we planned for
that, right? You've got your emergency reserves.” “Oh, you know, well.” And
remember back then we didn't have like integration software where I could
see what their emergency reserves are.
Even now, not everybody links all that stuff up. It's usually like, “Oh,
well, I never really built those up, Karen. I know you told me to.” I was
like, “Okay. We have plan B to the emergency reserves, the equity line on
your house,” because I always tell people get an equity line just in case
while you're working, you never know if you might need it.
And either they hadn't done that or the ones who had, had renovated their
basements and already had, they'd maxed it out and, and then what was left.
Typically, again, this is now what 18 years ago, 17 years ago, so we're all
at that point in our mid-forties. No one's over 59 and a half and most
people's money that's with me is their retirement.
So we're liquidating money at like 40% declines. They're also all, 100%
equity still, right? Because they're young. So the portfolios are down 40%.
We're going to put a 50 percent penalty on. And my brain is, is like seeing
them blowing up. Their life, their financial future, yet the next person was
fine.
They had their emergency fund, they had equity line if they needed it, they
blah, blah, blah, blah. So it really struck me like what's different between
people that I'm telling them the same formula, just the numbers are
different, but really it's the same formula, the same foundation, the same
savings.
Why do some people do it? And some people don’t? Like they can't get out of
their own way, and that's when I started digging really into the psychology,
and again, I don't know if I mentioned it, Don, but I don't know if I've
ever told you this, but you know, before I decided I was going to be an
architect, I wanted to be a psychiatrist, psychologist, or actress, so let's
talk about the psychology.
When I was 12, my mom, asked what did I want for my birthday and I wanted a,
a subscription to Psychology Today. I swear to God. So I used it at 12 and I
read it front to back. I loved it. I ate it up. But I had a friend whose
both parents were psychologists and the whole family were the weird family.
The kids were so weird and I just decided that went together, and so I
wasn't going to do that to my unborn children so I never went into it.
Yeah, well anyway, I sort of started looking back at the different clients
and I said, everyone's got this whole psychology around money. The spender,
the saver, the somewhere in between, the security-driven person, the “I
deserve to have this money is a reward.” Everybody's got these different
money stories and these different beliefs and values around money.
And depending on, on what that is, you've either got this healthy
relationship with money or completely unhealthy. And that's how I could,
that's how you know which client's going to take the advice. Which client
isn't? They either have this a healthy relationship or they don't. And by
the way, if you don't have a healthy relationship, it doesn't mean you spend
every dime.
That's one side of the scale of an unhealthy relationship. You actually
spend more than you earn. But the other side is hoarding money, never
spending, socking away every penny, being so frugal and building up wealth,
but never being able to let yourself enjoy anything. Right. So I got really
into understanding that about people, started incorporating, asking
questions about their childhood.
And as a couple. Who's the spender? Who's the saver? They're both similar.
And then ultimately thought, I'm going to write a book and try to help
people. So that's where the book came from, was just all these different
stories and examples of clients either screwing it up or being really
successful or being so successful but not being able to enjoy it and and
marriages and divorces and our children and everything that's emotional
about money and not logical is what I wanted to touch on in my book.
Don Patrick: And money is emotional.
Karen Lee: Big time.
Don Patrick: Very rarely logical. I mean, what I've seen is they don't
change. If they're a saver, just like you said, they go into retirement,
they can't spend it. It just goes against them.
Karen Lee: We are doing an incredible job helping our clients understand
this, Don. And we've got, I think of a woman who bought and she's single and
she's an engineer and so she's running all the spreadsheets and you'd think
someone like that wouldn't want to pay our fees.
Man, she, when she left Lockheed Martin, she moved three, 4 million, 5
million to us. And she's got a pension and she's single and she's living
with her dad in Florida. And we showed, she's had this idea about buying a
house in North Carolina and showed us this $1.6 million house and how she
wanted to buy it, but probably couldn't afford it.
And, but maybe she could rent it and la la la, we did our last review with
her. She was sitting on the porch of that house. And I promise you, she said
to us, “I have to tell you, without you guys, I never would have had the
nerve to do this. And I'm so happy we did.” We just got off the phone this
week with a client.
He's also got $6 million and he said our dream house, literally a house that
they had looked at 10 years ago, couldn't afford it. It just came back on
the market and it's like $1.3 million. And he's like, “I know we can't
afford it, but I just kind of wanted to look at it.” We’re got him leaving
this weekend to go look at the house.
Don Patrick: This is so great about this profession.
Karen Lee: Right.
Don Patrick: So wonderful. What's the name of your book?
Karen Lee: It's called “It's Just Money, So Why Does It Cause So Many
Problems?”
Don Patrick: And you parlayed that into CNN and all kinds of things.
Karen Lee: Well, in the beginning of it, I thought I was going to get out of
the business because we might as well let the audience know that the biggest
challenges I've had up until the last 2022, my big challenges were market
declines and feeling like I'd should have done something differently and my
clients were falling apart.
And obviously I've gotten over that because 2022 I handled just fine. No
problems and COVID, handle it just fine. No problems. But back then I
thought the hell with this business, I'm going to get out, I'm going to
write a book and I'm going to be the next Suze Orman, just a kinder,
gentler, straight Suze.
But, and so what I did was I had a client who was a reporter at CNN and I
went to him and I told him my angle on the psychology of money and
relationships with money and he put me in touch with a woman. She booked
guest hosts and she and I met together for lunch. And I told her my story
and my angle.
And she says, “I love this and I will get you on CNN, but you have to work
with me and my husband because it's going to ruin our marriage.” And to this
day, this woman will tell you I saved her marriage. Now, I don't like to
take that kind of credit, but she says I did. And then, yeah, she got me on
CNN within like six weeks and it, it kind of parlayed into about, I guess
about two years of doing a lot of weekends, small spots, three, four-minute
spots with Fredricka Whitfield and some of the other anchors, I think I did
one as recently though as like a year or so ago.
So every now and then I get a call, but I loved doing that. And I wish it
kind of secretly wished maybe that had taken off, but then I trust in the
world and the universe that maybe that wasn't meant to be. And I was
supposed to meant to run this business because look, now Daniel's with me.
And if I had ditched back in ’08, ’09, ’10, I wouldn't have a business to
bring him into. Right?
Don Patrick: That's true. Yeah. You're fantastic. You are made for
television.
Karen Lee: Thank you.
Don Patrick: And I didn't realize you wanted to be an actor.
Karen Lee: Oh yeah. I did. So I actually got my wish of your, cause what are
we, but money psychologists. And then I got to do my CNN acting. So it was
fun.
Don Patrick: You had it all, psychology, acting, it was amazing. So, yeah,
so let's talk a little more about building the business, or let's go with
just your biggest challenges running the business.
Karen Lee: So, yeah, those early years, I would say it was these market
crises and I'm an extremely emotionally based person, like an empath, so
sometimes it’s hard to be because we live through people's highs and lows
with them but some of the market crises were hard, the Allmerica Financial
going under and then the going independent transitioning to fees was hard,
but probably now the biggest challenge is—I mean, this building a team,
which is what I tried to talk about at the Meet the Experts, that we did was
that this is one of the hardest things I've ever done.
And I really would have said in the first couple of years, I did not know if
it would work, but it has worked beautifully. And I'm finally able to really
embrace what being a mentor, being a leader is about and the team is upping
our game in a way I would not be doing, I would not be upping my game in the
way the team has, and even the other day, I'm in the office and Jessica is
going on about a new technology and I'm like, “I can't, I can’t."
Don Patrick: One more thing to learn.
Karen Lee: But they're like, you don't have to, we're going to figure it
out. And we'll, you know, make a decision if it's something we should do,
and then we'll teach you if you need to be involved in it, so. But it's been
a big challenge. Transitioning to the team approach, there's no rule book,
there's no guidebook.
I think it, even if there was one, because of people and personalities,
there would be different iterations for different people. What we currently
have now are three financial planners. So it'sme, obviously Daniel, but then
Jessica says, “I want to be a planner,” and she's been with me longer than
Daniel.
And I have no doubt that there's some dynamic shift for her that happened,
when I brought a younger kid, 15 years younger and made him a financial
planner. Because that's clearly what his skill sets are. He could not do
well in admin and operations. And then she said she wanted to do it. And I'm
a big believer if you got a good person, you got to elevate them.
I would love to keep Jessica in operations for the rest of her life because
she's an absolute whiz at it. But she wants to be a planner and you know
what? She's doing great. She's doing great. Now she still brings that. And
that's what's been so interesting about team building is recognizing each
person's strength and letting them grow and empowering that strength, but
recognizing that someone else has a strength that doesn't make them less
valuable and more valuable. They're equally valuable, right?
Don Patrick: It's complimentary.
Karen Lee: Complimentary. It's hard when you've been a sole proprietor with
one admin operations person for what? 29 years of my 37 or 38 years. It was
me and one of her team.
Don Patrick: That's a big transition. I mean, you become a manager and a
leader.
Karen Lee: Ugh. Please don't say the word manager. I hate that. I have said
more times in the past seven years, I am not a manager. I don't want to be a
manager. I have no training as a manager. But yes, yes.
Don Patrick: That's amazing.
Karen Lee: Yeah.
Don Patrick: And so now it's running. It's pretty smooth, isn't it?
Karen Lee: It's going incredibly smooth. We probably have 160 households and
probably 40 or 50 more what we call one-account holders or just not comp,
they might be children of clients that we still do a review with, but we're
not doing financial planning.
I bet out of that group this year, I'm only going to do annual reviews for
70 of them.
Don Patrick: There's still quite a few.
Karen Lee: That is, the goal is to get me down, we've already picked them,
that my final 45 and over the next, this year, next year, and the following,
going extremely well. And Jessica's starting to take her first annual
reviews off our plate.
Daniel's doing obviously more than me at this point. I'm still involved in a
lot of the new client acquisition, which I love. In fact, what's been really
helpful about building this team is starting with what do I want to be
doing? If I'm still doing anything, what do I want to be doing? And then
working backwards to figure out how to get me there, but then incorporating
what do they want? What does each one of them want? And seeing if we can
make all that happen.
Don Patrick: So what do you want? What are you trying to achieve for you,
first of all?
Karen Lee: So, I'm not convinced that I'll be a good, fully retired person.
I think my brain still kind of loves the stimulation. The social connection,
though, to the clients, it's just a beautiful thing.
It's brought so much joy to my life. Even though I might see these people
only once, twice a year. But when they tell you how much you've meant to
them, how much you've helped their lives, and now we're helping their kids
and me, but that's how I'm wired. That just is a really affirming and feel
good feelings, right?
So I don't want to lose that. I want to keep it up. I want to still have
that feeling. And so we kind of figured maybe if I had 40 or 50 clients and
I said to the team just yesterday, I said, what would be really perfect if I
just showed up, but you guys ran the meeting of those 40 or 50.
Daniel said, how about you just go to lunch or dinner with those 40 or 50
and we, I'm like even better. So I think that's kind of what I want is to be
able to run a few meetings with my favorite long-term clients. I'm very
happy to still be what I call the voice and face of the practice. I looked
at me and thought.
What am I really good at? And part of it is pitching financial planning and
pitching our team. So I'm happy to keep doing that for them. Right.
Don Patrick: That's great. Well, I'm going to flashback because I missed
something and we'll bring it forward.
Karen Lee: Okay.
Don Patrick: So part of getting into this career is you want to have kids
and have flexibility, and being an entrepreneur, you do get that but you
also work very hard and you do take risks on it. But you had a reputation
for years of only working two days a week. Now you were only in the office
two days a week. I don't think you actually only worked two days a week.
Karen Lee: Right. So it took me, let's see, Daniel was born, I tried to do
four short days a week. Then, I'm trying to think what happened, when Julia
was born, Kim DiProspero convinced me I needed a nanny like she had. So I
got a, I did. I ended up with a nanny from Jamaica for some years.
But back then we had that crazy software that you introduced us to go to my
PC where we would dial, you could dial in from your home computer into that
work computer. And so when Julia was born, I had heard that strategic coach
guy, you or someone had brought them in or I'd gone to a conference, I don't
know, and they were pitching strategic coach.
And to me, in that pitch, they gave what I thought was their secret sauce,
which was you split your week into two focus days, two buffer days, and one
free day. They explained what those were. Focus would be where you make your
money. So with us, that's seeing clients delivering. Buffer days, we're
preparing for those meetings and then free days, what it sounds like, right?
So I did not sign up. I'm a quick start. I did not sign up for strategic
coach. I didn't have the time for it, but I took the secret sauce and I
said, I'm going to apply this. And that's how I started the two days a week.
Those were my office days. And of course we didn't have zoom. We didn't have
teams. So there were, you had to have office days.
And two days a week, Tuesdays and Thursdays, I went into my office and I did
meetings all day and Mondays and Wednesdays were the buffer days and I use
that go to my PC and I dial in and I do casework, anything I needed to do
case wise, right? To prep for those days, and I'll make phone calls for
referrals and book appointments and anything else.
And then, of course, I always joke that the free day never is a free day.
Especially now, with phone, with the smartphone, I've never really been able
to completely disconnect. I mean, Ken and I will be on a sailboat in the
middle of the ocean. And sure enough, I'll be on my phone checking things,
right?
But that's okay. I still enjoy what I'm doing. But so yeah, that's how I got
to that the part time status amongst my peers. But I will tell you, Don, I
still was not putting in the hours that the guys were in the office. In
fact, I got a funny story for you, is that, cause I remember when I was
talking about with grades, I don't know, I really cared about making an A,
and I really wanted to be, say, first in my class, but I was always, the
fact that, and I'm just going to call it out, Rich Lombardi, he would make,
I don't know, whatever, we'll make up a number.
And I would come in beneath him, but I would sit back and I would figure out
the hours I knew Rich was working and compared to the hours I worked and I
would divide his GDC or commissions by his hours, mine by my hours. And as
long as I, my hourly rate was higher, I knew I was winning.
Don Patrick: I'm going to make sure he listens to this. This is 51 minutes
and 37 seconds. I'm going to make sure he hears.
Karen Lee: But yeah, I mean, I had to come up with ways to feel like I was
performing. At the level of which I should be and should be expected of me.
Remember raised by these crazy overachievers, my parents, my brother went
to, like I said, he went to college at 16.
He went to med school at 19 without an undergraduate degree. He went to
Vanderbilt just on his MCAT scores. I had a lot to live up to. So I cared
about achievement, but I cared about being there for my kids. This business,
it did what they promised. It did what they promised, but I've made it work.
I mean, a lot of people know that they could work a lot less, and they don't
do it and they let the business consume them. And I thank God for kids. I
couldn't do that.
Don Patrick: It's called working smart.
Karen Lee: Yes. So, yes, I was doing part time work at that point. I bet if
I was working 30 to 35 hours a week, that was probably my high level of the
amount I worked. And it's only gone down from there, Don.
Don Patrick: That's great. That's impressive. So you've got three planners.
Right. And what else do you have for staffing?
Karen Lee: We have Priscilla, who was being taught from administration to be
our head of operations. She still has sort of Jessica as her boss or her
oversight.
So Jessica has such a deep knowledge of operations that she's there to tag
team if we need for Priscilla. So that's us right now, our group of four,
but the team has identified that they want one more client service
representative. They are finishing up and I say they, I literally told my
team. I'm not doing this.
I'm not writing the job description. I'm not finding the person. I will do
one of the interviews, but you are going to hire, you are going to do the
work and you are going to train because this is part of your training to run
this practice when I'm not here. Right? So they are creating the job
description and both Daniel and Jessica, they are working on that together,
and we, I think, will probably start looking very soon for a time frame of
hiring at the, you know, early, late spring, because summer's for us always
slower, and that would be the time to bring someone in.
And for the short term, I think that would be our perfect little team. And
anything beyond that will be up to Daniel and Jessica, not me.
Don Patrick: I love it. It's great you're delegating this to them, this is
how they learn, because they're going to need these skills going forward.
Karen Lee: If I could say anything to anyone else listening, it would be,
you need to know yourself.
You need to know what you want, and you need to start with the end in mind,
like Stephen Covey said. And then figure out how you're going to get there.
And for some people it is a complete sell and walk away, and that's fine.
But if you want to be in this business, but don't want to work as hard as
you do now, you got to figure out what that looks like.
Don Patrick: That's correct.
Karen Lee: Plot your path to get there. You only get one rehearsal on this
life, right? Or that we know of.
Don Patrick: That is the correct way, that is great advice, and it doesn't
happen in one year.
Karen Lee: No.
Don Patrick: It's at least five, if not longer.
Karen Lee: I thought five when I hired Daniel. I remember talking to Madge
and saying, I got maybe five more years in me, and more on, this is Daniel's
beginning of his eighth year.
And it's really just started clicking in the last two, and maybe someone
else can do it quicker.
Don Patrick: It’s hard.
Karen Lee: It's hard. It is hard. And he was really young when he came in
and that's part of it, right?
Don Patrick: Let's talk about your tech stack.
Karen Lee: Okay. Yeah. I think we're pretty similar to most people.
We were with Redtail. I, I saw, I think it was Howard at one of the advisory
meetings showing me Wealthbox and I told Jessica the next day, I think we
should look at this Wealthbox. And I bet two weeks later we were like, we're
moving. When we switched over. So we are doing Wealthbox for CRM. We use
LPL's WealthVision, which we love, and I swear to God, I believe that our
clients, especially the brainier engineering clients, they love
WealthVision.
And then we use Holistiplan, you know, as a tax planning software. So what
else would there be in a tech stack? You know?
Don Patrick: Do you use RepChat?
Karen Lee: Oh, of course we use RepChat, but I can't say a lot of our
client, maybe 30% of our clients use it. Mostly with like Jessica and
Priscilla. Not so much with me.
Don Patrick: Do you use the calendaring?
Karen Lee: Oh yeah. We are using, what's that called? ScheduleOnce?
Don Patrick: ScheduleOnce.
Karen Lee: We are using that. But like everything we realize it's, what it's
doing that is great, and then we realize it's weakness. And so we recently
had a, oh my gosh, we had an event.
I don't know if you heard about it from Lan, but.
Don Patrick: I did.
Karen Lee: You did? Oh goodness. So I have, in your wealthiest top five
clients, one of them are friends of mine that live here on the lake. And
when I first. I met with them at their house, literally around the corner.
And then I told him, because I thought he was going to be a tough cookie to
decide he needed us.
I made him come down to the office. That was like six years ago. And we've
met at their house ever since. We've never not met at their house. So he is
retiring June 30th. I mean, this guy's got like $8 million with us, right?
So I make the appointment or Priscilla makes the appointment. It's going to
be at the house, but ScheduleOnce has a flaw.
ScheduleOnce has flaw is you have to pick a phone, a video conference, or an
in office. It doesn't have a like other location. My team puts in, in
office, but in the notes, writes “at their home,” at their residence, then
she sends an email that says, just so you know, you're going to get a
reminder that says.
In the office, but she's coming to your home So we've got all this that
we've sent but that she made the appointment. Let's say three weeks before
maybe even a month before the appointment well by the time the appointment
came ScheduleOnce is shooting out these in office appointments and he tells
his wife, “No, we're going down to perimeter.” But he's thinking this is a
really important appointment.
She's going to show us our income distribution strategy. I'm sure she wants
the team and all. So sure enough, and it was a Friday. So sure enough,
Daniel is the assisting advisor we have for every one of my forever clients.
We have an assisting advisor assigned. So they're the one that go with me to
that appointment or sit in the meeting so that they can build that
relationship.
And God forbid, something happened to me. Client already is starting to feel
confident with them and he's the assisting advisor. He drives up to the
lake. We get in the car. No, do we get ready to leave? It's ten of three.
It's a three o'clock appointment at their house. And my phone rings. And
it's Jessica and it's Land.
And I'm like, what's going on? They're like, your clients are at the office.
I'm like, what? And of course, like a typical boss, I want to be mad at
somebody, but they immediately showed me what they, and it was all on the
client. And they felt bad, but they tried to say it was a no, not a bad
thing.
They understood that they messed up and I was like, and they wanted to,
should we just change the date? They didn't want me to work late. And I was
like, “Get in your car and drive up here. And you just text me when you get
off at the exit and we will be there.” And so we ended up starting about an
hour or so late.
But we learned that technology is as good as it is until it fails you.
That's right. So what's the answer? The title of the meeting can be changed.
It can say their name. You can title it how you want. So from now on
ScheduleOnce we'll say so and so at your home or whatever it is. It's rarely
going to happen because I almost meet with everybody at the office or on
Zoom. Hardly, there's literally, there are only two clients I meet with at
their home and it's my two lake clients. I just hate to make them have to
drive all the way down the perimeter. So yeah. So we're using ScheduleOnce.
Don Patrick: I do like the automatic reminder feature.
Karen Lee: Until it fails you.
Don Patrick: I had no idea.
Karen Lee: Yes. We need to let people know that are using that. Just put the
location in the title or as I said, “Hey, Priscilla, no harm, no foul, but
when that one-off happens, call them the day before and just remind them.”
That email, that reminder and sometimes when we use technology too much we
lose that personal touch.
Yeah, so we have to be careful about that.
Don Patrick: So tell us, how you onboard a new client. So you get an
introduction, a referral, then what happens?
Karen Lee: I'm really proud of this process that we have. I really think
we've perfected it and it was a team effort. So what we've done is we get a
referral and we have a, we have three referral workflows in Wealthbox.
One is going to be the referral you meet with them and they still want to
think about it. The referral you meet with and they say, I'm a go. And the
other one might be the referral who says, they'll get back to, there's a
third one. I think that's it. Uh, so we meet with the referral, if typically
if it's, we think it's a high net worth or they're over 50, I'm on that
call.
If we know they're younger, Jessica and Daniel do that without me. So that's
a crazy thing. We're now onboarding clients that I've never met. And it's
pretty awesome. I've got a real little business, Don. When somebody says
they want to meet, we do a no obligation meet and greet. It can be in person
or on Zoom.
We explain the team. We explain the consortium. We explain financial
planning. And what we've been doing now for, it's been 3, 4, 5 years as we
tell them that we are going to charge you an upfront fee for the first year
only. It's an onboarding fee. That's what we call it because we put so much
work into building out the financial plan, getting to understand how you
think and feel about money, figuring out where you're at.
And analyzing everything you've done up to this point, that we have to
charge an onboarding fee. From that point forward, if you were to, so, okay,
so then what happens is we explain that on the phone and if we get a yes or
I'm gonna, I need to think about it, sometimes they're interviewing other
people, but let's assume they say, “Yes, we're a go.”
Then the next thing is I tell them you're going to hear from Jessica.
Jessica is going to give you, send you an email welcoming you and giving you
a list of documents that we are looking for and a worksheet for you to fill
out. We ask that you get it all completed and let her know and then we're
going to send you a secure way to transfer that information to us.
Once we have that information, we're going to look at it as a team and we
are going to decide what the fee is based on how complex or simplistic your
situation is. We will get back to you with what the team agreed is the fee,
assuming it's okay. We will send you the financial planning agreement. Have
you sign off, we will send you, I think it’s what's it called?
Advisor pay? What's that called, Don?
Don Patrick: Yeah, AdvicePay.
Karen Lee: Advice pay?
Don Patrick: Uh-huh.
Karen Lee: We'll send you a bill in for the whole amount in full. You may
charge it to a credit card, but the whole amount in full. And then the next
thing you will do is you will have a deep dive meeting with Daniel. And I'm
not even on that call.
He's going to go through all the accounts. He's going to talk about how you
think and feel about money. He's going to find out what your most important
personal and family goals are. He's going to help understand, help us as a
team understand where all this stuff came from that you've got, these
resources that you've got.
And then the next time we meet, you'll be meeting with, now at this point,
we know who's going to be the lead advisor, right? Because we've looked at
all those stuff. You'll meet with your lead advisor and probably one of the
other advisors, and we'll present the plan to you, and this is how the
implementation works.
This is where we start earning our percentage, assuming we're managing your
fees. We're very clear with anyone coming on that that's what we want. We
don't want to just do the plan part. And so we tell them upfront because
some people, in fact, we've got one right now. And he said, “Oh, I don't
know.
I was kind of just kind of thinking about the plan and I've been doing it on
my own and feel pretty good about it.”
And I said, “Well, I'll tell you what. It's important that you know that we
are only really interested in bringing on clients that want to walk this
journey with us. They want us to be a partner in all the financial decisions
they make through death. So let me ask you, are you at least open-minded to
the possibility that if we show you, during this financial planning process,
that we could do a better job than you or add value in areas you haven't,
you will give us the opportunity to manage your money?”
And as long as they say yes, we'll move forward with it.
Don Patrick: That's great. Yeah. And so what are the fees range, typically?
Typically.
Karen Lee: I think I undercharged, but we're on the advisor part. It's 1.2
under a million. So if we're on Sam, we can add 0.1 to that. So they're at
1.3. A million to three million, we're 1%, so they'd be normally at 1.1, and
then at three million, we go to 0.8 on our side, so they're at 0.9 with the
0.10 platform fee.
And then at five million, we go to 0.65, ten million, 0.50. And I think our
thing might say negotiable afterwards.
Don Patrick: Okay. And how about the financial planning?
Karen Lee: Oh, the financial planning fee, $2,500 to $5,000.
Don Patrick: Okay.
Karen Lee: It's almost always $2,500 or $3,000. We just don't run into that
many super complex.
And if they were young enough, we'd probably drop them to $2,000. You know
what I'm saying? We’re still going to charge them something, but it's some
plans are just not as hard as others.
Don Patrick: So you've done the presentation of your findings on the plan,
and does implementation take place then, or is that another meeting?
Karen Lee: We try very hard, once we present the plan, to present them the
specific recommendations that we would do differently. already know we're
recommending that you move these three IRAs into this account. We like this
money manager. Here's what your costs would be, etc. This is why we like
them. I have literally one big cases on evaluating all the internal fees
that they're currently paying on their own by doing it on their own and what
our portfolio would reduce to and that if they tax our fee on top, they're
either virtually getting me for free.
Or they're getting me for 30 basis points, right? Something like whatever it
is. So we try on that presentation call to establish exactly what we think
they should do. And if they want are interested in moving forward at that
time, so we try right there.
Don Patrick: And then, so you’ve done the presenting the findings,
implementation, for the remainder of the year, what kind of interaction is
there?
Karen Lee: So what we tell them, if they say, “This is great, Karen, and we
want to move forward with this,” then I tell them, I don't know as much
about the administrative part. Basically, they are going to hear from
Jessica or Priscilla about establishing these new accounts, which will also
have transfer forms to transfer things, etc.
If there's insurance, we've given them the recommendation. We've told them
that we have a partner at IFG that we've partnered with, that we're going to
do an introduction for them. They don't have a will, we're going to send
them our referral sheet with wills and that we'll work with the attorney to
get that done.
Those done and we're going to pester them if they don't. I think I say nag
to the guys, I'm going to nag you. So your wife doesn't have to, right? And
then what happens? So what, once they onboard, I mean, obviously there's
more heavy lifting in that first year where they're getting everything on
board or moved over, they are going to get on our weekly market commentary
and we just send the LPL.
Actually, it comes from Daniel, that's something we did is let's have that
come from Daniel. They get a quarterly outreach call if they're an A client,
which just means they have a million or more. And it's either any, I think
it's an email actually, just saying, “Hey, it’s been three months, let us
know if you want to meet, is there anything on your mind?”
And you know, often that prompts people just to ask a question. Rarely does
someone ask for a mid-year meeting. What I tell people is we are at your
service. You can reach out any time. You will never get a bill for our time.
And that part of our job is to evaluate how much they want to hear from us.
Some people just want us to run things for them.
Other people want to hear from us more often. And then over time, sometimes
that changes. So I ask them, how often do you want to hear from us? How
often do you want to meet in person? This is what we normally do. We
normally are going to reach out quarterly by email, see if there's anything
on your mind, and we're going to do a deep dive annual.
We'd like you both to be there. We want to update your financial plan, hear
about anything that's changed. And so often with newer clients, we're
talking a little bit more often throughout the year, especially a lot of
them are in a transition themselves, right? But they know they can call us
whenever they want and that we're always going to send them something
weekly, the weekly market commentary, so they can just respond to that with
anything on their mind.
Don Patrick: Do you tag the CRM in terms of the frequency that they desire?
Karen Lee: Well, not so much, I don't think. Yeah, I'd have to ask my
operations team. I don't think so. I think what we do is we just have the A
clients on a quarterly email and the B clients on a semi annually.
Don Patrick: Yeah. Yeah. So now there are clients and you said most of the
clients, it's an annual review meeting. And you and Ken travel a fair amount
on your exotic sailing trips?
Karen Lee: Yes.
Don Patrick: How do you schedule all this?
Karen Lee: Well, it started before the sailing trips. It started when we
bought this lake house in 2013. And at that point, Ken had become a teacher.
And my kids were both still either in high school or college.
And so summer would happen, we'd be up here. We're in Gainesville. And
summer would come, and Ken's off from teaching. Both the kids are off, and
they're all yucking it up and having a great time. And I'm working. And it
pissed me off. I got resentful. So I went to Jessica at the time, who was
the only, I don't even know if she was there yet, but let me think.
Maybe she had just started with me. I said, listen, I got to clear my
summers. I can't have meetings in the summer because I'm getting too
resentful. So we took the amount of clients we had then and we took about
60% of them and we just put them on a calendar from January to Memorial Day.
And then we started them again at the beginning of August when school starts
here in Atlanta, and I did the last third then. And that's how I started
that happening and now it's gotten worse because I go all the way to Labor
Day. It's not that I won't talk to a client, but I won't do annual reviews.
Don Patrick: That's another great thing about this profession.
Karen Lee: It is. It is. And that's why it's hard when I see other advisors
of ours that are letting the practice run their lives and I'm like, you
know, it doesn't have to be that way.
Don Patrick: Well, we'll just refer them to this podcast.
Karen Lee: Okay. Yeah. Yeah.
Don Patrick: Right. So this is kind of a strange question for this type of
podcast, but you are a star when it comes to compliance in your practice.
Karen Lee: Thank you, Don.
Don Patrick: We know. We know all.
Karen Lee: Yes, you do.
Don Patrick: Well, obviously you have good processes and procedures.
Karen Lee: Yeah.
Don Patrick: And that's the biggest part of the battle, I think.
Karen Lee: Yeah.
Don Patrick: And it's also your viewpoint on compliance.
Karen Lee: Right. What's that phrase? Attitude is everything. That's
correct. That's right. So when you stop viewing compliance, what did we used
to call it? The business prevention unit.
Don Patrick: That's correct. That was in the old days. That was the old
days.
Karen Lee: When you start viewing compliance as it's there to keep me safe,
it's there for my benefit, then you can change your attitude around it. Just
be compliant, you know, just be compliant to the best that you can.
Obviously, I'd say of everything, I feel like the hardest thing is texting,
the texting thing. Because in my case, a huge amount of my clients are
friends. Like a large amount of friends become clients of mine, they've been
friends first. And I tried to get them all on RepChat, and some do, and some
aren't as good.
But I'm very good at being like, I don't say this. We just, “Hey, what are
you doing Saturday night? Oh, let's get together. Blah, blah, blah. Oh, by
the way, There's an IRA, blah, blah, blah. I will email you.” Then on the
email, I always say, “Just FYI, I'm not allowed to talk about work on that
personal text. And so here's, let's talk on this email, right?”
So, but mostly I think it's the attitude that compliance is there to protect
you from the rogue client. It's not that they're trying to prevent me from
doing business because I'm one of the good guys.
Don Patrick: That's correct. Yeah. That's correct. And the whole team
obviously has the same attitude.
Karen Lee: Agreed. Agreed. If anything, there's no gray area for Jessica and
Daniel. There's no gray. I probably have a little more gray, but they are
like. I don't want to use the term, but yeah, they are compliant Nazis. They
are very, very, very strict, which is good. Yeah.
Don Patrick: All right. So let's use three words to describe your talents
and strengths.
Karen Lee: Well, I'm going to start with empathy. I don't know if y'all
still do this when you bring someone on, but back in the old days, they did
these personality tests and they were like, I don't know, nine or 10
different areas. And there was this one area called like emotional
intensity, and I don't remember the other areas, but whatever they were, I
did really well, like exactly where they wanted me, because I remember I did
that personality test, and they said, “Wow, you're like perfect in all these
areas, everything we want, except this one, and it's emotional intensity.”
And I was like, well, what do you, what do you want? They go, Oh, we want
someone that's very low. And I said, why? And they said, well, then you can
take rejection. Cause remember we're in the dialing for dollars days. They
go, then they can take rejection and you're off the charts, emotionally
intense, and I used to tell the joke, I started crying and, and then we all
laugh, but the truth is they did say we shouldn't hire you based on this,
but we're going to hire you anyway because you did so great on all these
other areas, but if I look back, I would tell you it is my empathy that has
made me such a great planner because empathy allows you to listen with a
very open heart and really understand what people are trying to tell you.
And if you can understand how people think and feel about money, you have a
better ability to guide them down a path that's going to help them be
financially successful, but using the things that are important to them
about those tracks that they might run on, right? And so I'm going to go
with empathy as like, even though they almost didn't hire me over that, like
probably one of my best ones.
Another, I think would be articulation. I once did one of those client
surveys that you ask your clients, like, name three things, that you would
describe as Karen's, you know, talents. And one woman wrote, “She is able to
explain complex topics to me without making me feel stupid.” And I don't
know the word for that, like what that word would be, but I know that I'm a
good communicator, I am easy to articulate, I can easily find the words,
that's why I used to do so well I think on CNN at dawn because the words
come to me pretty easily, and then I would couple that with storytelling,
being able to relate me both my personal experiences.
I'm very open with my clients, happy to tell him how I think and feel about
money and how I can relate maybe to how they think and feel about money. Or
if there's a couple, it's usually, one's more of the spender, one's more of
the saver and I'll, I'll bring Ken into the conversation: “While Ken's more
like this.”
And so being able to. Explain those complex things, and I think in ways that
don't make people feel stupid is, um, I don't, if there's a word for it,
that's what I would say is, is one of my kind of gifts, and then, yeah, just
listening, caring, I don't know if you'd call it thoughtfulness. In some
cases, like the mediation, I have a good ability to bring humor into
difficult situations between couples and make them feel at ease.
Don Patrick: That's your psychology background.
Karen Lee: It is. And you know what? Daniel's got it too. I love that about
him.
Don Patrick: That's great.
Karen Lee: Yeah.
Don Patrick: Well, I'd absolutely agree with those, Karen. You are extremely
empathetic. You definitely are a storyteller and you are articulate. So,
yeah, I agree. All right. Last question is tell us something about yourself
that maybe others do not know.
Karen Lee: So it kind of goes back to what I don't know if people know about
that core value. Practice what you preach. But I mean, I'm so committed to
that, that I've had to talk to my own team. In the past about things like,
well, I have ended partnerships, as you know, I've talked to my own team
about, I'll at least use this one with Daniel.
Daniel bought a new car a couple of years ago and I was appalled because it
was such a nice car and it looked new and I was like, Oh my God, I didn't do
that at that age. You know the one thing I said to him, did you max out your
401k? And he said, Almost. And I said, well, you better next year. So, but I
want to tell you where that kind of comes from.
If you've got a few more minutes. Yeah. I think the thing that maybe people
don't know about me is that I'm a first-generation American on my dad's
side. You know that, but my dad was. My dad's parents immigrated to Cuba in
the 1920s. My dad was born in Cuba in 1929 and moved to this country when he
was 13 to upstate New York.
And when he married, he went to Cornell with English as his second language
and ended up meeting my mom and marrying her. And she her family had been in
this business, in this country for a while, but they, she lost her father
when she was only seven. And her mom didn't remarry till later in life.
So my parents met and basically my dad was an engineer. My mom was a high
school teacher. And when I went into this business, so I was 25, which means
mom would have been 55 and dad would have been 58. And I went into the
business and my father started boasting to me that he had like a $3 million
net worth.
And I was like, “What? I thought we were poor.” Okay. I've been driving a
piece of crap car. Through all of my teenage years, I had to shop at Kmart.
This is all in my book, of course. When, when chickens are on sale but
limited to two, my mom lined all the kids up at the grocery store. We have
been clipping coupons and living beneath our means.
“What do you mean you've got three million?” He goes, well, we always live
on my income. And when your mom works, we save her income. We invest in the
market. We buy and hold and blah, blah, blah. So my parents taught their
children how to be smart with money. Now, they a little bit what I talked
about relationships with money.
I wish they could have spent a little more and loosened up a little more
around it. But they, my parents created generational wealth that did not
exist before them. I'm so proud of them. They died with like a $6 million
net worth, but even more. Interesting, and beautiful is that all three of
their kids were so financially successful because they followed what they
did.
Don Patrick: That's amazing. Yeah. Because usually there's one sibling that
does not.
Karen Lee: No, we, every one of us was a self-made multimillionaire before
our parents passed and left us their inheritance. And so that's what I would
want. I don't know if people know that about me, but I have carried what
I've learned from my parents into my practice and what I learned, too, about
what I wish they had done differently into my practice.
So, yeah, practicing what you preach is a a big deal to me and to my team
and I think to our clients.
Don Patrick: It is. It's absolutely necessary. Karen, this has been It's so
wonderful. So much to learn. So, I mean, this has been great.
Karen Lee: It's been fun, Don.
Don Patrick: It is fun. And I just want to thank you for your time and all
you've done for your fellow consortium members and the consortium and
watching you grow, grow your business and where you're at now. It's just
heartwarming.
Karen Lee: Well, you are so welcome. And it has been my honor to be part of
Integrated and to be a voice for Integrated. And as long as you'll keep me
around, I'll keep doing it.
Don Patrick: Just maybe. All right, well, see you around the block.
Karen Lee: All right, Don. Have a great weekend.
Don Patrick: All right. Bye.
Karen Lee: Bye.
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.