Preview Mode Links will not work in preview mode

Freedom in Five Minutes

Aug 28, 2019

When you're working in the financial industry, most approaches are very cookie cutter. But if you want to be your own person, how do you really break out of the mold? How do you start your own practice to emphasize where your passion in finance is really at, and do so successfully?

In this episode, Aaron Hattenbach, founder of Rapport Financial shares his journey from working for bigger financial service firms to having his independent service firm which to date has now managed over 500 million in client assets.

Schedule a Meeting with Aaron:


Automated Transcript Below:

Dean Soto 0:00
Hey, this is Dean Soto, founder of freedom in five And we're here again with another freedom in five minutes podcast episode. Today's topic, is this going independent as a financial advisor. That and more coming up. Alright, cool. So we have a really cool show we had we actually been talking right before this a lot. And I'm like, oh, man, we gotta we gotta save this content for the actual show. But I'm here with Aaron Hattenbach, man, is this gonna be awesome. So Aaron, he is the founder and managing member of Rapport Financial. It's a boutique independent advisory firm, with a decade of experience in wealth management in the wealth management industry, having managed over 500 million in client assets. That's crazy man. Aaron works with young tech professionals in the early stages of wealth accumulation, as well as high net worth clients, with a particular focus on physicians and business owners. So without further ado, man, I'm so glad you're here with us, Aaron, how's it going?

Aaron Hattenbach 1:17
Happy to be here. It's going well, for a Monday.

Dean Soto 1:22
Well, it's cool. So one of the things that piqued my interest about you so so obviously, I have my claws out there trying to find really interesting podcast guests. I've reached out to several, you know, CFPB, sort certified financial planners, financial advisors, things like people like that. And there's one thing that is very different about you, when it comes to financial services in general. And that is, right off the bat, you you can tell that you are you, you have your own way of doing things, you you, you kind of have broken the mold. And we can go into this a little bit. But it seems to me in when you're doing any type of financial advising any securities, anything's like that. It's very cookie cutter people are very much on the defensive, because there's so many regulations and so on. And so when I saw you, I was like, Oh, my gosh, this guy's doing content this guy's doing like, just, he's teaching other people how to run their firms and things like that, I need to have this guy on this on the show, because that is one of the hardest things to do in your industry. So all that being said, I want to get your entire background, you used to work for these big Merrill Lynch, bigger financial services firms. And now you are your own person, and it was not an easy ride. How did that happen? Give us a little bit of background on your entire story.

Aaron Hattenbach 2:54
Yeah, so Dean, I started working right after the financial crisis graduated from from Brandeis in 2009. And really, this all came from an experience working at the attorney general's office on a case against some of the largest financial institutions and lenders that essentially contributed to the major mortgage meltdown that we saw, and I felt a passionate need to work on the side of the consumer and financial services, not on the side of the sales side, selling the institutions, and creating products, I really wanted to help shelter individuals, families, high net worth individuals across the gamut, and educate them really. So my passion is financial education. And I felt that I needed to start my own practice in order to emphasize that without limitations. So to backtrack to that to 2010. I started with Alliance Bernstein, they're very large, firm publicly traded, it worked for a couple of independent firms, one of which is hopefully going to go public, and I can cash out my stock at some point. And then found myself at Merrill Lynch and the advisor training program, built up a decent practice for myself. But I continue to find the same issues where I wanted to really be a holistic financial planner, cover everything that's beyond investing, because quite frankly, I think there's this misconception that, that building a portfolio is what an advisor gets paid for. I think in order to earn 1%, on a portfolio, you have to be doing full financial planning, and that, that covers retirement planning, tax planning, estate planning, stock options, planning, looking at an employer benefits package. So what I did was I saw this trend at the large institutions that were focused primarily on portfolio management, and recognize that the future of financial planning and wealth advisory for that matter, is helping people with everything personal finance related, and if you're not doing that, you're going to lose clients, or you're going to have clients that are going to question what you're charging them. So I created Rapport Financial back in early 2017, with only a few clients and with a vision that I was going to go well beyond the investing in helping my clients, but specifically focusing on young tech professionals that were from age 22 to 23, to 35, in the accumulation phase of life, trying to accumulate for a home purchase to start a family for a number of goals that quite frankly, in in this economy where the price of goods are going up, wages are staying stagnant, was becoming I think, less and less of it over reality. And so I wanted to show people that through a full financial planning process that I created, that they can attain these goals and a time window that is feasible, and not have to be waiting decades to to eventually, you know, be a homeowner. Yeah, it's, it's worked out really well. I really love my client base, I pick who I want to work with. And, you know, I cover everything from my clients even as far as if a client is going off on their own and creating a marketing consulting business, how to negotiate compensation, how to, you know, position themselves, with with the with, with, with strength, so they're, they're going in there and saying, you know, what, I don't need this opportunity. I like it. But here's what I'm worth. And so, there's so much more than just the investments, and that's what I get excited about is, I can actually make an impact on people's lives beyond picking ETFs and funds.

Dean Soto 6:52
I love that man. It's it's, it's definitely something that is different, because I've had a couple of clients in the financial services realm. And, you know, it's, it is a very, like, we like I said before, it's very, it's a very defensive industry, they that you you can, that you had your you have your standard cookie cutter, typically focused toward like what we talked about prior to the podcast toward baby boomer type, folks, and anytime you wanted to go any do anything that was outside of the box, you have to go and get it through compliance, right? content, it can be a whatever structure, you want to do it just tons of having to go through compliance when you're working with a big business. So like, so I can see how easily that can be frustrating if you're working for a bigger company like that. What were some of the pitfalls, that or it's not pitfalls, but like what is something that you just did not expect once you left? The big companies that that you feel what it that pretty much every single financial advisor is going to run into?

Aaron Hattenbach 8:10
Yeah, so I think advisors are trained on how to advise, right? Very, very plain and simple. I'm not going to get into the nuances of what a financial advisor does, I think, you know, it's very, very well publicized. But we're not taught how to own and run a business. We're not told how to hire employees, how to select vendors, how to really create a business from scratch. And I think that is the challenge for any entrepreneur is you might have an area of expertise, and a knowledge base. But if you haven't started a business before, you're in for quite the experience. And I know that you know this Dean. So when I started this business, I had done months of preparation. And in fact, probably about five or six years of preparation in my head. And in collecting documentation that I thought would be used fault. I created a dropbox folder that I knew at some point I was going to tap it when I was writing. And and it really token a conversation with a client of mine who was working with me since 2010. I'm only 32 years old now. So that's that's saying a lot that he stuck with me for 10 years, and hopefully, many, many years to come. But he said to me, I'm not moving my account and the relationship, you must be starting your own practice. And so that gave me the confidence that I don't think I don't think anybody is ready necessarily to start a business. Yeah, but there's no perfect time, you're not going to have everything mapped out. It's not all going to line up like a puzzle. But I think what I found in running a business for the past two and a half years, and even going back to Day One is you need to be willing to adapt, you need to be willing to constantly put time and resources into learning. And and I quite frankly, I'm constantly looking at my business and poking holes in it and saying, Where can I improve the client experience? How can I improve the infrastructure of technology? What can I outsource on a day to day basis, that is not my core competency. And quite frankly, also is compliant. Because I it's I you know, as much as compliance is talked about working at Maryland, Morgan Stanley, I still have a compliance department that I outsource. And I'm still subject to the same regulations, it's just a very different experience in terms of, you know, day to day, if I send a client an email or a personal note, I don't have to run it by someone to, you know, in order to get this to the client, I can, I am my own compliance officer, in fact, but I do still have to be subject to the same regulations. But I would say, you know, in a nutshell, being your own boss, setting up the infrastructure, really making a lot of decisions in a short time window and saying, Okay, well, you know, I'm going to do the best that I can do. And then the other thing to do is, is I kept all my contracts very short in nature, because I realized that if I made a mistake and selected a vendor that that wasn't appropriate for the business I was creating, if I did a month to month model, where I may be paid a little bit more instead of an annual contract and that I was locked into, at the very least I could get out of that and select a different vendor that made more sense for my business. So there are a number of things that I did and including, I would say, reading a lot of kids this articles, you know, I given back to that that blog, in recent years, because ultimately, I relied almost exclusively on kids, this is content. And I feel like there's there's enough content out there that if you're an advisor, and you're saying, You know what, I feel stuck, I'm not Merrill Lynch, or Morgan Stanley, I'm never leaving the sandbox, or I'm going to move from Merrill the Morgan because I don't want to go independent, I would challenge them and say, there's so many resources out there on the internet, and so many people that are willing to help that all of those pain points and all those reasons to not go independent. I can respond with here, here's what I think and give them the tools and show them how they can empower themselves. It's really, really neat. And this didn't exist, you know, 10, 15 years ago. Now, there are technology providers, we're talking dozens for every category that are that are built for the independent advisory channel. I mean, I can build a better tech stack than Merrill Lynch and Morgan Stanley has internally that is cool, and do so cheaper, and have and have the ability to say, you know, what, if I don't like what they're doing anymore, there are 10 more competitors that I can go to.

Dean Soto 12:51
Oh yeah, I love I love that. Because like, because it's, it's, it's it's riding the wave of well not really the wave, but actually, you know, like, breaking the mold, and then just riding the wave of, of the fact that things are changing. I mean, you could have just sat there and complained and just been like, well, I'm just this is what I do. I you know, I was trained as an advisor, and I'm just going to, but you took on the entire the entire business, which involves marketing, involves bookkeeping involves it involves, like you said, still involves compliance. But how can I do compliance where I'm still flexible in in various ways? And how can I give? How can I, with where I, where you're at right now? How could you do what Merrill Lynch does, but do it faster? Do it more in with with a more caring touch with your clients? Because that's one of the things about you is you actually go after you you are I shouldn't say go after but you are, you will definitely take on different type of client than your traditional advisor. Traditional advisors go after boomers who

Aaron Hattenbach 14:07
Yeah, boomers is an older and younger, that are that are retiring or nearing retirement, and have accumulated enough and assets to work with, quote unquote, a traditional financial advisor. Yep. What's interesting is, I noticed, in my time working at Merrill working in Hightower, working at concentric, that a lot of my peers were looking for financial advice. They didn't trust automating all of their finances. So you've got a lot of these robo advisors, which I think provide a great product, but they're not in comprehensive planning service. Yeah, um, you know, they're not going to tell you how to max out your employee benefits package. Yeah, they're not going to tell you to fund an HSA, when you have a high deductible health care plan. They're just there. They're intended to fill a gap. But they're not necessarily there to cover everything personal finance related. Yeah. So I saw a gap in a really in need in my field where advisors were not gearing their practices towards young professionals that are high income earners, what I call Henry's high earners, not rich yet. Yeah, I didn't come up with that term. But as an -

Dean Soto 15:20
That's an awesome term.

Aaron Hattenbach 15:21
Yeah. But being here in the Bay Area, you know, incomes are, are substantially higher than the median income in the country. And people here have to face high cost of living. But what I've noticed is with with some simple tweaks, and putting them through my five step process, I can get them from a point where they feel like they're not saving anything to where they're maxing out their retirement accounts, they have monthly ACH is going into their investment accounts. And they feel like they're in a position now, where they financially have a understanding of what the future looks like and why they work. Yeah, like, I challenge my clients. Why? Why are you working? Like, what is it that you're working for? Is it the money? Is it the passion? Is it a combination of the two, but at the end of the day, if we plan ahead, and we we build a full plan for their finances, which I do for them using incredible technology, that, quite frankly, I think, is on par if not better than some of these larger institutions. Um, I think I can provide the same level if not more, of a of a comprehensive planning service at a lower cost, too. So that's the other thing is that I think financial planning in general, comes with a high ticket cost, right at a high, high price. How can we lower the costs so that people that aren't high income earners, but really need my services, I can sit down with them, build them plan in a couple hours of time. And now they can sit down and every year and say, Okay, here's our plan of action, here the things I can do to improve the efficiency of my overall financial livelihood. And then at the end of the day, they start making better decisions totally.

Dean Soto 17:11
And what what better way to what better way to keep clients and to grow with them? Because I know, in I mean, in my industry, when people when people work with me, like, my goal is to make them more money or save more time. But usually, the making them more money is is the one that people they they're like, Oh crap, why would I not keep on going?

Aaron Hattenbach 17:38
Right? That takes a precedent.

Dean Soto 17:39
Yeah. And so like, for you, your immediate, you know, if even if they're not making a lot right now, every little time they're making more than they would have, they're like, why would I not keep on working with Aaron, like, I'm just gonna continue as they start becoming rich, because they're Henry's, as they start becoming much more it building different egg, acquiring different assets becoming their portfolio actually growing, getting better jobs, or building bigger businesses, whatever it is, you're the first person they're going to go to, because you've already proven with these small things, as it keeps growing, that you are that you know what you're doing, and you're you're always building their best interest.

Aaron Hattenbach 18:25
Right. And the whole thing is the trusted advisor capacity where I think I go beyond the traditional financial advisor. And there are there are many advisors, I know that do this, it does follow the same kind of narrative, which is, you know, they get invited to their clients, weddings, they become kind of a pseudo member of the family. But really, what it comes down to is like, I think you can't have three 400 clients and do this, you just can't, because clients are going to move to new cities, they're going to start families, you know, they move to a new city, you've got to make sure that they buy renter's insurance, and they're renting, or they buy homeowners insurance, that they're purchasing, helping them getting a mortgage and pre qualified. I mean, there are so many touch points in my clients lives where I want them calling me and I've essentially built this practice. And I've, I've trained them, in essence to call me anytime they have a major life event. Okay. So if you have a kid, we need to look into life insurance, right? So there's just so many ways I can help the client and this is my passion is the educational component. And then, as one of my clients put it recently, a hand holding, like knowing that you're not going into this experience, and and going on one website and doing some research and questioning the decision you made, because you were short on time, or you didn't have a second opinion from someone who does this full time. Yeah, right. And at the end of the day, it's like, I look at myself, as a general practitioner, physician in finance, Oh, I love that. That's where my job is if my job is really to diagnose, and then if I I'm not the expert on that subject matter whether it's insurance, mortgage, I have resources, I have people I can that I trust that I would go to for insurance and a mortgage myself. And I can connect them with my client. And I can also be involved in the process and make sure that my client is aware of everything, right from that financial standpoint. And it's really, I think it's one of those business models that it doesn't pay as much as advising two or 300 clients and putting them into mutual funds and meeting with them once a year to check in on them. But I do think that this is the future for my generation, they're going to want this hand holding Yeah, they're going to be willing to pay a premium for it. And I really firmly believe that if you don't migrate your business towards this, this more white glove level of service, you're going to get caught with your pants down. And I certainly would rather be ahead of the curve, make a little bit less, but know that I'm a fiduciary. And that I'm building a sustainable long term business that I can bring other advisors into, and feel good about what we're doing. Right like and make a good living eventually.

Dean Soto 21:10
Yeah, I love it. So so with with all of this, it kind of leads into the fact that not only are you helping your clients, but you're actually helping other advisors, do what you're doing and and start, because really, this is the way that you're doing this is a is a new model,

Aaron Hattenbach 21:31
a new blueprint,

Dean Soto 21:32
it's totally a new blueprint. And you're spot on with that with the hand holding. I mean, my father in law doesn't want any hand holding, you just like, take my money, give me return. And back for me. I'm like, and everyone that I know, that's of my age, or younger, is there like, you know, I want someone that's a little bit of a mentor, and a little bit of have some coach? Yeah, Coach were great making decisions. They're also saying, you know, you should do this as well, because, like, it's just because it's I don't, I don't you know, for me, I like that hand holding so. So how are you training other people? How are you? How are you building up these other advisors, like advisors who are really given their new different type of client, right?

Aaron Hattenbach 22:25
Sure. So advisors come to me at different stages of their careers, I'm finding most of the advisors that want to work with me, on an ongoing basis are advisors that have worked in the industry for a decade or two, they've primarily worked at at large institutions like Merrill Lynch, Morgan, Stanley, UBS, and plenty of other firms for that matter, and they have a large client base, but they are now realizing that, you know, for a number of reasons, it could be headline risk, you know, a major financial firm has a huge lawsuit, or, or a, you know, you can even point to the Wells Fargo opening up of fraudulent accounts are opening up of accounts that clients had not, you know, had not approved. So, I think a lot of advisors are finding that the institutions that they've relied on for name brand, and and and that power has kind of dissipated post 2008 2009. And I think, you know, it rightly so, right. Yeah, these institutions lost our trust, and got bailed out by by the government. And so, you know, it's really interesting, the ones that come from these institutions, what I have to do is, is basically overcome their obstacles and fears of growing independent, yeah. teach them about the infrastructure that's available to them. And what I'll do is, after this podcast, I'm happy to provide you with a couple of links for your listeners, for various, you know, whether it's finance, tech solutions for CRM, and billing and all that. I think it's an educational process. And if the advisors is experiencing so much pain at Morgan, or Merrill, or UBS or Raymond James, whatever, they're going to want the education. Yeah. And if they want the education I have, and I can teach them, why it makes sense for them to go independent. You know, what, it's going to end up costing them annually to run their practice based on what they're looking for, because no advisory practice is the same. Yeah, this is what I found. And I'm not going to say, hey, my model, and the way I work is the right one for every single advisor that I consult with. Now, of course, now I get to know them understand what they're looking for, what are they specializing in? where their clients, what services they provide? What do they charge? You know, I have a whole list of profiling questions that I have to rely on in order to get a comprehensive intake of who that advisor is, and what they're looking to do with their business. And ultimately, at the end of the day, it's educating and it's basically telling them here are the different vendors that I think makes sense. And then also coaching them on how to negotiate because they've been a big enterprises that have done the negotiating for them. So, you know, say Salesforce is offering you this financial services cloud for two grand here. Well, you know, you should know that they have sales people that have quarterly goals do. So if you can get them at the end of the quarter and say, hey, look, you know, $2,000 will read for me, but I can I can do 1400, well, a lot of this stuff is negotiable. And so I think you have to be your own advocate, you have to not just accept the answer as is. And it's ultimately it's like going back to school, again, you've got to go and you've got to embrace it, and realize that you're making an investment in not just your business, but your clients futures. And yeah, for me, this is, this has been really exciting. It's something that I added to my practice after doing this for two and a half years. But in addition, what I've done is I've taken the best of Maryland's the best of Hightower, the best of Bernstein, the best of like working in these different models within wealth management, and said, okay, because I've been exposed to all these different technology vendors, now I do have the ability to say to you, okay, well, your reporting needs are more extensive than mine, here are the reporting platforms that work. So that's been in essence, what I am, is I'm, I'm an advisor consultant on the side, and I do this not because it's going to make me a ton of money, but because I want to pay it forward. And I do feel like there are so many advisors that are capable of doing this, and just with a little more education and knowledge, they can, they can go off on their own, and they can not just build a practice that they're proud of, but a practice that they can eventually, you know, give to the next generation. Yeah. And, and set up and set up a practice that, that is sustainable, long term, and isn't reliant on an institution, it's, you know, it's, it's cool, you're setting up a legacy for yourself.

Dean Soto 27:12
I love that it's instead of instead of, you know, working and building somebody else's legacy, which was like a big, you know, the big Merrill Lynch or whatever you're, you're spot on like, you can, you can totally give that to the next generation. Now that it's now that it's becoming possible. And you're showing that this is actually becoming possible to be to that it's much, much easier now than it was 10 years ago, to become an independent financial advisor.

Aaron Hattenbach 27:41
There's just so much I think, because of the growth and if you look in financial services, right now, across the map, outside of wealth management, you know, most areas of financial services are experiencing a slowdown, because of technology out there, the fees are going down your tech companies doing direct listings and avoiding an investment bank. But what's really interesting is the one area that is expanding and expanding at an amazing clip, is this rush to independence. And you're seeing, I get emails every day about, you know, firms that are leaving a big, or teams that are leaving a big, firm and going independent. And it's like this has been going on the past 10 years, you're seeing the RIA channel, the registered investment advisory channel, grow double to double digits, and you're seeing the Merrill Lynch's Morgan Stanley wire house model, really just trying to hold on for dear life. And and they're also I think, really, I think, not geared towards the next generation. And the advisors are in their 50s and 60s, the average age of an advisor in those models. And ultimately, what they're doing is they're not setting up the next generation of their client tells kids and grandkids with a service model that's going to run with them. And so for me, it was okay, I can't be at a firm that is not going to really embrace the fact that a the next generation of wealth is looking for a different experience, different fee structure. And they're just holding on for dear life and trying to just keep keep the boat, you know, sailing, right, I'm for lack of a better analogy, I wanted to be ahead of the curve and recognize that the next gen of wealth is coming to me with with a different, a different service need. And if those big firms were not going to embrace it, I was going to create it. But what's interesting is Merrill Lynch and Schwab have created digital monthly subscription models in the last couple months, which I did two and a half years ago. Yeah. And it just it boggles my mind that they're now rushing into this. And, you know, who knows how their how that how that, you know, how the actual service model works? But it's just like, too little too late.

Dean Soto 30:03
Yeah, yeah, exactly. And, and and the Met, it would be hard to get a resonating message from one of those big firms to the younger generation?

Aaron Hattenbach 30:17
Well, I mean, I'll give you an example. I use Google Apps for a lot of a lot of my client intake. And it just feels like there's so many cool free ish, bringing tools available to advisors. And because those firms, unfortunately, for them, they they have to go through their public companies. Their their approval process is lengthy. Yeah, it all has to be built internally, you know, they're not able to use the best of, of technology tools that someone like me or another advisor has available

Dean Soto 30:51
and and

Aaron Hattenbach 30:53
open architecture model. It's Yeah, we I compared as it's like, you know, Apple and Android, right. So but, you know, in many cases, people love Apple, it's a closed architecture system is it's great, it's safe. But there are people that prefer more customization. And, you know, I would say, my model makes a lot of sense. And a lot of independent firms models make a lot of sense for people that are not looking for that very, like simple, I would say, archaic way of managing wealth, which is charge a person on a whim, and and set up a quarterly meeting, it's purely based on the portfolio returns.

Dean Soto 31:36
Yeah, no, I love that, man. I love it. I love it. And it definitely is. Even with, with utilizing those apps and the free the freemium type apps like that, it's what it's what my generation and and younger generation are used to. Right, and you're speaking the language, just even in something like that. So. So that's, I mean, I love it and actually kind of corresponds with so I always ask the five minute mindset shift question like the five minute like, strategic business decision that people can make that you that, that that you made, that changed the trajectory of your business? And and so in your five minute one, because you're so thorough, and you actually do the questionnaire, when I said to podcast, get you talk about your five minute mindset shift question is, it is based actually on questions, and asking your client questions, whether it be someone who's your financial advising or somebody, you're trying to help become an independent advisor. Can you talk more about that?

Aaron Hattenbach 32:50
Sure. So I don't go into any meetings without an agenda in advance. For my existing clients, and then for prospective clients, they book a time with me on my calendar, a tool, countless booking appointments. But I send them this financial planning checklist that I'm happy to offer to your listeners as well. And the checklist is really meant to gear the client for a conversation that is going to expand upon the investments. And so this checklist has a series of items that think of it as you know, an intake form when you go and see a doctor like. So in this case, you'll have your previous three years of tax returns, disability benefits, coverage, 401k, and other retirement accounts. And it goes on and on. So really the point of that being I want the prospective clients and know that like this call is going to go beyond just talking about my investment philosophy, or what you're looking for in a portfolio. Yeah, that's secondary. Primary to me, is the number one question I ask is, what are you looking for in a relationship with a financial advisor? Yeah, advisor, financial planner, investment advisor, there's so many monitors and names for what we do. But at the end of the day, it's not about me, right? When I am sitting down or having a zoom call with a prospective client, I need to know what they're looking for. If I can provide a service that matches what they're looking for, then let's move forward in the process. Let's, let's have you contact a few of my clients and ask about their client experience for reference checking, and then continue through my five step process. But if they're looking for something where they're like, hey, I want to be hands off entirely, I don't want to participate in this. I just want my portfolio manage, then I'm out there advisor. Yeah. And I have to recognize that and see that for what it is. Yeah. So I started off every call with that question. And I I completely shut up. Like I asked them this question. And I hope bit before the call, they've reviewed the checklist and the questions, and they've given it some thought, as far as what they're looking for.

Dean Soto 35:09
I love that.

Aaron Hattenbach 35:10
Right? Because in essence, it's like any other service that you that you look for out there. You're the consumer, you're empowered. Yeah. And you have so many different options. Well, why should I work with this service professionals? Yep. Because I like trust, and feel that their service model resonates and speaks to me, right? Yeah. So if they're looking for a comprehensive financial planner, that is going to help with budgeting that's going to help with with selecting of health insurance policies, and then their employer plan, then my firm is going to be the right service provider. But again, that they're looking for just a portfolio manager to babysit their money. Don't get me wrong, I can do that. But I get so much more satisfaction out of really building a full financial puzzle for my clients, and putting the pieces together. And also, what I what what I found is my clients need to be participants in this process. Yeah. And they're unwilling to complete intake forms, and complete some of the homework that I asked them in order for me to give them the best advice, then it's going to be more of a hassle for me, if I have to chase them down and remind them to do something that is actually going to benefit them. But at the end of the day, at the end of the day, some people quite frankly, don't want to put in the time. And kind of where I go back to the advisor, consultant practice. If I see that the advisor wants to independent, but they're unwilling to put in the time, then it's like, Is that going to make for good consulting client? For me? Probably not, yeah, I would rather make less money and have an advisor. That is that is a go getter that is committed to this, that is saying, I've got both feet out the door. I'm not dipping my toes in the water, I am convinced that this is the model I need to pursue. That's a good client, someone that is just looking for an answer to one or two questions is probably not ready to go independent. And I seen that so much. I know. It frustrates me because it's like these people are like, being successful at a wire houses is hard. I mean, one out of 100 advisors eventually becomes a million dollar producer. Yeah. So it is not for the faint of heart and the success percentages at these firms. We're talking in the the low single digits. Okay. So the fact the matter is, these are these are talented people that have the ability to both build trust, and they understand capital markets, and clearly have been able to build rapport with their client base. Yeah, yeah. But but the final step of the process is, you know, building a product of building a practice that you're proud of, but also that you feel you're giving your clients the best possible service offering. Yeah. And I just firmly don't believe that cross selling my clients, and making commissions on a variety of products is in my clients best interest? I just I don't I don't subscribe to that model. And I think, probably 80 to 90%, if not more of advisors don't as well.

Dean Soto 38:32
Yeah. But but but to have to actually build something around that belief. You have to be able to put in the work.

Aaron Hattenbach 38:44
It's what what it comes down to is your any life transition, whether you're taking a new job moving to a new city, getting married and starting a family. None of this stuff is easy. Like you can you can read books and and arm yourself with a ton of knowledge. But at the end of the day, it's Do you feel confident enough to be able to know that you can make a mistake or two, and it's not going to be Armageddon? Yeah. And what I realized is, when I took my clients and set up my own firm, sure, they had to be very patient, there were documentation issues, there were process issues, but they knew that they were getting somebody that was going to always look out for their best interest. And they were willing to be an early adopter, like the by the first year model of a car. Yeah, right. It's like the people are buying Tesla's right, you have to be a believer in the product and be willing to put up with some of the potential mishaps. But the service the offering is, is so much better, that it makes up for some of the small hiccups along the way. And that's what I would say to most advisors considering independence is you got to be okay with the fact that is not going to be perfect. On day one, certainly not perfect on day 365. That you're you're going to become a better advisor, by owning your own business. I really think I firmly believe that. And for me, it, it was probably the best decision I made in my life was finally going off on my own. And I think that there are too many advisors out there that don't buy into the process. And I would suggest the following. Had I not had all those experiences at those other firms, I wouldn't have been equipped with the knowledge, I would have been going in dark, I would have been just as scared and concerned about compliance, and an operational infrastructure and, and and all the things I don't know, that I'm not aware of right, like the fear of the unknown. And so what I've said to advisors is sure, you can read my 26 steps article, you can read a ton of stuff on the internet. But at the end of the day, when you're making a decision about probably the most important asset, your business. It pays to actually work with someone, it's a knock, but this one, for sure. And so I'm not trying to like be an advocate, you can go to another advisor consultant know who does the same thing that I do, it's just a matter of I don't think this is something that you go out alone.

Dean Soto 41:19
Yeah, no, it's it's, it's totally, I mean, you don't you don't go to school, you know, you don't you don't, you don't try and become an advisor in general without actually being mentored in some way, you know, and just any business, I was, gosh, this even just this year, I spent a lot of money, on advice on mentors for my business for people who, who guide me into places that I just don't know. Because, you know, if I looked at my time, I'd be spending a lot more in opportunity cost than spending the money that the capital that I'm spending that I'm giving to my advisor, mentor [lus, you by even just by doing that you get not only gain all the knowledge, but you have somebody who's going to watch your back. And then at the same time, you are also now part of their network. So if something does come up, that you need something, now they're the ones who are that who can introduce you to a whole bunch of people or if they have, if you I'm sure if at some point in time, you're going to end up mentoring and a financial advisor that sets up their own practice that specializes in something that you don't, and you go up well, here's some clients that I think would be better for you.

Aaron Hattenbach 42:40
Absolutely, absolutely. I think I think it's like the benefit doesn't just end with the consultation. It extends and had a number of advisors reach out that were even at smaller firms that were like, Hey, I'm gonna rip off the band aid, like, well, you don't have to rip off the band aid. And my suggestion is you don't, you don't wait until you leave the firm to start your own firm. Yeah, for for compliance purposes, you can't go and register your license, and set up your own RIA while you're working for another company. But you can certainly educate yourself on all the infrastructure, think about the business you want to build, build a business plan, marketing plan, value proposition and start really compiling all of your, your template form documentation. And that will take time. And so what I tell advisors who are like, well, I'm about to leave, I'm going to spend another month there, but I'm committed to leaving, and, and then I'll get started with you, I say to them, that's going to be too late. Like I hate to be the bearer of bad news. But when you leave, you know, you want to provide the best possible transition for your for the clients that are entrusting you with their money. Yep. And that are committed to you as a client. That's that speaks volumes, right? So you better put in the time, while you haven't yet. Really setting everything up for success. Because like I said earlier on the podcast, they're going to be things you're not aware of, they're gonna be mistakes that you make that are inevitable to being a business owner. Yep. But if you convince yourself that you have to wait until you have a clean break to get started with at least some of the educational process, yeah,you're going to be too late.

Dean Soto 44:29
Well, and you were like, even with, like the template forms, I mean, their systems, their systems that we're in a large organizations that you don't, you don't even you take, you take for granted. Exactly, you don't realize how many things, different template forms different, different little processes that are there, that if you, if you took the time to set up while you were at the firm, they if you would be you that would cause tremendous chaos, if you're if you had no income coming in, or if you had clients who were like, okay, now I'm

Aaron Hattenbach 45:03
ready, I'm ready. Me, it's embarrassing. If If you go to a client who is committed to working with you and moving their, their business, they're moving their their, their, their accounts, or their relationship to you. And you show to a meeting without the right documentation. Yep, that's amateurish. And so what I tell advisors is, you know, get started with learning about what the process looks like, it may take several months for you to get approval from the state regulators, which you know, that's three months, four months of potential downtime with no income, no clients, and by the way, the longer those clients stay at your predecessor firm, the more likely they're not going to move with you. Because they're going to say, like, what's been going on the past few months, like, you know, you can't, you cannot legally work with a client, unless you are registered with with the firm, right? As a independent advisor, investment advisor representative affiliate with an RA, or if you're, you know, registered as a, you know, working for a broker, dealer, whatever you may be doing, but the point being like, downtime and silence and not advising your clients, because you're legally not allowed to is a tremendous risk to your your enterprise. And so what I say to them is spend a few months, I spent five or six years compiling documentation, thinking about like, about my process, like obsessively thinking about the client experience standard that I wanted to create. And even then, two and a half years later, my practice looks a lot different than it did when I started. It's just it to me, it's like you've got it, you've got to embrace it, and you've got to fail fast. And you have to be willing to put out the resources, ultimately, say you're spending a few thousand dollars working with someone, well, they're going to save you thousands of dollars in negotiation, negotiating contracts. And in time, in so many ways that it's like, you're going to get multiples of what you spend. So I can't emphasize this enough, I just feel like advisors just need to be more open minded and less concerned about, you know, the fears that they've created the narrative they've created in their head that going off on their own is going to expose them to so many risks. And and these ultimately these firms are, they're lowering payouts. They are are telling advisors if you don't sell four or five different services, we're cutting your payout? Yep. And so it's about selling the enterprise. Yeah. And what happens is when you sell the enterprise, your client associates you, as a relationship manager at Merrill Lynch, or Morgan Stanley, and not as their advisor. And so then the clients never going to leave that institution. Yep. And good luck setting up your own practice, once you've sold your clients, a mortgage credit cards line of credit securities based loan, your clients are going to be like, Well, you've talked, you've talked about the institution for the past 10 years.

Dean Soto 48:13
And I now leave, why would I? Why would I leave?

Aaron Hattenbach 48:16
Right? And then advisors come to me saying like, what's the narrative that I can create, to get my client to move their assets? And it's like, well, if you've sold your clients on the enterprise, and your clients have four or five different service offerings, you the institution can be very hard. Yeah. And I'm not I'm not a magician, I can't wave a wand.

Dean Soto 48:35
Yeah, I mean, in just in, in moving things. It's hard even if the client loves you, and is willing, it's like, man, I have, I'm tied up in all of that.

Aaron Hattenbach 48:46
All of that. And I'm getting discounts on my mortgage, because I've got five different services. Yeah, you can't compete with that on the independent side. What I can do on the independent side is say, hey, look, I'm not captive having to provide your mortgage from the event, because I'm at Merrill, we can go shop around and hire a mortgage broker to go shop around for the best rates. Yeah. And ultimately, you know, that alone, I think, is worthwhile in terms of giving the client access to the the, you know, services of other institutions that may be better equipped, that maybe providing a better price, you know, so yeah, I would just say, like, for advisors that have sold their clients in the enterprise, it's, it's very hard for them to ever go independent. And if they do, it's, it's a one time thing. And you better put in the hours, you better hire someone to really help you navigate the complexities. But for an advisor that has worked at one of these firms, and is looking to go independent, don't go at this alone. Yeah, right. Go to go to kids to start calm. I don't get paid anything from kid says, I think he's his blog is the best in the industry, it's won many awards. It's ultimately actually was ranked higher than the Wall Street Journal in terms of influence on financial advisors, which is saying a lot. Yeah. And if you want to get free education, go there. But at the end of the day, you know, don't go out this process alone. It is, you know, you're risking your business.

Dean Soto 50:21
Yeah. But the best option is going with you. So how can people actually work specifically with you?

Aaron Hattenbach 50:31
Well, Dean, you're far too kind I, you know, I'm learning every day. So you know, I'm not the best for everyone. But my suggestion is if advisors interested in working with me, they go to my website,, there is a button to contact me and they can actually access my calendar. And I would encourage them to go to the prospective client meeting and select 30 minutes time where we can learn more about their practice what they're looking to accomplish. They can ask me any questions as far as you know, my service model for advising advisors, financial advisors, and you know, I do offer to a limited amount of advisors, the ability to retain me for a certain amount of hours. You know, this isn't my core business, it's just something I love to do in helping other advisors accomplish what I was able to do two and a half years ago. And so if they're looking for help on the tech marketing, business strategy, compliance, operations, practice management, really it covers the gamut and they're going to get 10 years of experience running businesses for within multiple advisory models. So you know, I think they're going to get a good mentor that is going to help them select the right vendors and and build a practice they're proud of all while saving some tone in the in the process and not hitting their head against the wall trying to figure all this out. It's it's a lot putting an entire business together I wrote this in my 26 steps article and quite frankly 26 steps was probably only half of what it took to create this business so um, I wish I hadn't gone at it alone I would have hired someone with the experience and would have prevented some money lost some mistakes and you know, what if i think i think we're shorten up my ramp up period to getting my clients on board and and operating so they can contact me they can go to my website and schedule 30 minutes of time they can also go to my homepage and there's an intake form where they can send me an email goes to the info that gets forwarded to my my email address but yeah, I'm would recommend going to my website, that would be the first step.

Dean Soto 53:03
I love it man so yeah, so go check out if you want to connect with Aaron and if you want to have that mentorship or if you just want to you if you even just want to see if that if Aaron would be right for you with you know 30 minute call go check out so report as in building rapport and head down to the opt in form and connect with their and he is if you can't tell he is one a wealth of knowledge and he freely gives out a lot of value and actually cares cares about the people that he works with if you can tell just through what he's been sharing right now so just go check that out once again it's rapportfinancial and go connect with Aaron. Also have that in the show notes as well as in the blog posts and and other places where we syndicate the actual publishing of this podcast episode so but all that being said, dude, Aaron, thank you so much for being on man. This has been this has been pretty awesome.

Aaron Hattenbach 54:17
Yeah, this is a pleasure. I really enjoyed it and you know have to do some more podcasting I guess right? Yeah.

Dean Soto 54:24
Yeah, for sure. That's I mean, that's one thing that that you have you have you're definitely a wealth of knowledge and and can bring so much value to everybody in the financial advising financial services industry. So that would be that'd be awesome. So

Aaron Hattenbach 54:42
well, really appreciate it was it was enjoyable and we'll be in touch.Thanks, Dean.

Dean Soto 54:46
Yeah, no problem. So go check out Aaron last time at or This is Dean Soto with the freedom in five minutes podcast. This this is the end of the episode but it is not the end of the podcast because we will see you in the next freedom in five minutes podcast episode.