Last Updated on July 20, 2020 by John Prendergast
Katie Stokes, financial analyst for Core Advisors, recently sat down with us for a chat about virtual client services and how to implement them. Due to COVID-19 worldwide pandemic, many business are switching to digital/virtual services to assist customers and clients with the high-quality service they deserve. Here’s what Katie had to say on the subject:
Transcript of the Interview:
John – So, you know, Katie, thank you for being here today. I just want to introduce you to everyone. So for all of you who are listening and watching, this is Katie Stokes, financial analyst for Core Advisors. Katie holds a CFA and charter holder and she holds a CFP. She serves on the CFA board or CFA Society of South Carolina. She’s been written about and quoted in publications like The Wall Street Journal, among others, and speaks on financial planning. So welcome, Katie, and thank you for joining us.
Katie – Thank you.
John – So we’re here to talk about how to serve clients remotely or virtually or digitally or how you’d like to describe it. But before we get going on on that topic, can you talk a little bit about how you got started in the business and really what drives you to serve clients?
Katie – Well, I actually got started pretty young and I had a small RIAA that basically took a chance on me. And so I went through first the CFP program and I was on the planning side for lots and lots of years where I did mostly planning, which obviously involves investments, but I didn’t focus specifically on investments. About five years ago, I moved into more of a investment centered role. And that’s when I went in, started to do the CFA route that that would be fun to do in my mid 30s. But so it’s really. I didn’t do planning directly at college in part of the reason was, is I had a real hard time with a lot of the complex associated with giving people advice and selling. So I wanted to be able to give advice. So when I had that opportunity, I took it. And that’s basically where we are now. And I’ve always been on the side and always been on the advice side. And that’s where I’m comfortable. So really, I think. I think being able to deliver not just advice that sounds good, but actually good advice that’s going to help clients in the long run is. I mean, that’s that’s one year. I guess my role here.
John – And you know, what is it about delivering advice to clients and helping them with their financial lives was the attractor for you? What? What’s that underlying thing that really gets you up in the morning?
Katie – I think really times like this are when we earn our money and not just in terms of financial money, but where we earn our purpose. I guess as advisors because as you know, a lot of people are pretty financially illiterate in this through no fault of their own. And really, it’s unfortunately money affects all of us. And. We have to deal with it, but it’s also just a means to something greater. So you can’t, people that come into us and they say, I just want, I just want more money. We say, what are your goals? I say, I want more money. That is not a goal. We really don’t know how to help those people. It’s people that come in and they and they have specific goals or to not so specific goals. But even just I want to take care my family. I want to do anything with their money. Just money by itself is just a tool. So really, the driver is trying to figure out how to use that tool to help them achieve something greater and bigger. And then when we hit times like this to not panic through them and hold their hand. Walk them through and make them realize that it’s not the end of the world. And times like this have happened before, they are going to happen again.
John – That that’s really helpful. And, you know, I think that aspect that you mention of money impacting us all. And it being something that a lot of folks don’t want to deal with, I think is a common motivator for a lot of our customers. And that’s why we’ve got such a great group of folks like you, I think. So, can you talk a little bit about the services that you, you provide to clients and then we’ll transition in to how you got started offering those services remotely.
Katie – So we actually have a couple of different sides to our business model. We’re an RA. We started doing retirement planning like many started. We actually have expanded beyond that throughout the years. We do we have our typical what we call our retirement planning clients, which is the people that are coming up on retirement age. They have some money in their 401K or I.R.A or they’ve amassed money throughout their lives and they need help figuring out how to navigate that retirement. That’s very similar to a lot of our models out there. The other side of our business is we deal with a lot of small business owners that have a lot of cash flow issues. Maybe they don’t have any money yet, but they have a lot of cash flow. She’s a lot of debt issues. And so we help them personally and their businesses doing all their bookkeeping, accounting, payroll, tax, all that wonderful stuff as well. And then as the business model evolves, as people as our business grows, they sell those businesses. Then they have money which comes back to us and we can manage that money.
John – Great. And so you’ve been really somebody who has led in in delivering services remotely. And, you know, we certainly remember fondly the write up in The Wall Street Journal about eliminating the traditional quarterly report in favor of a more digital approach. So can you talk about what got you started on that journey? What was your realization that you wanted to start to do that? And and how did you get started there?
Katie – So one of the things we were doing was just trying to move everything remotely. We wanted to be able to work from anywhere, which is great in times like this when you need to be able to work from anywhere. That was one driver. The second driver was actually a consultant that came into our business. And at that point in time, we were still preparing quarterly reports and he was digging in and asking a lot of questions like what’s, how much time are you putting into this exactly, through the process. And and as we started to talk to clients more, we realized that we were spending a whole lot of time on something that really delivered no value. By the time they receive the reports they were stale, the information was old. And this was probably, oh, gosh, I don’t know, ten or fifteen years ago, ten years ago, I’m guessing maybe that we that we made that change. And then when we thought it would be very difficult to transition people away from a. From a more paper model, and it turned out to not be difficult at all. Those people like they still get monthly statements from a custodian, they take him and they shred them or they throw them away or whatever, they don’t they don’t want to see it. So when they’re looking at on their own time, when they want to see it, they know it’s available. And that’s the real driver to it is they can get to it when they need it. That’s their value.
John – So what kind of services have you delivered, you know, remotely? I mean, obviously, we’re talking about reporting so digitized reporting.
Katie – Right.
John – But there’s all kinds of processes in your firm, so talk about the things that you found that were really important and valuable and maybe added some leverage to the firm by doing remotely.
Katie – So I said before we do accounting, tax, payroll, all those things in the business side, those are all delivered remotely through software that connects the business owner and us as well. So we can both access that information at the same time. There’s no paper at all that changes hands ever. Also meetings we can we use Skype or Teams or something like that. It depends on really the end client what we use. But, and so we can talk to people just like you and I are now and deliver their information remotely. We also use other softwares where their financial planning is delivered remotely. We never, ever print a financial plan anymore. We actually there was there’s a joke in our office that we’re not even allowed to print color. We’re not even allowed, we’re not supposed to print at all. We’re not allowed to print in color. Because they’re no use for it. Our clients never see it. So it’s it’s just not it’s not a necessity. People take they take paper and they take things and they throw it away. So even when we’re meeting face to face with a client, we still have everything up on a screen. And then if they want an e-mail version of it, we send it to them. But really, a lot of our clients, we have clients in Florida, in other parts of the country. And so we can have a relationship with them just like anybody else. But we do still try to have some human contact as necessary. Even clients that are far away. We try to see once every year or two just to have a face to face conversation. I do think it’s important. But you can you can do a lot without it.
John – And how did clients react to the switch? We’ve talked a little bit about how they reacted to the switch on the reporting side. But what about the meetings? I think many advisors feel like the regular meeting in person is, is a bed bedrock principle. But it sounds like you’ve had a different experience.
Katie – I think, I think there’s both. I think you have to have some, I guess it’s some face to face meetings, occasionally. I think also our process is not meeting centric. It’s, it’s deliverable centric, I guess you could say. So, we have a process, so we’re not, we’re not necessarily scheduling meetings and only doing work when we have a meeting. So our work is being done all year long and we’re communicating with our clients constantly about what needs to be done. So it negates the necessity for these big, long meetings all the time that most people don’t really want to have. Some people that have been around a long time still want to have. They want to come in and talk to their advisor because they’re retired and they don’t have anything else to do. And that’s great. We absolutely, come on in. I like seeing people face to face, but I don’t think I think there’s a way to serve people that are busy, younger and don’t have time for those kind of meetings. There’s a way to serve them remotely and make money doing it.
John – So, you know, what would you recommend to advisors who are thinking about doing this? You know, whether it’s the current, you know, pandemic issues, they’ve got an older client base and they figure I really need to not have to see them face to face to to respect that or simply for other business reasons. What would you, what would you say to them?
Katie – Well, I think, first of all, it’s good to have a plan in place. So when you come to the times like this, we can communicate. We have meetings scheduled all this week. Some people have chosen to come into the office. Some people have said, no, I don’t want to come into the office. And now we can say, OK, let’s have a meeting remotely, and we’ll still have our meeting. We don’t have to cancel and push everything back. So I think it’s good to have a process in place even if you don’t plan to use it. A lot of our ARIs, their clientele tends to be older. So I think that’s something that may get a little bit of a pushback, is that there are some people that just don’t. Like technology, we had a segment of our population that is like that for those people, I don’t think you can push them into the digital world. And you have to decide whether or not it is worth it to have those people as clients, I guess. But but a shocking number of people you would think would care, don’t. I mean, people have embraced DocuSign. I mean, everything. Everything that’s digital. Because it’s easier once they try. It’s easier right now. Probably 90 percent of our clients are good with anything we want to do digitally. We have a, we have about 10 percent, I would say that, still push back and prefer face to face meetings. Paper, things like that. And it’s not always related to age. We have a, you know, a young couple that are in their early thirties and still want everything in paper. So, which blew our minds. But there are some. But I’d say it’s probably 90/10. And of that 90 percent that are digital. I’d say maybe only 10 or 20 percent of them we really had to push. And I think a lot of that comes at the beginning of the process. Just developing the trust with a new client anyways. You’re there more as they’re more likely to trust you. They’re more likely to trust in your processes and things that you do. So as we go through those early steps, we see them more, we hold their hand more, we do those things more. And then as they start to trust us more, they say, OK, go ahead and send us a night instead. I don’t have to sign it in person or let’s have this meeting via Skype this time, because I don’t need to see you, but I think it does take a little bit of time. To move that needle for some folks.
John – So let’s say an advisor listening or, or watching has made the decision, I’m going to do what Katie did. Are there key things that they should do at the outset?
Katie – I would say ease your clients into it. Don’t make it a, don’t make it about you. I’ll tell you a story of an advisor that was trying to raise fees one time. And this was, this is a personal story with my parents. So they go to their advisor and he says, he says, I’m sorry. I’m gonna have to raise your fee a little bit. Our technology has just gotten so expensive and our costs have gone up and all these back end things. And my mother, who has an interesting brain, says, well, I don’t care about your costs, what’s the value to me? Why would I pay you more for the same service? And so I think about that every time I’m trying to switch something for our client is how is it going to help them? So when you’re going to the digital world, it’s a pretty easy answer. How it’s going to help them. It’s gonna save them a bucket of time, every day, especially when, we deal with a lot of dentists. They’re busy. They have to be chair side in order to make money. They don’t have time to deal with us. So you address it from our perspective of we will be face to face with you. We will meet you. We will do it however you want it to be done. But if you try it this way, you might like it. And if you don’t, that’s fine. We’ll do it the other way. We’ll do it however you want to do it. And that’s the service we offer. But most the time, if they, if they try, they end up liking it. They realize they don’t have to see it so much. They can send us stuff remotely. We can talk to them on the phone or on Skype. And it saves everybody a lot of time. If everybody saves time, everybody is happier.
John – And are there any mistakes either that you’ve observed or that you made yourself that that advisors should be watchful for? Things to avoid?
Katie – Pushing too hard. Just saying this is the way it’s gonna be. And if you’re willing to give up those clients, then you can do that, especially legacy clients, people who have been around a long time. If you want to get rid of them, maybe that’s a way you get rid of. It’s hard to fire clients sometimes, but if you want to keep those people around you, it’s got to be a gentle conversation. It’s got to be a conversation about them, not about you. And ultimately, it is about them. It’s not about us. It saves us time, too. But if we’re delivering their services better than they’re having a better experience. So I would say that’s the biggest thing, is not trying to push it on them, but ease them into it.
John – And I think I recall one of your particular solutions to that, at least when it came to reporting and I want to articulate it and make sure I’ve got it right for the folks who are going to listen to this. And what I recall is you made the universal choice to do digital reporting for everyone. And you simply said to everyone, OK, your reports are going to be digital. But if you’d like the traditional report that we provided, just ask and we’ll will make it happen. And as I recall from talking to you, the time that was very effective and from a behavioral economics standpoint, it changed the default behavior, right? So instead of default being get the report, the default was now get the digital experience. And that alone seemed to have really helped the transition. You, have got that right?
Katie – Yes, you are absolutely right. Nudges are effective. And defaults are effective. You think about it, Canda 401k plans now. So many people have auto-enrollment or you have to you have to have a qualified default investment alternative. You wanted to be good. You have to have all these things. And when you have auto-enrollment and people don’t have to make a choice to do it, they’re going to default to that choice more often than not. And that’s just yeah, that’s just behavioral economics and that’s the sides want to you you make the default option what you want. What do you think is going to benefit them, but you have to give them that alternative.
John – Wonderful. Well, listen, thank you so much for the time this morning and sharing what you’ve experienced in doing this. The last decade, really fantastic. And are there any other, you know, closing things that you’d like to to share before we wrap up?
Katie – I don’t think so. I mean, I don’t think this is a real novel idea in the terms of going digital or not going digital. I think the hardest part is, is pulling the trigger and just saying we’re gonna do it all the time. It probably already should have been done in most cases unless you’re dealing with a whole lot of elderly people. But if you want to have access to younger clients, which I think most advisors struggle with, you have to be you have to have this capability. That’s not really an option anymore.
John – Fantastic. Thank you so much for the time. Katie Stokes.
Katie – All right. Thank you.
John – All right. Bye bye.