Michael_Palumbos_podcast_about_systems_in_a_private_businessToday you’re in for a treat.  Michael Palumbos joins us to talk about a wide variety of issues.  We’ll talk about his journey to how he got to this point in his life, how following in the steps of his family has worked out and how he ended up starting a new company.

Micahel is the principle of Family Wealth Legacy, a wealth management firm and he also is one of two founders at The Practice Management Blueprint, a consulting and education firm that teaches other financial advisors who to run a practice that’s effective and efficient.

In today’s podcast, you’ll learn how to handle change, what it takes to be effective as a wealth manager and why he decided to start teaching other advisors how he runs his business.

Here are some of the keys to today’s program:

  • How other training programs helped Michael realize changes he needed to make in his practice and business model.
  • What the real definition of a family business is.
  • How a Xerox salesperson ended up joining the financial services business and why this was a great choice for MIchael.
  • Understanding the fact that your significant other really doesn’t know what you do and the fact that they’re scared almost all of the time.
  • How Michael discovered systems and how they have become the focal point of running his business today.


Narrator:         Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.

Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh:                Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business.

Today, we have my friend Michael Palumbos with us. Michael is with Lincoln Financial. He has his own advice business where he helps other financial advisors create great businesses.

Today, we’re going to talk about the process of change. In other words, how do you go from one career into another career, into another career.

You know, I did it for my first 20 years in business. I owned a vending and food service company. Industry went away and I was forced to make a change.

Michael has kind of a similar story but I actually think his is even more interesting than mine. So let’s bring Michael in and we’ll start talking about what the process of change is, how it can work in your business, and what are some lessons you might learn from it.

Hey, Michael. How are you today?

Michael:          Good, Josh. Thanks for having me.

Josh:                Oh, it’s my pleasure.

So before we were talking, you started telling me your story. So wait, wait, wait, we have to get story on tape so.

Michael:          Fair enough.

Josh:                You know, we’re going to talk mostly, today, about your wealth management business with Lincoln and how you morphed that into an advice business and some of the things that you did and some lessons we can learn. But first, let’s talk about how you got into wealth management business at all.

Michael:          Sure.

Josh:                You know, you’re 50 years old. You’ve been doing this for 17 years so you, obviously, were doing something before you went into this business. What was it?

Michael:          I had graduated from the University of Rochester with a degree in Economics. I was the nontraditional student. So I was married already and had a kid.

And when I left there, I found my way to Xerox sales agency. Basically, an outlet of Xerox for managing the small business owners, not so much the Eastman Kodak’s or the Bausch and Lomb’s. Those weren’t your clients. It was the mom and pop businesses up to 100 employees kind of places.

And I really liked it. I liked the sales. I liked the people. But what I found was that I wasn’t deriving much satisfaction out of putting black marks on a white piece of paper, putting color marks on a piece of paper and helping people do things better, faster, stronger kind of a thing.

You know, my father had been a financial advisor for several years. Today, this is his last year. He’s finally retiring after 40 years in the business. And we had a chat. Basically, it came down to something that he had said was that he gets paid very well for helping good people do some pretty incredible things. And that meant something, you know.

So talking about being sustainable, just the feeling of satisfaction was sustainable and knowing that you’re helping families and business owners over a long period of time, not just by selling them a product but really having an impact on the family, meant a lot to me so I got involved and loved it. It’s been one of my favorite decisions that I made besides having kids.

Josh:                So it sounds to me like you went from a job that was interesting and semi-important to companies to a job that is fascinating and has become incredibly important for the success of families and businesses.

Michael:          Agree. That’s exactly the way I would describe it. And families, as you know, they’re intricate, and they’re changing, and they evolve. So when you have a relationship with them that lasts, as my father has. Now, I’m taking over some of his family owned businesses that he’s worked with for 30 and 40 years so we see multi-generations and we see different personalities, and we see happiness and tragedy. And we get to share in those things with the families that we serve.

Josh:                I know that’s a really satisfying thing for me also when I do that. And the interesting thing I’ve learned over the years, and let’s see if you agree with this, is that all private business is family business.

Michael:          Agree, 100%. Whether there’s one person in the business, within the family or there’s 10 people from the family in the business. When there’s an entrepreneur in the family, it affects the whole family regardless of whether they’re involved directly in the business or indirectly.

Josh:                Yeah. And this is something– you know, if you’re a business owner, I think it’s really important that you realize that even though your family doesn’t come to work with you every day, they do come to work with you every day.

Michael:          Agree.

Josh:                And these huge, strategic decisions that you might be making with your business– boy, please include your significant other in it.

Michael:          I would agree 100%, especially when your significant other doesn’t understand what’s going on or if they’re in a different business. Like my wife is a teacher and the teaching profession is admirable. And she does a phenomenal job but understand why I’m spending money or how I’m spending money inside the business is something that’s very scary for her. She doesn’t understand why we have to spend money on marketing or why we have to spend money taking people out to dinner and building relationships. It’s different than being a teacher.

Josh:                There’s no question about that.

So let’s spend a little bit of time talking about your— I don’t know if it’s a pivot but it’s at least a move from being a traditional wealth manager to being a wealth manager who is also is helping other advisors build great businesses.

Michael:          Sure.

So what happened for us is, you know, the course of the 17 years of working in that business, I was lucky enough to have a good friend that joined the business who was a student of a guy named Dan Sullivan. Dan Sullivan runs a program called The Strategic Coach which I would highly recommend for any business owner, any entrepreneur. You can learn a lot about yourself and a lot about your business. John had spent about 10 years there, recommended that I get involved with the program.

And in a nutshell, what the Strategic Coach Program did for us is it helped us to put systems and processes into our planning practice. And so, if you look at Mike before putting systems and processes in, I was recreating the wheel. I was frustrating my team. I think I even— you know, there were some clients– especially, clients don’t notice that you’re – I don’t want to call it unorganized, but not as organized as you can be when the market’s going up and everything’s going wonderful.

But in 2007, 2008 and 2009, when the market started to go crazy, when you didn’t have systems and processes in place, and I didn’t at that time, it was noticeable. I think Warren Buffett said it best, you find out who’s skinny dipping when the tide goes out. And I think that makes an awful lot of sense when you look at my business.

Today, in retrospect, when we looked at it is that we were like going to the state fair when we were doing this. And we really needed this to be like going to Disney World.

And if you think about the way Disney World runs their business, you don’t see the garbage. You don’t see a character with part of their costume off. They’re always in character. And the characters that aren’t supposed to talk, don’t talk for a reason because they don’t want anybody to put any visions in their head to say, “Ooh, that’s not what I thought Mickey Mouse was going to sound like.” And so, Disney, I think, is the best example that a business owner can do. They look to put systems and processes in place for everything within the Disney system.

And that’s what we started to do. We just took every client engagement point and we created checklists, and processes, and flowcharts, and documents so that we were using the same document in each and every meeting. And, over a period of several years, it was pretty easy for us to tell when you’re dealing with hundreds of clients that that document was powerful or that part of the document was powerful, that was not. And so, we would change the conversations and we would change the documents. And so, we had a process that when clients were done, they wanted to talk about it with other people.

And so, the things that I think that I took away was (1) systems and processes matter. And Disney World’s probably one of the best examples of utilizing systems and processes. And that if you’re not having people talk about your business, if they’re not referring you to others, that means that you haven’t created a unique enough experience to be referable. And in the financial planning practice, I think that was about the most telling piece, is that if you’re not getting referrals then obviously your practice isn’t doing what it’s supposed to be doing.

Josh:                There’s no question about that. And I just want to point something out here. You’ve just been talking about systems. And here’s my observation of systems, Michael. And I’m going to bet the same is true for you as it was true for me. Is that, I personally, am not a big fan of systems.

Michael:          I resisted like there was no tomorrow.

Josh:                And the reason I don’t like systems is that I felt it was boxing me in.

Michael:          Agree.

Josh:                But I had a company with 90 people at one point, in my food service company. And even though I might not like systems, the other 89 people in my company loved systems because they knew what they had to do for success. Our customers loved systems because they knew what they could expect and what they were going to get.

You know, when you talk about Disney, when I was in the vending business, again, I took Disney’s course on quality service. And if you’ve never taken a Disney course, you really should go to do it because you’re going to learn how to map out your processes so well and how you do things so well that you’re going to go back and say, “I think I need to change my business a bit.”

Michael:          I would agree.

Josh:                And one of the five areas of sustainability is creating great systems in your business. And, frankly, it’s the one I get the most pushback from my talk with clients and with other business owners about. So I appreciate you bringing up systems.

And I’ve known about the Strategic Coach for years. I really never thought of them being as a systems organization but maybe they are.

Michael:          I think that’s really what pushed us to do it because without having the systems and processes and if you look at their business, they are very systems-oriented. If it wasn’t for those things, you’re not sustainable. You can’t take yourself out of the business.

In the financial planning practice, I’m still not at a point where I can take myself out of it because I am the face to the client. But because we’ve created the systems and processes, and we’ve recorded the trainings, and put pieces together, I have a CFP that was fresh out of college. She came in three years ago. And, today, she can handle probably 50% of my business. She can’t handle the large business owners. She doesn’t have that level of expertise. But for the people that don’t own a business, I would say the mass affluent, the millennials, the children of my business owners, she can do a great job with them because the conversations have been recorded and we know exactly what to say, when to say it. And she has the expertise from having gone through the CFP program. And then our system allows her to know how to deliver it and what conversations to have with them.

Josh:                So, Michael, how did you decide to take your systems in your financial services business and decide it was a good idea to start teaching this stuff to other advisors?

Michael:          That’s a great question. So my partner, John Enright, he and I had known each other since 2002, so 16 years now. And Dan Sullivan had been tapping John to say, “Hey, you know, you really should open this up and share this with other advisors.” And both John and I, when we originally were talking about it, were like, “No, you know, this is our secret sauce. I don’t want to share this with anybody.” To which Dan Sullivan took a 2×4 across our heads, basically, and said, “How many business owners are there across America? There’s no way you can even serve all of the business owners in Syracuse or Rochester yet alone across America. And if you really want to have an impact on the world which is what you are talking about when you’re dealing with the families that you serve, is having an impact, then why wouldn’t you share what you’ve been doing with other advisors?”

And about exactly the same time as that was happening, we were getting other advisors coming up to John or myself and saying, “I want what John has.” So it kind of clicked for us that moment that we needed to turn it into some type of coaching program. And that’s what we’ve been doing since 2012. We’ve been doing it part time so it’s taken a lot longer than any traditional startup. We both run our own financial planning practices.

And we believe that that’s kind of our secret sauce, is that we don’t share anything with another advisor before we’ve tested it in the field and used it with our own clients. So if there’s going to be a crash and burn, and I can tell you that there have been some through the years, we’re going to make the mistake first so that we’re not sharing those mistakes with other advisors so that the systems and processes, the flowcharts, and checklists that they’re receiving, and that they’re getting to work on inside of their practice are tested and proven and they work.

Josh:                You know, the interesting thing about a good coaching program, and you just sort of pointed this out, is you’re actually paying to avoid mistakes others have made.

Michael:          Exactly.

Josh:                If you think about that for a while, and that’s certainly true with the work I do with folks. I’ve made more mistakes than anybody I could possibly ever have met in business because I frankly don’t mind making mistakes. A lot of folks who are in business think mistakes are really bad things. And my experience has been the opposite.

Michael:          Yes.

Some of our best systems and processes come from mistakes that we’ve made. I’ll give you a quick example. I think, inside of my planning practice, our investment philosophy, I believe, is one of the strongest on the market today. And I believe that because we went through the 2007, 2008, and 2009 period and we made some mistakes in there. And if I had to do it all over again, we would definitely do it differently.

And I think that clients today are thankful for us learning that because if you look in this world, the financial planning and investments in particular, there’s a lot of very strong opinions on how it should be done. What I have come to learn is that they’re probably all right.

The secret, for us and for our clients, is that once you pick your horse you don’t change it. And you stay on that horse through the whole race.

Josh:                Same thing we learned. There was actually two lessons we learned, (1) one is once you picked the horse, stay on it and don’t get yourself into a strategy which tries to beat the market with tactical changes.

Michael:          Agree, that was the other. And we made exactly the same awareness came to us through that process.

Josh:                Yes. But let’s go back to mistakes for a second because I actually just finished writing a book and the working title was Magnificent Mistakes. That’s not what it’s going to be called but I think I’m going to write a book at some point with that title. And there are mistakes that are magnificent. I mean, I just made one two weeks ago and I was out at Sudden Money which is those financial transitionist people and I was getting some advanced training on financial transitions.

And the thought occurred to me, which was a mistake because when thoughts occur to me, it often is a mistake, is I’ve been doing exit planning as a unique thing. And I’ve been doing financial transitionist work as a unique thing. But when it comes to selling the business, those two things need to be married.

Michael:          Okay.

Josh:                And I also learned, by a mistake, that I might be the only guy in the country who knows how to do that, just because I’ve been trained in business exit planning by John Brown and his people and I’ve been trained in financial transitions by Susan Bradley and her people. And when you combine these two, you start getting this thought that in the business transition world there’s a missing piece. And that missing piece is a transitionist, somebody who’s going to coach you through the process, because a transitionist is the only one that doesn’t have a hidden agenda.

And I’m sure that you’ve had positive mistakes that have happened in your life too.

Michael:          Too many.

But when we look at the advising business where we’re coaching financial advisors, one of the biggest mistakes that we made is, when we doing some advertising, we limited our advertising to the U.S. thinking that we’re both US-based advisors and that our program was US-based. And we had a couple of advisors from other countries, namely Singapore, that contacted us to say, “Can you explain your program a little bit?”

And when we went through and what we realized is that our program is not based around whether you’re only fee only, or fee-based, or commission based, whether you’re an RIA, or a CFP, or a broker-dealer, it really didn’t matter. And it didn’t matter what products you represented. What mattered is the people you served. And people are basically the same throughout the world. And so that was just a big mistake that kind of jumped at us is that when we opened up our marketing– today we have about 25% of the advisors that we serve are from the Singapore area.

Josh:                That’s very cool.

Hey, Michael, we’re unfortunately out of time. And I’m going to bet some of our listeners are going to want to know more about your program and how they can contact you. So can you give us a short synopsis of your program and then how somebody would get in touch with you if they wanted to?

Michael:          Sure.

So the Custom Wealth Adviser Network or the CWA network is designed to coach consumers on what they should be able to expect from an advisor or a planner that provides comprehensive planning and how to differentiate one adviser from another. It’s also designed for advisors to be able to systematize their practice and make sure that they’re not missing any of the things that are important to consumers. So it’s a nice marriage between the financial services world and the consumers, to be able to help them. And you can find it at cwanetwork.com.

Josh:                Cool.

And if somebody wanted to contact you, Michael, how would they go about doing that?

Michael:          Probably, the easiest is michael.palumbos@cwanetwork.com.

Josh:                Thanks so much, Michael.

And I also have an offer for you, too. I have a 1-hour free audio CD that we mail to you. And you can put play it in your car, or play it at home or borrow a CD player from somebody if you don’t have one. And if that doesn’t work, you can even e-mail me when you get it and we’ll send you an audio file.

But at any rate, to get this, it’s really easy, it’s called Successes to Sustainability: The Five Things You Need to Do in Your Business to Become Sustainable. And to get is really easy, you take out your smartphone – if you’re driving, p please wait until you’re not driving when you do this. But take out your smartphone and text the word SUSTAINABLE to 44222. That’s the word SUSTAINABLE to 44222.

And this is Josh Patrick. You’ve been at the Sustainable Business. Thanks so much for stopping by. And I hope to see you back here really soon.

Narrator:         You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

Topics: sustainable business podcast, Sustainable Business, Financial Planning, starting over

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