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The transparent advisor

On April 13, 2008, Dateline NBC aired a special report titled “Tricks of the Trade.” Based on the popular “To Catch a Predator” series, the episode set up a sting operation with a biased motive — to entrap and document annuity advisors giving out unsuitable advice to seniors.

Let’s face it, for years the mainstream media has targeted advisors who do the wrong thing, particularly those who treat seniors and their nest eggs improperly. But having Dateline NBC air a show on bad-apple advisors, well, that put a big bulls-eye on the back of everyone selling “safe” products.

See our infographic: CSI: Bad advisor edition

The telecast didn’t make a dramatic and immediate impact. There were no Prohibition-era FBI tactics with G-Men kicking down doors and dragging annuity advisors to a jail cell. Just the same, advisors and the insurance industry took notice of the telecast and its aftermath. The counterattack to such an affront to the industry was a simple one: do the right thing. How to do that, however, is not always as easy as merely talking about it.

One advisor’s reaction

Sean Lee is a young advisor today and was an even younger one when the Dateline piece aired. Like many advisors, he spent that Sunday night at home glued to the TV, waiting to see what the episode would uncover.

“I couldn’t watch the entire show because it made me sick,” says Lee, president and founder of Murray, Utah-based SPL Financial, Inc.

“Seeing how so called ‘advisors’ were taking advantage of people that trusted them with their life savings…Those savings were being put into products that were sold to them under false pretenses and may or may not have been in their best interest. That’s what made it so hard for me to watch.”

But, like many advisors, he watched, at least some of it. He felt an obligation and a curiosity about what might transpire. At the time, Lee was really getting his feet wet in the industry and that’s not the type of exposure you want for your business. But the telecast had a lasting effect on how he viewed his practice and profession.

At the time, he was just growing his business and some of his clients had questions regarding the show. Lee says he met the questions head on. He talked in detail about what happened to the families in the show, why it happened, and why it wouldn’t happen with his clients.

“I made the decision during that period that no matter what happened there would never be a time where our values, ethics and how we plan would be compromised,” says Lee. “The families we work with have spent a lifetime accumulating the assets they have, and they deserve to have the very best plan for their situation.”

Moneyball

Lee is a former baseball player, and he looks at his planning practice in sports terms. “I was an outfielder and a pitcher, and I hit one homerun in the entire 24 years that I played baseball, and that was an inside the park homerun,” Lee says.

You see, he’s a singles and doubles guy, and he’s OK with that. “The big power hitters strike out a lot,” Lee says. “And I equate the markets to power hitters. They hit a lot of homeruns, but they strike out a lot, too.”

Lee says that many of his clients have $1 million-plus in assets and many more have $500,000-plus. But there are other prospects, families, who have worked hard all their lives, with maybe $200,000 in assets, and they’re not getting the planning opportunities they need.

“A lot of marketing is geared toward the $500,000-or-more families, but I’ve found there are a lot of families out there with maybe $170,000, and nobody’s ever sat down and helped them develop a financial plan.”

The plan, of filling in those niches that maybe too many advisors feel is not worth their time, is paying off for Lee.

In 2012, he submitted $6.5 million in annuities. This year, he’s on pace to ramp that up to around $15 million. He also said he’s set to hit around $13 million in managed money. The goal was to have $20 million in assets for 2013, and Lee might be looking at $28 million.

The efficiency expert

Much of that success is owed to how Lee is wired. “I tell a lot of people I’m an engineer stuck in an advisor’s body or an advisor stuck in an engineer’s body.” However it goes for Lee, it’s safe to say he’s organized and very processed-driven, much more so than most advisors out there.

When he began his practice, he took time, lots of time, in the planning phase of how he wanted to shepherd prospects through the process of becoming clients. “When someone steps in our office for the first time there is a breakout of tasks from that initial introduction all the way to when someone becomes a ‘family’ we represent.” (Lee refers to all of his clients as family, a term he’s doggedly stubborn to stray from.)

He says he set up the processes so nothing falls through the cracks. If he says he’ll contact someone in four weeks, it’s in his system and the contact takes place.

But more importantly, he says, it’s an accountability tool. “So, only way for things to not get done around here would be for the team to say: ‘Screw it! I’m not going to do it!’ ”

See also: An advisor's code of ethics

Otherwise, the process runs a client through each step of the way. For his CRM (Client Relationship Management) Lee uses Redtail Technology–it lays out when to contact someone, when to follow up with material, even when to check in and simply make sure they’re happy with the relationship.

“In all, families (there’s that word again) hear from us 72 times a year,” Lee says. They receive a weekly newsletter and various phone calls and emails. It’s all set up in the system Lee created to make things run smoothly. Those 72 touches may seem like a lot, but Lee wants clients to know their money is taken care of and that he’s looking out for their best interest.

At any time, he says, consumers can call or come in. “If the market gets beat up a little bit we’ve already got our team of money managers working on that. Their income is going to be secure because we’ve already planned and have that taken care of in an annuity.”

A land where transparency is king

“My mother was a schoolteacher and she taught me that if you do things right, you’re going to be OK,” Lee says. “When she worked with kids she would teach them those true fundamentals of life and I brought that into my practice.”

He says advisors can do things one of two ways. “You can do things the wrong way and bring in families and make a lot of money short term. But long term it will blow up in your face. I’ve seen that happen here locally.”

Or advisors can do things the right way. “You can take time energy and efforts to build proper plans for people and long term it will pay off in spades. And that’s why we see so many referrals from current relationships because we take time with people. We often don’t sign anything until the third or fourth consultation.”

By then, both sides know if they’re going to like each other and can work together, according to Lee. He wants to thoroughly evaluate the situation, too. Who knows, he might find that the account is healthy. “If so, I tell them ‘you don’t need me.’ If there are issues, then let’s work through it together.”

Once Lee and a “family” move forward he walks them through every step. “I tell them, don’t take my word for it. I want you to look at these documents and let’s get on the same page.”

At that point he says he tailors the plan to the individual, leaving nothing hidden – not even the negatives–that could come up and bite either party later

“The last thing I want is for a family to run out of money on my dime and feel that their plan was not built specific to them.”

That family thing

I try to trip him up, get him to call the people he does business with “clients,” but he won’t do it. Lee will only refer to them as “family.”

“We’ve built a family-oriented place of business. Family is first. Here (the workplace) is secondary. That’s the philosophy that we live by,” he says. “We’re upfront with families we deal with. We don’t call them clients. We call them family.”

The practice has grown quickly so Lee doesn’t have to bring on every “family” he meets with. While he refers to the prospects and clients as family, they have to earn the right to be part of his. “If someone’s going to be rude or short with Alycia (Siaperas, client relations manager) or Cory (Garcia, director of marketing) then, they don’t respect the process that we’re taken them through and they haven’t earned the right to be a part of our family.”

In a recent case, he walked away from $200,000 in managed money and $200,000 in premiums in an annuity because “they weren’t cordial. They showed up unexpectedly and chewed on Alycia. Don’t chew on our staff!” he exclaims.

For Lee, he’s learned his lessons by working closely with a core group of 100 families (the backbone of his practice) that he trusts and another 200 families that he also does business with and continues to grow those relationships. He sends them annual questionnaires to get feedback to find out if he’s truly doing things the right way, and, in essence, doing right by the families he serves. He finds that hearing the truth, warts and all, is the only way to run his business and for the transparent advisor, he wouldn’t have it any other way.





About Sean Lee

Sean P. Lee

SPL Financial, Inc.

Murray, Utah (Suburb of Salt Lake City)

Has a Series 65 and a Master’s of Science in Financial Services (MSFS)

Member of National Ethics Association

Has life and health licenses and is an Investment Advisor Representative with Global Financial Private Capital, LLC

On being transparent to clients:

“I’m the same person wherever I am. It’s just me. I wear a suit every day at the office. But I’m from Wyoming and I wear boots and jeans and baseball caps outside of work. No matter where I am, I’m the same person to my friends, family and clients. I never quit being the same person. There’s no double life.”

On growth:

“We grow organically. We don’t do seminars. We haven’t done a seminar in six years. I don’t like the dog-and-pony show. What we do is we partner with lots of strategic teams. One of the most impactful is that I partner with a nationally syndicated radio show. We get two to three calls per week from the radio appearances and we meet with the people if they’re a good fit.”

On licenses and designations:

“When I started I had all the licenses under the sun. Along the way as I started further down the path, I realized the only way to do best by the client is to be a fiduciary and sit on the same side of the table as them. So right now I only carry the Series 65, my investment license and my life/health license. I also plan to add the CFP to the mix, but have young kids at home so the timing is not right.”

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