Joe Anderson: 4 Marketing Channels That Drove 45,000+ Leads This Year

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Building a corporate marketing machine that delivers a consistent stream of high-quality prospects and new clients is pretty much every advisor's dream. Today's guest has done exactly that. Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor, The Way Forward Podcast. My guest today is Joe Anderson. Joe is the CEO and president of Pure Financial Advisors,, which is a firm that he co-founded in 2007. The firm has grown from a startup into a powerhouse with over $7 billion in assets under management and more than 6,000 clients. In today's conversation, Joe shares the story of how he and his team built a corporate marketing machine through 4 marketing channels that consistently generate thousands of high-quality leads for their advisors. By separating business development from advice delivery, Joe's firm enables their team members to focus on what they do best instead of forcing advisors to meet production quotas. Joe also discusses the importance of creating a career path for their advisors and how the firm has scaled by focusing on execution, team member specialization, and strategic outsourcing of certain functions. With that, here's my conversation with Joe Anderson. I want you to take me back to 2007, the year that you and your partners founded the firm. What was the vision back then? What did you see was missing in the marketplace that you felt that you guys could create something better?

I got in this business in the late 1990s with a firm called American Express Financial Advisors, AFS. And absolutely loved the business. I loved the people, but I struggled. It was a challenge. So I left American Express, moved out to Southern California, and that's where I met Mike Fenneson. And Mike Fenneson was frustrated with the industry as well. He just sold his business. He had an insurance brokerage firm and he was an OSJ for Multi-Financial. He was more on the brokerage side, product sales side of the business. I was more on the financial planning side of the business. And so it was like, could we create a platform that A, gave very high-quality financial planning advice to basically anyone and everyone that needs it? And then secondly, could we create a career path for the certified financial planner where they could absolutely be successful? So if you combine those two things and build a wealth management platform that could give high-level, like almost family office type advice to the mass affluent, and then make sure that we could get a ton of people interested to sit down with a certified financial planner to deliver that advice. If those two things were aligned, we thought that the company would succeed. So we started that in '07. We brought our first client in 2008. And you fast forward to today, we're over $7 billion of client assets, about 6,000 clients. And basically, Steve, we built this One client, one advisor at a time.

So it sounds like you pretty much early on were separating the business development aspect of being an advisor and the giving of advice aspect of being an advisor.

What we looked at, is there a way that we could create a marketing machine and is there different channels that we can get into to drive the leads? So in the beginning, It was, all right, here, let's market, let's try to figure out a lead. And then from there, I'm going to call the lead and I'm going to sit down with the advisor that we just hired, and then I'm going to help them close the lead. And then we're going to come up with a service model. So we started with 4 of us. Today we have almost 200, but we looked at different departments. And what we really wanted to do is to take everything off the advisor's plate besides just giving good advice. The Rick Edelman model was just that, hey, I could get you prospects in front of you. You just be the advisor and we'll build these different departments to take the financial planning off your plate, the client services, the operations, the finance, HR, and all of that. So we built out all those departments. So our advisors basically are solely responsible for the client relationship. And then we have other team members and departments or platforms, if you will, that take care of everything else.

I think pretty much every advisor listening to this is thinking, oh my gosh, I just want to create a marketing machine. I want to have a consistent number of leads reaching out to us that's predictable, and then I can staff to that. I can have advisors for that. But you've actually done that. Now, I know you didn't start out day one cracking the nut of building a marketing machine. So walk me through perhaps some of the different iterations that you had to go through, the trial and error, the angst that you had to go through to really hit upon the different channels that are working for you these days?

Yeah, there was a lot. There was a lot of angst, Steve. We tried everything and anything in the beginning. Yeah, we would, Mike and I would go in the office on Saturday mornings and write these handwritten postcards to CPAs all over Southern California, thousands of them. We got zero responses back. We would do the dinner workshops. So you go to the steakhouse and you spend a fortune there, and then you do 3 or 4 of 'em, and all of a sudden you see the same people over and over again. So we tried that right out the gates. We did AM radio and that was probably the turning point. We were able to leverage other marketing because marketing is 2 2 6 because they hear from the radio, then they go to your website, then they download something, and then maybe you have a webinar or some other event so that they're touching you multiple times and then hopefully you can convert them into a client. So like today we have 4, main verticals to our marketing. The first is education. So we tried to do webinars and we did these dinner workshops, and then that didn't necessarily work out. And so we're like, let's go to the libraries or state schools. So right now we probably do several hundred of these classes across the country. So we have a full department there where we're going into, let's say, San Diego State or USD or Cuyamaca College here in San Diego. So we're setting up a class. It's 6 hours long. It's long form. So we have an instructor, she goes out, she teaches the class, and at the end of the day, they raise their hand if they want to come sit with us. We'll do a short form class in a form of a workshop. We do a ton of webinars, and then we build a lot of content in regards to white papers, blogs, and so on. So that's our educational vertical. That was the beginning of Pure Financial Advisors. That's what we wanted to do. And then we hit AM radio. So now we have a full media channel. That's called Your Money, Your Wealth. So we still do the radio show. We do a TV show, we do a podcast, we have a YouTube channel. And so that drives a ton of traffic. The third is our digital arm. So when COVID hit, it was really hard for us to continue to go out to these state schools, libraries, colleges, to teach these educational courses that we've done for years. And so then that's when we really turned the button on digital. It was like, all right, how can we create more leads digitally? And so I met Michael Carvin, the CEO of SmartAsset, several years ago, and he was coming up with this concept of, hey, maybe I can help supply leads to financial advisors. I said, sure, I'll test you out. So we bought a couple. And then when COVID hit, I was like, man, I need a lot more. So then I bought a lot more. And so the digital arm is a really successful arm for us. And then fourth is the traditional centers of influence referrals. WalletShare, things like that. So from there, we drive thousands of different leads from all of those channels. But to go back to your original question, like the beginning was we did a little bit of all of that, but at a very smaller scale. You fast forward 17 years later, we just continue to fine-tune each of these different verticals until it's just rinse and repeat.

Let's dive into each of those a little bit here. So the first one here at the education silo, You mentioned you have a person who goes out and does some of these webinars. So do you have specific educators whose only job is to go out and deliver these workshops, or do you have some of your advisors actually deliver some of the workshops as well?

Both. The bulk of them are done by educator. We set everything up in the home office right now. We started in San Diego. We have two offices in Orange County. We have one in Los Angeles. Now we have one in Sacramento, Seattle, Chicago, Denver. In those smaller satellite offices, the advisor is going to teach those particular courses if we even need to have them. In our bigger market, Southern California, we have an educator that's going to go and that's all she does. That's her full-time job. So we're going to look at it from a home office in our, in our marketing team. They're going to look at the locations, they're going to set it up, they're going to get the people there. We do it via direct mail, we do social. To drive the audience there. Then we have the educator goes out, she teaches the courses, all of those leads come back, and then those leads funnel into our business development team. And our business development team are going to call those particular leads to set those appointments with our advisors.

And with the education, is that pretty much all done in-house? If you're creating white papers and blog posts and creating webinars, or is that your internal marketing team? Are they the ones that are actually creating the content, or do you outsource some of that to agencies?

Yeah, both. So again, I've been using, working with FMT for years, so they have a really good curriculum in regards to the classes. So they do a good job of getting people to the course. We pay 'em a, a fee, but then we have our own internal course too that we created from scratch and then from our own mailhouse. And so we do a little bit in-house, but I also like to lean on third parties because I don't have the answers for everything. And we always test and we always try to improve.

The second silo you mentioned is the media channel. You started on AM radio, then you said you got the TV show, you've got the podcast. So tell me a little bit about those forms there. How well are those still working today?

Yeah, AM radio. Yeah, I don't know if anyone listens to the show. We're still on here in Southern California a couple hours every Saturday morning.

We've been on Saturday. Do you record that live or is that a prerecorded or—

Big Al and I, my partner, we used to do it live every Saturday morning. And then when we first started the firm, it was all right, we did a 2-hour Saturday mornings and then another hour Sunday afternoon. And we did drive a lot of activity back then, but today we tape it, and then Andy Last is our media producer, and so she'll cut it up and make it into a podcast. And then the long form, we add a bunch of CTAs, and then we send it to the radio station.

So the podcast is simply the radio show that's been reformatted, or do you do a separate podcast for the podcast?

No, we actually do the podcast and we make that more into a radio show, if you will. Because I think before with the radio show, you give 30 seconds of content and then it's, call this number, 888-994, call in for your free financial assessment and I'll give you some steak knives and everything. You're just selling your soul constantly because people only listen to AM radio for a couple of minutes as they're going to the grocery store, it seems. But podcast is that you can't do any long CTAs. It's just pure content. So the podcast is an hour of really good content of people writing in, asking questions, things like that. So we're able to cut that hour or hour and a half, and then we put in all the different types of call to actions within that hour content to make it a 2-hour radio show.

When you're thinking about your long-form content, does it start with the podcast, meaning that's the core central long-form piece of content, and then you can slice and dice that into the smaller pieces for different social channels? Is that how you you think of that?

Yeah, if we did any social channels. We don't do a lot. There's some gaps here in our marketing plan. But yeah, we don't do a ton of that. We're pretty short-staffed in regards to the marketing team that we have, even though we generate tens of thousands of leads per year. We have a TV producer, we have Andy that produces the podcast and the radio show, and then we have two other individuals that are helping put together content. Newsletters, guides, white papers, and things of that nature. And then that's usually connected more to the TV show because you have more visuals in the TV show. And so they're taking those visuals from what we created from that content, and then they're putting it out into, I guess, more social. So, but the podcast and the TV show, they're two totally different type of animals, if you will. We're talking about one thing on the podcast, but the TV show could be a totally different subject matter.

And the podcast comes out how frequently, and the TV show is how frequent?

Podcast comes out every week, Tuesdays. We just eclipsed like 4 million downloads or something like that, so there's a few people I think that enjoy that. The TV show we put out weekly. We're on CBS here in San Diego, I think CBS also in Seattle, and I forget what station we're on in the Midwest, but we tape that show when we can. That's a little bit more tricky. There's a little bit more production to that. So we probably tape a TV show maybe twice a month, if we're lucky. And then we'll just play an old episode, but it will air weekly. But we're actually producing the new content maybe twice a month.

And the TV show, is that like a paid quote infomercial where you actually pay? Yeah. Okay. So it's paid advertising essentially, but it's obviously positioned as an educational show, not a 30-minute ad.

Yeah, exactly. I don't know. I've never seen it. I would probably, if I looked at it, watched it, I would say it's a 30-minute ad, but I think producers do a really good job of making it look like a real TV show. We have a TV studio here in our office. We try to make it as legit as we can.

Nice. And you mentioned you have a relatively small marketing team. So when you think about the marketing team, when you think about your educator, everyone in-house that's connected to producing your marketing content, and let's exclude your business development people. What's like the core marketing team? Like roughly how many people are on that team? 5. Yeah, that's a small number relative to thousands of leads that you're bringing in each year. Yeah. And then on the biz dev side, like how many like full-time business development people do you have?

That's close to double the size, about 10.

So we've got the media channel and tell me about how you emphasize or not emphasize YouTube because there's clearly, there's some number of financial advisors out there that are just absolutely crushing it on YouTube.

Yeah, I think we're paying a lot more attention to YouTube today than we have in any other year. We would just put stuff on there. Like, we didn't really have a sound strategy if we did a video because we have a full-time video producer here. So it was like, here, let's just tape stuff. Let's get advisors to tape content, 2, 3-minute videos on certain subject matter. We have the TV show, of course, which is 30 minutes. Now we're videotaping ourselves on the podcast. And so we would just throw it up there. We have about 30,000 subscribers. I don't know if that's good or bad. I think it's okay. That's good. But now we really want to put a little bit more focus there because we didn't do any call to actions or drive that many people to a certain website. It was like, let's just put video up there. Let's put really good content. Let's educate people. And then now it doesn't make sense to probably funnel the people that are going to the YouTube channel, try to drive a lot more subscribers to the channel, and then from there, potentially, hopefully can help them more long-term.

How do you think about, from your corporate marketing perspective, are you trying to create mini celebrities with advisors at the firm? Are you yourself trying to be, quote, a celebrity face of the firm, or are you trying to be more, no, it's not about any individual, It's about pure financial advisors. We want to attract people to the corporate brand and not have it rely on any one individual celebrity in the firm.

How do you think about that? Pure Financial Advisors is the advisor. That's the firm. That's the rainmaker. I do a lot of the TV, the radio, the podcast, and the video stuff because a lot of other advisors don't necessarily want to do it. But no, it wasn't like, hey, I want to be the next Rick Edelman. No, I'm the guy behind the guy. But we do have a lot of fun on the shows. This is a pretty serious business, but we take life less seriously. So we try to keep it light and have fun and make fun of ourselves most of the time. And it seems to resonate with most people.

So your third silo here is the digital platform. You'd mentioned SmartAsset. So tell me a little bit more about what you're doing there.

Yeah, we have quite the mix. SmartAsset is a phenomenal partner. But we also work with Wiser Advisor, Unbiased. We work with Dateline. We generate and create a ton of leads online ourselves. From a digital lead perspective, it's, it's a pretty big part of our business, but we're well diversified from the lead sources. But I think how I look at this and I think how we're executing and successful with these channels and is because we have a dedicated team of people that are making hundreds of dials a day. And secondly, I think how our marketing works quite well is generating the lead is one thing, but having a systematic sales process is really what the conversion is all about, right? Anyone can generate a lead or purchase a lead, but it's converting that to a long-term happy client I think is the secret sauce.

This fourth one here is the referral piece. I think centers of influence and referrals. So how How much of an emphasis do you place on your advisors trying to have referral conversations, or is there no emphasis and they just happen because you guys deliver great service or some combination of the two?

To answer your question, no, I'm not knocking on my senior advisor's door and saying, hey, are you asking for referrals and how many referrals did you get? And come on, let's generate some business. Is because that's a problem in the industry, in my opinion, is that we see advisors that have hundreds of clients. And so we cap our advisors at a certain level of clients. So we're able to get our advisors up to, let's say, 100 to 150 clients in a few years. And then from there, we want them to service the heck out of those clients. We meet with our clients every 4 months, but it's not, hey, you got to have growth goals. Because another issue I see with some firms is that it's hard to grow when you're always knocking on the door of your rainmakers. And sometimes if you get to a certain point, saying, I just don't want to grow anymore, I'm making a really good income, I like working with my clients, so I'm just going to hang out and service my clients, have a lifestyle practice and be good for the next 20 years. And that's how we set up our business in the beginning. It was like, hey, let's grind for a couple of years. I can get you to a certain level of clients, a certain level of income. And if you don't want to grow, that's fine. You don't necessarily have to grow. You'll get referrals, of course, just naturally. But it's not here, let's have a referral program and you have to ask every client 3 times before they leave. And hey, I get paid in 2 ways. One is the fees you pay me and 2 is the people that you give me and all that stuff. I hated that. It was terrible. I was like, I never want to do that ever again. I never want my advisors to worry about doing that. I will handle the marketing and business development. You handle the financial planning. You're the CFP. You do really good planning. I'll work on the marketing and biz dev. Some of our advisors want to continue to grow. They're like, you know what, 150 clients, that's great, but maybe I want to service more. So then we're going to build teams around them. All right, here's a couple associate advisors so we can still give the same level of service. And then some advisors are like, all right, I did the lifestyle, then I built a team. Maybe I want to do something else and help and mentor and manage other advisors. So we have different career tracks for the advisor.

Let's talk about the actual process. So you do all this marketing, you get a lead that comes in. So walk me through what happens when a lead comes in.

We have the same process no matter where the lead came in. So if it's a digital lead, if it's a workshop, if it's a radio lead, podcast, they're going to follow the same process. So our business development team is going to set that appointment. And basically how they look at it is who's available at that time and what region did the lead come in. If it came through Chicago, they're going to look at the Chicago calendar and they're going to look, all right, this prospect wants to sit down at 10 o'clock on Tuesday. They're going to look first at Chicago. And if they can't find anyone in Chicago, then they're going to find the next closest region. When I interview advisors too, they're like, oh, who gets the Glengarry Ross leads? And is it about close ratio or about this? I was like, no, it's about capacity. So we can fill our advisors with probably 200 opportunities or more per year. Most of the advisors that we bring on, they're like, you're giving me too many meetings. It's too much. So it's not like we're cherry picking and we're only giving certain leads to certain people. We have an abundance of leads. Where we have a shortage is, is advisors that are a good fit for our program. So how the process works is the first step is an assessment. So that's 2 meetings and it's free of charge. So Steve, you come in that first meeting, we're going to give a fact find, try to figure out exactly why you made the decisions that you have with the money that you have and where you want to go. It's a standard kind of introduction of the firm, but it's quick. If you're working with paid leads, they don't care about the firm and all of this. They want to know, can you add value? Because you're competing with monsters out there. So it's not, hey, we're pure financial advisors and we're a fee-only fiduciary and CFP delivered advice. They're like, okay, that's great, but here, I got this question, or what's your fees and what's your performance? So we have to add value fairly quickly, and the assessment process does that. So the first meeting, we're going to gather as much information as we can. Hopefully we get some information prior, but if you try to send a fact-find out before that first meeting, here, please fill all this out, give me all your statements and tax returns, they're not going to show. They just won't. So, you have to think on your feet in that first meeting, because that first 5 minutes is always a little bit awkward. And then you warm them up and then you get the information. And then we have a second meeting where we're going to deliver probably 15 strategies, if you will. Have you considered this, or have you thought of this with their cash flow, taxes, investments, estate planning, risk management? And at the end of that, they can either decide to work with us in a from a financial planning engagement, or they can take the information and walk, which is fine. It's free. Hopefully they decide to hire us. Then we'll bring them through our financial planning process, which we charge a fee for. It's not much. It's like anywhere from $1,500 to $3,000. Just a little bit of skin in the game because we take a lot of time and pride in the overall financial planning that we do. But our advisors are not putting together that assessment. That goes to our financial planning team. So we have a team of 20 CFPs that are like our bench, if you will. Then we also have a tax team of JDs, EAs, CPAs that are doing some tax analysis. That assessment then is delivered by the advisor, but not put together by the advisor. Then we go through the robust financial planning process. All of that information goes back to our financial planning team. They're going to do the heavy lifting in regards to the data entry, the research, risk analysis, everything else in between that goes with that financial plan. And then our tax team is going to do a tax analysis and give their observations and recommendations. That goes back to our advisor. The advisor's job is then to deliver that advice. Steve, here's our recommendations, blah, blah, blah, blah, blah. And then at the end of that, hopefully they find enough value where they want to implement with us and have an ongoing financial planning relationship. Then that triggers our operations team to come in. They're going to fill out the paperwork. They're going to work with the client to do the rollovers, ACATs, and all of that stuff. So first meeting's assessment, high-level educational piece. They could take that, implement on their own, work with their existing advisors. Hopefully they work with us. We charge a financial planning fee, then we bring them through our financial planning process, and then they can implement on their own, or if they want to implement with us, Then we're going to service that client ongoing. Like I said, we meet with our clients every 4 months. We put together like 150-point checklist of financial planning items that we go through each year with our clients. So we check all those off. It takes us 3 meetings to do, and then we know that their financial house is pretty clean.

How many people on your team interface with the client? And what I mean by that is you said you've got the advisor and then you've got the financial planning team of 20+ people that put the plan together. Do the financial planning people, do they like work with the client, say, hey, I need this data, or does the planning team be in the background and they have to work through the advisor and it's the advisor that has the relationship with the client? Like who all is touching the client?

Yeah, the initial touch is business development. That first meeting is done by the advisor. And then so before they're a client, the financial planners are not going to be engaged with the client until they become a client.

Right.

So if they're going through the assessment. Now they're a client, they paid us. Yeah, then the financial planners will reach out to the client. They'll ask for additional information. Some of them will sit in those meetings, but we're high volume, so they can't sit in a lot of meetings just because of the volume that we're running in regards to the assessments that they're putting together, plus the new clients that we onboard.

And financial planning software, what are you using for that?

We have two. eMoney's our Flagship, I guess. And then we also have MoneyGuidePro, but Money is the standard.

Okay. And like CRM system, since we're talking about technology here, what do you use for CRM? Salesforce. Okay. And any other interesting technology softwares that you use that you want to mention?

Let's see. We use Bloomberg Tax. We also use Lacerte. Our tax team does that. So they're running a full tax projection, a mock return for all of our clients. We use YCharts. Number Cruncher. We have just the standard stack there, I think, in regards to financial planning tools.

Excellent. Okay. So let's go back to the biz dev person for a second. So I'm one of your biz dev people. How are you going to pay me? And I don't necessarily need to know the dollar amount, but what's the mix between, is it all commission? Is it salary plus commission? How do you like structure the comp for a biz dev person?

Yeah, we pay them a base salary, which is probably anywhere from, it depends on the role of We have some senior individuals that have a little bit higher base, but all the others have the same base salary. And then that's roughly about half of their comp. And then the other half is going to be based on scene appointments. So they have to show up. It's not on how many people that they set, they actually have to show up. So then they have a certain goal on a month-by-month basis. It's actually quarterly, but I pay it out monthly. And if they hit higher than goal, then they make more. If they hit a little bit lower than goal, then they make a little bit less. But yeah, they're all making a really good living. A couple of things too, in regards to biz dev, because I talked to a lot of other firms that want to start building out a biz dev department. And so the question you ask, well, how do you pay them is always the first. And then I think the biggest mistake that people make if they want to do this is that they're like, I'm going to hire like someone out of college that wants to be a CFP or that came out of a CFP program or that wants to be an advisor or is going to be my next planner. I was like, do not do that. That will burn them out. They will hate the business and they will quit because they want to be an advisor. You have to hire people that love the phone, that love to talk to people. Look, I hired bartenders. They've been with me forever. There was another gentleman that worked at a country club in the cart barn. Now they wanted to get into more of a professional type of atmosphere and they wanted to make good money. But it wasn't like I was hiring my junior advisors to take on that role. I just wanted to throw that out there.

I'm glad you brought that up because it really leads to another question. There's a lot of large multi-billion-dollar RIA firms out there who say, if you want to be an advisor at our firm, you're going to have a business development quota. They may not use the word quota, but they'll say, if you want to be a senior advisor, you're going to have to bring in new business. If you want to be a partner, you're going to have to bring in new business. A, do you agree with that philosophy, or do you think there's financial advisors who should advise and there are salespeople who should sell, and those two can be under the same roof, but they shouldn't necessarily be the same person?

I think with our firm, the advisors that are really good for us are true financial planners that are not great salespeople that are not rainmakers. Let's see if I did that quota and I'm like, all right, Steve, go out there and get some business. They'd be like, all right, I don't know how to get business. That's why I'm here. You know what I mean? Our promise to the advisors, especially in the beginning, it was all right. Talked to a couple of my really good friends in the business that were making a lot of money. I was like, hey, we have this vision and mission, come work. And I paid them almost nothing. Those individuals were a little bit more rainmakers. But other people was like, here, I don't want to put quotas on anyone. I don't want them to feel like they have to sell the client. I want them to feel like they have to give really good advice to the client. The firm is the rainmaker. The firm has quotas, right? I want to grow. We grew 30% last year organically. I want to continue to do that, right? But I'm not putting that onus on the advisors. I'm putting the onus on our executive team, if you will. It's like, all right, how many more people can we help? And then what does that mean? And how many more leads do we need to generate? And then from there, how many more advisors do we need to hire to hit those goals versus going back to the well and saying, hey, you have to consistently have so much revenue coming through the door?

Okay. So then along those lines, and you touched on this a little bit earlier in terms of the career path for the advisor. So they come in, I think they're probably salaried comp, maybe bonus. But then if they want to continue to progress in their career and make a higher income, is there some opportunity for them to become an owner of the business? Or how do your advisors think about their career progression?

I would say all of our advisors, or every advisor at our firm that has been here probably 2 years or more, is a shareholder. They have equity within the firm. If someone wants to continue to build and grow, we want them to, and we'll continue to feed them. To grow. All of our advisors are awesome CFPs, but they all have different career paths of what they want to do. So we meet with them and say, where do you want this career to lead you to? And then let's build a business plan to make sure that we can accomplish it together.

And I think I heard you say earlier that if the advisor has 100, 150 clients and he's getting full, then maybe you'll bring on an associate advisor to work with him on his team and he can take some of his 150 clients and move them to the associates. So now maybe he can bring in larger clients. So how does he increase his income? Is his income going to be a function of the total assets he's managing or the total revenues he's managing? Or how does he get his personal income up?

When they first start out, we pay them a base salary. And then we have variable comp. And variable comp is going to be a percentage of revenue. As soon as they exceed their base salary, then they go on the variable compensation. And so that variable compensation will continue to increase. It's just a function of a percentage on revenue. So if they bring in an associate or 2 associates or 3 associates and that team continues to build that revenue, of course the advisor is going to make—

the sky's the limit, right? So let's go back to the funnel here. So we got the top of the funnel. We have 100 leads that come in. Walk me through how those 100 people flush out at the bottom of the funnel there and become a client?

Yeah. Big picture is that we're setting roughly 20% of the leads that come in. Some lead sources, of course, is a lot higher than that. Some is a little bit lower than that. But on average, we're setting around 20% of the leads. So you buy, you have 100 leads, 20% is going to be set on the books. From there, roughly 70% of those individuals are going to sit down with the advisor. Again, our assessment process is 2 meetings. So 70% of those individuals is going to sit down with the advisor for at least that first meeting. From there, roughly another 70% to 75% is going to continue to go through the assessment process. And then from there, 30% roughly is going to become a financial planning client.

And I didn't do the math there, but if you do all the multiplication there, so you start with 100 and you end up with roughly how many at the bottom there as a client? We're roughly closing 3% on the lead. 3%. Okay. And I'm sure you've got the numbers to know that if we spend $100,000 on marketing or we spend $1 million on marketing, we know we're going to get X amount of revenue within X number of months from that. And if you want to ramp up the marketing and grow faster, you put more into marketing and it's going to drop down to revenue. Is that—

do you think of it in those terms? 100%. You spend $1 million, we'll bring in $100 million. It's actually— we spend less than that, but You can look at it like that. So you spend $1,000,000, $100,000,000 is going to come in.

$2,000,000, $200,000,000 is going to come in. What's the hardest part of doing what you're doing here? Everything. I need more specifics. What keeps Joe Anderson up at night?

Oh, my 3-year-old. Okay. You look at this business, it's hard. It's challenging. It is. So it's all right. Are the leads going to dry up? Every year I think of that. My promise to my advisors as I bring them on board is I'm going to get you to where you want to go faster, and you don't have to do a lot of the heavy lifting. And then I don't want to break those promises, so that keeps me up at night. Hey, is this marketing machine going to break somehow? But each year just gets better and stronger, so maybe I'm just worrying about nothing. I also worry about the advisors, you know, making sure that they're doing a really good job for their clients. We want to make sure that we have happy clients. One Upset client can make a mess for the entire firm. You spend your whole life building something super special and you put your heart and soul into it, and then hopefully something doesn't happen that could blow it up. That keeps me up. The markets keep me up. The employees, all of— when you absolutely love something and you really care about it, it's hard to not think about it and not worry about it.

As I said earlier, everyone listening to this would love to be in your position in terms of you've created this corporate marketing machine. Now, as we've talked about, I think there's two high-level aspects to that. One is the actual marketing piece itself, but then the second part of that is the actual implementation and the execution and the follow-through and the measurement and the metrics and the tracking and the adjusting with all of that. So for you personally, Joe, do you view yourself as this creative marketing person Or do you view yourself more as a left brain? I'm the meticulous executor and I've got other people that do the creative piece. Do you think you're a little bit of both? Or how do you think about the success of your firm? If you had to maybe put a percentage on our marketing is successful because we're like great creative marketers. Is it slant that way or is it more we're just really meticulous on the tracking, on the pivoting of the iterating of trying new things and figuring out what works and trying to tweak everything 1% here and there.

How do you think about that, Steve? We're not doing anything different. I wish I had this magic bullet in regards to marketing that we created this, or we're so creative that millions and millions of people downloaded this thing. And yeah, we're doing workshops and seminars. I've been doing those for 20 years, right? We're doing radio, podcasts. A lot of people do that. We're buying leads from SmartAsset now, and then we get some referrals. So what we're doing I think is nothing new. How we do it, I think makes us special. It's tracking and making sure that we're getting better every single week. So it's how many leads did we generate? Okay. How can we generate a little bit more? Can we do something else? Should we have another white paper? Should we talk about this, that, or whatever? And I have a phenomenal team that comes up with all the creative stuff. If you're talking, I'm not creative at all. I just follow directions here. This is what we're going to talk about or read this. Okay. I'm good.. But what I'm good at is to say, I know what those ratios should look like. And if we can increase those by half a percent, we brought in 40,000 leads. So instead of 20% set ratio, can we get to 21%? And then from there, instead of a 70% scene rate, can we get to 72%? And then from there, can I get my close rate to 32%? That's another $200 million of assets. It's that simple. I don't want to follow the next shiny thing. I just want to look at what we're currently doing and how can we just fine-tune it just a little bit better because it's going to add to huge results for us.

And what I love about that is that's the nitty-gritty nuts and bolts of this business. It's like just really tracking all that stuff to the nth degree. And as you're describing it there, I'm just thinking that let's say you start to say the top of the funnel and the bottom of the funnel. It's like there's a whole bunch of steps in between there. And when you're measuring the results of each step, like you just laid out to me, we start with 100 and then 20% of those turn into leads and then 70% of those will meet with an advisor. Each step of the way, what the percentage is, and you can tell like in each step, where's the part where we've got the biggest drop-off and what can we do to improve that piece in addition to all the other pieces? So you can see like where's the kink in the, the machine here. That if we just made an improvement here, wow, we would dramatically increase the number of new clients that we have. So, it's that level of detail that I think you guys are doing that a lot of other firms may aspire to, but they just don't roll up their sleeves and do the blocking and tackling like you do.

Thank you. I appreciate that. But, you know, when you bootstrap something, or like I said, when I got in this business, Every lead was so precious to me. You know what it was like, man, I don't want to sell myself another disability policy just to pay rent or sell my dad B shares. Those are two true stories, by the way, where if I find someone, I really got to make sure that I track my numbers. How many leads am I generating? And then from there, how many can I set? And then from there, how many are going to show up? And then from there, how many can I close? And so each of the different campaigns, so let's say if someone's teaching a long-form class, I know that we should— 70% of those individuals should request a meeting with an advisor, but we're not going to be able to set all of those. 20% are going to fall off. So 50% of the people that show up are actually going to be set and seen. And a workshop is going to be completely different because they don't have to pay to go to the class. They're coming from a social media post. So we know that only half of those individuals are going to request a meeting and only half of those are going to show up. So you just back the numbers up. So each year as we're doing our business planning, it's like, all right, here, let's bring in $1 billion of flows. How do we do that? I can tell you exactly how to do that with our business model. It's just backing in the numbers. How many clients do we need? We average $1.2 million a client, but we have averages that are a little bit higher in different marketing channels than others. I think with COVID opened the doors for us completely because when we were just doing AM radio and teaching educational workshops and seminars, we were very confined to— and in all meetings were in-house. You had the standard nice office and all the clients and prospects would come in. We were confined to our regions, San Diego. All right. So we can only teach in so many areas here. We can only do so much direct mail and get people to these classes. And we had certain cycles. Then we went up to Orange County. Okay, we can rinse and repeat there. But then when COVID hit, it's like, all right, we could go nationwide. We can get kids all over the place. And because now most of our meetings are via Zoom, but still, I think a lot of clients want to know that you have a local presence. So still probably 30%, probably, of our prospects and clients still come into our offices. Maybe I'm guessing 70%.

Are doing Zoom. Yeah. And I heard you mention earlier that you have a 150-point financial planning checklist. I think that's the largest financial planning checklist that I've heard. So congrats on that. I think I also read somewhere that you have a 20-point checklist for establishing and nurturing relationships with new leads.

Yeah, it depends on the lead. Some of them are 27. And now we've used AI, but from a text messaging perspective, It's crazy at the technology that is coming out in regards to our business development team. So before, they could only make so many dials. I remember when I was dialing for dollars, how many dials could you make? And sometimes I would have 2 phones and, all right, I did 300 dials and talked to 4 people. And so with the technology today, our business development team can reach out to 400 contacts a day. 400 a day before it would take a week. And so we have AI doing some text messaging along the way that sounds just like our business development team's voice. It's depending on where the lead comes. Sometimes we have a 27-point check, and then if they go to a class or workshop, it might only need to be 2 or 3, and we'll set those appointments pretty easily. So yeah, and that's all done right on their screen. So the biz dev guy comes in, they know who to call and They don't have to leave messages. They drop messages so they can get through a lot more and hence set a lot more appointments.

We're setting 300 appointments a week. One other area here, Joe, that I want to touch on is you guys have taken some outside capital. So tell me the thinking behind that and what are you hoping to do with this outside capital?

Real simply, back in 2020, my partners that we started the business with, Mike, he was 20 years older than me. And so they needed a succession plan. Big Al, he's quasi-retired. And so we needed a succession plan. And so the outside capital was purely to succession plan for Mike, for him to retire. So that was the first thought. Second was, hey, we've done really good in the geographies that we're in. But when you look at our business model, we spend a lot of money up front on marketing. So we're not any referral channel. So we're not going to the Schwab. We're not in Fidelity's. But if Schwab and Fidelity are listening, we would love to join the channel.

But do you have clearing relationships with both those firms?

Is that true too? Because, okay, perfect. With that type of marketing, it works out pretty well, even though it's a little bit expensive on the back end. But you're not writing big checks up front to get in front of people. So it's a referral. You don't have to pay for the lead. And then once you convert the lead, Yes, it gets expensive along the way. So we bootstrap this thing. And so we're hiring advisors with no books. They come to us and say, hey, I want to build a business. It's not like, here, let's take your business and you could build it on our backend platform and we could do trades and compliance and HR for you. Is we're helping advisors build businesses under Pure. And so we pay them a salary, plus we put hundreds of thousands of dollars of marketing behind them. We could only hire a couple of advisors at a time just to get them filled up to about 100, 150 clients. And so then, all right, so you get a little bit more free cash flow, but the free cash flow goes right back into the business of hiring a couple more advisors. And then let's expand. And Mike's thought was always, let's plant more trees. We got to plant more trees. We got to save more people from the commission salesperson out there. So when we took the capital, it was like, all right, here, now we could probably chew up our EBITDA a little bit more, our free cash flow. Because if the market goes sideways or things like that, we had a little bit of a safety net, which, knock on wood, we never had to use. But it just gave us the confidence a little bit more to say, all right, here, let's open up in Chicago, let's open up in Denver. And then that also helped us with our inorganic growth strategy. So finding talent is challenging. So we have the marketing machine that we could put into Seattle, Sacramento, Chicago, Denver. We just need advisors and some, a base there. So from there, it's like we have an inorganic strategy that we started a couple of years ago, hired Jason Carver. He's my CFO now. So he runs that channel. And so we're looking at smaller companies, couple hundred million dollars. Maybe it's a retiring advisor. Maybe they have a G2. We hire 2 advisors in that office. So you have a little bit of a base and then you turn on our marketing and you make a $200 million firm, $400, $500, and so on. So the first firm we bought was in Seattle, second Sacramento. We had a small practice of a retiring advisor here that knew us in San Diego. And so we're looking at that capital to continue to help us expand, but we don't need to do M&A, right? We grow very well organically. The M&A piece is just to help us get into the other geographies that we're interested in and also partner with really cool people that want to have a good time and have fun and, and help a lot of people.

So I've heard you mention that your advisors have 100 to maybe 150 clients. Years ago, I had a conversation with Rick Edelman, and one of the things that he had said to me was, our advisors have 3 times as many clients per advisor as the typical advisor out there. And I said, Rick, how do you do that? And he said, our advisors do one thing and one thing only. They sit down all day long and they're meeting with clients. They're not paying bills, they're not trying to do business development, similar to the model that you've just created here. But he said their advisors have 100, 400 clients. And so I'm curious if you, as you think about your business model at 100 to 150, how do you think about the profitability of your model where you've got a business development department that you have to pay, you've got an advisor that you have to pay, there's 100 to 150 clients, and I think they average maybe a million, so Maybe there's $1 million to $1.5 million in revenue per advisor. So, as you think about the profitability of your model, would you say that it's very profitable? Would you say it's profitable similar to the industry profitability ratios that we see out there?

Yeah, it's very profitable. But the 100 to 150 clients is where I will shut them off of our marketing. So, we can get them to 100, 150 clients, let's say in 2 years, 3 years. Something like that. Depends on their closing ratio, of course. If they have a higher closing ratio, it's going to be a lot shorter. If they have a lower closing ratio, it's going to be a little bit longer. But that's all right. We're going to help them get them through. I would say on average, our advisors have $200 million and above of assets that are senior. So half of our advisors are working with existing clients and then the other half of our advisors are building their overall books of business with the help of our marketing.

Joe, appreciate you being on the show, and congratulations on all the great success you and the team are building up here.

Awesome. Thank you, Steve.

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