How To Go Independent

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Bouncing Back from an abrupt departure - why Todd Simmons needed two moves to get to independence

InterviewsSean KernanComment

This is a transcript of HTGI podcast episode 13 (click HERE to check out that show) I did with Todd Simmons. It has not been edited to a final draft quality, so please excuse any hard-to-follow passages. You can also listen to the show using the media player to the right or below if on mobile. 

Sean: Today I am talking to Todd Simmons about his business. Todd and I have known each other for about a year. we started working together last year and I thought he'd be a great example of what going independent looks like from a fairly recent perspective. Why don’t you tell us a little bit about your background and tell us before you got in the business, where you came from and we'll go from there.

Todd: Sure. I was born in Shreveport and grew up most of my life in Shreveport, Louisiana. My dad had a law practice there, went to LSU law school so I kind of grew up with the LSU Tiger family. I’ve been an LSU fan all my life but I opted to go to Louisiana Tech, got a Political Science degree, thinking I was gonna go into practice for my dad and I figured out pretty quick that wouldn’t probably the way I needed to spend my life so I went back and got an Accounting degree at Northwestern State and got my MBA at Centenary College at Shreveport, worked for the Shreveport report there for several years and worked my way up into Deputy Director position and then decided to change career. I actually moved from Shreveport over to Mansfield, Texas to to start my financial services career. I’ve been married to Rona since 1988 and we have a couple of kids -- Alona, who's a nurse, lives out in California; and our son, Nolan, got an Art degree at Centenary College as well. He's still in Louisiana working over there, doing some things with some artists and collaborates with some people over there. I started my career in 2001 with another firm and worked here in Mansfield for about thirteen years with that firm and ended up kind of getting forced away from that firm and transferring over to another firm.

Sean: I hate to interrupt you so quickly but before you get too deep into that you had mentioned before we started recording that your parents kind of piqued your interest in the industry. Tell me a little bit about that.

Todd: Yeah, they had an account with a guy from another firm. He’s actually the first advisor with that firm in Louisiana. They knew that I had more potential than just working for the Shreveport report and they kind of talked to about it and convinced me to apply with this other firm and so I went to that process and actually turned them down to begin with. It just wouldn’t feel right, wasn’t comfortable with it. A couple of years later, they call me back, want to know if I might still be interested and by that time I was at the Shreveport report, I kind of gotten dirty and so I re-applied and went to the whole process again and that's when we moved over here to Mansfield.

Sean: Gotcha. It’s interesting that your parents would kind of see what that firm was all about and that sounds like a good direction for them to get you think about it at least.

Todd: Yeah. That Shreveport job was a good job but there's only so much you can make working for the city..

Todd at his ribbon cutting for his Mansfield, Texas office. 

Todd at his ribbon cutting for his Mansfield, Texas office. 

Sean: Sure. Okay, and I know you had a fairly, somewhat unusual transition out of that firm that you’re there for quite a while -- twelve years or so. From what I remember, you weren’t looking to necessarily leave at the time or really preparing for it, right?

Todd: Not really, I wasn’t prepared for it. I actually kind of got sideways with another -- I thought he was a friend of mine. He accused me of some stuff that just wasn't true and their personnel department agreed with him and his wife didn’t even talk to anybody else. It was there at the time. So they gave me opportunity to resign or be terminated. I decided to resign so I wouldn’t have anything on my record that would follow me around. That happened right at Christmas time so I had a break. I had about a three-week period where I didn't have a job. That kind of put me behind a little bit of an eight ball and I got rid of the transfer, everything.

Sean: I can imagine. So what was that like in terms of the stress level?

Todd: Oh my gosh, it was a lot of shedding of tears and blood pressure was up. It was very stressful ‘cause this other firm where they do business, they interchange brokers regularly and they brought somebody in two days later and started calling. It was kind of funny that one of the first calls was to my dad. The guy got a pretty good earful ‘cause he already knew the story. So it was very stressful and I think it hindered me quite a bit in being able to bring more assets over.

Sean: Sure. I would think, a lot of times people worry about that when you have my experience. And then others advisors, I think if you're ready and willing and able to pull the trigger, it's one thing but if you’re in an unfortunate situation like that it can be difficult especially with that gap.

Todd: If anybody's thinking about making a change, make that change on your terms and not somebody else's terms because it seems to work out better. I’ve talked to some other buddies that have left at the original firm on their terms and they've had a much higher rate of success than I did as far as bringing assets over.

Sean: So this was at the end of 2013, what happened from there?

Todd: I went off to another brokerage firm and ended up having to relocate my business to a different city that's about thirty minutes away. I think that had a little bit to do with people moving assets over ‘cause working with financial advisors is a lot about trust and friendship and knowledge but there's the convenience factor there too. I mean, you're not gonna drop twenty investment offices to see somebody else probably when you can get mutual funds on just about every straight corner anymore and as well as the internet. So I think there's the convenience factor there and I would recommend that if you are gonna do the independent side, definitely try to stay in your hometown where you've been doing business. I think that really makes a difference as well.

Sean: I agree. Is this an independent firm or another employee model firm?

Todd: It’s another employee situation and actually the firm I went to has a grid system so if you're making below a certain gross commission on annual basis and they reduce your payout but since I was moving over and kind of had a unique situation they gave me an enhanced payout for about fourteen months and then after that I still went quite to the grid number that they were looking for so that payout got to 20%. You know, as well as I do, this job's not very much fun when you're making minimum wage.

Sean: No, not at all. So when you moved, I remember you had that timeline. The payout, I didn't realize that was a bit of an exception. What was the normal policy given?

Todd: Normally, if you're making below two hundred and fifty gross per year, the payout is 20%, but once you get over the two hundred and fifty it goes up to 40%, and then I think at three hundred it goes up to 48% or 50%. So the difference between the 20% payout and the 50% payout is enough to make a difference ‘cause I still have a mortgage and grocery bills/

Sean: Sure. Okay, very good. Why don't you take it from there in terms of when did you start to realize you might not get to this boggy and how did you sort through all the different options out there?

Todd: It's funny ‘cause when the original transition happened, I interviewed with several different firms and the firm I ended up going with was a lot like the firm that I was with before. I actually talked to another LPL or another independent advisor and just wasn't comfortable with that whole process. I didn’t think I was ready to do that on top of everything else. I just didn't feel like I was mentally prepared to make that move to independent -- ‘cause that word, when you've been an employee with a brokerage firm, that word “independent” can be a little intimidating and frightening if you don't know what involves that.

Sean: That's a good point.

Todd: But as I got closer and closer into that enhanced payout period I realized that it was gonna be quite some time before I ever got to number they're looking for and I wouldn’t gonna be able to survive on that 20% payout. I called the original independent guy that I talked to before and met with him again. Actually the guy that I worked with at the first place did go independent and called him up and he's with a different group and that's when I met you. We had lunch one day and you kind of told me about the benefits of the group you're with and it really piqued my interest and you got me in touch with a couple other folks in your group and we had lunch and that’s truly when I committed to the group that we're with now. I just really felt comfortable with the management team and the whole process and the help. There's just a lot of added benefits that I didn't see from the other independent guy that I talked to. So that’s when I decided to join our group.

Sean: It's good to hear your experience. I think it's still an evolving feel but there’s this kind of a middle ground that I think (hopefully) we’re occupying. Like you said, you run your business day to day.

Todd: There’s a support system and people actually know that you can shake hands with them when you need to not just the one-eight hundred number in California or St. Louis or whatever it is.

Sean: Not to copy that model but the original firm you started with, in some ways, I think this mirrors their system in terms of having the local connections about being on your own day to day to have someone looking over your shoulder. Obviously independent is still a lot different in an employee but there is that, it’s nice to be connected to something besides just yourself.

Todd: I totally agree.

Sean: Very good. It sounds like your retention of relationships wasn't quite what you would hope in a move the first time. Give us a sense of the second time when you had a little more time, like you said..

Todd: It's funny. I think sometimes we may have a little bit higher opinion of ourselves and our clients do and sometimes there are relationships there that you feel are stronger than they might be. You might think they're real solid and the clients don't necessarily have the same opinion. The first transition was not as good as I thought it. I moved about half of my book but then when I transitioned the second time, those folks were very loyal and almost a 100% of those moved over.

Sean: Great. I think it's hard to know but given the nature of how that first one went down, and who knows -- I'm sure you heard some of that from your clients, who knows what was said?

Todd: Well, that was the other thing. I've heard multiple stories that were going around and there's no telling. They're gonna say and do just about anything they can to keep the assets. That’s just human nature and I had some hard feelings for a while but I'm well over that now because I'm extremely pleased with the way things are going.

Sean: Good. Is there anything that surprised you other than, like you said, realizing -- in a little bit of a unique situation -- that not everybody kind of trusted you or believed your side of the story. Anything else that surprised you on either move that could benefit other people?

Todd: The biggest surprise that I had was I had some close, long-term relationships with people that I've known before I even went on the business and I had some relationships with people from Church. I guess the people from those two groups that didn't transfer with me, that really hurt more than anything -- people that you really had a relationship with outside of business that didn't stay with me. That's what surprised me more than anything.

Sean: It's a little harder to get the real story of those, which is interesting. When you're starting in a lot of things in life, you trust those people to tell you what they say, tell you how they feel, but with money it might be a little harder for them to tell you why, right? At least that’s my experience.

Todd: And you just never know what's being said. It just blew my mind. So, yeah, you're right.

Sean: I have one or two of those that I still wonder and then some of that I met as business associates so you'll never know exactly why in every case. It seems like, generally speaking, if people move -- especially if it's a planned move -- you can retain enough to do a good job and have a heck of a business but you’ll never get every single person necessarily.

Todd: Yeah, and I think that's the biggest thing. If you feel like you're gonna get 80%, you're probably not gonna get 80%, probably something less than that. When you're getting ready to make that decision, feel conservative on what you think you can move over and hopefully that's enough. And if you get more than that, that's great but I would definitely not set my expectations too high ‘cause it can be disappointing.

Sean: Sure. You don’t wanna build a business of expenses, in particular around a certain revenue number and then come in under that. That can be very stressful, obviously.

Todd: That is correct.

Sean: I’m thinking through this timeline. So you're at the first place about, like you said, twelve or thirteen years (that's about how long I've been in the industry now) -- at that point, looking back when you say relationships were strong as you hoped, do you have any sense that maybe you’re in some sort of cruise mode?

Todd: I think there was that and actually, my wife and I met with a guy from church just ‘cause I was travelling with all that stuff at the time. He made a statement. He said “You know, I kind of noticed that you had kind of gotten full of yourself” and I thought about it. It kind of hurt my feelings and I thought about it a little more, sitting there and I say “You know what? That may be true. I probably got a little comfortable. I probably wasn't working as hard as I should have, making the contacts that I should have, and I think that probably had something to do too with those relationships not being as strong as they should have been.”

Sean: And I’m just curious ‘cause as I was thinking through that, especially when markets are good and you have no intentions of leaving where you are, that’s why I kind of sit in my ten year in the business, like I said, right now is about that level when I've made my change I was three years and seven years in the business. So there wasn't enough time to get complains especially when you're moving.

Todd: That's definitely coming to play. You just can't get comfortable. You have to work everyday.

Sean: That's interesting. I appreciate that. It's good to get background. Now that you’ve been out over about eight months or so, I think, what does your business look like? How do you approach it? Do you have any particular niche you focus on? Give us a sense of what your business looks like.

Todd: I don't really go after a specific niche. I do have quite a bit of money and retirement accounts -- that was sure from the beginning. I probably have over half of my assets in RIAs. Rollovers were big part of my business. I'm a big fan of mutual funds and I’ve got a few clients who have individual stocks. those are harder to manage because you can buy something on Friday and something bad happens over the weekend and you can't get out of it. So lock it up on Monday and that may open down 20%. So I don’t do a lot of individual stock business. I think mutual funds are just an easier way to manage people's money and some got a bulk amount of money and mutual funds and individual tax free bonds. I do have some annuities, never had been a huge annuity. My book is probably a little bit younger than those two ‘cause the town that I'm in is a growing community with a growing school districts. We have a lot of younger families here and not as many retirees as other towns might have.

Sean: Gotcha. And then you're very active in the community. I know that's a big part of you and obviously it leads..

Todd: Yeah I’m a member of the Kiwanis club since we've been here -- so 15 years. I’m actually serving my second term as President and I’m on the Board of the Chamber Commerce and very active at our church. So, yeah, I have been really active in the community and I think that helps. This might sound crazy but I don't solicit business at any of those places. People that know me, know what I do and if they wanna talk about it, I'll be more than happy to talk to them and help them out but I don't actively solicit business at church or in Kiwanis. I figure that it’ll take care of itself if people need something.

Sean: Right. That makes a lot of sense. And then from the costs of the business or the expenses and overhead that I know a lot of are interested in when they're looking at the different ways to go independent, give us a sense of your office -- How much space you have? Why you picked it? If you don’t mind sharing.

Todd: I actually looked at several different places here ‘cause I do feel this is how I started in the business but I do feel like it's important to have a place for people to come sit down and see you behind the desk, in front of the computer. So I actually found an executive suite over here, where I am, and that happened to be a little three-suite complex -- there’s one small and then the guy that was in here before had already taken the wall between the other two so I have like a double suite and a single suite with a door between them. I kind of have a low reception area and got a really good deal. I think I got about 1200 square feet here and it's about 1200 dollars a month, which I don't think was outrageous. But I know there are a lot of folks out there that just work at the house or just work out of their laptop. I started my career that way and I didn't like it. I think you need to go to work and then you need to go home. That's just my personal opinion.

Sean: Yeah, I think, definitely. Even if it’s from business perspective, it’s definitely a personal preference. Not everyone is built to do that. Not everyone is able to or it’s not feasible if they’ve got small kids. I do work from home sometimes but it's not ideal.

Todd: Right.

Sean: They make noise.

Todd: Yeah, you're right. And there was some initial cost. I had to buy desk and computers. I had some furniture from a previous place but I do had to buy desk and computers. I went with two monitors ‘cause I like to have everything up so I can see it when i need to see it. So there was some upfront cost there but it wasn’t outrageous.

Sean: Right. The other thing about the office space is I think -- much like you said about planning for taking less than you think just to be careful -- it's a lot easier to ditch an office later on, after six months or a year, if you realize you don't really have to have it during your business for some reason. If you can go without it, that's something depending on your situation to consider but I think, from a perception standpoint, it definitely helps. At least that’s the approach I took six and a half years ago. I rented an office sublease from a colleague in a nice building that a family practice doctor owns. I didn't sign the lease to have it, I’m still there six and a half years later. But the flexibility -- it’s a lot easier to go “Okay, I'm gonna run a virtual practice later” and sort of once your clients are with you they say everything's gonna be okay versus the perception can be “Oh, he's working out of his garage. Is your money safe?”

Todd: “He may be gone in the morning.” I agree. I think it just gives people a comfort level to be able to sit down and say “Okay, he's committed to this deal.”

Sean: Right. If you have clients who value the really high end office space -- if that’s the kind of the client base you built, you gotta know your clients also (I think, Todd, your clients are like mine) -- there certainly are perceptions you wanna deal with especially when you're in transition. You don't wanna add in any uncertainty or any holes for people to drive reasons.

Todd: Exactly.

Sean: Very good. I asked about office ‘cause that can be a larger expense for running the business, what about staff, which is usually the biggest if people have that? What have you done and what's your outlook?

Todd: Well, as you know, the groups that we're with has a transition specialist so that was extremely helpful. I mean, that was a valuable resource for me, just coming in and not knowing the system. It would've been a very very slow transition without having that person to help. That was a valuable resource for me. I feel like I'm pretty indepth at picking up on software and systems and things like that so I have figured out how to use our system now and so I'm really comfortable with it. It's interesting. You know, I had that low market pullback towards the end of the year and then we had another one here to start (January or February) and I really didn't get a lot of phone calls when all that was going on. I got a few but not like I was used to get more, people are just overly concerned and I think that's due to the fact that the clients I have now are extremely loyal. They’ve moved with me twice and they understand now kind of what the whole market cycle’s about. So I didn't really get a lot of phone calls.  don't have a staff person right now. I expect that if I get back to a forty to fifty million dollar office, I will have to have somebody ‘cause when you have that many households and that many assets, it just lives itself to more administrative type work. So I suspect here, over the next twelve to eighteen months, I will probably have to bring somebody on, a staff person, just to help with that administrative stuff. But right now I don't have anybody. I went on a vacation recently, I was out of the office for a couple days. I just changed my voicemail to call our main number (of the group that we're with). I got back and didn't have any calls while I was gone. There were no missed calls on my phone so it really hasn't been a need as of yet. I think we have the ability to do kind of  a shared administrative deal if we need to. I haven't done that yet but that might be my next step before I hire somebody, if it gets to a point where I need some administrative help -- maybe take that approach first before I commit to a staff person ‘cause as you know having employees is a whole another set of things you have to deal with.

Sean: I agree. I think I've probably mentioned on this show before and I think we exchanged emails on piloting that kind of idea internally and maybe even externally ‘cause I think that's a great progression to go from. It’s good that you (or we) know the system as advisors just because one, so we can do it; two, we can train someone; three, we can spot problems. If we hire someone that isn’t a fit, we can know that ‘cause we know when things are..

Todd: In my opinion, again, it's very important to really know how to use the system yourself because you just have to be able to do it ‘cause you may have an employee that's sick for a week and if you don't know how to use the system then you're kind of left in the lurch about there.

Sean: Right. So I think going from a nobody to a full time, as you said, that's a huge gap.

Todd: Yeah. There's the expense. There's the management and other issues. there's just a whole lot that you open up as soon as you start hiring people and I haven't been willing to take that on yet.

Sean: Yeah. you really are deep into the whole process. I did this at the wirehouse that I was at. The shared model could work but the challenge there was if you got five people and there’s typically at least 1 squeaky will. These are all employees of a larger firm. No one really kind of said things, like there's a demand somewhere out there, like your practice and mine -- to some degree -- where I don't probably need a full time person just for myself but I really like having someone to go through the daily stuff.

Todd: Yeah I thought about that too. When I do get ready to do that, they will most definitely be on a part time basis, maybe nine to three or ten to three, something like that, not an eight to five employee (full time). I would probably start out something part time, maybe even four days a week just to start when I get to that point. And, really, the first place I was with, I had an assistant and she did stay busy but I wasn't ever really sure exactly what she was doing. I feel like there was not much work to be done but she kept herself busy though.

Sean: It's great to have support but I noticed about that business model, when I was there that -- as you know I started -- it just seem like if the phenomenal resource, and I think it's great for customer service, but it seem like overkill at my stage in the business and my scale. You get that choice where we are. We didn't have a choice there.

Todd: That’s right.

Sean: Okay what about another big expense and uncertainty that I know people worry about is health insurance. If you don't mind sharing, how do you handle that?

Todd: That's an interesting point. My wife is a school teacher. At the time we have two kids at home and we’re gonna add myself and the two kids and it was cheaper for me to go find just a personal health plan. I got it through Blue Cross Blue Shield. So me and the kids were on that and it was actually less expensive than adding to the school plan. So I've had that for I guess fifteen years now.

Sean: Oh, wow.

Todd: And, you know, with ObamaCare now, most of the policies you get that you can afford are basically catastrophic policies anyway that have a big deductible. That's what I have, I think my deductible is 5000 dollars and I think I made it one year when I had a knee surgery and that was about it.

Sean: Right. That sounds about that's the idea. If you have something that's more life threatening or more serious, not that a knee surgery's not serious but obviously, you know you're gonna recover from that, hopefully.

Todd: Sure.

Sean: If something happens, I always tell people or kind of have the attitude of that, 5000 dollars, you know, you’ve gotta plan for it. I don’t wanna minimize money but if you need that, you got bigger problems than 5000 dollars, from a life standpoint.

Todd: That’s right. And when I had this knee surgery, the hospital that I had the surgery at worked with me and they let me pay it off over six months or whatever. I mean, the people that worked with you, everybody understands.

Sean: Sure. I think people probably get tired hearing me talk about this but this trend I see is whatever's affecting the employee firms, or whatever is affecting the independents like us, same trends that work in the employee side and there's no real free lunch so the employee firms will get that money out of your payout one way or another. There's gonna be something involved, unfortunately. It’s not that it’s good, it's just not any really that much worse.

Todd: That's right. Just like you said, you're either gonna have a reduced payout and have it covered that way or you're just gonna cover it yourself. I always tell people that I'm pretty sure I know how to spend my money better than somebody else.

Sean: That’s ANOVA concept. Very good. In running the business, I hear people say or third parties tell me “I don't wanna run my own business. I just wanna focus on my clients.” Other than obviously doing your own paperwork and learning the system, which is typical at any move -- employee or independent regardless, how much time and energy do you spend running your business, so to speak, that you wouldn’t have in an employee firm? And you have to take out your own trash, right?

Todd: Yeah, you gotta do that at home too, so that's not big a deal. Since it's just me here, I don’t generate a whole lot of trash.

Sean: That's good.

Todd: Run it a couple times a month, it's not like a lot of workload. So that part is really not even an issue for me.

Sean: Sounds like you keep things fairly straightforward, fairly simple.

Todd: I mean, running a business, there's a trade off. My dad always told me, growing up, the only way you ever make money is if you work for yourself. He started out his law career working at a firm and he figured that out pretty quick. He went out on his own shortly after that. I mean, running your own business, you work as hard or as little you want to. And the harder you work, hopefully, the more money you make and just the day to day details of it are just part of it. To say you just wanna talk to clients all day -- even if you have five hundred clients, they're not gonna want to hear from you every week. So there’s only so much of that you're gonna do on a day to day basis. So, I don't really know how to answer that question.

Sean: Sounds like you don’t end up spending a lot of time -- that’s one reason I asked you. For most of us, we can all make things as complicated as we want to. We have that right. We can hire three assistants and have real complicated communication systems and outsource other stuff, contracts you need to keep track off, but by and large I'm thinking you and I don't do that much more. Once everything is established you kind of have to understand, okay you're about to do taxes as self employed, after the first time, that’s a little different but..

Todd: Maybe set up next week.

Sean: If you don't have a huge payroll and you don't have staff to have lots meetings with, you don't have all this idea that running a business, so to speak, or being self employed is some complicated monster.  I think that's a bit of a myth or overblown.

Todd: I agree with you. It's not like I’m buried in amounts of paperwork over here. The way our system works is -- you can almost do everything we do paperless with our e-signature system. I've got two cabinets upfront -- one got two doors of mutual fund paraphernalia that I have anything in any of the other drawers.

Sean: Right.

Todd: It's just not as scary as i thought it was gonna be. That being said, the transition, you really need help (in my opinion) ‘cause learning a new system and trying do a transition at the same time could possibly be overwhelming.

Sean: Sure. That makes sense.

Todd: That first two months is critical but after that, if you've been in business before you know how to run the business. It doesn’t really change that much from your year to year.

Sean: And it could be that the technology has evolved over the last eight to fifteen years where it used to be extremely expensive to get a reliable computer, not that long ago, the big scheme of things. But now, we go to bestbuy, I guess that’s an outdated reference now but you got amazon or whatever.

Todd: I had a computer and my staff got it all set up ‘cause I didn't really want to spend the time doing it, not paying them a little bit but that was one thing that I would rather somebody else do it, does it everyday.

Sean: Gotcha.

Todd: I tell people all the time if you don't have the time, ability, or desire to manage your money, then you need somebody like me. There's  a lot of people out there that wanna manage your own money and that's great. They would be a great client for us. But just like change, I can change my own if I wanted to. I’ve done it before but why would I wanna go down here if twenty minutes later I'm headed to the house?

Sean: Yep. And the business aspect of this one-time setup cost, like you just described, get someone to do it for you -- what I love about that is mostly it's a one time expense. So you set up and run. It might break here and there. You might need someone if you're not a techy person, like I have a scanner/printer that I have sitting next to me that I don’t have working correctly just ‘cause I haven’t dedicated time to get a fix. I have an app on my phone that I can that I can do scans. But it's a one-time expense versus the way you pay for that staff and all the help we got at the old places. You're paying for every single paycheck with that low payout.

Todd: Every paycheck and it's not a small number.

Sean: No. I understand the value too of outsourcing, getting help, and having experts. I don't wanna minimize that but man, there’s a lifetime tie to that. And there are good reasons to stick around in those models but someone else fixing my printer when those are just about disposable these days -- it's not really a good risk.

Todd: Exactly. I mean, you can get a good printer/scanner for a couple hundred bucks.

Sean: Very good. And then what haven't you enjoyed about being independent? It’s kind of related to that piece. Why don’t you touch on that?

Todd: I guess the biggest thing that I've had to get used to is the difference between being independent and being an employee is when you're an employee you get total -- what to use. There’s one system that everybody uses; But when you're independent you have to kind of pick and choose the systems that you want to use. For example, I wanna have an access to the full blown system with mutual funds. I need to have that just for my personal benefit. So that was one of the things that I invested in. I just recently added a contact management system ‘cause I know we need to keep notes when we talk to people and I like to call on my clients on their birthday and so I made a system to do that. I had a two-page printout and it just wasn’t working for me.

Sean: So what CRM are you using now?

Todd: I'm using redtail.

Sean: How do you find it?

Todd: I like it. I wish it integrated with our system so you have to download your client information and then transfer it over. And then anytime there's new, you add a new account. I’m glad we’re talking about that ‘cause I just have one today. I need to go add that person over to my redtail.

Sean: Right.

Todd: So that’s a little cumbersome but again that's part of the reason you go independent. You have that freedom and flexibility. There's pros and cons to everything.

Sean: Sure, at least in our case. I would assume one of the reasons you chose redtail is ‘cause someday that's gonna integrate with our system, at some point.

Todd: Yeah. There are systems out there and there's another one out there I looked at that cost a little bit more because -- they used the word “customizable”. I don't want to customize anything. I'd rather load it on the computer and start working. I'm not one to spend much time trying to create my own wheel. I'd rather use a wheel that's been around.

Sean: Yeah, you kind of figured how it works and sort of why you used this option. It’s probably pretty good and it’s at least 80% solution in terms of what you'd want anyway and it goes for helping people. There’s some allure to the plug and play and as we were talking before we recorded, I think in our network maybe we could do a better job of having a standard or recommended CRM: here's a laptop that will do the job; here's a desktop that will do the job. Just kind of keep a current -- not that it's better than any other but if you wanna just go buy on amazon here's the description, just search for it, order it, done. That would simplify it.

Todd: As far as contact management system, if we had something (that was maybe one or two options) that we could use, you could find somebody that's been using that for a few years and might have some shortcuts or some helpful hands that they could share with you that you wouldn’t have to spend time on the learning curve trying to figure out yourself.

Sean: Right. That's a great point. If you’re a detailed, customizable person, you want a super horsepower, here’s a sales force as an example. If you want something a little bit more intuitive that will also be integrated with our system, here’s redtail. And then if you just  want to essentially remind me to call people, there's some other web-based stuff that are far simpler than redtail but it's not gonna have the industry-specific capabilities that redtail has obviously built for our business.That might be a good step. I know there are a lot of networks of advisors that already have that through that hit plug into our platform. Some of them might look a little bit more employee-like in the lack of customization but again that's one of the reasons I'm doing this podcast is -- there's so many options out there. I get excited about a lot of options but in areas of my life it beats me down. In a lot of ways to me, options is a bad thing ‘cause it's just so hard to sort through.

Todd: Yeah.

Sean: Very good. Any other issues that if you say “Hey if I could do something different in how my career has progressed or set up my own practice…” anything in particular that you would like to have a do-over on?

Todd: I think probably the one thing that I would do different if I could is make that transition on my terms. That didn't happen but the other thing that I would’ve done is I wish I would've come here the first time ‘cause it would've been (I think) a lot better for me. The word “independent” I think, can carry a fear factor too. It's just not as not as big a deal as I made it out in my mind to be. It’s just I would recommend it. If there's somebody out there working for an employee firm, you're making probably 40% or 50% payout and the independent payout is more. You’re gonna have some expenses that you don't have as an employee but those expenses don't acquire to 30%.

Sean: Sure. You bring up a really good point. When I did this move -- it was 2009 -- so not that long after the burning made of issue had come down. I was all fired up and excited about this independence and I think even my long-term clients, I think it gave them some of them pause -- what does that mean? Maybe I need to make that my mission to find a way to carry that out or just make it more clear what's involved.

Todd: I think from a client standpoint, it's not like we’re out here printing statements and placing trades on. We have a support system and it's a great support system and I think that's one thing that, maybe from a client's standpoint. it might be fearful to them like “Yeah, you are independent but all that means is I gotta pay more bills.”

Sean: Right. You still have the same compliance, same regulatory bodies..

Todd: You can’t do crazy stuff. You still have to follow rules and you still have somebody watching what you're doing. But on the flip side of that is there are so many more investment opportunities for clients. There are some really really good products out there that employee firms just don't allow their advisors to use because -- I don’t know why. I guess that was the biggest eye opener for me is when I left my first firm is how many great products are out there that I never had even heard of before.

Sean: Yeah. That's a good point and that was within the same sort of similar kind of firm.

Todd: Exactly. That's exactly right. It was very similar to what I've been doing but even that firm had more options than anything that I'd even knew about. The word “annuity” kind of brings its own connotations but there are some really really good products out there that evolved over the years and there are some really good products that don't have that don't lock people in for twenty years. That’s what we were always told at my first firm was “These are the products we offer because this is how they work.” There are so many more opportunities out there for clients that can help them reach their financial growth.

Sean: Right. I solely agree. And interestingly in the environment we're in, that evolution and sort of improvement in those lines of products, I think it’s only gonna continue with the deal of ruling coming down which is scaring people, who maybe that's all they did, but I think for those that use them in the right circumstances..

Todd: I brought that up because I think we are much better position when that finally comes down to make that transition than some other firms are gonna be because they've done business the same way for years and years and years and when they have to start calling their clients say “Okay, we've been doing business this way but now we have to do business this way.” I think there are gonna be some issues there and I think we're much better prepared for that change than other firms are gonna be.

Sean: Yeah, I tend to agree. I think the word independence comes from the fact that (like the firm we're affiliated with) it’s not owned by a bank and also it doesn’t manufacture -- it doesn't make  its own products, does not have in-house staff. So that's a huge, one big conflict of interest that doesn't really exist, where it historically existed at a lot of the larger name employee firms. They were, in some cases, notorious for various episodes that happened. We’ve been around long enough to see what that means and how it manifests itself but I tend to agree that when you're able to make decisions, focus solely on what you think is the best fit for your clients. It just opens a lot of opportunities and it simplifies how you deal with folks and I think people appreciate that.

Todd: Exactly.

Sean: Well, Todd, I really appreciate the time. I think we've covered a lot of ground. Is there anything else that we didn't touch on that you think would be noteworthy for other people that might be where you were a couple of years ago?

Todd: I would just say that talk to some people that have made the transition because it's really not as scary as it sounds. It's very beneficial.

Sean: Great. Well, thanks again and I look forward to keeping in touch/talking soon.

Todd: Sounds great. Thanks for your help.

And there you have it. Hope you enjoyed the conversation with Todd. As promised here's his contact information: you can email him at; his office phone number is 817-225-4476; and you could find him if you search Todd Simmons 360 Wealth Management LPL Mansfield, you can find him on the “Our People” page. There's a list  of advisors and he's down in the S's or he's got a facebook page for Simmons Wealth Management so if you have any particular questions or would like to hear more about his experience or insights, feel free to reach out to Todd. And till next time, thanks for joining us!