be a client-centric human in a world of ai and technology.
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the disruptors
with liz farr
rory henry asked himself, “why don’t financial advisors and cpas work together?” it boggled his mind because both work with the client’s finances but are not always in sync. “we’re advising them on their businesses, and then the wealth advisor takes over and manages the finances,” henry says. “but really, one decision affects another.”
more rory henry: the holistic guide to wealth management | more disruptors: mike maksymiw: be the leader you wish you had | terrell turner: build a solid business showing up as yourself | kelly mann: be the bull in the china shop | alicia katz pollock: create a human-centric business | nancy mcclelland: be the one your clients ask first |alan whitman: stop accepting the status quo | sean duncan: discover your own genius |
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the ultra-wealthy have long used the family office model to bring a staff of cpas, attorneys, and advisors to provide governance, legacy planning, and intergenerational wealth planning. at arrowroot family office, henry is leveraging technology to bring the benefits of the family office model to everyone. “so it’s really integrating these solutions, using technology, using relationships, to really provide for the many needs of the business and the personal finances of your clients.”
using technology to leverage a network of advisors creates a human-first approach, which, henry says, “deepens that client relationship and allows you to build a moat around your business for any technological changes in the future that could occur.” in the modern firm, technology keeps the back office running efficiently as background noise, with the advisor “out in front and center” to “allow the advisor to really shine,” henry says.
henry believes cpas are the logical choice to sit at the “center of the financial flywheel.” at the start of the flywheel is tax and accounting, followed by tax planning, financial planning, investment management, and estate and exit planning. “these all need to be working in collaboration with each other, and so that that cpa, that accounting professional, really sits at that center of that universe, and they can quarterback that situation,” says henry.
ultimately, henry believes that technology will transform accountants’ work so that “we can really coach people to success, and whatever success looks like for that person in their business and their personal lives.”
as henry describes in his new book, holistic guide to wealth management, he is a behavioral financial advisor (bfa), which he says is “a human-first approach to working with clients” and involves uncovering a client’s top values to help them achieve their goals. according to henry, “the research shows our values shape our goals. our goals shape our behaviors.” when our behaviors align with our values, our business and personal decisions can emanate from those values.
while doing a deep dive with clients to understand those deeply held values may be outside the comfort zone for many cpas, his book provides ample evidence that this approach is effective. while cpas understand how to optimize businesses and financials, henry is “in the business of helping people optimize their well-being” by helping them achieve their goals.
14 more takeaways
- it’s not what you want your clients to do but how you want them to feel. provide great experiences for your client.
- people will still want to talk to a human when they make complex decisions.
- practice the platinum rule: do unto others as you would want done unto you.
- let your client be the hero while you are the guide who helps navigate the complex terrain of regulatory, investment, and market changes. the more you are the guide to your client’s hero’s journey, the greater the value you provide.
- instead of being the advice monster with all the answers and wanting to give advice, try a curious and consultative approach where you ask powerful questions. this will allow you to tailor and personalize the advice you give your clients.
- to dig deeper, try the awe approach: ask your client, “and what else?” you may need to do this three or four times to help your clients vocalize their thoughts.
- to temper the advice monster, try the wait approach: “why am i talking?” sit in silence for 5-10 seconds to let your client digest the information and respond.
- build a dream team of advisors for your clients and leverage that network for a return on relationships – the relationships you have with other advisors and clients.
- a behavioral financial approach teaches the 4r approach when considering any major purchase:
- recognize the stimulus of the shiny new object
- reflect on whether that purchase is consistent with long-term goals
- reframe by looking at all the available options
- respond to make mindful purchases that are aligned with your long-term goals and values
- to make better decisions, create a vivid visual picture of your future self. where are you? who are you with? what are you doing? how do you feel? you’re more likely to make better decisions with your future self in mind.
- building better leaders for tomorrow means investing in continuing education and learning.
- improv classes teach valuable lessons. you can learn to be okay with making mistakes, which will help you overcome your fear of failing. you’ll learn to be present and an active listener. improv classes also teach teamwork. you develop a “yes-and” mentality.
- foster your yes-and mentality. say yes to the meeting, to the vacation, to the conference. those opportunities can change your life.
- stop selling time for money. instead of being transactional, be transformational with your clients.
more about rory henry, cfp®, bfa™
rory henry, a certified financial planner™ and a behavioral financial advisor (bfa™), is a director at arrowroot family office and co-founder of afo wealth management forward. originator of the advis-ror® methodology (return on relationships), henry has been in the tax and financial advisory profession for nearly two decades. he has created a unique program to help accounting professionals incorporate holistic wealth management and proactive planning services into their practices. he is the author of the forthcoming book “holistic guide to wealth management,” a comprehensive resource with contributions from over 24+ thought leaders in accounting, wealth management, and behavioral finance. he hosts the afo wealth management forward podcast. he has been published in numerous financial and accounting media outlets, including accounting today, 卡塔尔世界杯常规比赛时间, intuit tax pro connect, and financial advisor magazine. outside of the office work, rory is an avid sports fan, plays golf, and enjoys performing improv at comedy theaters throughout los angeles.
transcript
(transcripts are made available as soon as possible. they are not fully edited for grammar or spelling.)
liz farr
liz farr, welcome to accounting disruptor conversations. i’m your host. liz farr, from 卡塔尔世界杯常规比赛时间 and on this we’re doing a little bit about people who are doing things a little differently than our parents accountants. my guest today is rory henry, who is director at arrowroot family office, co founder of afo wealth management forward, the host of the wealth management forward podcast, and author of the new book, holistic guide to wealth management. how are you today? rory liz,
rory henry
i am great. thank you so much for having me on the show. i am a big fan of the disruptors, so it’s an honor to be speaking with you today.
liz farr
well, i’m always pleased to find new people who want to talk to me, and i’m always honored when people who have a profile like yours want to speak to me,
rory henry
don’t shower me with too much phrase there. liz,
liz farr
well, you know you’re you’re a great person, and anybody who might meet you will know immediately the passion you have for what you do so
rory henry
well. thank you. liz, and like, yeah.
liz farr
now, rory, can you tell listeners a little bit about what you do, and you know where you’re located, what services, what kind of clients and all that?
rory henry
yeah, that’s great question. i am the director, as you stated, at arrowroot family office, and we’re out of marina del rey, california, so right by the beach here. and we are a multi family office, liz so and we’re employee owned, so we manage the finances of the people here arrowroot, and then we work with high net worth families all the way down to the mass affluent. and we’re a big believer in technology, so being able to provide our services to not only the wealthy, but the nurse, the teacher, the construction worker. and i also have a program, as you stated, called afo wealth management forward and a podcast where i educate cpas accounting professionals on how to integrate holistic wealth management services into their practice, integrating the tax accounting, wealth management, financial planning, estate exit planning, what i call a virtual family office, really bringing together the best of the cpa and accounting world with the wealth advisory world. and then, as you stated, i’m coming out with my book, which i’m really super excited about. it’s actually this way. well, it’s this way, and it is a guide for cpas accounting professionals out there looking to integrate these services. i have 24 plus thought leaders from the accounting world, wealth management, estate planning, behavioral finance, technology that have lent their expertise talk about the future advice. you know many names that the folks who are listening probably are familiar with, seth feinberg, blake oliver, randy johnston, alan koltin, bob lewis, and then a number of people on the wealth management side that talk about the different service offerings and how we can integrate them in an authentic and holistic way.
liz farr
that’s correct. and i admit, i’ve read maybe a third of this book, but i really did enjoy it, and i liked the holistic approach that you’re taking, that it’s not just, you know, get your get your 401(k), but it’s getting all the pieces of your financial life together now. now, how did this book come about?
rory henry
well, that’s a great question. liz, i have to give credit to our friend seth feinberg. we were at, i believe it was qb connect, and we’re at that outside bar, which we’ve been at together liz after the conference, and we’re just chatting it up. and says, says, rory, have such great content out there, and i see all the work you’re doing, all the relationship relationships you have in the accounting and the wealth management world. he says the profession needs a step by step breakdown on how to integrate these services. they need a playbook, a blueprint, a guide, really, on how to integrate holistic financial planning, holistic wealth management, all the other services we talk about and really to provide greater value to clients. so i set out, took me about 15 months to gather all these wonderful contributors, and i wanted to have other contributors, not myself, really lend their expertise, and they’re people that are at the top of the profession, on the wealth side, the accounting side, to really talk about their service offering or their methodology and how we can integrate it into. practice, because i strongly believe liz, this is the future advice. technology is advancing. it’s evolving. we’re going to be able to integrate the business advisory of the cas world with that personal financial planning and the wealth management, the estate planning as well the exit planning for businesses, in a way, to really be a one stop shop for clients out there to provide for both their business and personal financial needs. so i have to give credit to our friend seth for really being the catalyst to get me to write that book. and it’s been an interesting journey, and i’m just excited to share it with the masses out there.
liz farr
well, i am excited for the firm owners and firm leaders who will get this and actually integrate this and there, there are so many clients that i worked with who really would have benefited from something like this early on, from an approach like this. but, you know, the firms i was at were just too siloed. you know, we do the tax, we do maybe the bookkeeping, we don’t do the rest, and we certainly don’t really talk to the wealth management side.
rory henry
yeah, i, you know, i asked the question, i don’t know, six or seven, six years ago, maybe i said, why don’t financial advisors and cpas work together? it just boggled my mind, because we’re really working with, you know, that relationship, that client, and we’re advising them on their businesses, and then, you know, wealth advisor takes over and manages the finances. but really, one decision affects another, and taxes are like gravity, as we all know, liz, it affects investments. there’s insurance component to it. so i, i set out to really bring these two worlds together and bring the best in breed to work together to really provide for the full financial life cycle of the client. and so, you know, i think historically, they have worked in silos, but we’re now seeing a convergence of the professions as we know. the cpa exam has increased the holistic financial planning questions as part of the exam. i think it’s up to 40% don’t quote me on that. and then we’re seeing on the wealth wealth advisory side, because, you know, online, i’m looking at the marketplace, we’re seeing more financial advisors bring in tax planning into their practice. i think it’s the american college of financial services just sold out their tax planning accreditation. so we’re seeing more and more wealth advisors seeing the value add of proper tax planning for those clients. so i think we are at a inflection point in the professions here, we’re going to start seeing a greater integration, really, to provide for the many needs of that client.
liz farr
that is very true. and this is what in your book you describe as the modern firm. and so could you explain what you mean by the modern firm? well,
rory henry
that is a good question. liz, you know, i know we hear about technology, i’m a big believer that we need to be tech enabled. we need to be up to be up to date with the latest technology that allows us to be more efficient. you know that back office allows us to run our business more efficiently, but then the front end, we can be more effective with our clients utilizing technology. but really technology should be in the background. it should be that background noise. the advisor should be out in front and center. it should allow the advisor to really shine. so i think the the advisor, or the firm of the future is one that is leveraging technology, but as i talk about in the book liz, we want to have a human first approach, because i believe in today’s economy and tomorrow’s economy, especially, people are going to want to deal with a person who has a shared human experience. and so i studied behavioral finance, as you mentioned, i’m a behavioral financial advisor. that sounds fancy. it’s not. it’s really a human first approach to working with clients, and it’s really helping them uncover what matters most to them, their values. so what’s a client’s top five values? because the research shows our values shape our goals. our goals shape our behaviors. then, in turn, our behaviors will then reflect our values, and then we can emanate. our businesses decisions can emanate from those values. our personal decisions can emanate from those values. so it’s really doing a deep dive on helping people uncover what matters most to them. i know this might be out of the comfort zone for cpas and accounting professionals out there, but i think when you read the book and you do a self assessment on where you want to be in your life, you know it’s effective. i did it myself and outlined a life plan to go along my financial plan and my tax plan. and i think those that read the book can have a better understanding for. a pathway to success. i always say that we can optimize business, we can optimize financials, but i’m really in the business of helping people optimize their well being. where do they want to go in life? i’m a big fan of the golden rule, but i’m a bigger fan here liz, of the platinum role. and the platinum role is, do unto others as you would want done unto you, and we as advisors can help people really uncover what matters most to them, and then we can use our knowledge, our resources, our relationships in business advisory or financials to help them get there. that’s the vehicle we can help them get there. but we want to know what that north star is for those clients,
liz farr
absolutely, you know, and and to people who think that there really isn’t any great financial benefit from this, you know, if you look at maslow’s pyramid of hierarchy, which bain research did, they did some studies where they looked at what were the most important services that a business could provide. they found that at the top, it’s when you are helping people to to realize their potential and self actualization, right? yes, exactly, and those are the most valuable services that you can provide. yeah,
rory henry
i prescribe to the notion that it’s not how what i want my client to do necessarily is how i want my client to feel, and it’s really providing great experiences. i’m a big fan of our friend, ron baker, and i read ron’s book, and i love also the book the experience economy, and they talk about how we can go from delivering services to really staging experiences, and that’s maybe we’re i can take a step back, and we’re using utilizing technology to really provide great experiences, but in the end, i think the end goal was to really guide those transformations. and as financial professionals, we have intimate knowledge of people’s businesses, people’s personal finances. they share information with us. they may not share with their spouse, they might not share with their employees, right? so we sit in a privileged position to help guide transformations, whether that’s with their business or with their personal finances. and that’s where i go back to this human first approach, which really is a deep discovery, on helping people map out what they want out of their business. do they want to ipo liz, right? or they want a lifestyle business and spend more quality time with their family. i think when we ask ourselves that question, we ask our clients that question, we can really help them optimize their well being, and that’ll lead to great transformations,
liz farr
exactly, you know, and is, i was reading this book, i kept thinking of a client i worked with, who had the goal of selling his business ultimately, and retiring on the proceeds, but he didn’t really share this goal with the firm leaders until it was really far too late, and there was just nothing we could do, and his business eventually just kind of dwindled away and was worth nothing. yeah,
rory henry
you hear those stories, right? and sometimes i think it’s part we’re in that algorithm and we’re on autopilot, and we don’t really reflect on what we want out of life. i was actually speaking with a ceo of a very prestigious professional services firm, and i was talking about this human first approach, liz, and he said, you know what, rory, i don’t know if i would have became ceo, if i would have asked myself these questions 10 years ago, he goes, i may have. he goes, but i may not have, and i didn’t go through this exercise, and i wish i would have so. i think i’m advocating for those listeners out there, people who read the book, people who work with with clients as a financial professional really ask those questions to those clients on what success looks like to them. you know, what do they really want out of life? i’m big into the dimensions of our well being. liz, i don’t know if you’ve read that part of the book, and there’s the eight dimensions of well being. it’s financial, there’s emotional, they’re spiritual, they’re social, there’s physical. and i think we as advisors have potential to look at those other aspects, or help people look at those other aspects of their well being, and not just focus, or have a hyper focus on a business or financials. let’s look at our social life, right, our physical well being, and we can, we can start quantifying. uh, that part of who we are, and maybe something’s lacking, maybe your social well being is is a little low right now? well, let’s make sure we can schedule some time with some friends or some family so we can increase that. so i think we’re in the well being business just as much we are as we are in the business advisory business or the the financial advisory business.
liz farr
that’s a really good point, and, and all those dimensions are something that accountants have historically been reluctant to look at. yeah, you know. and you know, one of the things that jumped down on me in your book is that you talk about how cpas are uniquely positioned to take this holistic approach, but few of them really do. few of them really take advantage of this. yeah, why? why don’t they? what, in your opinion, are the obstacles? that’s
rory henry
a great question. liz, and this is why i wrote the book, really is to look at those obstacles and then, you know, provide the remedies, on, on, on how we can think differently. you know, i have long argued that on the wealth advisory side, well, i came from the tax business, you know, i am, you know, former tax owner, i built a tax practice management software to rival karbon and canopy. i then, later on, got into the wealth advisory business because i saw the technology over there and how we can provide holistic services that way. and so i have long argued that we as financial advisors, wealth managers, don’t start working with clients until later in life, until they have enough assets to be managed. it’s just part of the business model, right? you’re not incentivized to work with somebody who doesn’t have assets. you know, the 1% aum, has stood the test of time. it is a cpa, the accounting professional, who is working early on, liz, with that small and medium sized business owner, they’re working early on that, that life cycle of that client. they’re helping them start their first business, right to help them grow that business. so they have an outsized impact on that person, because they just work earlier on in their financial life cycle than people who who work with financial advisors. so i say the cpa, the accounting professional, is uniquely positioned to start integrating these services, in essence, liz, most firms out there are de facto family offices right now. they just haven’t put a system in place. they haven’t monetized it. they haven’t got the license to do so. but really they’re bringing in subject matter experts when needed it. okay, go talk to one of these 380, financial advisors, or here’s an estate planning attorney. you know, go ahead and speak to that person. so they have been that quarterback to that client’s financial life. they haven’t put really a system in place, and that’s why i wrote the book, to give them that system, that methodology, to start integrating these services, either getting a piece of the revenue, or taking that revenue on themselves by bringing it in house. but i long argue that that cpa, that accounting professional as the most trusted advisor, sits at that center of that, that financial flywheel. i call it right the tax and accounting is the start of that flywheel. it then goes out to tax planning. so financial planning, investment management, estate planning, exit planning, and these all need to be working in collaboration with each other, and so that that cpa, that accounting professional, really sits at that center of that universe, and they can quarterback that situation i outlined in the book, really how to do it in a systematic way and how to monetize it.
liz farr
and i really like the idea of bringing everybody into the same room and making sure that the accountant is at the table when those decisions are made. you know, i can’t count how many times the client would come to us and say, oh, by the way, my my lawyer restructured our businesses, and we’re like, what? okay, i guess this means that those tax returns we just filed are all gonna have to be amended because we didn’t know about this, and, and, you know, and, and sometimes, you know, the the attorneys would suggest things or would put things in place that made zero sense. yeah.
rory henry
so, so imagine, that’s what, that’s what i mean. imagine this is historically how the profession has worked, and it maybe it’s not their fault, right? technology wasn’t around. the collaboration wasn’t there. and so, you know, you would have one advisor doing one thing, and the client would get conflicting information from another advisor. this is why i call it a virtual family office, because. look the wealthiest people in the world, the john d rockefellers, the jp morgans, the jeff bezos, the elon musk. they have all these professional service providers, cpas, attorneys, financial advisors, bankers, all working collectively to advise the family businesses as well as the personal financial affairs of a family. i’ve now talked about the virtual family office really being accessible to the cpa, to the financial advisor, through tech enabled solutions. many times. you know that aha moment came to me, liz, when i saw trust & will, which one of the contributors of the book? his name’s cody barbo, friend of mine is the ceo of trust & will, and they call it the turbo tax of estate planning. and when i saw the the technology for people to really do an estate plan, a revocable trust, you can do a will. the trust is, i think, $499 you can do a will for, i believe, $169 and what i saw that people could now do an estate plan from the comfort of their own home, instead of going to an attorney’s office right, sitting down, answering very sensitive questions. and that estate plan sometimes becoming out of date, because, you know, things change right? when i saw the the technology in the estate planning space, and it’s now exploded. there’s so many estate planning technologies out there, but i saw that. i saw the ability to connect these services you have now, the ability to work backwards with an estate plan. i call estate planning a family office level care liz, because you’re connecting generations and you’re helping people out in case of any unforeseen circumstances, and so it’s just that that’s was the something that kind of gave me an aha moment on how we can now integrate these services work collaboratively. now there’s high level or high net worth clients that need an actual estate planning attorney, but for majority of the population, you can use a tech enabled solution to provide that service to clients.
liz farr
absolutely, you know, technology is really democratizing access, yes, to all of these services that used to be just available on a bespoke basis to the ultra wealthy, you know, that’s, that’s a theme that that was in the book the future the profession, yeah, which is really, you know, i believe that technology is really going to reshape how we live our lives in so many, ways.
rory henry
yeah, no, i agree. and, you know, ai is a big talking point. liz, and i think i’ve stated before, you know, i think we need to leverage ai. but once again, i go back to the fact that we sit in privileged positions and we almost sometimes act like therapists, for better or worse, people are still going to want to talk to a human because they’re making complex decisions. i say, you know, i referenced joseph campbell and the hero’s journey in the book, and i think many advisors out there can look to that book and and see themselves as guides in the client’s hero’s journey, and we’re helping navigate folks through the very complex terrain of regulatory changes, right, of investment changes, right the market changes. and so i think the more we can really be the be the guide to the client’s hero story. you know, the greater value that we can provide to those clients,
liz farr
absolutely night. and i love that you brought up the hero’s journey, because many, many cpas, more than you can shake a stick at put themselves in the role of the hero that they are the ones who have to save the day. they are the ones who have to have all the answers and and i think because they see themselves as this hero, that makes them actually afraid to act as the hero that they could be, yeah, but a much better role, as you mentioned, is to be the guide, because the guide doesn’t have to know everything. yeah,
rory henry
yeah. and i talk about in the book how many times we hang our hat on our expertise. michael bungay stanier, stanier has a coat, has a book called the coaching habit, and he, i don’t know if you read it. liz, great book, yeah. and he talks about how we can shift our approach from being the expert in the room who has all the answers so being the answer person to how. having a curious mindset in the consultative approach, where we’re asking the right questions, which will in turn allow us to tailor and personalize advice to our clients. he actually came up with the term the advice monster. and we all have, we all have the advice monster. you know this? liz, right? the advice monster is that, that urge to want to give advice. and he says there’s three personas with the advice monster, there’s the the tell it. advice monster, which, when we want to show our knowledge right, want to share our knowledge and fix the problem. the other one is to save it. advice monster, we want to save someone from making a mistake. and then the last one you think, he says, it’s the control it. advice monster. we want to control situations. but i believe the beauty happens when we can dig deeper. that’s why i go back to the human first approach liz and doing a deep discovery of what matters most to our clients. i think he uses, yeah, he uses the acronym, awe, which is a, w, e, and he says that we can say we can use the and what else question. we can do that three to four times to really help clients vocalize and work through their thoughts, work through their problems, and sometimes maybe they come to the solution on their own. i use that acronym. there’s another one that i i use to temper my advice monster, it’s wait, which is w, a, i, t, and i learned it from dr christy archuleta. she is, was the former head of the financial therapy association. and wait stands for, why am i talking? i’ll put a sticky note on my monitor that just says, wait and why am i talking? right? and we also came up with the pause appreciation zone. and this is it’s very difficult to do, but she said, rory, pause for five or 10 seconds and just just sit in silence. i yeah, okay, that was five seconds, and that was that was mortified, right? but it takes people a while to digest information, especially if it’s complex information, like taxes or investments or, you know, estate plan. we want to make sure that we’re not one, using jargon, and that, two, we give people time to digest information. the other way i help people out, or i work with with clients, is doing a rephrasing of what they said to make sure that i’m understanding it properly. so i’ve talked about it with a couple clients to say we have a pause appreciation zone in this conversation. we can pause. and also, if you don’t understand something, feel free to say, hey, can you rephrase that? or, you know, state that differently so, so i can understand,
liz farr
i love that, that human approach that you have, because so often we we feel like we have to be the experts. we have to dazzle our clients with our brilliance, or they won’t respect us. but yeah, i go back to that dale carnegie book, how to win friends and influence people, and a big secret in that was just to ask questions, right and be curious.
rory henry
yeah, don’t be interesting. be interested. yes,
liz farr
yes, absolutely, absolutely. now, now we’ve talked a little bit about what a family office is, but i think a lot of listeners might be confused about you know, well, you’re talking your your book is about wealth management, yeah, so what? what is it that you were doing, and what is the difference between wealth management and family office? what is that?
rory henry
oh, that’s a great question. liz, and, you know, family offices, i think i stated was really for the super wealthy. so, like i said, for the jeff bezos, bill gates, and, you know, for folks that have, let’s say, 20 million or more assets, it’s a lot of money, right? not a lot of people have that amount of money. they would have a family office, because they can have a number of professionals working collectively to, like i said, advise the family businesses, advise the family affairs, a lawyer, cpas, advisors. and so really it comes down to the level of service and the amount of net worth, really differentiated wealth management from a family office. so if you have, you know, 10s of millions of dollars, you might have a family office because you’re doing more than just financial planning, wealth management. you’re doing governance, right? you’re doing intergenerational planning, you’re doing legacy planning. you know you’re you’re doing wealth transfer advice. so you’re doing more than just the generic wealth management. but i’ve long argued that holistic advice really can be encapsulated by a family office, because you’re looking at the person’s whole situation all their businesses, right? so the tax accounting aspect of it, you’re looking at their personal finances. you’re connecting generations with estate planning. you’re making sure that they have the proper insurances in place, you’re helping out with their lending needs. so a family office really encapsulates what a holistic strategy is. and so i saw technology advancing, and i said, well, look, we can now have a virtual family office where we don’t need to have a staff of all these professional service providers. we can leverage our network, our relationships. i don’t think i’ve mentioned it yet, but i trademarked the term advisror, as you can see above the book there and the ror’s for return on relationships, and that’s not just with your clients. it’s the relationships you have with other providers out there. so you can build a dream team of advisors to serve the many needs your client. now, i think the most effective solution, and i talk about in the book, is for cpas and accounting professionals to take on a more future facing role. so go above the taxes, above the tax planning, and start incorporating holistic financial planning, some of the human first approach that i talk about here, because i think that deepens that client relationship and allows you to build a moat around your business for any technological changes in the future that could occur. so you can build that virtual family office what was for the super wealthy can now be had by your everyday clients, and that could look like doing a trust for $499 with trust and will right making sure that they have a financial plan as well as a tax plan. so it’s really integrating these solutions, using technology, using relationships, to really provide for the many needs of the business and the personal finances of your clients.
liz farr
i love that. and you know a family office is certainly something that most accounting professionals could get their their heads around, because, in essence, we’re already really doing this, or we should be doing this. we shouldn’t be just focused on that, that itty bitty rear view mirror, right of the tax returns and the financials of you know, last year, last quarter, yeah, but we really need to be helping people look towards the future. so, you know, what are you? you know, it’s great that you’ve got this new job and you’re making three times as much money as you ever have before. let’s put a plan. let’s put a plan in place. let’s at least make sure you’re maxing out your 401 k. let’s see about other ways that you can save and other ways that you can put things together to benefit the family. yeah, you know, not just, oh, wow, i’ve got this huge paycheck. now let me, let me buy that house and that car, oh, and let me buy another house, another car and and pretty soon they’re they’re really living from paycheck to paycheck because they haven’t taken the long term view of what it is they’re trying to do.
rory henry
no, i i agree. liz, you put it so nicely, and i talk about with clients, and i’ll give you an example for myself as part of the behavioral financial advisory curriculum. it’s really being mindful of our spending. you know, many times we can be on autopilot and we want that, you know, new outfit, or that new car, and we’re not really taking a step back to make a more mindful decision. many times we’re hit with an outside stimuli, especially with all the marketing that happens our phones, right? or constantly trying to sell us something. and sometimes we’ll just autopilot, one click things, and all sudden, amazon shows up with a new toy, right? but the the bfa program talks about how we can use the four r’s. so this is something practical that the audience members can take and the 4r represent how we can move from that amygdala response, the fight or flight, to the prefrontal cortex to make rational decisions. so it goes, the first r is for recognize, there’s some type of stimuli in emotion, right? ooh, i’m walking by saks fifth avenue, and i want that those new pair of shoes, right? it’s like, okay, wait, hold on. so the second r is for reflect, and the reflecting is we. think about our long term goals, our values, right? does buying that new outfit align with my goal of putting my kids in college? does that new sports car align with making sure i have enough money in retirement? so it allows you to take a step back and remind yourself what your goals are, what your values are, and then you can reframe. so the reframe is looking at all the various options. well, maybe i could buy not as an expensive outfit, maybe a little less expensive outfit, or maybe i can lease a car for a couple years, right? so you can start looking at different options, which takes it from that emotional response and it has you start thinking and using your prefrontal cortex, and then you can respond accordingly after you’ve gone through that process for any purchase of $1,000 i use this methodology for anything less. it gets crazy. it would just be thinking all the time, right? but i use the 4r or recognize, uh, reflect, reframe, and then respond as a way to be mindful of my purchases to make sure that they align with my long term goals and values.
liz farr
that’s exactly right. and i love the way that you bring neuroscience into wealth management. now, in a previous life, i was actually going to get a phd in neuroscience, believe it or not,
rory henry
oh my goodness, yeah, i love it. that’s
liz farr
that. that was all a long time ago, but,
rory henry
and i could have been speaking with dr liz here.
liz farr
well, you know, and back then, going into neuroscience. back in the late 80s, early 90s, we didn’t really have the technology yet that enabled us to look at what’s happening in the brain in real time. and now we do have those tools. so back then i realized, no, this is not a path i’m going to take. i don’t want to do animal experiments for the rest of my life. so, you know, now i’m thinking, you know, it’d be kind of cool to get back into that, but it’d be a huge learning.
rory henry
yeah? well, yeah, that’s interesting. you say that, liz, because i just spoke with oliver schnusenberg. he is the professor at the university of north florida, and he is starting out in the field of neuro finance, so looking at how we make decisions, and using brain scans to find out what part of the brain is happening. and so it’s a burgeoning new field. the hardware is not there yet. you can’t put an fmrg machine in everybody’s office, or can’t put a cap on everybody’s head. but it is a new field where we’re really finding out how the brain is working or making decisions when it comes to, you know, our money and finances. so it’s very fascinating. like i said, behavioral finance and psychology money is one of my passions. one of the people i write about in the book is professor hal hirschfield, who has a book called your future self, and he’s over at ucla. i’m a ucla bruin, so i’m a big fan. and he talks about how we don’t make decisions with our future self in mind. when he was doing the brain scans, he said that we see our future selves really is no different than a stranger, and the antidote to make better decisions is actually there’s a couple ways you can do it. one is to create a vivid visual picture of that future self. so you know, where are you? who are you with? what are you doing, and how do you feel? and then you’re more likely to make better decisions in the here now for that future self in mind. so there’s some fascinating stuff with the brain and research that i love to geek out on, and i try to apply that into the book. but really it’s trying to make better decisions when it comes to our finances as well as we can translate to better decisions in our life.
liz farr
yeah, i love it. i love it. now i’m gonna, i’m gonna shift gears a little bit. i have a series of questions that i ask most of the guests on my podcast. okay? and surprisingly, i keep getting really different answers. oh, so. so one of them is about leadership. you know, we are at this transition point between the old top down model of leadership and a more collaborative and humane version of leadership. what advice do you have for accountants who want to be better leaders?
rory henry
oh, that’s a that’s an interesting question. liz, i think, well, one we are at a transition point. i think we’re at, i think they’re we’re at. an inflection point, really, and that happened because the pandemic, and now with private equity coming in here, it’s forcing change. it’s forcing folks out there to be better leaders, and it’s presenting new opportunities for younger talent to sometimes go out on their own and build the practice, you know that they want so as far as leadership goes, you know, i it’s tough. i think, i think if you are at a firm that has a culture of helping folks learn and develop, you know, that is a huge catalyst. you know, arrowroot family office here, you know they’re great about continuing education and learning. and so i think if you’re at a firm here that that really prides himself on building the better leaders of tomorrow, you’re a good spot. if you’re not, you may want to move right. but we, i think we’re at in the golden age of accounting. liz, i know there’s a talent issue, but with the amount of money coming in from private equity bad or good or bad, and the opportunities to really serve the many needs of the client, as i outline the book and we all talk about, you know, you can do so many things in this profession. and i think, you know, we’re trying to solve the talent shortage and the pipeline problem. i think it’s got a branding issue. but we are really strategists. we are trans, like i said, transforming people’s lives, transforming people’s businesses. we have the ability to to do so much. so, you know, from a leadership standpoint, i think culture matters at firms you’re at, and then if you’re out on your own or whatever, just continue to learn. there’s so much great stuff out there, so many fantastic vulnerable people, people that have been on the disruptors podcast that you can learn from. so, you know, i try to be a sponge and learn as much as possible. i’ve been capped out on how many three letter names i can have after my after my name. but, yeah, i think there’s opportunities out there, and if you have the right culture at a firm there, you’re not in a great position.
liz farr
the emphasis on learning and curiosity, i think, is something that will serve everyone very well. i worked with a woman years ago who was impressed that i was taking french lessons on the side, because she said she would, it would never occur to her to learn something that didn’t have a direct correlation with doing her job better. yeah.
rory henry
no, it makes sense, yeah,
liz farr
yeah. now another question i ask is about mistakes. we always we. all of us make mistakes, and sometimes the most valuable learnings we have are from the mistakes that we’ve made. so what would you say is the most valuable mistake you’ve made? you know, valuable in terms of what you learned?
rory henry
oh, that is a good question. liz, there’s so many personal business mistakes i could reference. yeah, i at one time. i, like i said, i built a tax practice management software almost eight years ago, and canopy had raised a bunch of money at a time. they they went through all that money, and it was a tough lesson, but i would say that. i’ll say this. i i believe that my biggest catalyst was being okay with making a mistake, and that came from taking an improv class almost a decade ago. i had a fear of public speaking because of a middle school asb incident, it’s a long story. liz, we don’t want to get into it, but i sang whitney houston’s, i will always love you. i got booed, and it was traumatic. and so i said, i gotta get over this fear. and i signed up for an improv class, and i was so bad. liz, it was horrendous. i was on stage stuttering, stambling, making a fool myself, and i almost quit, and because level two was characters, and i can’t do an accent for the life of me. and i took level two, and i ended up taking all six levels, and i started performing on stages in la and what it allowed me to do, it allowed me to overcome my fear of failing. you go on stage and they give you a word and you’re supposed to be funny and you don’t know what to say. you got to build a world with a teammate who doesn’t know what’s going on either. and so it allow you to move on to the next scene. be okay with failing. it also taught me a couple other lessons. one was actively listening, because you have to stay present in an impromptu and you can’t create a scene your head because your improviser partner doesn’t know what’s going on. so you got to really build off the last thing that was said. and it really helps out in business and life, and you can collaborate better. it helps with teamwork. and then having a yes and mentality was the the last thing, probably i would say that that improv helped me out with it allowed you to say yes and to things, and that’s one of the major tenets of improv, is just saying yes. so yes to that meeting, yes to that date, yes to that vacation, saying yes, and because you never know what door would open up. i i talked about another podcast, you know, i went out on a red eye to vegas for digital, cpa or something. i didn’t have a ticket, but i just went out there to say hi to everybody, and i ran into clayton oates. clayton oates had not and i had an hour and a half conversation at that same bar at the at the aria, and it was a heartfelt conversation, and it was transformative for me. and he’s such a wonderful person. and if i didn’t say yes and to that, that trip and went to vegas, you know, i wouldn’t have had that conversation with clayton. he wrote the foreword to the book, and he did a phenomenal job. you know, i’m so thankful for for that. and so i think saying yes and to life being okay with failing, if anybody out there wants to challenge and wants to get out of their comfort zone, it would be to take an improv class. it’s changed my life. i wouldn’t be sitting here with you today. liz, if i hadn’t gone through that one on one improv class and embarrassed myself and moved on to the next one. kept on trying. so it’s, it’s been a big part of my life, and it’s why, you know, why i think i’m, i’ve had some success. and you know, anybody out there that’s looking to to challenge himself, i think it’s a good way to do so improv is, is a terrifying thing for a lot of accountants, because we like to know what’s going to happen next, yeah, but you know myself, i’m part of a virtual toastmasters group. ah, i love it. and, yeah, it’s a lot of fun. it started. i joined during the pandemic because it was really, it was originally an in place toastmasters out of st paul. so many of the members have been members for 20-30, years. yeah, then during the pandemic, it went virtual, and that enabled them to bring in former members of that club who’d moved away, as well as people from all over now. and i’m, i’m one of two accountants in that where invite, we would love to have more accountants join us, so it’s a lot of fun. yeah, i actually have a toastmasters tonight in three more hours.
liz farr
oh, i have one. oh, mine is in two and a half hours.
rory henry
all right, thursday toastmasters. i love it. liz, we’re kindred spirits. thursdays,
liz farr
yes, that’s right. well, now i know that i can’t invite you to join ours. so
rory henry
well, maybe i can pop in
liz farr
sure we’re always open to guess i love it. so another question i ask is about, what should accountants stop doing immediately?
rory henry
oh, liz, that’s a tough question. i mean, i mean, i it’s the easiest answer to stop selling time for money, right? you know? and i think i go back to how we can go from being transactional to more building teams and being transformational. it’s part of the book is building that virtual family office that dream team advisors are working with other great subject matter experts, or bringing this in house to help really transform people’s businesses, transform their lives so and i think that business model is going the way of the dodo bird, and we’re seeing more and more innovative practitioners take on a more future facing role, being priced properly, pricing their services properly, providing great value to their clients and helping them transform their lives. so i’m going to go with the generic stuff, selling your time for money answer, because i think that we have. opportunity, especially with ai and and and all the services we provide, we can, we can’t help change people’s lives.
liz farr
absolutely and with technology, it really doesn’t make sense anymore to sell our time for money. yeah, because what used to take three hours you can now accomplish in two minutes. so what are you going to do? are you going to build for two minutes of your time? or it’s just, it’s ludicrous? yes. ludicrous. ludicrous. yeah. and now looking towards a future, what do you think the accounting profession, the accounting industry, is going to be like in 10 years?
rory henry
oh my gosh. i gotta put my my future goggles on. well, i’ll say this, mckinsey did a study, and i know it’s the on the wealth side. but mckinsey did a study and said, in the next 10 years, advisors are gradually going to shed their role as just investment managers. i think you can substitute business advisors or tax advisors for that, and they’re going to become integrated life and wealth coaches that advise people on investments, banking, healthcare, taxes, estate planning, financial wellness, as i stated in the book, and i talk about the many needs of that client, we’re going to see these integrated services. and i think in the end, we’re going to become really life coaches and business coaches. we’re going to be the people that are in the belief in the behavior business. we’re helping people believe they can do something. we’ll have the real time analytics, the data, many of the technologies are probably spit out that plan. it’s going to be, we’re going to be coaches and coaching people to success. i think that’s really what the advisor of the future is, or advise-ror, right for that return on relationship. we’re going to have those relationships where we can really coach people to success and whatever success looks like for that person in their business and their personal lives,
liz farr
success, you know, whatever it looks like in their lives. yeah, that’s perfect. and i think that that is the perfect note to end our conversation on, you know, an optimistic, forward looking view of the accountant as more of a business and life coach than just the keeper of the debits and the credits.
rory henry
yes, i love it. liz, thank you so much for having me on the show. well,
liz farr
i appreciate it very much now, rory, if listeners want to get a hold of you, yeah, where are the best places to find you? well,
rory henry
i am most active on linkedin, so you can message me on linkedin if you want to learn more about the book should be on sale by the time this come out comes out. and then you can go to adviseror.com to get updates on the book, and then i’m all also available via email, rory@arrowrootfamily office.com.