October 24, 2013

McPlanning? How Franchising Works in the Advisory Space

Briggs Matsko looks to replicate the success of Retirement Security Centers in other markets

Franchising a financial planning business—it’s not McDonalds, but it’s an idea with legs, at least according to Briggs Matsko, a Lincoln Financial Advisors-affiliated planner.

Matsko, the developer of the EASE retirement planning process and co-founder of Retirement Security Centers, claims five of the other top Lincoln advisors have already signaled their intent to purchase one should the plan come to fruition.

It stems from the overwhelming success he claims to be experiencing with Retirement Security Centers, a firm founded to focus on what he sees as an underserved mass-affluent market.

“Franchising the Retirement Security Centers would be similar to The Mutual Fund Store concept,” Matsko, a CFP and CRPC, explained at FPA Experience 2013 in Orlando last week. “RSC’s unique value proposition is that they are process-driven, not product-centric. We’re also looking at changing the model by using salaried-based advisors.”

The stores would be populated with three to five advisors and would have centralized call and service centers.

“We would handle the prospecting, so they can focus exclusively on the client. We would also allow for equity stakes in the firm, similar to a law firm.”

Matsko’s RSC Sacramento office manages $1.4 billion in assets, with Matsko and Jeff Maas, his partner, managing $1 billion of that amount. Matsko said he relies heavily on Lincoln’s proprietary interactive software to achieve scale, software that is in its third generation currently developed by Fiserv.

“Process is our quiver, and our software is a major arrow in the quiver; it’s interactive, customized and provides for a more collaborative client experience.”

The process to which he refers heavily involves the aforementioned now 10-year old EASE platform, which stands for envision, analysis, solutions and evaluation. He describes the platform further:

"E" stands for envision. “Our engagement ratio is extremely high — well over 90% — when we use our pyramid to explain the concept of categorizing expenses and linking them to income sources and assets. Since it uses a visual representation to convey the message, clients generally find it easy to understand and retain.”

"A" stands for analysis. “We use a specific customized software program called Retirement Income Illustrator, which my partner, Jeff Maas, and I helped develop and train in our roles as consultants to Lincoln Financial Advisors."

"S" stands for solutions. “Advisors often are trained to be product centric — selling the features and benefits of products while trying to convince clients they should "buy" or fit the products. We believe the product should be tailored to fit the client and that can be accomplished only through a process that includes discovery (asking the right questions) and analysis. Since the client is intimately involved and understands the process, the solutions are more evident and there is a higher level of understanding and implementation around their plan.”

 "E" stands for evaluation. “While there are tools such as Monte Carlo analysis to determine the probability of success or failure, we believe that income distribution and planning is not a one‐time event, but rather, an ongoing process. To move beyond ‘probability theory,’ it is our belief that an annual review of the client's retirement situation must take place."

Using the process helps to define isolate and solve for what he sees are the four biggest risks in retirement: longevity, expenses, rate of return and inflation.

“Retirement is a complicated process; it’s not black and white, there are 1,000 shades of gray,” he concluded. “We can take a complicated concept and simplify it while creating a dynamic experience for our clients.”

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