Latest / Financial Planner Search / Quarterback Planning for High-Income Founders with Josh Davis | Financial Planner Search
Transcript
- Gregory Wilnau: Josh Davis, good morning. How are you today? Josh Davis: I'm doing good, Greg, how you doing? Gregory Wilnau: I am awesome. Thank you so much for coming on the podcast. Josh Davis: Looking forward to it. Gregory Wilnau: Yeah, let's just jump right in here. So the way I like to start these is just to get a little bit more understanding of who you are, what you do. So maybe you could take a second to just tell us a little bit about your practice and what you specialize in. Josh Davis: Yeah, so I've had my practice now for nine years and we specialize in business owners. So generally high income business owners who have large tax bills or have a lot going on and need someone to delegate, you know, kind of their organization and the tax plan to somebody. So that's where we jump in. Gregory Wilnau: Okay, so you specialize in business owners and helping with tax planning. ⁓ Maybe you could tell us a little bit about how you got started and then maybe what inspired you to do this. Josh Davis: Yeah, yeah, absolutely. So ⁓ my uncle was in the industry for over 40 years. And so when I was in college, I really saw him enjoy his work and have a lot of fulfillment out of helping clients. So I switched my major to ⁓ finance in college and started taking finance and investment classes. I just really loved it. Just fell in love with it right away and knew like this is what I wanted to do. ⁓ So I worked in the industry for a handful of years before starting my own practice and really felt that I wanted that my own practice so I could build it from the ground up the way that I thought was the best for the clients. And so yeah, it's been nine years now and just loved every minute of it. Gregory Wilnau: Yeah, I love it. ⁓ That's great. So let's talk a little bit about how many clients you have now since you started nine years ago. Josh Davis: Yes, so we are about 115 households and we just crossed $200 million under management. yeah, it's been tremendous, tremendous growth over the last nine years. Gregory Wilnau: Congratulations. That's awesome. How was it during COVID for you? Because I was in, I was fully remote and fully online during my business when COVID happened. And that was an interesting experience. But how about for you? Did you notice anything, any pattern changes? Anything changed for you when all that happened? Josh Davis: Yeah. Yeah, I COVID was, it was a wild time, but, ⁓ I mean, lot of my clients were business owners were just scrambling to keep their business afloat and stuff like that. So diving in and helping them with, you know, PPP money and stuff from the government to help them. ⁓ so kind of try to stay on top of those government programs during that time really helped our clients so they can focus on the day to day and the business. Gregory Wilnau: Mm-hmm. Josh Davis: and not have to worry about learning about the government programs out there. So we definitely try to show our value add during that time, ⁓ but it was just a crazy time in the markets and with the lockdowns and stuff like that. But I feel like we came out of really good and we landed a lot of clients that year from kind of our high level of service. ⁓ Gregory Wilnau: Yeah. Do you think that was because there was just so much going on and they just needed some help? They had too much to kind of worry about and focus on and having you think more about the money and all and all of that made it easier? Is that what kind of drove them to you? Josh Davis: Yeah, knowing that they could rely on us for, you know, tax updates or different programs. ⁓ and then also from new clients, ⁓ people that just saw that their advisor really wasn't doing anything for them. ⁓ and when the markets were crashing, they weren't getting phone calls, they weren't getting updates. And so that's when people really start shopping around and seeing what else is out there. And so if they talk to any of our clients, they'll, you know, they'll get referred to us because they. they get told how much hand holding and help we offer them. Gregory Wilnau: Yeah, maybe we could start there. Because I like to during these episodes, I want to talk, I really want to learn more about your clients and kind of how you serve them, what it looks like for them. I know that with business owners, a lot of times, especially if it's your first business, ⁓ you could do when it comes to finance, you can do a lot of things reactively, especially when it comes to like taxes, you know, one year it's really good and then you get your tax bill, you're like, ⁓ damn. So that might be what prompts them to reach out to an advisor. But maybe you could describe more the typical person that kind of comes to you. Is it a tax thing? But what's a typical situation that you might lead them through that prompts them to reach out? Any patterns? Josh Davis: Yeah. Yeah, I would say the two main ones are taxes. So their income has just skyrocketed and they're paying tons in taxes. And so they'll ask their CPA like, what should I do? And then the CPA will refer them to us and we'll kind of work with the CPA on some strategies. And then the other one is retirement, right? So they have real estate, business, different stuff going on. And they're like, can I afford to actually retire next year or five years from now? ⁓ And so they ask for referrals and they get our name or they find us online or they get referred through a CPA. And so we'll kind of help get them organized, make sure they're on track, try to save them in taxes, make sure their state documents are all up to date and the way they want it. And so we kind of bring organization instead of having, ⁓ Gregory Wilnau: Mm-hmm. Josh Davis: Insurance agent out there and the state attorney a CPA will kind of wrap it all together and get them my organized plan and this and the clients love it They're just like we feel so much more organized and know what's going on now and Exactly, yeah, and so we play the financial quarterback where we're bringing everything together and then we're explaining to them so they understand it a lot of times They'll have this estate plan, but they really have no idea Gregory Wilnau: Yeah. It's kind of like wrapping a bow around everything almost. Yeah. Josh Davis: what was set up or what's going on. And so we'll help summarize their insurance plan, their state plan, what's going on in their tax return, what levers we can make adjustments to. ⁓ So yeah, those are the two main ones, the taxes and retirement. Gregory Wilnau: Okay, so let's dive into this a little bit. sounds like one of your primary clients, business owners, which that's awesome. I'm a business owner too. owner retirement, that's an interesting thing because a lot of times business owners don't necessarily, they're often entrepreneurial and they might not necessarily want to retire, they might just wanna new business or to sell it. So anyway, this is me a long way for me to get at like, help me understand maybe the differences in the patterns you've noticed from a business owner who's looking at retirement and just a career person, an employee who's looking at retirement. What are some of the differences there? Any any thoughts on that? Josh Davis: Yeah. Yeah, I mean, with any business owner, we definitely had a plan for what they're going to do. It's essentially getting to financial independence where they sell their business or they hire somebody to manage it for them. But a lot of times, like for example, a meeting I had yesterday, they're just burnt out. They've been doing the business, they've been running the business for 30, 40 years and they can't take it anymore. So maybe it's bringing in management and making it more passive, but keeping the business. Gregory Wilnau: ⁓ yeah, baby. Josh Davis: maybe it's ⁓ selling and doing something else, something less stressful, less time consuming, ⁓ or it's jumping into more hobbies. So we definitely need something to transition to, because a lot of times business owners, they like to be somewhat busy, they like to have some kind of purpose. So just going from a full-time business to nothing is not necessarily a good plan always. So having a plan in place and what the next few years of transition will look like is really important with business owners. Gregory Wilnau: Mm-hmm. Okay, I love that. Yeah, that's interesting because I know that, you know, I've been burnt out before and it is a lot of work. There's a lot of pieces. There's a lot of moving parts. There's a lot of pressure, right? Owning a business, there's a lot of pressure there. So, but also, you know, you do want that purpose. You want to feel like you're getting you're waking up for a reason in the morning. I think a big difference between retirement, doing being in business and an entrepreneur is oftentimes when you're ⁓ a career Josh Davis: You know. Yeah. Gregory Wilnau: person, you kind of know that there's a path that's kind of there for you, right? You go to school, you graduate with a degree, you know, if I get these classes and I go through this path, I'll get a degree and then there's a path there for a career. But with an entrepreneurship, it doesn't really exist. You kind of have to pull it out of the ether and decide for yourself the path that you're going to take. And you you might have help along the way, but ultimately that has to come from inside of you. Josh Davis: Yep. Yeah. Gregory Wilnau: So I'd imagine that there's differences between how somebody who's had a more traditional career and somebody who's had a more typical experience in business, in how they approach thinking about retirement and what comes after. Have you noticed any patterns? Josh Davis: Yeah, I mean I would say, mean every business owner entrepreneur is different and some like taking a lot more risk and some don't like taking risk, right? So sometimes you'll have a business owner and they'll have a million or two million of cash sitting in the business, right? And they like to have that cash in the business but it's not really earning anything from them. And there's other business owners who wanna start two or three businesses and... know, risk everything on one business. And it was like, okay, maybe we should dial it back, you know, have a safety net, take it easy and stuff like that. So, and then also does the spouse or the kids work in the business, right? So that's another aspect as well. So maybe it's not working out to have all the family in the business and we need to have something else for the kids to do or your wife to do or something like that. So there's a lot of aspects to the entrepreneurs and business owners that are Gregory Wilnau: Mm-hmm. Josh Davis: That's a lot more complicated than just somebody who's a W-2 employee at the same company all their career. Gregory Wilnau: Yeah, a lot more moving parts, a lot more nuance. All right, so let's talk a little bit more about maybe that the, what's on the mind of your clients when they're meeting with you for the first time or thinking about possibly working with you. ⁓ So they've been referred, either referred to you by a CPA or they've had this huge tax bill and they're like, ⁓ damn, what do I do? So they're meeting with you for the first time. What are some of the questions that they typically might ask or some of the concerns that they might have that they'll bring to you when they meet with you for the first time? Josh Davis: Yeah, I would say most of them are wondering what we actually do for them, right? Maybe they've never had an advisor before or they have had them, but we're different than most advisors out there. You know, a lot of times they think they have an advisor, but it's really, they have an insurance agent, right? And so, or they have an investment advisor, but they haven't actually done any planning. So explain to them, like all the things we offer and we do for them. is generally a question that we get almost every initial meeting. And they're just explaining all the aspects and all the things we look at. And they're usually generally pretty shocked, right? Usually their advisor has never asked for the tax return or their state planning documents, and they're actually shocked we're looking at those compared to what they're used to seeing. So yeah, I'd say what we actually do for them. And then the onboarding process. How many meetings, when do we meet, know, ⁓ what it takes to get from start to finish to become an ongoing client is a big question as well. Gregory Wilnau: All right, so we'll talk about your process and what it looks like to start working with you a little bit later. But let's dive a little bit more into some of the questions. So they'll come to you, they'll ask, what do you do for us? How do we work together? Are there any other questions or things that you find are on their minds when they come to you? Josh Davis: Yeah. Yeah, mean, one big one is how do get paid? Right? So just explaining that we're fee only, we don't charge any commissions, you we charge a percentage of what we manage. And then are we fiduciaries, which we are. So a lot of times when people look online, like how do you, you know, interview advisors, one of the big things is are they a fiduciary? You know, how do they get paid? What services do they offer? Gregory Wilnau: Produce share is just a fancy word for you make decisions that are in their best interests. Yeah. Okay. I didn't want to interrupt. I just wanted to explain what that was in case you... Anyway, go ahead. Josh Davis: in their best interests. Yeah, exactly. Yeah. Yeah. And then, ⁓ and then generally, they'll also ask, ⁓ how do we like what's our investment philosophy and how do we manage investments? ⁓ And so we kind of dive into that as well. And then we'll go through their current investments and kind of our recommendations for what we would change if they became a client. So there's generally a handful of questions around that as well. Gregory Wilnau: interesting. Okay. Let's talk a little bit more about ⁓ maybe some of the demographics that your ideal clients fall into. like age range, income, maybe net worth. Are there any tangible numbers for when it starts to make sense to work with you? Or when you found any patterns for when they start to reach out around age range, income or net worth? Anything specific? Josh Davis: Yeah, I'd say most of our clients that fall into our ideal niche are between ages of 40 to 60, business owners that either own one business or multiple businesses and generally have an income, family income over $500,000. We have a whole bunch between 500 to a million, but generally above 500, if not a million dollars of income. And they may have real estate, they may not. ⁓ And they may have family working in the business, they may not, but ⁓ generally, their lives have gotten much more complex over the last five or 10 years. ⁓ And so they need help, right? They're scrambling left and right. They could handle it when it was a startup business and they didn't make much money, but now they make a lot of money and a bad decision is very costly, right? They make one bad decision, it costs them $10,000 in taxes, right? So they need the help. ⁓ or they just realized they need the help. ⁓ Gregory Wilnau: Yep. One of the first books I read about money was called Rich Dad Poor Dad. You know, it's a very famous book. It probably needs no introduction. And one of the things he said is, you know, poor people have problems and rich people also have problems or just different types of problems and having too much money can be a problem or cause other problems. So, you know, I mean, he's like, I'd personally rather and this is me too. I'd personally rather have problems from having Josh Davis: Yeah. Yeah. Gregory Wilnau: enough money or too much money than not having enough. it sounds like they come to you, your clients come to you to solve those types of money problems for sure. ⁓ When it comes to having multiple businesses, what are some of the problems that can come from that, that you are very well equipped to help your clients solve? They've got like three, four different businesses, you know, they're all over the place. And then they come to you, what's a typical thing that Josh Davis: Yeah. Gregory Wilnau: like a problem that comes from that that you can just like help, help with. Josh Davis: Yeah, yeah, I mean, what I see a lot is they have multiple businesses and employees in different places, and then they want to start a retirement plan, but they only want to start it for this one business. And they don't realize the rules that you have to offer the same benefits to all these different employees and which ones you have to offer them to. So a lot of times CPAs don't even know that, right? So explain to them what we can and can't do with multiple businesses. And then also, know, cashflow. How much money are we putting into this new startup? Where we're not risking their whole financial future on this new startup. So making sure they kind of manage liquidity versus illiquid ⁓ startups and stuff. ⁓ And then are they bringing on partners for these? So what kind of questions or discussion things should they bring up when they're negotiating a partnership and stuff like that? So yeah, there's lots of different things that could come up when they're starting multiple businesses. And then if they have liquidity event, what do they do with that? ⁓ Do they put it into the other businesses or do they keep it separate? And how do we handle these different businesses the most tax efficiently, right? Maybe one has a loss over here, but the other ones are highly profitable. So what do we do with that? Which ones? are better to have higher income and which ones are better to have less income in, depending on the structures. So lots of different factors when they have multiple businesses. Gregory Wilnau: Where do you typically find your clients? I know that some were referred to you by CPAs and probably other clients. ⁓ But is that the typical place where you find your clients? Where do they typically come to you from? Josh Davis: Yeah, so I'd say a third online search, ⁓ a third from CPAs and then a third from current existing clients. yeah. Yeah, yeah. Not all for one source. Yeah. Gregory Wilnau: Nice. So you've diversified. You have to it on one source. That's great. OK. So I know we're spending a lot of time on how you work with your clients, but I think that's important because anybody who's considering, especially a business owner, working with you, you'd want to know, have an idea of what it would be like to work with you. So maybe we could talk a little bit more about some of the ways you and your team get to know your clients and understand their situation. Anything stand out there? Josh Davis: So, we'll you later. Yeah, so our typical process is ⁓ people can schedule an intro call. So it's usually 15 or 20 minutes and they can, they can book it through the calendar on our website, ⁓ davisprivatewealth.com. ⁓ And ⁓ we'll just have a chat, just get to learn more about each other, what their situation is, what their pain points are, ⁓ and see if it makes sense to have a more in-depth. And then so from there, We generally will gather a handful of things ⁓ about their investments, taxes, that kind of stuff, insurance policies, and then we'll do a more in-depth one hour, either in-person or over Zoom. And maybe we discover things that they didn't even know were problems, right? Things we see like, whoa, your beneficiaries on these accounts are your ex-spouse or your parents and not your wife or something like that. ⁓ You know, you're, think you have a trust, but you don't actually have a trust, right? So different things will come up and we'll just discuss it and we'll kind of go through all of the things we could help them with. And then maybe sometimes, maybe sometimes there isn't much we can help them with. And maybe we say, Hey, come back, you know, in six months or a year when this and this happens. And then maybe we could offer more value, but we'll definitely, we're definitely honest with them and transparent. And the ones that have a lot of things going on. and there could be a lot of issues. And so, you know, we just say, hey, this could take some time to kind of resolve all these issues and stuff like that. And, you know, we'll take care of this this month and these other issues next month. And so generally the onboarding process is after they become clients, two to three meetings. And then we meet with them either every six months or once a year after that on an ongoing basis. But in the first Two to three meetings we're dealing with, generally the investments, retirement, planning in the first meeting. Second meeting is gonna be more insurance, estate planning, cashflow planning. So that's typically the onboarding process. Now there's some that are much more complicated, where we're gonna need a handful more meetings, but for the most part, it's two to three meetings to come up. Gregory Wilnau: Yeah. Okay, I like that. I wanna dig more into your onboarding process and what it looks like to work with you over the course of a calendar year here in a second. ⁓ I also wanna ask, cause ⁓ you know, we can spend a lot of time ⁓ thinking about the things that we want to do better or are better at or are working on. And it takes a little bit more effort to acknowledge the things that we're good at or the things that we do well. So if you would for me. Josh Davis: Yeah. Gregory Wilnau: Put on your humble hat for a second and maybe brag about yourself for a little bit. Tell us something that you do for your clients that takes, you or your team do for your clients that takes a significant amount of time or energy, but that they might never know about. Josh Davis: Yeah. they might never know about. That's a good question. ⁓ I would say we are very detail oriented on stuff. So we are tracking all of our clients retirement plan contributions from 401ks, pension plans, SEPs, SIMPLES, ROTHs, IRAs. And so we track everybody's contributions throughout the year to make sure. that they're on track to max them out, right? And if they're not on track, we'll make those adjustments and we'll let them know, hey, let's get this additional money in here. And so it's just above and beyond just making sure that we're helping them out as much as we can, tax wise and retirement funding wise. And then we're looking at their tax returns every year. And so sometimes they won't really know that we've done it, but other times when there's a mistake or something missing, Gregory Wilnau: Mm-hmm. Josh Davis: We'll let them know what their CPA know, like, Hey, you're missing this or we need to make this adjustment. ⁓ and so we're, we're going above and beyond to help our clients because it's what I would want somebody to do for me. Right. I want somebody looking at that and making sure everything looks good and we're not missing any opportunities. Right. Because I feel like if you're not getting a high level of service, a lot of things can fall through the cracks, especially as. Gregory Wilnau: Right, yeah. Josh Davis: your business owner's life gets more complicated, way more things can fall through the cracks if you don't have somebody looking out for you. Gregory Wilnau: Yeah, so you put a lot of time into thinking through things, different angles, ⁓ sorting through details to make sure that the final output is in the best interest of the client. And that's something that takes a lot of energy, a lot of thought. Probably also spend a lot of time keeping up to date on changes so that you're working from the most current information. And I could see how that would be really helpful to a business owner who has many other things to worry about and think about. Josh Davis: Yeah. Gregory Wilnau: All right, so let's talk a little bit more about your practice and where you're taking it. ⁓ In the next one to three years, ⁓ maybe what's your vision? Are there any goals that you're working on? Josh Davis: Yeah, well, we just crossed $200 million in our management. So we're working towards $300 and I think we're going to hit it a lot quicker than the last $100 But I brought on another full-time advisor about a year ago. And so we're having him take the lead on a handful of clients and stuff like that as he gets trained up and gets better and better. he's working on his CFP as well to get that. Gregory Wilnau: Congrats. Yeah. Josh Davis: So yeah, we're just trying to add as much value as we can to clients. And we generally bring on anywhere between 10 to 15 new clients every year. So I would say, we'll probably get to 150 clients and over $300 million in the next three years. And without sacrificing any client service on the ones we already have, that's very important to us. Gregory Wilnau: Awesome. I love it. You're growing. You're bringing on new people. ⁓ That's great. Okay, so this is the part of the interview where I like to understand more about what it looks like to work with you. And we kind of already covered maybe what onboarding would look like, you know, the first couple of weeks or the first couple of months, how you get to know your clients. ⁓ Maybe you could explain more what it... Josh Davis: Mm. Yeah. Gregory Wilnau: looks like to work with you during the course of a calendar year, like maybe two to three years after you've already gotten to know them after they're onboarded. Maybe the see maybe we could do a little bit more interesting. Somebody who's got three to four businesses, right? You've been working with them for five years. What is it? What is it? Explain what it looks like to work with somebody over the course of a calendar year as This is a very probably dynamic situation, having that many businesses. How do you work with somebody like that in an ongoing way? Like what are the interactions look like? What's the meeting cadence like? I know this is probably a big question. So feel free to pass on this one if you want, but do you want to take it, take a stab at maybe what it kind of looks like to work with somebody, a business owner who has a situation that's kind of complicated? Like how do you approach it? Josh Davis: Yeah. Yeah. Well, every, every, every client's gonna be different, but I would say what it would look like is we're getting together twice a year, either in person or lunches or zoom. ⁓ we're helping the business owners, but we're also helping their kids. Usually they have adult kids that either work in the business or don't. Right. ⁓ and so we're, coordinating to make sure that the whole family is doing things tax efficiently. Right. So if the kids work in the business, are there things we could do to help save the overall family taxes? ⁓ We're checking in, we're reviewing their estate documents. So maybe their documents were updated 10 years ago and we need to have a conversation like, your kids are now adults. Do you trust them with this level of money or taking over these businesses? Do we need to update these documents and bring the lawyer in? ⁓ We're talking with our CPA generally ⁓ with them or without them. So we'll get the taxes and the tax return and then we'll have a conversation with the CPA and say, Hey, what about this idea or this idea? so we're very proactive when the, even when the client's not there, right? Cause the client is very busy with all their businesses and properties and they don't have time to set up calls and meet with their attorney or their CPA. And so we're proactively having these conversations with them ⁓ to see what we can do for our client to, to, you know, ⁓ Gregory Wilnau: Mm-hmm. Josh Davis: We're informing the CPA. they're thinking about selling this business in the next couple years What should we strategize to see what we should do with this? ⁓ So yeah, we're reaching out we're meeting with the clients but we're also doing things behind the scenes with the other professionals to make sure that Nothing's missed and we're doing the best job we can for the for the clients and stuff And then generally when there's new tax updates or big law changes that happen here in Florida Gregory Wilnau: Mm-hmm. Josh Davis: We're doing our research on those and then we'll take that information and go through our client lists and say, Hey, who does this apply to? Right. Who is a business owner that operates in there and they own the real estate. Right. So this new change here applies to these 10 clients. Let's reach out to them and see what we can do to get them, ⁓ to, handle this situation here. So, ⁓ yeah, we're just very proactive, right? So we're never just resting and stuff like that. We're looking. Gregory Wilnau: . Josh Davis: for opportunities for all of our clients ⁓ to help them financially. Gregory Wilnau: It sounds like the way that you work is you have a structure, a basic structure that you follow and that structure creates, well, that meeting cadence creates the underpinnings of structure that allows you to kind of creatively operate and coordinate things. ⁓ Because it gives you a lot of room and space to build on top of what's going on with the client and the things that are dynamically changing in their life so that you can pull all of the pieces together. Josh Davis: Yeah. Yeah. you Gregory Wilnau: ⁓ I like that because nothing stands still, especially in business. It's not a static thing. It's a very dynamic thing. Josh Davis: Oh, things are always changing. And then also things are always happening, right? A family member passes away, a property gets sold. So we try to be the first person they call all these things. And so they know they can go to us and we can get them an answer or help them with something or guide them on any family or financial thing that happens in their life. We want to be the go-to place for them. Gregory Wilnau: I love it. All right. So thank you so much, Josh. For somebody listening who wants to get in touch with you and a business owner who sees the value in what you do and is interested in learning more, ⁓ what should they do next? Where should they go? Josh Davis: Yes, so go to our website, davisprivatewealth.com and you can schedule ⁓ an intro call right there on the calendar there. And we'd be happy to have a conversation and see where it goes. ⁓ yeah, so ⁓ business owners, you know, we have clients in 15 different states and the majority are here in Palm Beach County ⁓ in South Florida. but ⁓ we enjoy having conversations and seeing if we're the fit. If not, we can kind of guide you in the right direction as well if it's not a good fit. Gregory Wilnau: All right, Josh, thank you so much for coming on. Thank you for all that you do. I think small business owners are the engine that turns the world. So thank you so much for all you do to serve them. Josh Davis: Awesome. Thanks for having me, Greg. Awesome. Thanks Greg. Have a good one. Gregory Wilnau: All right, bye buddy.