Episode 9 with Terri Kallsen CFP ®, COO with Wealth Enhancement Group

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Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.

Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.

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Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

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Sandy: Today, we’re talking with Terri Kallsen about the challenges faced by registered investment firms and advisors in our new virtual environment. Terri, can you tell us a little bit about yourself and your background?

Terri: Sure, Sandy. Thanks so much for having me today on your podcast. You know, my background is over 30 years in the financial services industry. I’m fully insurance licensed, all of the FINRA licenses. I’m also a certified financial planner as well as a certified wealth strategist. So, originally, I started out at a company called Thrivent Financial, which is headquartered in Minneapolis, and I worked there for almost 12 years in various areas, both in the sales, I became registered during that time, and also worked with recruiting and our head of sales and really learned the financial planning process and the importance of risk management, investment management, long-term planning to achieve long-term holistic goals. Then I ran the wealth management group down in USAA, San Antonio, Texas, so, yes, I did move five hours south of the Canadian border to five hours north of the Mexican border with three young children and a husband. So, spent many years at USAA serving our military and their families very proudly in all areas of investing, financial planning, banking as well as insurance services so really spent quite a bit of time there building that offer and really growing that offer for our military. Then went to Charles Schwab and ran their private client group for several years, which was about, let’s see, about $150 billion in assets as I was working there, and then ran the branches, so 350 branches across the country as well as internationally, and then all of retail services. That was a fantastic job to really continue to grow a firm into a wealth management firm and, during the time I was there, we won the J. D. Power Full-Service Award three years in a row so that was really an exciting time. And then I came to Wealth Enhancement Group, which is an individual RIA, registered investment advisor. I’m the chief operations officer and so I can take all the experiences I’ve had in the industry from brokerage, investing, to direct to consumers, digital, to obviously building a relationship based on high tech, high touch, and serving in a fiduciary manner to all of our Wealth Enhancement Group clients. 

Sandy: Wonderful. Thanks, Terri. Welcome to Beyond the Challenges. As a female executive in the financial services industry, have you found any challenges as you’ve gone up in your career? Or what have you seen?

Terri: Well, sure. You know, 30 years in any industry, you’re going to see challenges and, you know, those challenges often present opportunities for learning and growing and so I think about them as things that I’ve had to really learn to be able to overcome so that I can grow in my career and serve more people so, ultimately, more people could achieve financial security. So, yes, you know, growing — as I’ve grown, obviously, taking all the exams, the multiple exams that you need to take, as well as building the relationship skills and, you know, every book that’s written about leadership, and in particular, Marshall Goldsmith, who was my executive coach, really shares that as you grow in leadership, your technical skills are obviously still very important. The fact that I can understand investment portfolio or the need for disability insurance and what it provides as well as, you know, different types of trusts, GRAT trust, all of those things are very important, but as I grow, I need to have more emotional intelligence and really inspiring people to a larger vision and goal, bringing people together with various talents, diversity, and making sure we can get the full potential from people. So, there’s always been challenges in that. There’s always differing opinions that people might have. But perseverance, tenacity are all very important qualities that, as a female in the financial services industry, I think it’s required in the job, I think it’s required in everyone’s job, but really having an end in mind and bringing people together to achieve a particular goal, be it for clients, be it for the firm, be it for shareholders, or be it for employees, it requires a different level of emotional intelligence to try to get there.

Sandy: Well, you’ve obviously gotten there because you’re extremely successful. So —

Terri: Oh, thank you. Thank you very much. It’s because, you know, I think one of my greatest talents, believe it or not, is the ability to attract and retain talent and, you know, knowing talent, understanding talent, rewarding talent, and coaching talent. You know, you’re only as great as your weakest link, right? And so if you’ve got a weak link on your team, then your team’s not gonna be so great and so, you know, if I have been successful, it’s because I’ve been able to pick and retain great teams.

Sandy: Great. Well, let’s talk a little bit about some of the challenges that are faced, because I know all sectors are facing challenges right now but I think the insurance and financial services seems a little bit longer than average, especially with the regulatory change, economic uncertainty, consumer expectations, and now everyone trying to do a virtual selling environment. How has COVID-19 changed the way your advisors reach their clients and service their existing clients?

Terri: Well, you know, when we think about Wealth Enhancement Group, a $30 billion registered investment advisor, headquartered in Minneapolis, Minnesota, but growing by 60 percent a year in terms of total assets, doing that through organic growth of our advisors as well as through acquisitions and, as all of you who are listening know, that we are in an expansion phase in the RIA industry and we’re continuing to acquire, consolidate more RIAs so we can serve more clients. And so COVID hit and, at first, there was, you know, quite a bit of uncertainty in terms of the economy, in terms of advisors’ openness to leveraging more technology to meet with clients as well as clients and so, in the initial phase, there was quite a bit of concern but, as we learned from clients what their needs were during COVID, I mean, financial needs don’t stop because a virus has arrived in this country or internationally, so we spent time with clients, spent time with advisors, everyone worked remote. That worked out beautifully. Wealth Enhancements Group’s technology area is very, very strong. So, we got everyone working, being able to meet with clients very easily. Clients loved it. We were still able to do webinars for clients during this time, virtual webinars, so, you know, questions people had about taxes and investing and various policy changes that were going on during the election, we were able to help many clients through that process. So, although it started slow, really picked up and now Wealth Enhancement Group had one of their best years in the history of the firm which is over 20 years last year, and in 2021 is continuing to help more clients with their financial needs plan. You know, this COVID has really created questions in the minds of our advisors and our clients, you know, should we be helping clients retire earlier if they want to retire because, you know, maybe they’ve seen some things in their life based on COVID that they wanna spend more time with family or they wanna move, we’re right there to help those clients with those key decisions. So, overall, COVID has been very, very challenging across the country, amongst many families, but for Wealth Enhancement Group, it gave us a chance to step up and actually meet with more clients and help more RIAs consolidate within the increasing regulatory and technology requirements that this business is continuing to offer throughout history.

Sandy: Okay, so it does sound like, I guess I’m gonna say the uncertainty has brought a lot of opportunity to both your own firm as well as the industry in general. What do you think is, I’m gonna say, the biggest opportunity that you see right now?

Terri: The biggest opportunity right now in the industry amidst, you know, a changing economy, both domestically and internationally, is to have a financial plan. I mean, I am a certified financial planner. I believe that every client that wants a plan, be it whatever wealth segment they’re in, should have a financial plan that covers risk management, insurance, banking, investing and, you know, really understanding cash flow and budgeting as well as college savings plans and estate planning. All of those are critical during COVID and outside of COVID, but where I think the opportunity is is that COVID helped accelerate people to really thinking about all of their financial needs, not just their investment or retirement needs. And so a financial plan is our biggest opportunity in this industry. Everyone should have access to one and everyone should have access to talking to an advisor to be able to help them think through the various solutions so that they can achieve their goals.

Sandy: Great. What do you think will be changing in financial services over the next three to five years?

Terri: Well, I believe there’s going to be three major themes that will be taking place. First of all, the continuous need for improved technology, leveraging artificial intelligence, machine learning to be able to help support advisors in knowing their client even more effectively and facilitating the process to serve clients. The second thing is that we need to make this simpler for client. Many clients can get overwhelmed with the need for various investing solutions, insurance solutions, banking solutions, and advisors can be that key coach in their life, the key facilitator to produce or provide the right solution at the right time and so that is a huge opportunity we have with every segment of society, be it baby boomers, millennials, generation X, generation Z, which is much younger, but really instilling the need for simplicity in this industry. And the third area, I believe, is around innovative pricing. There’s going to continue to be a need for transparent pricing, for innovative pricing, be it fees as well as subscription fees may be another area that we’re going to need to understand. I was just reading the other day that most millennials are willing to pay an advisor by the hour or by subscription and so some of the outdated models that we have, we may need to think about how do we meet the needs of the next generation of clients so they understand what they’re paying for and they know what services they can expect.

Sandy: Okay. Now, with a lot of companies talking about technology, and you see more in insurance than in financial services, but there’s a lot of tech debt out there. How do you see carriers or financial firms dealing with that tech debt in order to be able to invest in some of this new technology?

Terri: Well, I mean, one of the things that technology offers to the financial services industry and the insurance industry is the ability to know their client even more deeply and this can be from drawing various aggregation tools about the client and then understanding and being able to predict the various life events they have. There are seven major life events in anyone’s life and, you know, many of us are going through some of those right now. They might be marriages, divorces, planning for retirement, living in retirement, moving, all of those life events, we pretty much have, based on the data, the ability to predict. So, when we’re able to do that, we’re able to scale our operations, meet the clients at whatever life event they’re at, help them and then, ultimately, reduce some of the operational needs that we’ve had because we’ve been able to scale that based on the technology that we’ve offered. So, investing in technology can help drive a better client experience which, ultimately, helps you from a retention and referral standpoint and then also reduces some of the need that you have in the operations, in the back office to be able to spend more time with clients.

Sandy: So, do you think that your advisors have really been growing their books of business based on, I’m going to use the word “new technology,” that is out there for them? Has that helped them grow their books of business?

Terri: Oh, yes, without a doubt. So, first of all, being able to capture all that we know about clients, both in client meetings but also when we know what clients are shopping for, what they’re looking for, what life stage they’re in, absolutely, we can track all that and then use it to create a richer client experience when we have meetings with them. So, you know, let me give you an example about my own advisor. In the last 18 months, during COVID, you know, my husband and I, we’ve been married 28 years this year, you know, we are going through some pretty big life events. One is our daughter went to college. Two is we are planning to move. Three, I actually changed jobs, right? So the job changed. My husband actually got a job and he hadn’t worked for 16 years because he stayed home with our three children and, you know, also we’re caring for our parents during the COVID time and really helping them making sure they’re on track, both on their health and their wealth side. So, you know, that’s six major issues facing us during an 18-month period and I’m sure there’s listeners out there who have clients who are going through similar things. And, you know, so with my advisor, she knew that and so, you know, instead of meeting every three months or four months, while COVID was going on and we were experiencing these various items, we were making different investment decisions, different insurance decisions as well as different time allocation decisions and so my advisor knew that and we met with her on a monthly basis for those first six months so that we could spend more time together making those particular changes. Now we don’t have to meet every month but, during that time, I had some real urgent needs. And so, as advisors, you know, the more we know about our clients — and we can proactively discuss these items with them on a holistic level, right? Not just insurance, not just investments, not just cash flow planning but at a holistic level and understand what the right hand is doing to help the left hand support those holistic goals. So, the more advisors can do that, the better off we will be helping those clients and, ultimately, growing our business and that’s where technology plays such an important role.

Sandy: Great, I might need your financial advisor’s name, by the way.

Terri: She’s fantastic and it’s, you know, and we talked about women in this industry, I’ll just add, Sandy, that, you know, both male and female advisors are fantastic. Where the industry needs to get better is some people prefer working with the men and we have that capability. Some people prefer working with the women, and vice versa, right? My husband actually enjoys working with a female advisor, I do too, but he really likes the way she thinks, her proactive approach, the relationship we built, and so it’s not — we just have to have enough of both genders so that, as clients wanna work with someone for a lifetime, we can offer what meets their needs.

Sandy: Okay, great. I wanna talk a little bit about, I’m gonna say you yourself. So, tell me a little bit about the best decision that you ever made that had a positive impact on your career.

Terri: You know, I’ve often thought about this, Sandy, that, you know, the greater risk, the greater the reward, although in the investment industry, you know, we always say, you know, past performance cannot predict future, right? But we set allocations based on time horizon, needs, risk tolerance, and the more risk you take over the long term, hypothetically, you are rewarded. Not in every case, but there is a philosophy, a guiding principle around risk and reward. In my career, I’ve taken significant risks with my own career, with my family in moving, and, you know, taking roles that I wasn’t necessarily 110 percent confident I could do. And so, I took roles that I knew I was working with a very talented group of people, I was working for a company that I trusted and had very high ethics and integrity, and I learned and listened and proactively sought out information as much as I could. So I moved, as I mentioned, from Minneapolis to San Antonio, Texas. Major risk. At that time, my husband and I had, you know, three children, our youngest was about less than a year old and so that was 16 years ago, she turns 17 in two weeks, and he left his job, we moved to a state that I knew very little about, we moved to a new culture, and, you know, I took on a new job. Big risk. Wasn’t even sure if we could do this, but it worked out beautifully and, from there, because I worked for such a great company and we could share great performance results of serving members and helping people, you know, then I was offered more opportunities, more promotions, and each one I learned and really got a talented team and worked even harder, but without that move from Minneapolis to San Antonio, Texas, I wouldn’t be able to tell you that I would have experienced the success I did for the next 17 years from then.

Sandy: Seventeen years and continuing.

Terri: Yes.

Sandy: Hasn’t stopped yet.

Terri: That’s right. That’s exactly right.

Sandy: What advice would you give to somebody who’s looking to get into the financial services industry?

Terri: Well, let me tell you a story. I mentor a lot of people in this industry. I’ve made a personal commitment to mentor six people every year in this industry, people that are considering it, looking at growing in it, and so when I lived in Denver, Colorado, I did a Mentor Walk for financial women or women in financial services and they pair you up based on, you know, what you do and I had two women with me, we walked about three and a half miles, and during that time, they had the chance to ask questions of me, to learn more about the industry because they both had a real interest in learning more about financial services. One was a history major who worked in the Peace Corps before thinking about financial services and the other was a business major. And so I shared with them what’s required in this industry, things like analytical skills, people skills, a love of math, a love of helping people, a love for continuing to demonstrate learning in your career, because you’re never really done in this industry. There’s constantly regulatory changes, tests we have to take, and I shared that with them and then I shared with them, you know, the personal rewards I get from helping families when I did financial planning, helping them make really good decisions in their financial lives. And both of them were very intrigued. Well, it turned out one of them applied at Charles Schwab where I worked and went through the process, got hired, and then had to start taking all the exams and worked in a call center initially, answering clients’ questions, helping clients make transactional decisions. Now, she wanted to be a CFP, she wanted to work directly with clients through an advisor role, but it was a good two to three years out. Well, she called me one day about a year into the job. She said, “You know, I just — I don’t think I can do this. It’s just too overwhelming. I don’t feel like I’m making progress,” and I asked her, I said, “Well, what did we talk about during that walk?” and she said, “Perseverance, tenacity, commitment, joy in helping people,” and I said, “Yep, it’s still there. It’s still there, you can still do it.” I said, “Don’t give up. Just don’t give up. Stick — stay with us at least one more year and then we’ll talk.” Well, it turned out she did. In the second year, she got her CFP, she was promoted, she was now working with clients directly under the mentorship of another advisor and the bottom line is, today, she’s a senior financial adviser with her CFP, her CWS, she’s got a team of junior advisors reporting to her, and she loves it. She loves it. She’s really great at her job and she’s serving families all over the country in financial services and, you know, that’s probably my favorite story about how do you help people get in this industry. This is not an industry for the timid or for someone who doesn’t wanna work really hard but the rewards for that hard work and that tenacity and the test taking are unbelievable. The amount of autonomy that you get after you make it through those first three to five years is amazing and so I just — I help people see the end in mind and some of the challenges you have to overcome in order to achieve that level of empowerment and autonomy.

Sandy: Well, that’s some great advice. I think I’ll take that myself. What keeps you up at night now?

Terri: You know, I just worry that people don’t have a financial plan. I mean, I talk about this a lot. There’s been studies done with people who are at the, you know, $70,000 income a year amount, which is also, hypothetically, the amount that has been researched that creates happiness for people, right? So it’s not about the millions of dollars, it’s about enough money so that you can live an empowered life and make good financial decisions. And then anywhere from, you know, that above, as well as teenagers and financial literacy, so what keeps me up at night is helping everyone get a financial plan because that will lead, I believe, to good, sound, long-term financial decisions as well as creating happiness, or what I might call peace of mind for people. Because, Sandy, I run marathons, I haven’t in the last couple years, obviously, because of COVID and other things, I just don’t have them anymore, but when I did, I knew that there were certain steps I had to take every day and every weekend to be able to be successful in that marathon and, oftentimes, it was a six-month training schedule and if I didn’t do those things, if I just said, “Yeah, I don’t really wanna do that today or this week,” then, you know, I might as well not show up at the starting line because it’s gonna be a disaster. There are very clear steps you have to take in order to run a marathon. Well, there are very clear steps in your life that you need to take to be able to have that peace of mind, that success that you have. Now, it takes longer than six months for — you know, equating a life financial plan with a marathon, life is much, much longer, but following those steps, having an advisor, having a plan facilitates confidence at that start line, at the mid-level, and at the finish line and that’s what I want for all people of any wealth stage in this country, because I think it’ll make a tremendous difference in people’s quality of life.

Sandy: Earlier, we interviewed Jon Stenberg with Symetra and he had a lot of concerns about the insurance coverage gap in the US and this is a financial services coverage gap. How do you see technology or something else helping with that coverage gap? What do you see helping with that financial services gap?

Terri: I have some creative ideas around that. So, the way I think of financial security is a pyramid and if, you know, I know you can’t see me but if you just picture in your hands a pyramid, a pyramid or a triangle, the base of the triangle is the strongest part of a triangle or a pyramid and, oftentimes, if you look at places like, for example, the Golden Gate Bridge and it’s built of pyramids and, you know, there’s many architectural structures that are built with pyramids. Well, one of the reasons they do that is the base is the strongest part of any type of structure and that’s the pyramid. So, on this pyramid, I want you to think about the very base is something called risk management, which is insurance management. Life insurance, disability, long-term care, umbrella policies, those are there at the base of your financial plan to be able to manage the risks in your financial life. From there, you go up, but these parts become important but nothing more important than getting that base done which is the risk management part. From there, you go into cash flow management, right? Budgeting, and this is as important for people making $200,000 a year as $50,000 a year, but having a spending plan, understanding your cash flow for the long term. And then estate planning comes on top of that which insurance plays an important part. Insurance is tied to estate planning, but you need to have that. From there, you go to retirement planning up the pyramid, then you go to college plan. But let me tell you this, if you don’t have that insurance base done, then it’s pretty hard to know that you can afford college for your children. But why is that? Well, let’s talk about me, for example. My husband and I, I was the only breadwinner in the family. If I didn’t have my base done, if I didn’t have life insurance, disability insurance, all the umbrella insurance, then if something were to happen to me and I am the sole breadwinner for the first, you know, 20 years of our marriage, we could then say goodbye to any college planning, right? Because if I became disabled now, health is my greatest asset, disability covers that so I can still plan for my three children and their college planning, but if I’ve wiped out that base and thought, “Oh, I’ll gamble. I’ll see if I can actually get through this life,” well, I’ve really wiped out my peace of mind and my success. And so I think about that visual of insurance being the basic foundation of the strongest structure we have and once I have that down, then I can make sure I can achieve those other goals and so I agree with your peer that you interviewed that insurance, the gap in insurance is dramatic in this country and we need to be able to have more resources for clients to be able to understand that risk management piece so, ultimately, they can achieve their goals.

Sandy: Wonderful. Terri, thank you very much for your time today. It’s been really great to learn more about how your advisors can turn economic uncertainty, rising consumer expectations, and a virtual selling environment into better customer solutions and higher profits. Thanks, Terri, we appreciate you being here today. 

Terri: You’re welcome. Thank you.

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