wealth management

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wealth management

Chris Ragain,  Managing Director of Ragain Financial and Founder of LedgerSync, built his own firm and wealth management practice from the ground up.

He realized at a young age he needed to start his own firm, and you’ll hear exactly how he built his firm and wealth management practice.

In this episode of the Growing Your Firm Podcast, David Cristello and Chris Ragain discuss:

  • How to niche down and build referral partners
  • How defining a niche helped Chris transform his marketing dollars into real ROI
  • How he’s been able to grow his team and scale his firm
  • Why LedgerSync was created and how it reduces costly admin time
  • How Chris was able to add 6 (and soon to be) 7 figure profit centers to his firm through wealth management services
  • and much more… if you’re an ambitious accountant ready to grow your firm, tune in!

Part 2: How to Add 6 – 7 Figure Wealth Management & Profit Centers in Your Firm 

Part 1: Finding new clients, building referrals, and how to retain top talent 

/us/podcast/growing-your-firm-strategies/id923004172 

 

 

 

 

Additional Links:

LedgerSync: (a software that will automatically code every transaction including checks, deposits, electronic payments, payroll transactions, even if they are handwritten!)

 

Starting His Firm At 24:

Chris Ragain started his work at Arthur Andersen and KPMG. But, at age 24, he realized it was time to start his own firm. However, his big firm experience doing audit didn’t translate well for working with individuals and businesses.

It was a bumpy start and thus Chris lived off of ramen noodles for awhile. That’s what he had to do as he figured out how to attack the marketplace.

Starting off, he realized most individuals price shopped his services. His tax work was a commodity. In order to make $300,000, he would have to do a 1,000 tax returns…alone.

That wasn’t going to fly.

Then he realized what he needed to do (after much trial-and-error). Work with just small business owners — not individuals. If an individual wanted a return done, he would refer them out. Clients value a specialist. He found out those he referred out eventually referred him business.

The problem —> All he had to do first was find these small business owners.

Chris started with mailings and brochures. Those flopped. He followed that up with using the internet (when it first started gaining traction).

Slowly, word spread about his specialty in small businesses grew. Like I mentioned, he saw organic referrals from being known as a specialist. Nowadays, more than ever, a specialist is wanted.

First Hiring Mistakes

Again, Chris learned everything you hear in this podcast from simply stumbling and picking himself up. The same goes for his first hires.

It took a few years for Chris to make his first hires, and there’s a reason. Once you decide to become a manager, there’s no going back.

Chris says his first mistake was simply hiring to fill a trouble spot. He didn’t think about the career path of the employee.

What he found was these type of “stop gap” employees ended up leaving for bigger firms and higher pay.

When you don’t offer a career path, you don’t know: how to train them, which clients they should work on, or type of work they should be doing.

That all changed with his newer hires. He builds out a “path” for each employee.

  1. Every employee works on one side of the firm and then transitions to another if they wish
  2. Every employee knows how much they’ll make in the next 5 years if they hit milestones

The reason for this is simple: Everyone, no matter who it is, wants security and a great quality of life. If you can provide this to your employees, they will never leave you.

That’s how he built his firm to an extent where he could launch his wealth management firm.

 

Wealth Management Firm:

Chris believes every accounting firm should develop a new profit center e.g. a wealth management arm. Your clients have many other needs besides just tax and bookkeeping.

Think about “What are your clients needs?” Many will have wealth management needs, others cash-flow needs, budgeting etc.

Your job, as you get to know your clients, is to talk regularly with your clients and figure out their needs. If you only talk to your clients at tax season, you’re doing it all wrong.

Your firm will fail if you don’t have an open mind about what your clients need.

Chris started his wealth management firm after figuring out what his client’s needed. They needed someone who could guide them with their investments. Someone they could trust.

He started with zero knowledge of the financial markets. What’s the first step? Picked up some books!

Next, he subscribed to a bunch of newsletters and from there learned the ropes of what worked and what didn’t.

Now, his wealth management arm is thriving as its own business. That’s how you build a business. Find the needs of your clients.

 

Ledgersync

This works again and again as now Chris launched Ledgersync. Ledgersync is a software integrated with the most common bookkeeping systems. It pulls check images and bank statements directly from the bank and fills them into your ledger. The key: no data entry ever again.

Chris found this a need internally when doing client’s books. He partnered up with some coders and launched Ledgersync in 2013.

Chris built an accounting firm, a wealth management firm and a software company all from talking to his clients and solving their problems. That’s how you build a business.

 

 

 

Transcript:::

 

Part 1

Hey everybody, David Cristello here. Today’s interview is Chris Ragain, he’s phenomenal. We go into different profit centers he’s been able to build, how he has accelerated his client growth, how he’s hiring new people and so much more but before we dive in to today’s interview I would have to give a shout out to LedgerSync, that is ledgersync.com. They came on board as a promotional partner and they have a fantastic tool that will automatically code every transaction including cheques, deposits, electronic payments, payroll transactions, even if they’re handwritten, you can go to ledgersync.com, you can start a free trial, the software syncs with quick books, accounting cs, zero, and so much more. Again, that is ledgersync.com.

 

Welcome to growing your firm podcast. The podcast where ambitious accounting professionals who are ready to accelerate their growth presented by Jetpack Workflow. The podcast for accountants, CPA firms, and accounting professionals 

 

David: Hey everybody, Daid Cristello here from Jetpack Workflow. Today’s guest is Christopher Ragain. He is the founder and director of Ragain Financial which has been operating for the last thirteen years and he’s also the founder and Chief Sync Officer for LedgerSync. We’re going to dive in to the story. We’re going to learn about the lessons that he has gone through, the learning he’s had, his experience as an operator, we’ll also dive in to why he decided to go into the wild world of creating software products so Chris welcome to the show.

 

Chris: Thanks David, glad to be here. Thank you so much letting me chat with you guys for a little while.

 

David: Yeah, absolutely. So, let’s just rewind back a little bit. Take us to the Genesis of Ragain Financial. What made you, you know, venture out and start your own thing and what did that first year look like in trying to figure everything out.

 

Chris: My first work with clients was of course not in my own firm. I worked at Arthur Anderson for a number of years and when Arthur Anderson closed, I was given a job at KPMG, I quickly learned that it was time for me to probably run my own firm and that was at a rifled age of 24, so I didn’t probably know as much as I needed to know about the accounting world and what to do for clients that I was bold and I started Ragain Financial in Chicago back in 2002. What I quickly learned was that there is easily a disconnect between what I was doing for these large firms and what the clients that I would soon going to be serving needed. I was used to audits and big tax engagements, of course, that’s what not the micro business needs and the small business owner. They’re much more worried about what their tax return bill is going to like. They’re not nearly as worried about the work papers and that kind of thing and so I quickly learned what the client needed from me and probably the first year or two of Ragain Financial, one thing that sticks out on my mind that was a constant to my life back then was Ramen noodles. I couldn’t afford much else to eat and being young and unmarried and without a lot of attachments, it allowed me to put everything that I needed to put into the firm and I quickly decided to go down the path of working mostly with small business owners so that’s one of the themes that Ragain financial still has is we only work for business owners and I knew that I needed to pick out some kind of niche, something to kind of hang my shingle on and making the decision to focus all the way down to only serving business owners has been for me a good decision. We enjoy it, the practice is thriving.

 

David: So was that something, the decision to niche down, was that something because typically, you know, you start a firm and you just want to get work because you need cash flow, you need to eventually one day move up to pop tarts or whatever the next food group is, and so was it, in those first two years you decided to niche down and that’s where things might have taken a turn for the better or was it right slight or on…?

 

Chris: Well, it was pretty quick and here’s why. I started to see because if you’re not doing the small businesses, what you’re really doing is doing a lot of individual tax work which of course I know there are many CPA’s out there that do massive amount of that. The problem for me being in Chicago at that time was there were so many folks doing that work that it become extremely price sensitive and that’s one of the things that I think is wrong with the 1040 practice and business in general. It is very tough to justify the kind of fees that we deserve to a customer base that is used to shopping those fees around and so what I learned after the first year was that the 2nd year when these people came back around to me and this was when I really made the decision, they were going to put pricing pressure on me using my competition or HR block or something like that and I said for me to make $300,000 doing individual tax returns, and let’s say they average $300 a pop because that was about all I could get for kind of an average 1040 back then. I needed to do a thousand 1040’s there was no way I could do it. There was just no way that I could make that kind of money and do that amount of work by myself and when I first started doing x corporations and partnerships, that kind of thing, I started to see the fees that I could charge for that and a light bulb went off and I really started to say to myself, I would like to have more of this please. And said to my, you know, even though I was struggling, I said hey, let’s try and advertise in market that this niche is kind of what we’re trying to put our footing and that matters. You know, people want to hear that you specialize in their life. You know, that is something that I tried to tell my staff people is they want you to be a specialist in their thing. So when you decide to be a specialist, you will notice that from a marketing perspective and from a new client perspective, you start to see some real volume there because people are attracted to that, they talk about that.

 

David: Gotcha, and so when you decided to make that switch and that makes a lot of sense and I love the point which is, you know, you had a specific number in mind and I love when people reverse engineer where they want to get to so the example the 300,000 and say on my current track if I do hit my goal, you know, how would I hit, you know, this number? Whether it’s financial lifestyle, whatever it may be, what would I have to do? And just realizing very early on what that track will look like and then determining okay maybe we need to look for another opportunity and I think so often, you know, you find out opportunities by early on doing a lot and then see hey these clients are great to work with and I can charge more. This has been a no brainer. So that’s a perfect point when you decided to make that switch, what did the early marketing activities look like? Were you cold calling people? Because it’s always kind of a tornado of what to do once you make that switch.

 

Chris: These were, looking back on it, my first advertising initiatives were messy and I will break them down like this. I was purchasing mailing lists so that is a not a great idea and we’ve learned a lot about that and I’m sure you blog about that quite a bit where you really need to be organically be getting your list rather than purchasing them but at the same time we were purchasing these lists and what I was doing was I was printing on an inkjet printer a small trifled brochure that would take them through what the Ragain Financial Package was and this was kind of the beginning of me getting away from hourly billing into a value based billing because when I came out of KPMG and Arthur Anderson, hourly billing was all that I knew and so I was very much trying to emulate what I knew but I started putting together these brochures that would talk about these business owner packages where we would provide bookkeeping, payroll, I shouldn’t say we, where I would provide bookkeeping, payroll, tax returns, tax planning, and kind of wrap it up into these quarterly fee amounts which back then we used to bill people by quarter. Today we do it by month. There were these very simple brochures that we sent out. At the same time, those had a little bit of an effect. It was kind of, back in 2004, 2005, that seemed to work a little bit better than it does now. I don’t think that is nearly as lucrative an advertising space used to be ten years ago but it works. The other thing that I did, the Internet was really just starting to, I shouldn’t say starting to be around of course but it was starting to be this place that people trusted more and there was a website that used to be around, I don’t think it is anymore but it was called respond.com and it was where people would post the kind of services that they needed and people could, vendors could bid on them. I bid on a lot of business projects on respond.com from New York City to Los Angeles. I was in Chicago but geography didn’t bug me one bit and most of my probably 30to 40 percent of my new clients were not located in Chicago and were utilizing me as this long distance accountant that they found me online and kind of thought, it sounded like a good deal and again because I specialized in what they were doing. They felt like it was the right choice.

 

David: interesting and I imagine you made sure to highlight that as well in your phone conversations, in the brochures as well but you didn’t do, well if a company came to you and the owner wanted to do an individual return, did you refer them out to somebody else?

 

Chris: No, here’s kind of what we did. We would still do a lot of 1040’s and did that back then too but you have to be a business owner for us to do your 1040. Basically, if somebody came to use with just the 1040, the W2 wager, and just have the 1040, we would politely tell them, very politely say it’s just not the kind of work we do, here’s somebody who does and that’s one of the things that I have to emphasize is if you do get a niche and you do decide you’re going to turn certain business away, have a place where that business can go because not just does it makes them happy but it really does eventually start to come around where if you take care of people, they will take care of you back. They will have a friend that’s opening a business that they refer to you and say yeah this guy couldn’t do my stuff but he does only businesses and Greg you got to go talk to him and it really makes people, you know, feel this kind of community where you can refer people to them, they refer people to you and the more we network to each other the better we all usually become because we’re all trying to specialize on something and it pays to know who else is out there that’s doing the work you don’t.

 

David: Absolutely, I love that point, you know, and that’s a great way, you know, very early on to build your partnerships whether it becomes a formal partnership or referral partnership, or just you know, if you have a client that comes to you and you want to know whether it’s legal or whether it’s IT or you know, website you know, designs whatever it may be, the more that you can offer in terms of support, in terms of referrals, and people that you know, I think it will always come back to you because they view you and your firm as just experts in helping businesses. They view you in a much broader scale because you’ve been helpful in connecting them with the right people.

 

Chris: Absolutely, absolutely and it doesn’t have to be something that you really try and force, you know, early on I kind of felt like well they’re not going to refer anything to me because I’ve only referred one thing to them. It’s not so much about that it turns out. It turns out it’s just about knowing them and making sure that when you can help them, when you can scratch their back, do it and it will always come back around to you. You don’t have to worry about what you’re getting from them, just make sure you take care of folks and send them where they need to go to get the best service and it all comes back around. I don’t know how but it just does.

 

David: Well that’s the long term approach like you’re saying, you know, maybe it’s not in the next twelve months but you’re just building up, I don’t like, it’s not the right word but you’re building up so much equity and so much good will I guess is the better word that in three years, in five years, in seven years, you don’t know but if you just keep providing value to people in terms of referrals or good content or whatever it may be, people will remember that. They want that experience. They want to feel like you, like you said, you know, you specialize in their life, like you can take care of them and they can come to you with questions when they’re accounting focus or maybe they’re having, you know, something where they need to find a good lawyer that does xyz and you know, it’s kind of like the bigger network you know, you can point them in the right direction the better. Whether you get a commission, kickback, you know, whatever. I feel like that stuff can be formalized later. Put this value in place as early as possible.

 

Chris: Absolutely, absolutely, 100 percent.

 

David: Great, well you know, aside from marketing which I think is perhaps is the most challenging area because nobody ever learns marketing until they have to do it. I feel like, you know, unless, you know, you’re a weirdo and you go through bards and novels before you even do anything in business and start reading marketing books but it’s just something that’s not formally taught, you know, outside of conferences and books. But then the next topic where I think is the next milestone that a firm has to cross is the first hire or first two hires. At what point, you know, how long in where you in your business, you know, a year, two years, three years when you got your first and second hire and what were some common mistakes and what do you do now when you’re setting up new hires?

 

Chris: The, and I hear this a lot from other businesses and I didn’t listen to them whenever I was starting mine. Hiring you need to take a lot more seriously than I did when I did my first one. I was greedy back then so I didn’t hire until I absolutely had to and I still think that is very good advice in itself is make sure you literally can’t get all the work done until you make that first hire because once you go down this road from a doer to a manager, you are bound to it probably for a very long time if not the rest of your businesses’ life. So once you’ve made that decision, I’ve made that decision about two years into Ragain Financial so I want to say it was about 2006 that I made my first hire and I hired a young lady from a university that had just graduated and she was very very intelligent and probably the best piece of that was I really believe in trying to train your staff to do it your way and so I was new at this, I had never done that but I really put a lot of effort in the training. What I didn’t put a lot of effort into is trying to think through what her career path should be.

 

David: Interesting, okay.

 

Chris: And that was where I started to see problems and problems that would plague me for probably 3 or 4 years because instead of hiring them and thinking through what their life at Ragain Financial was going to be like. Instead I hired them to fill a stop gap for me. And at first that would work just fine but not knowing what path they should be on really hindered my ability to train them, hindered my ability to see which clients they should be working on and what kind of work they should be doing and eventually I lost these people to Ernston Young to other bigger firms because I trained them to be these generalists that knew how to do bookkeeping, knew how to do payroll, knew how to do taxes, but I wasn’t giving them the opportunities over time, that they wanted. I probably wasn’t paying as much as I should have because, and this is rampant through probably 90 percent of the Accountants I know and I’m the same way, I want to pay as little as possible for things. That is in some ways not the right attitude when it comes to your staff people and it definitely is not the right attitude when it comes to the first one. You need someone who can really emulate what you’re trying to accomplish and it’s worth every dime having someone who cares about the business as much as you do. What I eventually learned and the practice that I have today is we have several different career plans where we have to kind of place them either on the accounting side or the tax side and then after they’ve been there for two years, we let them switch to where the accountant has been on that side for two years, then gets to go over to tax. The tax folks go over to accounting so I’m still creating these generalists but I’m allowing them to kind of choose and hit these milestones where they are progressing on their own. Something that’s very, probably unheard of is I actually create a five year plan where they would know what they will make in each of those five years as long as they hit those milestones. So, not only do they what they will make next year as a salary and a bonus but they know what they will make in five years, as a salary and a bonus.

 

David: That’s fantastic.

 

Chris: So long as they hit these certain marks and I’m here to tell you, it creates loyalty like you’ve never believed. Because they’re not just thinking about what they’re making today and the experience they’re having today. They’ve got their eye on that price that’s5 years down the road and it has been a tremendous success for us.

 

David: I love that because, you know, typically one of the characteristics, and this is a bit of a generalization but you know, typically some of them wants to get a great job, they do so because they want to have a certain amount of security, right? They want predictability, not only in their day, week, or month but just really in their career and I think the career track is a great one but even though, well 3 years from now, 5 years from now because outside of work of course their planning their life. The down payment, the car, the kid, whatever it may be and for them to say well if I keep doing what I’m doing, investing into the company and making it grow. I know they will invest back into me and in 4 years, 5 years time, this is what, there’s no guess work, I don’t have to wok an uncomfortable meeting to ask for a raise. I, you know, we set it up from day 1 this is what it’s going to look like. So I think that’s, I’ve never heard that before and I think it’s fantastic.

 

Chris: Well, I kind of made it up because I was tired of people guessing at what this career is going to look like and so I just came up with what I had always planned on their path being and said why don’t we just close it to them. There’s no reason to hide it. There’s also, there was a realization that I had when it comes to staff people and they’re not like me all the time. I am very concerned sometimes about the financial side of things, the monetary side of things and I used to believe that employees would be happy so long as I was tying performance to money and I learned very quickly that that’s not all that they cared about. They care quite a bit about quality of life, they care about vacation time, they care about time with their family, having flexibility in their job, being able to work from home sometimes, being able to dress at a casual Friday, that kind of thing but one thing, well really two things that we’re doing has really brought some loyalty home for us too. One has to do with time off around the holidays. We close the office, meaning no one has to work from December 20th until January 2nd and everybody gets to go home. It doesn’t count towards their vacation time. It is just time off and I say to them, go home and spend time with your families. Enjoy a week, week and a half off here because once tax season starts, I do not want, I don’t want you guys unrested and it, what it really signalled to them was it wasn’t all about the business for me, that I care about their lives with their families and what it turned out to do is during tax season, they just work, they’ll work for me all the time because the love that they got to spend time with the holidays and then everybody kind of turns on, it’s tax season. We may have to work 12 hours a day and yadayadayada but it created some good will before this big work load comes out. It’s a very interesting piece of it. The second thing that we do that, I don’t know, probably I learned this from just watching other corporate kind of America things, we have lots of little competitions. We’ll have trivia contests, we’ll have March Madness pools and we turn on the TV in the office to watch the games during tax seasons. Any way you can make it fun every once in a while and have maybe a little few cash prices tied to it, man it really helps morale which can sometimes suffer in the accounting firm because let’s face it, we’re not doing the most exciting stuff every day. So, we’re trying to make sure that the employees love what they’re doing and that translates into, quite frankly, profits for me.

 

David: Yeah, well I think it helps everything grow and what I would, you know, it made me think, you know, we did this interview two weeks ago with Steven King from Growth Force and we talked a lot about culture and the holidays as well and when you’re talking about the holiday time off, what is the, I think, unattended benefit of doing that is you know, they’re sitting at home December 28th texting, emailing, calling their friends and family members asking them what they’re doing. If they want to go out and grab a coffee or a drink and they said no I have to go back to work, you know, why aren’t you at work? Are you sick? Did you call off and you know, they get to tell their friends and family members and you know, everybody else that no this is just something we do every year and they actually get to, it kind of reinforces their excitement about you know, where they work because everybody around them I’m sure knows. They say what happened? Are you a teacher or government worker? How did you get this time off? And say no they just do it and it’s going to build just word of mouth and loyalty and reinforces their excitement to come in for work because I’m sure all the family members and friends, they’re thinking why can’t I get time off? You know, it sounds like a great job to me and it just all comes back to, like you said, that energy into the New Year.

 

Chris: Yes, absolutely. That’s exactly why we do it.

 

Thanks for checking out Part 1. Of course Part 2 is coming soon. If you like the podcast, be sure to subscribe and leave a review below. As always, we would like to thank our sponsors, Jetpack Workflow, your leading cloud based application to help you regain transparency over your client work, manage staff more effectively, and make sure nothing falls to the cracks. You can always go to jetpackworkflow.com to learn more. Thanks so much.

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Part 2

Hey everybody, David Cristello here. Today’s interview is Chris Ragain, he’s phenomenal. We go into different profit centers he’s been able to build, how he has accelerated his client growth, how he’s hiring new people and so much more but before we dive in to today’s interview I would have to give a shout out to LedgerSync, that is ledgersync.com. They came on board as a promotional partner and they have a fantastic tool that will automatically code every transaction including cheques, deposits, electronic payments, payroll transactions, even if they’re handwritten, you can go to ledgersync.com, you can start a free trial, the software syncs with quick books, accounting cs, zero, and so much more. Again, that is ledgersync.com.

 

Welcome to growing your firm podcast. The podcast where ambitious accounting professionals who are ready to accelerate their growth presented by Jetpack Workflow.

 

David: Yeah, that’s fantastic and where are you at right now in terms of your team size? If you don’t mind me asking, it’s because it’s, you know, we’re talking about those first hires in 2006 now we’re 20014. Has it, what’s the evolution look like? You know, because it seems like these are milestones throughout the firm and you know, whether it grows in team size or anything else. I just want to get a gauge on, you know, I think all of these things are fantastic and I wonder how they have gone into your evolution of where you’re at right now.

 

Chris: Oh, we have twelve team members right now that work primarily for Ragain Financial or Ragain Financial Wealth Management and we’re kind into the point where before I can do lot more with that I got to have some of these folks that I’m training and kids come up with me start to take over their own mini firms and so that in the next two years you’re going to start at least at Ragain Financial see a couple of my oldest recruits taking over their own books and business and hiring their own employees because running twelve people that’s about all I can handle, you know what I mean? And so that, really our growth strategy is build from within and let them take over some of their own clientele and some of their own books and business and run a little Ragain Financial maybe that’s down in Florida where we’re at or maybe that’s in Minnesota or whatever location they want to. We can be flexible with that, it’s kind of exciting to see someone that came to you as a college student now ready to take on their own firm almost.

 

David: Yeah, absolutely and I think, I imagine that would really help with retention because you know, if they see themselves as still growing, well then, from a career perspective makes a lot of sense and if they have any interest in building their own client base, their own firm, well this is a perfect opportunity to give those people that really want a lot of responsibility in those positions to have a lot of ownership and things like that. You mentioned Wealth Management, when did you add that component on to Ragain Financial?

 

Chris: We added that in 2007 and I can tell you that if there was a piece of advice I would like to give every accountant, CPA out there. It is explore that side of a business offering because it has been extremely rewarding for us and it has been extremely rewarding for our clients and from a profitability and revenue standpoint, nothing that I’ve ever come across, except maybe software has the kind of explosive growth potential that doing investment works for folk does.

 

David: Interesting and how did you take the first steps into exploring if that would be a good fit for you and like if somebody hears this interview, they’ll say alright, you know, you just, I gave a lot of benefits of why they should look into it, what would you recommend, you know, is there a book, a resource, a site. What would be the first steps they would take, you know, start investing in?

 

Chris: I’m not here to recommend a book, I don’t think anyone guru has it, I would probably recommend, and this is something that my professor used to harp on me about is I need to be a student of the profession. Meaning I needed to have a professional curiosity for what it was that I’m wanting to teach people to do and the first step that I took, investments weren’t always something I was really that interested in. I come across a lot of folks that believe doing investments is kind of this hotshot Wall Street movie, you know, wall for Wall Street kind of thing. It’s not. It’s a very accountant like process that we go through to do investing but the first thing I did was I just started reading whatever I could get my hands on and watching whatever I could get my hands on about it. So it may be as simple as reading the Wall Street Journal each day and reading a little bit about what other people are investing in, reading Warren Buffet’s annual report, watching CNBC. I know this sounds maybe over simplified but investing is not as hard as people make it sound to be. It’s really just about doing your homework and from an accountant’s perspective, the reason is so important for us to at least explore that idea. It’s because our clients want our objectivity applied to that discipline as well. So when you build this relationship right, with this client, you’re not selling them anything. Your whole job is to make sure you’re watching out for them. Whether it be from a tax perspective, accounting, whatever. They want that to apply to their investment portfolio. They will come to you and say if you, especially if you show an interest in wanting to learn more about how they’re invested. They will immediately come and bring you their financial statement and say what do you think? Because you’re this independent non salesman guy. That is what’s funded in 2007 for us, is I have clients that were coming to me saying well if you’re interested let me show you this and I looked at it and I said wow, you’ve got a lot of things going on here, you know, this maybe the right fit for you, it may not be, you know that was beside the point. What was really needed was they wanted a relationship with someone about their investments and I could give them that relationship in most cases better than the person that they currently use and you know, if you do the math on investments, you’re talking about quite a bit of money. If there’s ever a day where I can retire from necessarily doing accounting and tax work all the time maybe my folks could take over the business for me that would be the next business I start is training accountants how to do the Wealth Management side because they are perfectly suited to it and it is something we should be looking at as a profession for sure.

 

David: Well, knowing you and how you start things we’re going to dive in to LedgerSync, that’s I’m sure will happen just a matter of time but I can imagine you have ample time right now running…

 

Chris: I have to check with my wife to see if there’s any opportunity for that kind of thing. She may have a different answer than I have.

 

David: Yeah, well people are really interested you know, we could you know, we could, we’ll talk about this offline of course I, you know, we’re on the interview now of course but we could even talk offline. I would love to spend an hour maybe just deep dive into this topic and then you know, package it up however you want to because if people are listening to this interview, email me david@jetpackworkflow.com, let me know if this is something of interest and we’ll see what we can do to potentially promote or engage or just grab at least materials around this topic. What’s really interesting is you said, you know, the customers and the client that you have, they almost expect you to do, well they don’t expect you but if it’s so perfectly in a value chain, it’s you know, it’s so well aligned. It does make a lot of sense to explore.

 

Chris: It does and if we have time and we can move on for sure but I’ll take you through step by step exactly how we do this, you know how an accountant really does this because the first question I got asked at conferences when I get talked to about it from other accountants is how do you pick the stocks? How do you do this and how do you do that? I can show you exactly how we run the program from start to finish and to kind of put the cherry on it, we charge between 1.3 percent and 2 percent a year on each of these portfolios. We do not pay a custodian. We get to keep all of that money and if you manage as we do a portfolio that’s close to 50 million dollars, you can do the math on what that revenue is, right? It’s approaching million dollars a year just on the investment side and that’s something that I run with myself and one other employee.

 

David: That’s fantastic.

 

Chris: Yeah.

 

David: And so that is I imagine that is the first question and we could dive at you know ten minutes or so I mean it’s up to you. I just imagine this is going to open up a can of worms you know, I love asking questions as you can tell so we’ll probably have to connect again in the future. Whether I bump into you at a conference or whatever else but you know, I think the margins are exciting, the service and value is exciting. People desperately want this type of service. There’s a lot of armchair subjective opinions out there from friends, family, people that essentially for the most part don’t know how to invest. That’s what creates a lot of confusion. So what’s, you know, we see the angle, now how do we you know, for reading the Wall Street Journal we’re getting our mind set set for moving into this space and thinking about how we should you know, start, what does it look like when somebody comes to you and what your response is well I don’t even know what stock to pick.

 

Chris: Well, the first thing that we have to get used to is, if we’re really going to get on the Wealth Management side of it, is standing on the shoulders of others who were doing research as a living and one of the best sources of research when you’re really trying to come up with what to invest in is finding individuals in businesses that have set up a business of making recommendations to people of what they should invest in. What are these? These are newsletters, these are monthly services that you can buy a subscription to and find out what they’re recommending you invest in. Now here’s why that’s so powerful because they don’t make money unless they’re right. It’s easy to shut up your subscription if the guy gives you terrible stock picks, isn’t it?

 

David: Yeah.

 

Chris: What the key to the whole thing is your job in the whole bit of it is trying to be the aggregator of what the good information from the fluff is. So you just can’t subscribe to one or two. You have to subscribe to a hundred and what your then doing is you’re refining down these picks to portfolios that correspond to your client’s risk tolerances. Now once you do that. Once you get over the phobia of, well I don’t know if they’re good at this or not, what you really have to start asking is where am I seeing trends. So if I see 25 newsletters that all, I’ll give you a real life scenario, Tesla just sold off euro to the last few weeks, the car maker. About 25 of our services have recommended that we start dipping a toe into Tesla here. That’s a trend and if you trust the people that you’re getting information from and you have a track record with them and there’s a lot that I have to teach about how to know what someone’s track record is of all these places that you get information but if you know their track record and you trust them, you’ve got 25 of them all saying that. That maybe a good idea for you because you’re standing on not just the shoulders of one person, you’re standing on the shoulders of 25.

 

David: Absolutely, I’m really happy you pick Tesla and your advice was not shorting the stock, I’m not an investor advisor at all but I did invest in Tesla so by a hard stop for us I guess oh my gosh what is he going to say.

 

Chris: No, no it’s probably the upside potential is probably better that the downside risk but there was a time when I first got started that I didn’t invest in individual stocks. I put everybody in the mutual funds.

 

David: Yeah, yeah.

 

Chris: Where I put them all in the ETF. The world is completely open to you as to what decisions you make here. The key is that you’re trying to make decisions that are driven by the needs and the priorities of your client which is traditionally so aligned with that the accountant’s Hippocratic Oath basically is. We are not salesman, we are her to take care of people and by making these stock choices we are probably in a great position to do what the client need us to do rather than what is promoted or driven by a firm that we work for, for profit, for any of that and it has been extremely successful for us. Clients love having their accountant also be their investment guy. Lot of people say I don’t believe that one bit, I’m living proof I’ve got hundreds of clients that invest with us, they love it. They love being able to get on to one place for all their answers.

 

David: Absolutely and it just fits so well with your focus, I mean if somebody focusing on, I could imagine what could benefit from a Wealth Management perspective but let’s say I mean for you it business owners and they’re, hopefully bringing in cash flow, they’re looking at well how do I re-invest this and to make sure my family is set up, my kids are set up, their grand kids are set up, whatever they be, so it’s perfect as for most clients it is that case you know, I think the big picture take away whether you focus on business owners or anything else is you know, what else are they seeking or what else would just be a perfect complimentary service that they’re looking for you to do and you know like you said, it doesn’t made you invest or you say we’re going to do this after listening to the interview. It’s just a matter of exploring it and taking those steps like I think you made a great point of being a student and starting to wrap your head around the eco system that’s out there, the newsletters that are out there, the websites that are out there, and items like that.

 

Chris: I couldn’t have said it better. It’s not necessarily about opening up your own investment firm. Yo0u may find that your clients really need a credit counselling or you may find that your clients really need advice on a number of different financial topics, budgeting, financial planning, that kind of thing. Whatever your client base is aching for, it’s time to serve that need and some would say well then you’re not specialized right Chris? I mean you just said you’re specialized and now you’re getting in to all these other things. There’s no rule that says you have to specialize in one thing. The rule is you have to specialize so it’s not so much about just choosing one or two things and that’s all I’m going to do. It’s about saying I’m going to be a professional and an expert in these items. I made the decision and when you move forward like that there’s a lot of success in front of you.

 

David: Yeah, absolutely and I think you know starting now, you know, the NBA would say find your, find that initial niche that you want to serve but you look at, you know, take an example, most, hopefully all people are familiar with Apple computers, right? They started out computers then Steve Jobs got you know, the boot for whatever reason and you know he was recruited to come on board and he said but we have to specialize and he started chopping away products from the product line and they did go back to their core. Well, okay they specialize, they got that down, they grew that, they’re still growing that of course but then look at all the other things they added on in terms of the value chain. They don’t just own the Ipod or the smartphone and they have Itunes, you know, now they’re moving into you know, tablets and everything else on the planet, watches and so I think it’s fine to specialize early on but you know, look at the value chain, what else can you provide? If Apple came out of the gate and Steve Jobs came back and they said alright we’re going to launch this computer, we’re going to do a phone, we’re going to do a tablet, we’re also going to you know, try this and that. It’s probably a different story but you know, I think the danger with some interviews is we look at something that you’ve built over you know, a decade or more of working and it’s not like you started out at 24 implementing all these things at once you know, you, learning and adding on as you went, right?

 

Chris: There’s a theme I think you’re driving at that is something that I think about a lot and that is I have to keep an open mind. I have to keep an open mind to what my businesses may become. Ragain Financial may have to morph from providing accounting and wealth management services to something else and it turns out that the client base want something else and if I didn’t have an open mind to that I would be unsuccessful. So as accountants we have to kind of keep this open mind to what our business may need to become to see the success that we want to see and to serve our client base so it’s a very good point you make.

 

David: Great, well that’s a perfect segue of you know, let’s talk about how you’ve gone from, of course you still do them of course, professional services to the non-chaotic of course I’m being a bit facetious , world of software and the genesis of LedgerSync.

 

Chris: So in 2012 I was watching all of this online software stuff starting to happen and I’ll disclose that I’m not a user of quick books online or zero or fresh book. I still use good old quick books desktop in my practice.

 

David: I can hear people applauding right now in the future audience.

 

Chris: Well yes and I can sympathize with exactly what you’re saying. Most accountants we talk to at LedgerSync are in the same boat that I’m in. They’re going to stick with their desktop software, least for a while and if you ask them you’ll say “Do you have anybody that’s on this online software?” Well yeah, we have a few. Okay. So in 2012 I’m watching this start to happen and as I went and sample of these, because of course I’m keeping an open mind. I’m saying do I need to think about switching to this. If this is the new best thing let’s go take a look. As I was doing the work, I started to see that I was going to be missing information that I needed to get things done so let me put it in perspective, you got to write a plan, you put them on quick books online. You got a bank feed that is feeding you transactions from the bank. Okay this is nice, I don’t have to do as much data entry, kind of cool. However, as you’re starting to look to the transactions, you notice two things. First is there’s a whole bunch of cheques in there that just say cheque number 1, 2, 3, 4 because the client is not using software to cut the cheques. They’re out in the back of their restaurant cutting those cheques by hand. The second thing I notice is I still need the bank statement so not only did I have to get the bank credentials from my client where this online software would work but I still have to go get the cheque images and the bank statement to be able to complete my work. To boot, I’m paying probably $30 a month to use this software so very quickly I start to say to myself, I don’t really like this. I’m going to go look for a solution that kind of does this a little bit but doesn’t. And so I started looking around and I wanted three things. I wanted transactions, I want cheque images, I wanted bank statements, I wanted all three. I want it sent to me or delivered to me, whatever they would offer. Quit looking around, couldn’t really fin anything. Called the number one bank feed company in the world. It’s a company called Yodlee, they are the people who supply Zero and mostly other apps you see on the Internet with this transaction data and said to them “Can you guys make a product for accountants that not only gets the transactions but also gets the cheque images and the bank statement?” After a very short conversation they said “No.” For a couple of reasons, they’re technology wasn’t set up to do that kind of thing and they didn’t really think it was important. Now I don’t know about anyone in the audience but for me I wasn’t about to have these software guys tell me what’s important to my accounting practice. I knew what was important. I needed these things. And so I started looking around for a solution or people who knew how to do this and the beginning of 2013 I came across a group of guys that new how to pull the data that I needed and we formed a partnership and worked on LedgerSync from 2013 into the beginning of 2014 and LedgerSync went live to the public in June of 2014 and we do exactly that. We pull transactions, cheque images, and bank statements so you have all three and we give you tools that allow you to sync that to your desktop or online software and we do it very inexpensively. That’s in a very quick nutshell.

 

David: Awesome and this is something they would pay monthly for, right?

 

Chris: That is, so each client costs about $2 a month to have their transactions and their statements and their check images delivered and we’re working on some really cool tools where we do some things with these data so one of the draw backs to even looking at cheque images is you still got to in there and put in who the payee was, right? In my previous example, whenever you download a bank feed it’s just cheque number 1, 2, 3, 4 for each of the cheques or whatever cheques there are. We’re working on a solution where and we think we’ll have it by the end of the month where our system reads the handwritten cheque in LedgerSync and spits out the data to where you don’t have to code it yourself anymore. So it’ll come to you just like an electronic transaction where even the cheques, the payee, the amount, has been read on the cheque itself where you import it. It’s very very easy.

 

David: That’s incredible. That’s really impressive because one of the biggest gaps just you know, from a computer engineering perspective has always been reading images, has always been, I mean for Google for example, has always had issues you know, they could sift through data but images has always been difficult so you’re going to be able to automatically pull out that information what in the next 30 to 60 days?

 

Chris: We’ve cracked the issue of being able to read it. So we’ve figured that part out. What we’re working on building right now is just the actual integration of it and so when you open up LedgerSyncnow, it will, doesn’t matter what kind of transaction it was, was it cheque or an electronic transaction, it will give you all the data in clean typed letters for when you import that, you don’t have to fiddle with it anymore. It just works right. This will be really kind of, I don’t like to use the word ground breaking but really will be because the future of accounting is going to be to some degree centred around these bank feeds and the whole notion of automation in accounting depends on some kind of feed going into a piece of software. Well, unless tomorrow the entire world quits using cheques, cheques will be a huge issue and I get some clients may login their own software and cut their own cheques from it, I get that, but I have hundreds of clients at Ragain Financial that don’t and so I suspect that lots of accountants have clients that use, handwrite their own cheques, aren’t using software at all for it, are expecting the accountant you know to come in after the fact and create the financial statements. That will be a huge benefits to those folks, to those accountants who are trying to do that kind of work because now their coding job is really going to be a lot easier and if we’re ever going to get to zero data entry, reading cheques has to be part of it and we’re the only technology that gets cheque images and we’re probably the only technology that can really get reading of the cheques going at this point.

 

David: Yeah and I will say this you know, we’re recording this interview, it’s the end of October, people might be listening to this, it’s November, maybe it’s 2015, 2016, who knows? So you know, whatever we discussed about software you know, everybody listening they want to see the latest updates because you know a software it’s always going to be updating, yeah you know, whether it’s in two weeks, two months, two years, what’s the website, is it ledgersync.com?

 

Chris: That’s right, it’s ledgersync.com, and we offer a 30 day free trial so there’s no reason to not just come and take it for a spin and see if it’s something that will work for your firm. You don’t have to use it for every client but for the clients that you do write up for, it can be a big benefit.

 

David: Awesome, awesome, well I’ll link it up in the show notes below and if somebody wants to reach out say thank you, learn more whether it’s the software we mentioned LedgerSync.com, about your firm, what’s the best way for them to learn more or just even to reach out say thank you or ask a few questions about the interview even.

 

Chris: Sure, let’s use my ledgersync email address because it’s definitely one of them that I use every day which is chris.ragain@ledgersync.com or they can reach out to me at my Ragain Financial address which is at cragain@ragainfinancial.com.

 

David: Awesome, well this has been a blast for us. I think we’re going to have you on a couple more times. It just seems we have a lot of ground to cover. This has just been a of fun and thank you so much for coming on.

 

Chris: My pleasure David, I’ve enjoyed it.

 

Thanks for checking out this episode of Growing Your Firm presented by Jetpack Workflow. If you like the episode, be sure to leave your review and if you want to stay up to date on all future episodes, be sure to subscribe below. Thank you so much.