#FASuccess Ep 070: Taking Leaps Of Faith As An Introverted Career Changer To Build A Successful Advisory Firm with Sue Stevens

What You’ll Learn In This Podcast Episode

• How Sue went from working as a cellist to building her own advisory business. [6:44]
• The unique way Sue cultivated clients as an introvert. [21:07]
• Traits that make introverts great financial advisors. [21:07]
• Why Sue refers certain clients out to other advisors. [30:15]
• What’s going wrong in firms that have diversity issues. [40:15]
• Why all the employees at Sue’s firm are women. [40:15]
• What Stevens Wealth Management's fee structure looks like. [46:18]
• Advice for figuring out what to charge for services. [50:54]
• What made her decide to sell her firm to a much larger one. [53:59]
• Why writing a dream job description can be a powerful exercise for any firm owner. [1:06:45]
• How she crafted her own dream job description. [1:06:45]
• The annual strategic planning process Sue uses to keep her business on track. [1:25:24]

Resources Featured In This Episode:

• Sue Stevens – Buckingham Strategic Wealth
• Certified Advisor in Philanthropy (CAP)
• Stevens Visionary
• Nerd’s Eye View: The Succession Planning Mirage And The Rising Need For Exit And Continuity Planning Of Lifestyle Practices Instead
• Pinnacle Continuity Planning
• Dan Sullivan's Strategic Coach
• Essentialism by Greg McKeown
• MoneyTree Financial Planning Software

Full Transcript: Taking Leaps Of Faith As An Introverted Career Changer To Build A Successful Advisory Firm with Sue Stevens

Michael: Welcome, everyone. Welcome to the 70th episode of the "Financial Advisor Success Podcast." My guest on today's podcast is Sue Stevens. Sue is the founder of Stevens Wealth Management, an advisory firm in the Chicago area that serves 150 clients with nearly $350 million in assets under management. What's unique about Sue, though, has been her ability to take leaps of faith and making several major shifts in her career, both in the decision to launch her own advisory firm, to create her own job opportunities at major companies like Vanguard and Morningstar, and her decision to enter the financial services industry in the first place and eventually get her MBA and become a CPA, a CFA, and a CFP professional after spending her 20s as a freelance and professional cellist who played in the Chicago Symphony Orchestra.

In this episode, we talk about the leaps of faith that entrepreneurial financial advisors have to take, why even as such an entrepreneurial person, Sue still took an entry-level job and worked for years in a lower-paying apprenticeship position when she started her career change, why building your own self-confidence is such an ingredient for success as a financial advisor, and why managing your own personal finances is also a crucial ingredient for success, both as an advisor and an entrepreneur who sometimes needs to take leaps of faith.

We also talk about Sue's own advisory firm, including how she cultivated clients over time as an introvert through writing on Morningstar.com, why she started out with a flat-fee retainer model but eventually switched to the AUM model, the annual strategic planning process she uses to keep the business on track, and how she leverages the Strategic Coach framework of having free days, focus days, and buffer days, and why all the employees in her firm are women even though she didn't set out to hire an all-female staff.

And be certain to listen to the end, where Sue talks about the process she went through to craft her own dream job description as the owner of an advisory firm, and why that ultimately led her to decide to sell the firm to a much larger one, not so she could retire, but so that she could regain the freedom to focus her energy where she wants to, both inside and outside the business. And so, with that introduction, I hope you enjoy this episode of the "Financial Advisor Success Podcast" with Sue Stevens.

Welcome, Sue Stevens, to the "Financial Advisor Success Podcast."

Sue: Thanks, I'm glad to be here.

Michael: I'm really excited for this episode because you have, truly, what, to me, is one of the most fascinating, like, stories and journeys through your advisor career, your financial services industry career. Like, when I was first, you know, reading and learning about your background...and, like, I mean this is the best of ways, but your story reminded me of Forrest Gump. That is because the movie, for "Forrest Gump," he has all of these amazing intersections with people who, you know, change the trajectory of his life, and, you know, all of these really cool intersections. And you have this giant list of intersections as well. I feel like yours are even better than Forrest's because Forrest is just kind of...like, he was just there while they're giving speeches in Washington, and, like, he was just kind of there while JFK was there. You were even more involved.

I know you went to Booth School of Business when, you know, Howard Haas was teaching leadership, and it's like, "Oh, and kind of helped out with his first book, 'The Leader Within,' that kind of became a rather famous book." And then you worked at Vanguard for a while, and, like, Jack Bogle used to scribble notes in the margin of ideas on, you know, the materials that you were working on. And then, you know, you were at Morningstar for a while because you went to college with this guy named John Mansueto whose brother Joe made this neat company about investment research. And, like, all...and before that, you were a musician that, I guess, toured or played with lots of very famous people. So, I just...you have this amazing life and story of all the stuff that you've done and the people that you've interacted with, and so, just, I'm really excited to have you sharing that journey with us and some of what you've learned from it along the way.

Sue: Yeah, it's been a fascinating road. And you know, I think I try to pay attention to the signs, and the signs lead me in unexpected ways at times. So...

Michael: I mean, it does sort of remind me. There the old famous saying of, like, "What do you do when opportunity knocks?" You know, "Do you welcome it in or, like, do you tell the noise to go away?" And there is, sort of, a certain...like, I don't know, there is, like, an expression of that in your journey that you seem maybe even more attuned than a lot of others to figure out how to find and make those connections and turn them into opportunities that change the trajectory.

Sue: Yeah, you know, I think a large part of it is intuition. And I know you and I are both introverts, right?

Michael: Yes.

Sue: And I think sometimes that heightens intuition. And I think the other thing that might have something to do with it is nonverbal communication. You know, as a musician, you're picking up all kinds of other things except, you know, words, and I think that just gives you a different frame of reference. So, I pay attention to a lot of different things. Words are part of it, but you know, feelings are part of it, too. Which makes you a good advisor in some ways, and it makes you a good musician in some ways.

Michael: Well, I feel like that's very not, sort of, the traditional view of advisors, right? Which is still all, like, the extroverted, go out there, like, meet people, people people types. That, if you like...that's still the stereotypical view, at least, of advisors, and you're talking about all the strengths of introverts as advisors.

Sue: Yeah. I think introverts come out more of their shell when they're helping people. You know, that all falls away when you can see that you can make a difference in somebody's life and you have something to bring to the table. And I've always felt, in the advisory world, half of what we do is psychological and half of what we do is crunching numbers. So, you know, I think we can bring both things and really help people.

How Sue Went From A Cellist To A CFP [6:44]

Michael: So, maybe as a starting point, can you just tell us a little bit about your advisory firm as it exists today? Or, I guess, as it existed up until recently since I know you made a recent transition which kind of happened just as we were talking about doing this podcast. So, maybe, like, set us up for where you were, and then we can talk in a few minutes about the transition itself.

Sue: Sure. So, I founded Stevens Wealth Management, I guess, about 18 years ago, and there's six of us here. We're all women. And that wasn't planned, but that's how it evolved. We have about 150 clients. I think starting the year, we were around $350 million in assets under management. And we're very heavily into financial planning. So, you know, I'm just extremely interested in all the technical things that go into being a good planner, including tax and, you know, sort of the complex end of things. So, that was always important to me. You know, I guess coming from being a cellist, I wanted a lot of education along the way so I could really help and bring all those things to bear that you need when you're working with executives and just people with more complex situations. And I have a lot of artsy people, too, so it's not all corporate.

Michael: Well, I'm kind of giggling a little that you say, you know, as a musician, you wanted to get educated along the way. So, like, just to bring folks up to speed. So, Sue has her CFP certification. She's also a CPA with the PFS credential. She's also done her CFA marks and got an MBA from Booth School of Business. So, let's...your, like, "I wanted to be up a little on education" was, like, a decade of...

Sue: At least a decade, yeah. At least. And the CAPS thing most recently in philanthropy.

Michael: Yes, and now American College's program in Certified Advisor in Philanthropy.

Sue: Well, you and I both share that, don't we?

Michael: Yes, yes. A fan of the alphabet soup thing. Not for the sake of getting alphabet soup, but just, like, it was certainly what struck me getting started in my career. Like, I came out...you know, I landed in a sales job. Didn't know that's what it was. Kind of learned as I went, figured out pretty quickly. And, you know, all they really taught us in was our products, right? They called it, you know, "financial advisor training" in air quotes, but it was basically product training.

And, you know, it quickly impacted me to see, like, I'm writing "Financial Advisor" on my business card, and I'm talking to people as a financial advisor, and I became acutely aware that I didn't really actually know much of anything about financial advice. And, like, it was just that gap and, I don't know, like, feeling guilty about that gap on behalf of myself. Like, if I'm going to give people financial advice about their life savings, I feel like I should know what the heck I'm talking about.

That led me down the road of, "Okay, well, I'm just going to enroll myself in some courses and try to learn more about this stuff." And that started with classes for CFP, and then I added ChFC, and then I added CLU, and then some master's degrees and all this stuff. And, like, it was never, to me, about adding letters to my business card for, like, marketing purposes or anything, I just actually wanted to know what the heck I was talking about because I was giving people advice about their life savings. But when you stay continuously enrolled for the better part of 10 years, even just one course at a time, like, a whole bunch of alphabet soup kind of pops out at the end.

Sue: Yeah. I think it's curiosity, you know? You find yourself saying, "Ooh, I want to know about that." And then, you know, you're going down that road to try to learn more about it. And I think where it started for me, you know, I was a very successful cellist. I was playing with the Chicago Symphony and doing a lot of recording, part of the recording academy that votes on the Grammys and things like that. And I'd hang out with these fairly wealthy musicians, and they'd all be talking about, you know, what they do with their money. And I thought, "Ooh, I want to know about that." And so that kind of led to, "All right, well, where do you learn about that?" And, you know, I thought, "Well, University of Chicago's got a good program in finance, so why don't I apply?" So, you know, aim high. You never know where you'll end up if you aim high.

Somehow I got in. I was the only cellist at the Booth School. And it wasn't the Booth School then, but it is now. And that first year was like Chinese for me, you know? Like learning a new language. I had to record most of the classes and listen to it at least twice. But by the end of the program, you know, I was clearly at the head of the pack.

And one of the classes I had was on entrepreneurship, which I loved. And one of the assignments was to write a business plan for the business you wanted to launch. And mine was, you know, to have a financial planning firm. And you presented it to the class, and the class gave you feedback. And the feedback I got was, "Well, go apprentice somewhere," which, of course, was great feedback. So, I looked around Chicago, and at the time, I thought one of the best practices was Arthur Andersen. And, you know, luckily, they took me. And, you know, that started a six-year stint with them.

Specifically brought in to do financial planning, but, you know, I learned tax while I was there, which was super helpful. The other class, I think, that was important for me at University of Chicago was leadership. When I was there, they started the leadership program, Howard Haas started it, and I ended up being his teaching assistant. His son played percussion, so, you know, we had something in common, and he became a mentor of mine over the years. He was the founder of Sealy, and then he founded the leadership program at University of Chicago. So, we worked together for a long time. I helped him write his first book, which was "The Leader Within." It's a passion of mine, for sure, just, you know, figuring out how to motivate other people, and cheer them on, and, you know, do what we can to advance the industry.

Michael: So, I'm still just trying to process, the, like, "I was a successful cellist and playing with the Chicago Symphony, and I heard other wealthy musicians talking about what they do with their money, so I went to Booth School of Business."

Sue: Yeah. You know, I like taking leaps of faith, and I've done that a lot of times. I think entrepreneurs are risk-takers, and I am. I think it's not...you know, you think about what you're doing. You kind of work it through as far as, "Does this have any shot at all?" before you try it. But then, I think, you don't overthink things, which is definitely, you know, where I'm coming from in a lot of these decisions I've made. So, when they took me, I thought, "Great, let's give it a shot." And I'd study backstage. Everybody was used to me, you know, carrying around financial, and statistics, and economics books backstage. And, you know, eventually I went to Arthur Andersen.

Michael: So you said, "I like taking leaps of faith." I feel like that...I mean, for most of us, that's a struggle. Kind of literally, like, it's a scary thing. That's why we call them leaps of faith.

Sue: It is scary, oh yeah.

Michael: What is it that makes you able to do them when so many of us struggle? Is it just, like, you're just wired that way and it just doesn't freak you out as much? Or is there something, like, you tell yourself about how you power through to make all these leaps?

Sue: That's a great question. You know, I think some of it comes with experience of having done it a number of times. And what I would say is, when you do it, you can't be afraid of falling or failing, because sometimes that happens, you know? So, I like to say sometimes, I'm blessed that I came from a background of not having a lot, you know? So, in a lot of ways, I didn't have that much to lose. And so, when an opportunity presented itself, I thought, "Well, yeah, let's go for this and, you know, what's the worst thing that could happen?" And when that's not that bad, I think, you know, you make the decision, "Let's try it. If it doesn't work, we'll go to something else."

And I think the other part I would say to anybody who puts themselves in that position is, after a while, you start to trust yourself. You know that you've got, you know, the critical thinking skills to figure it out even if you don't know the answers going into it. So, I always think one of the best things I learned at University of Chicago was critical thinking, and that's a really helpful skill.

Michael: I mean, I do think there is an interesting aspect to it around just the confidence, and trusting yourself that you'll figure it out as you go. I mean, I think a lot of us, the struggle on taking those leaps of faith, it really basically comes down to, "I'm just trying to figure out..." I think particularly for us advisors and a lot of us being analytical types, like, "I want to analyze all the different contingencies," right? Like, "What am I going to do if this happens?" And then, "What am I going to do if that happens?" And you know, if it's a big enough leap of faith in the first place, you can come up with a whole lot of contingencies to plan for.

And there is, sort of, a certain power of just saying, "I've got enough confidence in myself that I'll just...I'll figure it out when the stuff comes up." Like, "I can't plan for all of it in advance. At some point, I just have to live it and figure it out as I go. It's one of those leaps." Like, it's hard to make that leap until after you've made the leap and get a sense that you really can. It's one of those...like, the second leap of faith is much easier. Like, the second and subsequent leaps of faith are much easier than the first one ever is.

Sue: Yeah. You know, I think what that makes me think of is...again, sort of, I think in terms of music, but, sort of, flow and playfulness. So, one of the things you'll see with musicians is, you know, a sense of camaraderie. We all kind of...we play together, literally. You know, in the orchestra, you breathe together. You create music together. And that sense of play, I think, is something that's guided me a lot, you know? I like to have fun, and, you know, I'm kind of looking for, you know, what might be fun next. And for me, a lot of the time, creating things is a pattern, you know? I created a lot of things for Arthur Andersen, and Vanguard, and Morningstar. And, you know, hopefully, into the future I'll be creating things. And I'm just somebody that kind of thrives on inspiration, so it has got to be part of my life. It's like breathing. So, that leads me, a lot of times. And when you're thinking about those things, you're not thinking about what could go wrong.

Michael: It sounds like a live-in-the-moment sort of…

Sue: Kind of. You know, very calculated thought pattern there. But yeah, I think when you're really looking for ways to find joy in life, a lot of it is, sort of, spontaneous in some ways.

Michael: And I hear you. I just...I'm trying to reconcile...like, I've known a lot of creative types over the years as well. You know, my minor was in theater back in undergrad, and I'm still involved with theater in the D.C. area, and Washington Prop Thtr is a group I've done work with for, now, almost 20 years. And, like, really, I'm not trying to overgeneralize too much here, but when I think of, sort of, playful, artistic, creative types, I don't necessarily think of CFP, CPA, CFA.

Sue: Yeah. Well, I think there is an element of that, though, that translates in creating materials for people to understand concepts better, for connecting with clients. You know, I think you sort of think on your feet when you're talking to a client, and the most important thing we do in those situations is listen. So, you know, you want to take in what they're saying, and then you want to have, you know, a whole palette of things you could choose from in how you might help them going forward.

Michael: So, I want to go back to the advisory firm for a moment and just, kind of, get a little bit more up to speed on where the business is now. So, you said 150 clients, about $350 million in assets under management. So, I'm just kind of doing the math here. Like, your average client is $2 to $2.5 million dollars. So, it's a fairly affluent clientele. So, where do your clients come from? Like, how do you find the folks that you work with for these 150 families?

Sue: Again, I think it's evolved over time. Referrals are probably the biggest area. But for me, you know, I never really did marketing per se. What I did was writing. And so, you know, when I was at Morningstar, John Rekenthaler said to me, "You have a column starting next week." And...

Michael: Into the deep end.

Sue: Yeah. So, and it turned out to be an amazing thing, and I'm grateful to him for, you know, just pushing me in. And that turned into founding Morningstar's personal finance newsletter, "Practical Finance," and I had a very popular column at their website where I just fielded questions from thousands and thousands of people. And it was great, you know? It was a way of using what I had to help other people.

How Sue Was Able To Cultivate Clients As An Introvert [21:07]

Michael: So, what does that look like in terms of actually getting clients? Like, people would literally, like, read a column on the Morningstar website by Sue Stevens and be like, "She's awesome. I want to give her my life savings"?

Sue: Pretty much, yeah, honestly.

Michael: That's some powerful writing.

Sue: Well, yeah. You know, I'm super low-key, so that was never my intention. I just wanted to try to help people. You know, I got to know some people at Arthur Andersen. Some of those folks are still with me. They weren't for a while because when I went to Vanguard, I didn't take clients. But they found me later, and, you know, we've had a long history together.

Part of it was some of them got to know my writing when I was at Morningstar. I wrote every week, and I think when you do that, people get to know your voice and, you know, who you are. There were thousands of people who, I think, felt pretty comfortable with me because they knew what I wrote. And so, you know, 1% of the people that, maybe, read my stuff would even be appropriate as a client. So it wasn't like I was getting a lot of clients that way or that I wanted a lot of clients that way. But when I went to Morningstar, I negotiated with them so that I was four days a week for them, and one day a week I could start up my practice.

And we did that partly because I took less money when I went there. I've done that a number of times. I took less money when I went to Arthur, and I did it again when I went to Morningstar. And, you know, that's a pattern. I'm not afraid to do that, either, if it means, you know, I have something that I really love to do.

Michael: Yeah, there is one...and there's an interesting corollary that goes with, sort of, the "I took less money so that I could keep the flexibility," is just managing your lifestyle to the point that you can live on less money and have the flexibility in the first place.

Sue: I know we have that in common, don't we?

Michael: Yeah. Like, I guess, like, for me, it was just my natural style. I've always tilted somewhat frugal. I drive cheap old used, low-cost cars because I can't stand putting money into depreciating assets and all of that. But, like, I know, you know, my career has similarly had a couple of those leaps of faith, as you framed them. But for me, like, a lot of them, frankly, weren't that risky, because I didn't...I risked giving up income upside potential, but, like, my lifestyle and the ability to maintain my standard of living were, frankly, never really at risk at any of them. I'm not actually that risk-inclined at all. I'm pretty conservative by nature.

But when you ratchet your lifestyle down in the first place...or, not even ratchet it down, just don't let it ratchet up, because it's a lot harder to just not let it go up than it is to bring it back down later. You know, when the cost to maintain your household just isn't as much dollars, it's kind of amazing sometimes how many choices and additional doors open up because you can take gigs with new...you know, you can take opportunities with new flexibility. Because you don't have to negotiate for the maximal dollars to make sure you cover your mortgage and your household's fixed expenses. You can negotiate for a lower number and then take the flexibility to do whatever thing you want to do.

Sue: Yeah. Plus, if you're creative, and I know you and I both are, there's gotta be enough space and freedom to let that bubble up. You know, you can't be so overloaded that, you know, you don't have time to think and time to, kind of, reflect on what you want to say.

Michael: Yeah. So, you were actually starting to build your advisory firm while you were doing work at Morningstar and having the opportunity to have a column. So you could...you literally got to build the client base from the columns you were writing at Morningstar when you were doing it early on? Like, they allowed that cross-over?

Sue: Yeah. You know, I made sure we'd negotiated all that with the lawyers before we started. Yeah, the lawyers are always there, in the beginning, to make sure we all know how it works. And then, you know, hopefully, you can forget about it and just do what you do because you're not going to cross the line.

So, yeah, you know, I had a very low base salary when I was at Morningstar, and it was enough that I knew I could make it. And so I just started slowly, and things grew over time. I was always blessed with a pretty good growth rate, and I think a lot of that, really, was, instead of me going out and looking for clients, I wrote. And, you know, it was at Morningstar, but it was at a lot of other places, too. And so, you know, one person would tell another person, and it grew like any other advisory business.

Michael: Yeah. Well, and I know one of the things that I've found is impactful as well, just the idea of writing regularly, of putting stuff out there regularly. You know, as you said, like, people get to know your voice and get to know who you are. And I get it, technically there's a good and a bad of that. Like, there will be people who hear your voice as it shines through in your writing. It's just like, "I really don't like this person." It's like, "Well, exactly. That's fine. Internet's a free place. Go, like, just roll right along and read something else. Not offended at all. Haven't met you anyway." But when you put your voice out there regularly, a subset of people may find they feel similarly, and have some similar views, and start to connect with it. And it's really powerful, the kinds of connections that get made when you regularly share a voice and some people identify and connect with it.

Sue: You know, I had a fair number of advisors that followed my stuff when I was at Morningstar, in addition to consumers. I think my writing has always been sort of retail-focused, you know, where I'd say yours is probably more advisor-focused. So, but there were a fair number of advisors that, I think, found, you know, interesting things in what I would write. And, you know, hopefully I can do a little bit more of that. I've just launched another site, so we'll see what happens with that.

Michael: So, what's the new site, now, that you're launching?

Sue: stevensvisionary.com. And, you know, I just wanted a place to, kind of, put my writing. And I wanted to re-focus what I wrote about because I've written about everything personal financial planning for a long time. And going forward, I just want to be a little more focused about what I'm writing about. Like philanthropy and, you know, Life 2.0, and, sort of, the complex tax, financial planning sorts of things.

Michael: So, for folks that are listening, this is episode 70. So if you go to kitces.com/70, we'll have some links out to Sue's new website if you want to see a little bit more of the style of what she's writing on now. Like, Sue, is this intended for advisors? For industry? Is this ultimately, sort of, being written for consumers because that's the primary audience you've written for in the past?

Sue: Yeah, I think it's going to be consumer-facing because that's what I really do with my writing. And honestly, you know, I don't know what I want to do with it. I just want a year to, kind of, write. I have a licensing agreement with Buckingham, and my view of coming into this is much like yours, that this is not anything I'm particularly thinking of as a commercial venture. If it can help somebody, great, then let's do it. And, you know, I think we share that in common.

Michael: Yeah. So, your 150 clients, like, there's no relation of this back to all those wealthy musicians you were hearing talking about what they did with their money? Did you ever think about going back into that as a niche, or is that actually a big piece of your client base today?

Sue: Wealthy musicians?

Michael: Yeah.

Sue: No, I wouldn't say that's a big piece of it. There are some. There's a lot of people who love the arts. There are some writers. There are some artists. There are, you know, a variety of people that, you know, sort of shared my passion for the arts. But it's a mix of people. It's...you know, there are quite a few C-suite types and, you know, what really makes me love these people is just the way I've gotten to know them over the years and gotten to know their families, and I really care about them. And so it doesn't seem like work to me. It seems more like play to me most of the time.

Why Sue Refers Certain Clients Out To Other Advisors [30:15]

Michael: So you mention, as well, 150 clients. The firm got started 18 years ago. So, like, was the growth pretty even for you throughout? You've added, like, what would that be? 8 to 10 clients a year for 18 years, and it just adds up to 150 clients and a couple hundred million dollars under management? Or did it grow differently?

Sue: Well, you know, I think it's evolved over time. You know, in the beginning, I would do more of what I would call flat-fee, retainer-based planning, not asset management. And you know, I think you and I have chatted about that off and on, too. I like doing that. That can be very labor-intensive. It's harder, in a lot of ways, and yet, you know, you want to find a way of structuring your practice so you can serve, you know, the people that you're best qualified to serve. So, I had a lot of that. I converted a lot of that to assets under management over time. And the other thing I would say is, you know, when there's been a mismatch, which hasn't been that often, but it has happened, I have not been afraid to transition somebody out to, you know, perhaps another advisor or a different situation if it just wasn't a meeting of minds of the same kind of investment philosophy or anything like that. And I've gotten much better at identifying up-front who's going to be a good long-term fit for my practice and who isn't.

Michael: So, how do you transition them when the time comes? I feel like this is always an awkward conversation at best.

Sue: It is.

Michael: Like, what works for you, of how to kindly let them go?

Sue; You know, I think, again, it's always a process. And I think you start having conversations about, you know, where there might be a disconnect between what they're asking for or, you know, what their patterns are and where you're coming from. And I would try to see if there's a way we could have a better meeting of minds before we get to the point where you need to say, "Look, this is a partnership, and I can't in good conscience go forward with this," depending on, you know, what the issue is, "and here are a couple of other names," of either somebody that might fit their style more... You know, if they're looking for active trading, then clearly I would not be the right person. Or, if you've had the conversation about "You're overspending" many years in a row and, you know, the trajectory is not good, I think sometimes you have to do something like that partly because they can't afford your fees anymore and they should get to something, you know, where that is not as big of an issue. So, it's hard, though. It's always hard.

Michael: I mean, do you ever get clients that...they kind of blow up with you about it? Where they're all like, "Wait, I'm the client. Like, I'm supposed to fire you. You're not allowed to fire me."

Sue: That has not happened, but, you know, it hasn't happened very often that I would counsel somebody out. But if I needed to, I would. I remember early on in my practice, I counseled out probably my biggest client at that time. And at that point, it was sort of a staff abuse situation where you try hard to make them happy and, you know, do what you need to do to help them meet their objectives, but if there are people that, you know, just lay into your staff for one reason or another, you can't let that go on forever.

Michael: So, I hear you, but I feel like for most of us, then, it's like, "Except, when it's my biggest client, if I fire them, I might have to let the staff go anyways because I can't afford them anymore if I let my biggest client go." Like, how do you...

Sue: Yeah, I knew I would be okay if I did that and it wouldn't harm the staff. You know, I think that the toughest time, thinking about what you're talking about, is the 2007, 2008, 2009 timeframe was a tough time. And I think, you know, during that time, I didn't pay myself for probably a year. And, you know, I had paid off my house at that time, because I carefully watched my Morningstar stock options 'til they hit the right number and I could pay off my mortgage. Did it, then we hit 2007/8 and I took it out again. And I felt fine about it. I mean, I wasn't thrilled, but I felt good in that I was doing the right thing for my staff and my clients. And we got through it, and, you know, I made it up, and it was fine. I think that's that entrepreneur mindset that, you know, when you're the leader, you're the one that takes the responsibility, and sometimes that means sacrifice.

Michael: I'm sort of struck...you threw it in there as a side-comment for it, but did you just say you paid off your mortgage? You're a CFA. You know how the math of this works, right? My mortgage cost is a couple percent after tax, my long-term growth rate is generally higher than that on average. So, like, you, I'm sure, can do that math and analysis better than almost any of us. What leads someone with that much of an investment base and confidence in investments to not keep their mortgage in place and just add to their portfolio?

Sue: Well, in some ways, you know, I am risk-averse. I'd just as soon not have to worry about that if I don't have to. And, you know, I thought, "Well, this will be an interesting little exercise. You know, how high does the stock price need to go," after Morningstar went public, you know, "'til I can just do this?" And you know, I wasn't trying to be greedy. I just thought, "Yeah, it'd be great to get that thing off my back. So, when it hit the number, I thought, "Oh, time to go." So, I just...I mean, not leave Morningstar, but sell the options, and pay off the mortgage, and be done with it.

And again, remember, I'm behind. I'm, like, ten years behind everybody because I was a cellist for ten years, and there are not 401(k) plans when you're a cellist, you know? You're a cellist and you're, you know, self-employed. So when I came to Arthur, I was ten years older than everybody and, you know, different. Really different. So, I kind of made it up as I went along. And I always try everything out on myself, you know, in the financial planning world, because I think you learn the most when you go through it yourself.

Michael: So, how do you handle some of that transition as a career-changer? Because that whole phenomenon of coming into the financial services industry 10 to 20 years older than new entrants seems like, still, a challenge we have in the industry today. I know some people that are career-changing in that just...they can't even find an initial job to career-change into. I mean, you can always get a sales job, go get clients even though you have no experience, but finding that apprenticeship-style job that you said you were seeking out at Arthur Andersen ten years older than everyone else, like, is hard for a lot of people. Were you just fortunate to find an opportunity? Or, you know, fresh out of Booth School of Business was just a good enough thing on your resume that doors opened? Like, how do you work through finding opportunities when you're coming in as a career-changer?

Sue: Well, doors did open, you know, having that credential. But I think the word that comes to mind as I'm listening to you is "patience." You know, I think you have to really have a lot of patience as a career-changer and as the manager of a career-changer. So, when I was doing this, you know, that first year, I don't think they knew what to do with me, really. And I've thought many times about, you know, that first year, you're the entry-level person, you know, in this tax division of doing financial planning. I remember at one point they said, "Here, white out all the blobs on these overhead projections." And I, you know, patiently did it and thought, you know, "What a waste. Oh, man."

Michael: You...like, "I got my MBA so I can white out overhead blobs."

Sue: Yeah, but you know what? I was an apprentice, and I figured, "Okay, we can do this." And I said, you know, "How about if I start the CFP program?" And of course, you know, at that time, they wouldn't pay for it, and I thought, "All right, I'll just take vacation time and pay for it myself," which I did. But by the time I left, they were paying for people's CFPs.

So, I think patience is important if you're making a change. You know, they don't know what to do with you, and you don't exactly know what you're doing either, so I think you just want to bring who you are and what makes you interesting to the table. Like, for me, at Arthur, I would look at a spreadsheet and say, "Why don't we do this in graphs, and colors, and pictures?" And, of course, clients loved that. So, I could bring, you know, what I have to the table.

And now, you know, I have a number of career-changers on my staff and, you know, an all-female staff. And I think that takes patience, too, and recognizing that women, especially, I think, you know, are pulled in a lot of directions. You know, with parents, with children. And I think if you can give flexibility and just allow enough room for them to do what they need to do, they can change careers. I had one woman come two years ago, and she'd been out of the workforce for seven years, and she had a heck of a time getting up to speed on the computers at first. But, you know, she got there. And I think, you know, it's best just to give people time to sort it out, and eventually they can be really strong.

What's Going Wrong In Firms With Gender Diversity Issues [40:15]

Michael: Right. And so, tell us about this staff of all women. You've mentioned once or twice that you have that structure. Is that, like, a deliberate intent and goal? Like, you want to be a firm that creates more opportunities for women, so you're specifically trying to hire women into the business?

Sue: No, I never intended for that. I had always had staffs at Arthur, and at Vanguard, and at Morningstar that were about half and half, and that wasn't intentional either. I've just always looked for, you know, "What am I hiring for? Who's the best candidate?" And that's who I hired, and this batch of them just turned out to be women. I think going forward, there's a couple we're talking to, and one is a guy. And I certainly hope he'll come here. And, you know, it doesn't matter to me if they're men or women as long as they're good at what they do.

Michael: So, I hear you. I feel like a lot of firms say they have a similar philosophy, right? Like, "We're not trying to hire of any particular gender, or ethnicity, or anything else." Like, "We just want to hire the best candidate for the position, and that's who we hire." Yet, then I look out at the industry overall, and, you know, 70% of CFPs are men. And if you actually look at the broader financial services industry numbers, the gender diversity is even worse. So, how do we end out with...everybody says they try to hire the best candidate for the job, yet you end out 100% female and most firms end out 80% male?

Sue: Well, that's a good question, isn't it? You know, I can't answer that. I think, for a lot of firms, they're going to have to put more emphasis on diversity, and, you know, think outside of their immediate experience, and look for people who bring, you know, different skills to the table.

Michael: Is there something that...I mean, you've been in large corporate environments as well, so you know what some of those hiring processes look like. I mean, is there something about how you hire, or screen, or interview, or write job descriptions that just seems to connect with different types of candidates, or that you connect with different types of candidates? Like, how do we end up with such a different outcome for your firm versus so many others?

Sue: Well, it's probably leap of faith again, but, you know, I do take the time to write out a very specific job description. I do go through, you know, extensive interviews. I do put people through a testing process because I know I'm, you know, fallible. And then, at the end of the day, it's a gut check, I think, about, you know, who do you want to be working with? And that could be why, you know, some of the other organizations end up with more men. It's familiar, and maybe that's, you know, part of their process, too. But I don't know.

I like having different kinds of people around. I don't want people that necessarily look like me and think like me. I want different skill sets. Many of the people on my staff are much better at various tasks within our firm than I am, so I try and stick to where I can add the most value and let them shine where they're much better than me. And a lot of my group, I'd say, too, we've known each other for a long time. Sarah, in my group, I've known since she was ten years old. She studied cello with me, and then I hired her at Arthur, and then I hired her in Stevens Wealth, and, you know, now she's part of Buckingham with us. So, you know, that kind of togetherness over a long period of time makes for camaraderie and playfulness. And, you know, Elaine been here 15 years. So, Jolie and I have known each other 25 years back from the Arthur days, and one of the candidates now I'm talking to is from Morningstar. So, you know, I like that, where there's a lot of shared history.

Michael: Yeah. So, as you look at the firm from here, like, how you work with clients, you said early on you were doing more of a flat-fee, retainer-based pricing, then you started converting clients to AUM over time. You know, I feel like that's a big debate in the industry overall these days, about the future of fee schedules and business models. So, can you talk to us a little bit more? Like, I guess, first, just how does it work today? Are you solely AUM, or do you still do a combination of planning fees and AUM? And how do you look at this for the industry overall?

Sue: Well, I'm still a combination of retainer fees and assets under management. And you know, where I would look at the industry going forward is, we need to structure it so that we're helping people at every level. I know Bob Veres has a leadership group that he gets together at his conferences. And at one of the ones in the last couple of years, we talked about, you know, there should be a robo offering for people that...you know, I'd say robo plus human because, you know, I'm big on the human element here, but at a price point that makes sense for people if they don't have $1 million. I mean, most people don't. So, there should be something where we can do something efficiently and provide good guidance for that group.

I like Sheryl Garrett's model, you know, where it's an hourly fee-only kind of planning. I think there needs to be that for the middle market. And I think there's a place for the high-end, you know, more complex type of planning. So I think all three are important as we go forward.

Stevens Wealth Management's Fee Structure [46:18]

Michael: So, what does your combination look like? Is it up-front fee and ongoing AUM? Do you do ongoing planning fees and ongoing AUM? But, what is the pricing structure there for you?

Sue: I've got, kind of, three buckets, if you will. There's just flat-fee retainer. A couple people doing that, some, one of them a very big client. But what we're doing is more planning, not asset management. But very complex planning, which is super interesting. Then, I would say, what I've done in the past is, if someone had less than a million dollars under management, then there was a retainer portion of their fee that was for the planning piece that they needed or not, and then the asset management fee. And then, if they were over a million, I didn't break it out, you know, for the planning.

Michael: Okay, so if they were...in essence, it was a million plus, just an AUM fee, and planning was bundled in. Under $1 million, you just had a flat fee? Or you had, like, a combination? Your AUM schedule started, but there was a planning fee on top?

Sue: That's what it was, a combination of things. And I think, you know, in that group in particular, you have to be careful about where you set minimum fees and minimum asset levels, and...for them. Not necessarily for you, you know? But it has to make sense for the person who wants the advice. If it's too expensive, it just doesn't make sense.

Michael: So, where did you end out on that, on that balancing point? Like, where...what's the retainer portion? If you're under...where do you set your AUM fees in the process?

Sue: The AUM schedule is the same no matter what. You know, there just could be an additional fee if you're under that million dollars. Then I might set just the minimum at a certain point, or it might be in the contract that if we do additional planning, there will be a separate fee for that. And maybe some years there isn't a need for it, and then we don't charge it. But if they want, you know, an updated or a new retirement plan, there might be an additional charge for that. And then they can decide if they want to do it or not.

Michael: And what kind of fee were you setting? Is this like $1,000 or $2,000, or lower, or, like, $5,000-plus to cover the time for doing all the work?

Sue: I'm super analytical, so what I did is I did a spreadsheet that shows how much time it takes me and how much time it takes staff. And I priced out the time it takes plus a profit margin and came up with, you know, "What does it cost me internally to do these different things that people might want?" And that's how I did the pricing.

Michael: So, you would meet with them in, like, an approach meeting, get information about their situation so that you could make this spreadsheet estimate of at least, like, how much cost will it take? What's your cost per time, add a small piece for profit margin, and call that the planning fee number?

Sue: Pretty much. The spreadsheet was sort of for anybody. The discussion with the person would be, "What do they need?" I know how much these things cost. I would do a proposal and a contract saying, "Here's what I think you need, and here's what it would cost," and then it's up to them if they want to pursue it or not.

Michael: And, like, were you...do you share that spreadsheet to the prospect and show them how you come to the number? Or do you just kind of say, like, "Look, I've evaluated your situation. Here's the number that it would cost to work with us."

Sue: I did not share the spreadsheet because it never really came up. But I could see where you could. You know, and I do remember playing around with thinking about, "Should I do more with retainer?" You know, that whole industry conversation that we've been having for years. And I think you could price in, you know, for the complexity, or how many different accounts you've got, or, you know, how much technical stuff you need to bring to bear if you're talking to a CEO, or somebody with $100 million, or any of those situations. But you know, honestly, with that granularity which I've done, I'd still go with my gut. And if my gut says, "Nah, I don't...that's just too high," I'd pick a different number that seemed fair. I think fairness is where I would want to come down.

Michael: I guess just with the caveat that some of us may have better gut feelings on this than others?

Sue: Yeah, yeah, yeah.

How To Figure Out What To Charge For Your Services [50:54]

Michael: Like, I do...I hear you. I think I have a similar tendency. But some of that is, like, it's easier to have those gut estimates of time, and complexity, and cost, and value for...that justify your time after you've been doing it for a bunch of years than early on where it's really hard to figure out that number. I have to imagine you have a couple of people that you worked with in the early years where you set a flat fee number and then did the work, and it was like, "Oh, that was way, way longer than I'd expected."

Sue: Oh, yeah. Yeah. No, of course, I think we all do that. And especially in the beginning, I think we undercharge for what we're delivering. You know, I would say one of the more valuable things that you can do is to have a peer group, whether it's the XY Network or whether...you know, I have a study group called The Athena Group that's sort of AICPA leadership. Whatever your peer group is, I think that's the place where you can have these discussions about, you know, practice management, and, "How do you think about these things?" and "How is it evolving?" And, you know, they'll give you good feedback.

Michael: Yeah, it was interesting when we did our first benchmarking study for XY Planning Network last year, one of the things that we asked was, you know, what they've been doing with their fees and how their fees have changed over time. And we found for firms, like, who started with us from scratch, literally 100.0% of respondents, of advisors, said they raised their fees in their first three years. Like, every single advisor decided that they priced too low initially and then lifted their fees up later.

And, you know, I know some people make the case that, "Well, you know, you got a little more experience over the first few years, so your advice was worth more," but when we looked to the numbers, like, people raise their fees by 50%, 100% in the first three years. Like, way more than just, "Oh, I've got a few years of experience. My advice is a little bit more valuable now."

Sue: Right.

Michael: It would seem to be driven much more by, we just have to get confident in the value we're providing by having some good successful wins with clients and a little bit of revenue going, and then it gets a lot easier to be confident in your pricing. With some study group members to maybe kick your butt from time to time if you're not doing it. How did you find your Athena study group?

Sue: One of the members was someone that I knew from Arthur Andersen, and, you know, periodically they were looking to add people, and he thought I might be a good addition. And I'm very happy that I joined that group. It's a lot of good people in, you know, some very large firms, some smaller firms. I guess I've been both. I'm now with a larger firm. So, it's helpful no matter where you are.

Why Sue Decided To Sell Her Firm To A Larger Firm [53:59]

Michael: Very cool. Very cool. Yeah, I'm a huge fan of study groups as well. As some folks know, I've had a study group I've been involved with going all the way back, what, 12, almost 13 years now. And it's really powerful to have some people that you can go to and bring the challenges that are coming up in your business, and just being able to get good, candid feedback from people you trust, where you're willing to talk about what your challenges are and get that feedback. It's a powerful thing.

So, I know for your business, in particular, you know, you were building your firm for 18 years, you said. You know, early on, and while you were also, kind of, one foot in the door with Morningstar and one foot in your firm. And I know earlier this year you made a transition and merged your firm in with Buckingham Strategic Wealth. We actually had Adam Birenbaum from Buckingham on the podcast just a little while ago. So, for anyone who's wondering, like, this was purely coincidental. I was looking at talking to Sue long before I found out that she was doing a deal between Stevens Wealth and Buckingham Wealth. But here we are.

So, I am curious, though. For someone that's both had, you know, 18 years of success in building the business and is so entrepreneurially-oriented, right? I think we tend to think of entrepreneurs as, you know, wanting to maintain their independence and not necessarily tucking into larger firm environments. Like, what led you to make a decision to affiliate with a much larger firm?

Sue: Well, I think, you know, a number of things came into play with this. It wasn't like I was particularly looking for it. I think, again, it was one of those things that sort of evolved naturally. You actually wrote an article that was meaningful to me about, you know, succession planning and making sure that we do the right thing as the owner of the firm for clients and staff. And I remember when you first came out with your article that talked about, you know, there are contingency agreements out there as well as more formal succession agreements. And I thought, okay, that makes sense to me.

I'd been thinking about an internal succession plan for a long time, and it just didn't work out for me. You know, people moved away or just, you know, didn't really want that step up to partnership level. And so, I find myself going down, sort of, that external succession path. And again, I'm fairly young, so it's not like I'm thinking of retiring anytime soon. I just wanted to make sure I was doing the right thing for clients and staff.

And, you know, I talked with you and Pinnacle, and I bumped into a Morningstar colleague, and he said, "Oh, I'm with BAM," I think, at that time, "and wouldn't you like to know more about it?" And I said, "Well, gosh, yeah, that sounds interesting, but..." you know, I think this was in February a couple of years ago. I said, "I really don't have time 'til August." And he said, "What date?" And I thought, "Oh, okay."

Michael: Well, that's a good salesman right there. "Can't talk until August." "Great, will that be August 3rd or August 10th?"

Sue: Caught me fair and square. So, anyway, I went, and honestly I wasn't sure why I was going. You know, I knew there were a lot of good things about Buckingham, and I had a couple people in my study group who were...one was BAM and one was Buckingham, and so I had a good impression of it. And I went down there and, you know, had dinner with some of the leadership, and I just had fun.

You know, I think the leadership there is definitely one of the reasons that I started to think more seriously about it, and there's a whole group of people down there. Adam you mentioned, but Dave Levin and Shannon O'Toole Coolman. The lawyer Sal's a cool guy. David Luckes I'm very fond of. He's got a big career in philanthropy, and that interests me. Jeff Remming. So, they're fun, they're young, and it started me thinking, you know, maybe this is the group that I want to affiliate with and I would think of as, sort of, strategic partners.

And really, the issue for me was, you know, you hit these bend points in the life of your firm, and you either become more management or you find a solution so that you can focus on what you're really good at. And for me, it made all the sense in the world to affiliate with them. And you know, you can go the BAM route and then, you know, maybe the Buckingham route. I decided, "No, I'm just going right for Buckingham." I think we had just a great overlap of investment philosophy, and I thought about things very much the way they did. But honestly, it was the character of the people there, I think, that was sort of the tipping point for me. I just liked them a lot.

Michael: Well, you know, you highlight to me two really interesting points in there. You know, one is that what started out as a discussion on succession planning and, I guess ironically, sort of ended out successoring into a larger firm as well, was a journey in the middle around continuity planning more than succession planning, which to me is one of those things that we don't separate enough, and we should. That, you know, the discussion in the industry, is either you find the successor, or you just sell. Like, and those are your only two options.

And for so many of us, I feel like, at the end of the day, one of the great things about the advisory business is, like, you can do it as long as you're able. And since this is not very physically demanding work for most of us, like, you can do this quite a long time that you're able. I feel like advisors will be, like, you know, a lot of law and accounting firms where you've still got the senior partners that are still coming in their 70s and 80s because they just like the work that they do. They don't necessarily work the hours they did in the early years, but I think you just keep going because you have a lot of knowledge and a lot of skillsets, and you enjoy working with the clients, and you can.

So, you know, succession planning isn't appealing because you don't want to leave, and selling isn't appealing because you don't want to leave. And just finding, like, what are the options in the middle is this whole new marketplace that didn't really exist before and now is. So, either you get continuity planning options...and you know, that's what, you know, you had a conversation with some folks at our firm about that at one point because we do that for firms. You know, you can keep your firm and keep doing what you do, but someone signs a contingent agreement that says, "If something happens to you, we will come in and execute a buy/sell at that point because you're not there, and, you know, make sure that the clients are served so that they're not just kind of left to the wind." And, you know, some check for a terminal value. Maybe not as much as you get with a proactive sale, but you get to keep making the income along the way. So, you can do that with a backstop until your 70s or 80s.

And then you just get the platforms, you know, the places like Buckingham, and BAM Alliance, and Hightower, and Dynasty. And I feel like, even Ron Carson's. Carson's institutional platform is built this way as well. You know, like, how you navigate that moment that you hit in your firm where, once you get more than five or six employees and what, for most firms, is usually somewhere between, like, $1.5 to $3 million of revenue, you just start hitting the point where you need more and more people. And then all these people have to be managed, and you hit a crossroads where either your role has to change away from advisor into management, you have to start hiring fairly expensive senior manager people to manage all these people, or you have to find a larger firm to affiliate with or tuck into who can take a bunch of that management burden and scalability off of you.

Sue: Exactly.

Michael: And so, what led you to the decision of...you know, because I know Buckingham, in particular, like, they have two options. They have a BAM platform, which is sort of the...you keep your independence, but they give you some of the back-office services to make it a little easier to scale, and then the...you know, just actually being acquired by them and merging into the core wealth management firm. And you chose the merger route and not the platform route. So I'm just wondering, like, what's going through your head that you decide to finish there particularly? Since, as far as I know, that was not actually what you were looking for when you started down this journey.

Sue: No, but again, you know, I think I trust my gut. And you know, there were just...I'll tell you a story. So, a couple of years ago, you know, I was thinking about, sort of, succession types of things. And I took a piece of paper and I wrote down exactly what I was looking for. You know, "If I could find the ideal situation, what would it look like?" And it described, you know, what I was looking for in the way of strategic partners and what they could do to help me, and what did I bring to the table, and, you know, sort of this list, the dream list, wishlist, of things that, you know, in an ideal situation, that's what I'm looking for.

Put it aside, totally forgot about it, you know, and life goes on. And probably six months into this process of talking with Buckingham, I stumble across the list. You know, it's sort of like that Mary Poppins moment where, you know, the kids have their list, and you tear it up, and it goes up the chimney. Here it is. Here's this list, and I read it, I thought, "Oh my God, it's Buckingham." So, you know, I just kind of knew I liked the folks there a lot. Again, the philosophy matched up. I think, you know, one of the things I'd say that's unique about them...a couple things unique about them. They're a large organization, but there's a very intimate feel, I think, to the way that they work with different offices.

So, we're the Chicago office, and you know, it's still the six of us. We're still in the same space. We didn't have to combine with other cubes, you know, across the parking lot or any of those things. We kept, you know, our autonomy to some degree, but we already had so much in common, it was not difficult to merge our philosophies.

And I think the other thing that made me feel more comfortable with a big decision like this is, they have what I would call, sort of, concierge onboarding. So, there's a group of people that stay with you from the beginning of those conversations right through, you know, when you've joined the firm, and then there's another concierge onboarding group that comes in and helps you with everything, you know? The hardware, the software, the HR, you know, stuff that you need to do. Like I said, they have a head of the compliance area who's just a really nice guy on top of taking that off of my plate, which I'm so happy to give him. So, there were a lot of positives there that made it a pretty easy decision for me.

Michael: Interesting.

Sue: And I had been at big companies, you know? I had been at Arthur, and Morningstar, and Vanguard, so it's not difficult for me to work for a big company. I think some people, you know, would say, "Oh, don't you feel bad," you know, "giving up what you built?" I never did at all. I was like, "No, let's go. I want the next chapter and the next opportunity, and I can take what we've built and who I am and hopefully add to what they have." And they have an amazing group already, but I hope someday I can, you know, add to that.

Why Writing A Dream Job Description Can Be A Powerful Exercise [1:06:45]

Michael: So, I am curious. What was in this, like, dream job description you were writing for yourself? Like, what did that look like?

Sue: You know, I think I wanted partners who, you know, I think could recognize who I am as a human being. You know, that I'm different, and quirky, and creative, and somehow that's a positive, you know? Even in a big organization, somebody that could be there, you know, for my clients. So, I think a lot of times what happens is, you keep taking on more and more responsibility. And I think the whole point of finding the right partner is, they're going to share that responsibility with you and, you know, take some of it so that you can find the freedom, you know, that I'm looking for to create and have a longer career. And in some ways, that's what I would tell clients, too, is, "Look, you know, I like what I'm doing, but for me to keep going, I've got to get rid of some of this stuff that's on my plate right now that's just not all that interesting to me, more of the back-office stuff."

Michael: And it's kind of an interesting exercise that, you know, maybe is a good one for folks listening to try, of just, you know, sitting...like, finding a quiet half-day or full day if you need to. You know, get out of your office, because if you're there, people will call, or knock on your door, or do things that interrupt you. Like, just take a half day or a day, and just sit down, and just write, or whiteboard, or draw, whatever your style is, of, "What would your dream job description look like within your own firm?"

And I find, like, for me at least, this is...it's actually particularly powerful to do as a firm owner. Classically, you write job descriptions for employees, not yourself as the firm owner. But, you know, when you're in that position of ownership, like, the reality is, particularly in a small business, like, the buck stops with you. Everything flows uphill or downhill, depending on where you want to put yourself in that. It all comes to you. You end up being the one that fills in everything because you have to.

And at a point, you know, eventually, you start growing to a size where you don't always have to. Like, you get to start making choices about, "Am I going to do this thing, or am I going to hire someone, or partner with someone, or work with someone else to do this thing?" And if you don't pause and take a day just to re-write what you want that job description for yourself to be, I think sometimes you get lost in just dealing with what's happening in the business that you sort of have to deal with from day to day and sort of forget, you actually run this thing. Like, you do get to make these decisions about which things you're going to do or not do. Obviously, you have to manage the resource constraints of the business, but you actually do get to write your own job description, as long as you're ready to handle the trade-offs of hiring around you for the things that you don't want to do, or can't do, or shouldn't do.

Sue: Yeah. I say to myself all the time, "You're the creator of your own reality. If you don't like the way it looks, then, you know, in our kind of positions, we can make a change." And I did Strategic Coach for probably six years, which I would recommend to anybody as a way to help entrepreneurs find tools to do that quiet thinking and focusing on, "What exactly is it that you're trying to do?"

And I'm a big believer in setting your intention. If you don't know what you're trying to do, you know, you're never going to get where you want to go. So, that's true every day. You know, I get up at dawn and think about, "What's my intention for the day today?" Because it grounds me and helps me do what I need to do. But also, every quarter, I still use my Pocket Coach from Strategic Coach to help me make sure I'm tracking with my business plan, which I've done since my Arthur Andersen days every year when nobody asked me to do a business plan. But you know, I'm a real, classic entrepreneur, so I think about, "What is it that I'm trying to do here?"

Michael: Which, they trained you well at Chicago School of Business.

Sue: They did.

Michael: What does your annual business planning process look like, then? Is it you? Is it staff? Like, what do you produce?

Sue: Yeah, so, you know I think if it's going to be a successful business plan, it has to have buy-in from everybody. So, it needs to be something that, as a group, you agree on. But I think as the leader, you know, you're responsible for making sure that you're measuring and you're implementing. So, what I do, I love simplicity. So, Schwab came out with its one-page business plan a few years ago, and I used that template.

And every fall, probably like October time, I think about...you know, it's got different elements in it. Part of it is, you know, "What's your objective? What are your strengths?" Sort of SWOT analysis in there. "What are your one-year goals, your three-year goals? What's your value proposition? What are some of the unique things that you bring to the table?"

So, I think about all those things, and then, you know, quarterly, I use this tool from Strategic Coach that's called Pocket Coach, which is both personal and business, which I think is super important. So, you know, it's not just all about business, it's about what's going on in your life. And, you know, Strategic Coach is very good at helping you think about, "Am I happy? Am I getting enough free days? Am I pursuing something that actually speaks to me in some way creatively?" So, you know, I've seen it make a difference in a lot of people's lives.

Michael: So, can you talk about this a little bit more? What is Pocket Coach, for those who haven't been through Dan Sullivan's Strategic Coach process?

Sue: Strategic Coach is very good at coming up with lots of different tools to get you to think about, you know, what you're doing and where you're going. So this, in particular, is a two-sided template that identifies, you know, free days, focus days, and buffer days. So, you sort every quarter into how many you're spending on each.

What exactly are you doing on your focus days? You know, focus is when you're making money. So, might be meeting with clients, writing, or whatever it is that you do, speaking, that generates revenue. Buffer is, you know, "What are all the things I need to do behind the scenes to make sure focus days go well?" And free days are, what do you do when you shut the door and you're trying to regenerate and, you know, do whatever it is you want to do outside of work?

So, it starts with that, and then it identifies your 20 highest opportunities, and what they call "farm club." So, it's the next 20 opportunities that you have, and you define what you mean by that. So, it could be your biggest clients and making sure you're spending enough time with your biggest clients. It could be, you know, the next opportunity that you have for whatever it is you're trying to do. You know, bring in business, or, you know, just meet people, or spend time with interesting people, or whatever you want to put there. And then it makes you reassess every quarter, you know, "Did I meet my goals?" It puts, you know, the top 40 things you want to accomplish in the quarter. It lists five things that are, sort of, goals for the quarter. So, it does stuff like that, as well as lifetime goals on the back of the thing. So, you know, it's great. I get a lot of out of it.

Michael: Yeah, I love the idea of breaking things up into free days, and focus days, and buffer days. Yeah, that was something I started doing, not quite with those labels and terms, but kind of similar in spirit, that... About three years ago, I found just the sheer number of business-y things that I was involved with was just, like, hard to figure out even where your personal capacity is when there's so much stuff that flows back to you as the business owner, that the only way I could really get a good handle on it was, I just started making a calendar for the year of what all my days were and the primary thing was for each day.

Because, you know, usually you can only do one big thing for a day. Like, if this is a client meetings day, like, I'm just going to load that day with client meetings. And, you know, since I travel for speaking, like, if this is a speaking travel day, I'm not getting anything else substantive done that day. I can answer emails from the airplane and such, but, like, I'm not doing any other big project on the day that I'm also traveling for speaking. I'm just going to make sure I get my speaking done.

And, you know, basically I just ended up with a giant calendar of what, for me, are, you know, focus days, where I'm doing things that are, you know, client-facing and revenue-producing, internal team days because you need to make sure you allocate some time to manage your business, and then a subset of, kind of, free or creative days for me, as well as some buffer days. I kind of put them into a similar category.

And it was kind of amazing for me how much it helped regain control of the craziness of the calendar, because there's just...you know, we're all constrained to the same amount of time, and as someone that resisted structure for years and years and years, it was pretty powerful to suddenly put some structure in place when life got really busy and just be able to see, like, "Here's exactly how much stuff I can commit to and say yes to, and when I have to start saying no." Because I literally have a calendar of every day of the year, so when you run out of days, like, you just can't do anything else.

Sue: Right. Yeah, I think the most important skill you can have at the highest level of what we do is organization and prioritization. And I think that's one thing we need to do more with our staffs to help develop. So, especially this year with the Buckingham transition, we've talked a lot more about time management, and I know it's made a huge difference with some of my staff.

Michael: Yeah. Yeah, Ron Carson gave a great speech that I heard a year or two ago. I'm going to butcher the quote of what he said, but it was something to the effect that, like, you know, most of us feel like we're too busy and trying to keep up with too many things, and at the end of the day, it's really just all about priorities. Like, whatever you actually want to truly make a priority, you will get done. And so, you know, if you're struggling with all the things that are coming at you in your business, in your life, like, by definition, it just means you're not prioritizing enough and you have to say no to more things.

Sue: I know you've read that book "Essentialism," right?

Michael: Yes. I'm a huge fan of that book.

Sue: I love that book. Yes, oh my, I love that book. Like, my whole last year was about identifying when I needed to say no, and I say no a lot. And you need to do a lot more of that if you're going to focus on what's essential, so it fits right in with what we're talking about.

Michael: Yeah, I'm a huge fan of Greg McKeowan's book. I'll make sure I put a link in the show notes as well. But you know, he has this phenomenon that he calls about the paradox of success. And it's this idea that most entrepreneurs are successful in their business because, like, just, they see a gap, a problem, a something that needs to be solved or, like, in our business, you know, a way to serve clients that they've not being served today. So, "I'm going to make a business and I'm going to do that for my clients."

And that's how businesses get entrepreneured and innovated, and that's what's a lot of us successful. Like, we've got this vision of how to serve clients a certain way, and we go and do that, and we find people that appreciate that, and value it, and want to pay for it, and poof. And, like, you make a business. And then the more successful the business gets, the more opportunities that come. Because now you're established, and you start getting referrals, and people start coming to you, and maybe you get opportunities to partner, and you get all this stuff to do more things. And it's cool to have more opportunities coming in and to be doing more things, but the more things you do, the more you lose focus on the one thing that made you successful in the first place.

And he documents how people in lots of different businesses, not just the advisory industry, end out with these struggles that he calls "the paradox of success." That, in essence, the more successful you are, the more opportunities and doors it opens, and if you're not good at saying no to most of them, the opportunities you get from success causes you to stop succeeding.

Sue: Exactly.

Michael: So, as you look back on your advisory business and this growth path, like, what surprised you most about what it's been like building the business versus what you expected? Because I'm cognizant, like, you came at this...again, you're very humble for, like, the launch that you had. Like, you came at this as Chicago School of Business, having worked under Howard Haas on leadership. Like, you came at this with more of a, like, business and leadership educational background than virtually any advisor that comes into the industry. So, like, you had the book learning of what it takes to build a business and be a leader, now you've lived it in your firm for 18 years of running your own firm in addition to what you did at Vanguard, and Morningstar, and Arthur Andersen. So, as you look back on it now, like, what surprised you the most about building your own advisory business versus what you expected coming in?

Sue: You know, I think the honest answer is, a lot of times I go in with very little expectation. I am motivated by being of service, and if I can see a need, then I want to try and follow that. And usually, it involves... You know, it's also really interesting from a technology standpoint or, you know, just something that interests me. Right at the moment, it's philanthropy, but we're writing...there are lots of things that catch my attention.

So, you know, thinking about my path, I picked music because I thought it would be the hardest thing to do. You know, you've got to balance physical, emotional, intellectual all at the same time. It was extremely difficult to make it in the music business, so I thought, "Well, let's give that a shot and see if it works." And then I got to this point where I thought, "Well, I don't want to do that forever. What else is there?" And I thought, "Well, I like money, and I like knowing about money, so let's figure that out."

So, I went to Booth, you know, apprenticed at Arthur. I didn't really have any expectation there except that I wanted to learn. You know, that's been a theme for me. So, I learned a lot from them. I also learned what fit for me there and what didn't and ultimately decided, "Hey, culturally, this is not the right fit for me." Vanguard had talked to Arthur and said, "Hey, who do you have over there that knows personal finance and computers?" They said, "Oh, that's Sue." So, I built the algorithms for their first retirement planning software while I was at Arthur and worked with coders in Arizona and the folks in Pennsylvania. And when I went to Pennsylvania for the first time, I thought, "Wow, it's pretty here. I could live here." And then, you know, I did.

Michael: And then, so you did.

Sue: Yeah, I got to know Jeremy Duffield, who, you know, was one of two successors to Jack Bogle. And we really hit it off. And he's a super creative guy, and he said, you know, "You've gotta come to Vanguard." And I eventually did, and they created a position for me there as head of research and development for institutional participant education, which basically meant, "Dream up anything you want for mass-market financial planning." Which I got to do, and it was fun.

And then I bumped into John Raqenthaler at a conference in New York about retirement planning, and they said, "Look," you know, "come to Morningstar. We'll create a position for you there," which turned out to be director of financial planning. And I thought, "Yeah, that sounds fun. Why don't I do that?" So, I went there. I was there nine years, which was awesome. Got to know...I had known Don Phillips for a while anyway. We got to know each other better. John Rekenthaler was one of my best friends at business school. Joe founded Morningstar, and Joe and I have known each other for a very long time.

And I started my practice while I was at Morningstar, you know, kind of quietly and on the side, and it grew, and eventually I needed to spend more time with my practice, but I still have a great relationship with Morningstar. And then, you know, at a certain point, you know, again, I wasn't particularly looking for it, but this opportunity with Buckingham opened up. It just feels right, and I like them, and I think we can create things together. And I think they can free me up so that I can be who I am, which is some sort of mashup between musician and advisor.

Michael: Which is an interesting mashup in our industry.

Sue: Yeah.

Michael: So, as you look at the business now, like, has it ended out where you expected it?

Sue: Well, I had no idea where it was going, and honestly I never do. I look at it as one day at a time in that whoever crosses my path, I hope that, you know, we can have some sort of meaningful conversation. And it doesn't matter who it is or what we're trying to do, but that's my focus, is, "Who can I help?" And, you know, isn't it cool whatever kind of exchange happens between two people, or however many people? That's as far as it goes for me, and as long as I'm feeling inspired and I maybe can inspire some other people, I'm good.

Sue's Rigorous Annual Strategic Planning Process [1:25:24]

Michael: So, I hear you, but I'm at the same time...like, you're sort of talking about this as though you just kind of go with the flow of the opportunities that come, but you also do have this really, like, rigorous annual strategic planning process. So, how do you reconcile these or try to find your balance between, you know, "I want to live in the playfulness of the moment of going where my business takes me, but I do have to plan and set some direction to this, or we don't make progress."

Sue: Yeah, to me, it's right brain, left brain, whole brain. I've got both. I like going back and forth between the two, you know. It sort of, again, merges within who I am. But, you know, I need both. I need the creativity that maybe comes more from the music side or the writing side, and the analytical side which, to me, is like a puzzle. You know, I think the wiring of music, math, and computers kind of goes together, and I like all of that. So I think the pattern recognition that you find on the analytical side is important.

And, I think, looking for the next challenge, I would say, maybe can answer your question a little bit. I like that. I like achievement. I like challenging myself to see, "What else can you do?" or "What's the next iteration of that?" I am very easily bored, so if I don't have something that, you know, catches my attention, I'll dream up the next thing, because I'm happy doing that, too.

Michael: Yeah. Well, and I know you have a recent project now that you're doing with the ASCPA folks on their "Leaders Amongst Leaders" program. Which, I guess, like, goes back to your leadership days with Haas. Like, can you talk a little bit about the program?

Sue: Yeah. So, I think you were there at the kick-off. It wasn't this January, but a year ago, we all went out to, oh, California. You know, it was a small, sort of, intimate group that Michael Goodman and Lyle Benson started. And the idea was, you know, "Let's get us away from the office, smaller group of people, and let's have these, sort of, deeper conversations about running our practices." And I know this year they talked more about G2. I was occupied with the transition with Buckingham, so I couldn't be at that one. But you know, those guys are incredibly thoughtful. They brought in Stephanie Bogan, and Jill Schlesinger was there, sort of the MC of the time we were there. It was a lot of fun. And I guess they dragged me up on the stage when you were there, didn't they?

Michael: Yes.

Sue: Yeah. And we were talking with Bob Veres and...Lyle, I think. Was that who it was?

Michael: Yeah.

Sue: About the future of the industry. So, yeah, I mean, leadership is something I care about passionately. You know, whether that's mentoring other people or, you know, in my music world. Somebody sponsored me to go to Tanglewood when I was a young cellist, and now I do the same thing at the Steans Institute with Ravinia in the summer. So, giving back and mentoring is important to me.

Michael: So, in that context, I guess, someone that's spending time looking at leadership in financial planning, the profession overall, like, I'm curious, then, for your perspective of, like, what is it about our leadership and the way that the industry runs that we continue to have such problems with diversity in firms? Like, I mean, we have gender diversity issues, we have racial diversity issues.

You know, I mean, we kind of said it earlier. You know, you said you try to hire the best people as a leader for your firm. Other firm leaders say they try to hire the best people. Yet, somehow you ended out with a firm of 100% women and other firms are 70%, 80% male. Like, is there some leadership gap here, or something else? Like, what are we doing so wrong in most firms that we can't figure out how to bridge this gap?

Sue: You know, what comes to mind is, listen to successful women, and I think they'll help you find the right answers. Sometimes I feel like a bunch of men get together and decide, "Here's how we're going to," you know, "talk to women." You know? I mean, I see it all over the place where it's some man saying, you know, "Women are this." You know, you try and box it in. It's not a box. We're half the population, and we're going to have all the money, or most of the money, going forward.

Michael: Yes, you tend to outlive us on a routine basis, yes.

Sue: Right? So, you know, don't talk down to women. You know, I think they don't realize that they do that, but I see it all the time. And I think if there's a concerted effort to listen and, you know, include women in the upper echelons of leadership, there are so many subtle things that people are missing that are just not that hard. I think listening and inclusion are the answers.

Michael: What are the things that they miss? Like, just snubs that happen that typically male leaders don't realize they're doing?

Sue: Yeah, like sending an email to the women advisors in the firm and saying, "Gals, here's a great article on," you know, "how to speak to women clients." Well, we might already have that down, you know? You know, it's just...people are well-meaning, but they don't always know when they've just said something that's somewhat demeaning. Or, even creating a women's program. I mean, what is that? Why can't we have just a good program that fits both men and women? You don't have to have a special track for women, necessarily. I think you just need to know...any good advisor when they're sitting down with a client knows sometimes you have to make it more sophisticated or less sophisticated, and sometimes, you know, you need to speak in a language that's going to relate for the other person. So, you need to be able to change that up as a good advisor. That doesn't need a special track, necessarily.

Michael: Interesting. Although...I hear you. I guess, playing devil's advocate, I'm cognizant of the terrain I'm on here. But you know, I feel like there's a lot of concern that we're so not good at this in the industry that if we don't go above and beyond...which I feel is how, in good faith, a lot of women's programs, women's tracks, women'oriented events get created. Sort of a, "We need to get so much better at this than we are that we have to put additional effort into it," which gets expressed as women's programs, women's events, women's tracks, things like that.

Like, just, I don't know. From your perspective on leadership, like, is that just...it's still the wrong approach? Or, like, we're overcompensating and going down the wrong road because we just need to do better about inclusion at the leadership level and let it bubble down?

Sue: You know, it's a very rich area, right? There are lots of layers to this. I think, you know, something I would notice in my own firm is, you know, we do a lot of complex financial planning, and, you know, my group is very good at that. But it involves, sort of, again, the people side of things and the number side of things, and bringing that together.

One of the things that I did recently was I looked at, how many plans did we do last year? You know, we use Money Tree, but you could use whatever you want. I'd looked at, like, 50-something plans, and I split it out into...and, what was the issue? Because there are so many interesting issues that I wanted to create case studies around different types of situations.

And I think that kind of an approach might appeal to more of a cross-section of people. I've got one that I'll put up at my website that's about combining Roth conversions, stock options, restricted stock, and how you think about all of that with tax planning. You know, what I like are the complexities of lots of different pieces that maybe you just wouldn't run into in the normal course of, you know, the book learning in this. Maybe if you take a little more of a contextual view of how learning happens versus, you know, "Did you make your numbers? Did you bring in..."

You know, I think women can be turned off if it's, "Did you bring in X amount of business?" Or, you know, I think they're probably...it's a generalization, but, you know, less interested in cold-calling, say. But if you just say, "Hey, go wherever you go and talk about what you do with the passion that you have for," you know, "this industry," the clients will come. You know, being a good storyteller, I think, is how you do that instead of, you know, some artificial measuring system.

Michael: Yeah. Which I feel, like, also kind of takes us back to some of the discussion at the beginning. That, you know, having that kind of freedom for exploration is predicated on either having your financial house in order or the business's financial house in order so that you're not at a point where, "Hey," you know, "we have to grow and find the next new client or the next new people, so get out there and keep cold-calling," because otherwise you can't afford to pay your bills, or "We can't afford to pay you to be here." The more financially stable your household is and the business is, the less those pressures seem to get expressed in the first place.

Sue: And you know, the other thing that comes to mind with that is, you know, I got into this industry as an apprentice, right? That's how I thought of myself with Arthur Andersen. With all of the business owners getting to be, you know, 50s, 60s, 70s, there should be a lot of apprentice opportunities out there if you're willing, you know, to go down that road.

Michael: Yeah, I...it's still, for young people today that are coming into planning and ask me for, like, suggestions about, you know, finding work and finding opportunities, one of the things I push pretty hard is just, when you're completely new to the business, just getting any experience, just some of that apprenticeship-style experience, is so valuable. Like, don't worry about finding the perfect job in your first job out.

Find a job, get some experience, get the perspective that comes from having done it for a while. And if you land at a great firm, then you'll grow and build there. And if you land at a firm that you decide isn't great, you'll learn a whole bunch of things about what you don't want to do and want to do differently in the future, which still means you're going to find the good stuff next.

So, don't overthink where you have to go right out of the gate. Just find a job with some experience. And by the, you know, second or third time you maybe make a transition three, five, or seven years in, then it starts to matter a lot more about, "Are you really picking the right firm that you can grow your career with in the long run?"

Sue: Yeah, and I think, piggybacking on that, networking is incredibly important. You know, those informational interviews, I probably do half a dozen a year where people come in and, you know, they're kind of testing the waters. And it gives me a chance to see, you know, what kind of talent is out there. And you know, three of my last hires have all been people that came in for an informational interview and I thought, "Oh, well, might not need 'em right now," but maybe six months later I do, and I have. So, that can be a great way to find the right home.

Michael: Yeah. So, as we come to the end here, this is a podcast about success. And one of the themes that always crops up is just, like, the nature of success and what we're working towards is very different for different people. Sometimes it even changes for us at different stages in our lives.

And so, you know, you've built, I think, what anyone would objectively call a very successful advisory business. You have six employees, and 150 clients, and $350 million under management, and this...you know, what I truly think is, like, a Forrest Gump kind of career progression. You got to write your own job description at Morningstar and Vanguard. That doesn't happen very much. And now you're in this next transition with Buckingham. So, as you look forward from here, I'm just really curious at a personal level, like, how do you define success at this point?

Sue: Good question. And you know, I think you hit it on the head when you said, "It evolves." You know, at this point in my life, what it's about is, you know, having an opportunity to make a difference. This is an incredibly amazing industry, you know? And there are days when I can come to work and know I'm going to change somebody's life today. And it's just, you know, where do you get a chance to do something like that? It's phenomenal.

So, you know, at different points in my career, it might have been, you know, "I'm just trying to survive after my divorce," you know? "I have to figure this out. I have to pay my mortgage." There are different things. I think when you come from not a lot, which is my background, in the beginning, you know, it's fun to go out for a fancy dinner or, you know, take an amazing trip, or buy a good car, or whatever it may be. That stuff all passes pretty fast, and I think, you know, what it boils down to later in life is, you know, "Can I really use my life to help other people?"

So, that's definitely where it's at for me. Again, I think if I'm looking at...you know, what I'm going for, it's inspiration. You know, not just being inspired, but inspiring others. And definitely, a big piece for me is, sort of, the freedom to create and express who I am and what I think. And then, just, I really do love that service role, you know? I love my clients, and I love my staff, and, you know, I want to do right by them.

Michael: Yeah. Well, it's been an amazing journey just to hear how you have gone through the stages, just kind of gone with the flow through the stages. It's built a pretty amazing thing for what seems to be a lot of really good intuition gut-checks that work very well for you.

Sue: Yeah, I've had a good life, and I know, you know, you've done the same. You've made some of those same decisions along the way, you know, in how your career progressed. I see a lot of similarities with you and me, you know, in choosing to be more independent and create. It's fun.

Michael: Yeah, it is fun. Well, thank you for joining us, sharing a little bit of that fun here on the "Financial Advisor Success Podcast."

Sue: My pleasure. Thank you.

Michael: Thank you.