#FA Success Ep 318: From So Many Clients To So Few: Transitioning From Retail Brokerage To The Multi-Family Office, With Ali Swart

Resources Featured In This Episode:

• Ali Swart
• Waldron Private Wealth
• Waldron Private Wealth Family Office Service Menu (download)
• eMoney Advisor
• LucidCharts
• Vanilla
• Financial Planning Association (FPA)
• Own It: The Power of Women at Work by Sallie Krawcheck

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Full Transcript:

Michael: Welcome, Ali Swart, to the "Financial Advisor Success" podcast.

Ali: Thank you, Michael. I'm happy to be here and really excited about our conversation today.

Michael: I'm looking forward to the discussion and delving deep into what to me is one of the really interesting distinguishing factors that comes up in the experience that clients have from one advisory firm to the next which is essentially the ratio of how many clients an individual advisor has. From the industry, and we often talk about it, is basically kind of a productivity metric. A good advisor has 100 clients but a great advisor with wonderful technology and a fantastic support team can get to 175 clients. And we tend to frame it in the context of essentially productivity and capacity. But the reality, while there is some, I think, validity to that, a big function of how many clients we can serve is just...essentially comes down to what our services are, what our services really, really are and how deep we go with clients.

And that spans on the one end the traditional retail brokerage firms that often have many, many hundreds of clients assigned to a relationship manager in a branch all the way down to family offices that...well, in the extreme, they literally only have one client, one family that they serve or maybe a multi-family office that has a half a dozen clients that they serve. And I know you have literally lived these extremes from retail brokerage with hundreds to multi-family office with less than half a dozen. And so just I'm excited to talk about what it's really like from the advisor and when you go from a world where you have hundreds of clients that you're responsible for to a world where you have five.

What's that transition like?

How Waldron Private Wealth Differentiates From Other Ultra-High-Net-Worth (UNHW) Firms [05:48]

Ali: Yeah, absolutely. So, I think you're spot on. There are multitude of ways to do business and the way that firms might think about their staff to how many clients they want to serve and in my time at the larger brokerage firm...which I'm happy to talk about that experience. I think it comes down to what you just said, Michael, which is the services and the experience that you're providing the clients. And for some models, having a few hundred clients to one advisor is perfectly fine because you may be going something like an inch deep and looking at maybe less complex things that may include cashflows and some retirement planning and things that you can do on a mass scale.

But then when you get into the area that I am now, we're going five miles deep with our clients and the level of complexity is very high. And so that requires a higher touch and I would say a more...the white glove Ritz-Carlton experience.

Michael: So, let's just start there to understand what your world looks like today. So, can you tell us a little bit, I guess, first just about the advisory firm that you're with and then we'll talk a little bit more about your role in particular?

Ali: Yeah, absolutely. So, the firm that I'm with now is Waldron Private Wealth and we were founded essentially in 1995. The firm operated under a different name prior to 1995 but the essence of how we operate today...we were founded 20 some years ago by John Waldron. And John founded the firm based upon a holistic planning mindset. So, John describes himself as a recovering CPA because that's what he was. He worked for...I guess it would've been the big eight in the late '80s and early '90s doing complex ultra-high net worth tax work. And his big aha moment came when he did some really great wealth planning and tax work for a client and the client was very happy with that and said, "Go implement all of this." And he couldn't because in the '90s, the intersection of financial planning and investment management and CPA accounting work just...it wasn't there.

So that was John's aha moment of saying, "Wow. I want to be the person that serves these clients soup to nuts." And Waldron Private Wealth was born on that concept. And so, we come into the essence of how we plan for clients at a very holistic, deep level oftentimes leading with tax planning, with estate planning and getting into the weeds on those complex issues because that's really who we serve.

Michael: So, talk to us a little bit more about who you serve. What does that typical client look like in practice? A lot of advisors say, "Well, we do holistic financial planning including investment management, retirement planning, tax planning, estate planning." But I think what you do is a little bit different than what a lot of other advisors do in practice. So, help us understand a little more. What does the typical client look like that you're working with?

Ali: Yeah, and I completely agree with you, Michael. I think one of the challenges in our industry is wealth management firms are called the same thing but in reality, there could be a multitude of things that actually operate under the term wealth management. It's similar to how a lot of people call themselves a financial planner or a financial advisor and those can be very different things. And so really who we work with, we work with a lot of business owners. Typically, multigenerational family business owner wealth that either currently still have an operating business or they have had a liquidity event and now they have a liquid pot of money that they're sitting on. And so, a lot of our planning begins at that business level. And speaking to some of the complexity and size of our clients, nearly all of our clients are well above the federal exemption. So, we look at those clients from the tax lens and from the estate planning lens. Of course, we do have clients that are outside of business owners. We have corporate executives. We have people in the medical field whether it be physicians, things like that. But really the bread and butter of who we serve are multigenerational business owners.

Michael: Okay. And so federal state tax exemption, being above the federal state tax exemption. So, we're talking about folks with tens of millions of dollars of net worth and up from there?

Ali: That's right, yes.

Michael: So, you're working with fairly affluent folks. Now is investment... and talking a lot about tax and estate planning, is investment management still part of the business as well? Is the business model still ultimately tied to assets under management and these are services you provide very complex clients who have these issues or are you actually a whole different kind of model?

Ali: Yeah, so I'll answer that in two ways since I think there were two questions there. So yes, investment management is absolutely part of holistic financial planning. So, we definitely do that. But I would say clients come to us for investment management the least. They're coming to us more for the wealth planning side of it and the investment management side of it is usually the least of our clients' concerns although it's an important part because our industry is geared towards thinking about performance and what types of investments should I be in. And candidly, I think a lot of people, when they think wealth management, they really hear investment management and that's where their mind goes. So, when I might be in a casual conversation and I say I work in the wealth management field, I still get questions surrounding kind of stockbroker types of questions. They think that I invest people's money and that's the least of what I do and what our firm does.

Michael: So how does the business charge for its services, then? Are you on an AUM model or some kind of separate flat fee model or is there a component of each? How does it work from the business model perspective?

Ali: Yeah, so we like to say that we don't have a fee schedule because we truly don't. A lot of clients or prospects will come to us and say, "What does your fee schedule look like?" And candidly, we don't have one because each of the families that we work with is going to have separate and unique needs. To answer your question directly, there are typically four ways that we can charge our clients. Assets under management is certainly one of them. Retainer is one of them. Limited consulting agreements is one of them. And lastly, hourly for specific personal CFO services that we provide. The personal CFO services is an hourly fee that we assess on our clients who we are acting as their personal CFO which typically means caring for any and all bill payments, real-estate taxes, really getting into the nitty-gritty of what our clients need on a personal CFO basis.

And where that kind of stemmed from was because we work with a lot of business owners, a lot of these families had kind of a built in CFO or personal CFO within their businesses that kind of handled those things for them. And upon a liquidity event or a sale, some of those resources go away. And stemming from that, we've also had success over the years of having single family offices that are kind of shutting down. And Michael, as you know, single family offices take care of everything for their clients. So, as we absorb those services into our firm, we have to be able to offer those things. And we find that the personal CFO services are best on an hourly basis.

Michael: Okay. So, I guess I'm just trying to visualize in practice...you may not have exact numbers handy by any means. But is there a breakdown of just how this boils down in practice across these different categories? Is the business...it's 80% retainers and then there's a little bit of AUM and consulting and hourly services or revenue-wise, is AUM still the driver, then retainers and consulting agreements fill out the rest? Just where is the center of gravity at the end of the day in how the firm tends to get paid for its services?

Ali: Yeah, and it really varies per client. So, we have some clients who are all AUM. They may have had their liquidity event. The business planning is in the past and now they have that liquid portfolio to where an AUM model makes the most sense for that client. We also have clients who have zero dollars with us in liquid assets. And that's where we look at the retainer type of model. Because we are dealing with business owners, many of these clients are able to provide some tax discounts through their business as business operating expenses for our retainer. I'm not a tax preparer so that's not tax advice but generally speaking, our retainers are often in conjunction with business planning services and financial planning services for the family.

Michael: Is there a typical, I guess, minimum fee that it adds up to of just what someone has to be ready to pay in order to get the full breadth of what you do for clients?

Ali: Sure, sure. So, there's no minimum fee necessarily. I would say there is a minimum level of complexity. Because we understand that we are not going to be everything to every client, I like to say that we operate on a minimum level of complexity because there are services that we can provide but we're not going to be the most inexpensive firm out there for some people. And I'll just use an example. There are times where somebody like a Fidelity Investments or a Vanguard can fully do what a client needs to do but other times once you go up that value chain and the advice that you're going to need, you're going to need an ultra-high net worth firm that operates in that space and has a lot of experience dealing with some of the complexities that come with the ultra-high net worth multigenerational families. So, the short answer is there's no minimum fee but I would say there is a minimum level of complexity.

Michael: Well, I'm presuming just that's still... Ali, my life's extremely complex. Can I hire you for $5,000 a year? I'm going to guess the answer is no. Just in practice, you can't do the depth of services that you do for $5,000 a year if you're going to go fully deep into my business planning and family dynamics and we’re going to redo an estate plan with a bunch of GRATs and all the other things that start cropping up at that level. I'm presuming at some point there's just some level of fees that have to translate through or you can't do the breadth of what you do for folks that have tens of millions of dollars and up.

Ali: Yeah, Michael. I would definitely agree with that. And that's really where, you alluded to, we have a low client-to-staff ratio. And clients come to us knowing that they're not going to be able to get the advice that they're wanting and needing elsewhere for potentially a lesser fee. And we have had experiences where clients or I should say prospects interview our firm, hear what we can offer, and candidly other firms out there will say that they can offer the same things and once a client gets into engagements with other firms at times, not always, but we see those clients come back and say, "Well, what they said they could do really didn't meet the mark. And so, we're ready to try with you all." Knowing that our fee is going to be higher but recognizing that there's value in that fee.

Michael: Are there particular areas where that gap tends to crop up of, "I thought I was going to get this somewhere else and now I realize I have to hire your firm at a higher fee to really get it done right?"

Ali: Yeah. And I can say specifically with two families that come immediately to the front of my mind, it's execution. There are firms out there that have excellent sales presentations. They're big firms. Excellent sales presentations and cay say they do a lot of what we do. But at the end of the day, they're not necessarily being proactive and driving things through to the finish because when you get into advanced estate planning, a good advisor is thinking up those trust strategies, communicating those strategies to the client, partnering with the estate planning attorney that's going to draft the documents, pushing all of that through because those types of documents are not just like drafting a last will and testament and a revocable trust. There's a lot of complexity that can go into those documents, pushing things through to the finish line and then making sure that everything is executed on the back end once the trust planning and tax planning is done. You need a quarterback to really drive those relationships.

Michael: And so again, a lot of firms say they get that execution done. Literally, the label, "I'm your financial quarterback," "I'm your personal CFO," is relatively common these days, I find, in the advisor world of just people saying it. So, what's the difference between everybody who says that and what your firm is doing and executing on it?

Ali: Agree with you, Michael. A lot of people say they do those things. And going back to the couple of families that came to the front of my mind, we work a lot on a referral basis with accountants and attorneys. And oftentimes they are referring their clients to us for wealth management services. And a lot of times those accountants and attorneys do work with other firms as well. So, they get a firsthand view of what we can do versus what other firms can do. And there have been several instances where you have two firms that are saying they can do the same thing and it came down to an accountant or an attorney having that relationship and saying, "We have seen this from both sides and we've seen the execution on Waldron's side." And so, it's...accountants and attorneys have to be objective in their recommendations for sure. But having that nod of faith that you're going to get what is being displayed here is vitally important to our firm.

Why Waldron Implements Lower Advisor/Client Ratios [21:53]

Michael: So, you've mentioned that part of this distinction just ultimately comes down to lower advisor-client ratio. So, what does that look like in practice at your firm?

Ali: Yeah, so when we think about how we structure a client relationship team...so let's say we have a new client coming in. Who is going to work on that client? So, in all of our engagements, you're going to have at least three people with specialties. So, one is going to be a wealth planning person which is the team that I manage. You're going to have an investment team member and you're going to have a client service team member. And comparing some of those things to how I operated in the bigger brokerage firms under the hundreds of clients to one, I was all of those things at one point. I was the planner, I was the investment person, I was the person opening the accounts, doing the transfers, doing the money movement. I was all of those things. And here at Waldron, those are three separate jobs and three distinct people.

And we pride ourselves on maintaining a low client-to-staff ratio because we know that the people that are going to work on our clients, those are all full-time jobs and we often look as a firm of hiring ahead of needs. So, when I think about my wealth planning team in particular, I'm always thinking about, "Oh, my gosh. We need to bring on X amount of revenue next year. That could be X amount of clients. Who do I need to hire to make sure that we stay ahead of that need so that we're providing the excellent level of service that's expected of us?"

Michael: So, what does that add up to in terms of the ratios? You've said it's a low client-to-staff ratio but when you talk about one of these teams, someone from wealth, someone from investment, someone from client service, how many clients does a team like that support in practice?

Ali: Yeah, so I believe we are around, I would say, 280 families right now. And we have a full-time staff of 75. So, if you do the math there, is that four to one, five to one?

Michael: Yeah, so you're four to one, five to one ratio.

Ali: Yeah, and...

Michael: Because I'm assuming you hire with capacity to grow more.

Ali: Exactly. And we definitely live by the old adage, if you're not growing, you're dying. We seek to grow our firm. We seek to help more families out there with their wealth management. And every year we want to be growing and adding clients to our firm and adding headcount to our firm as well.

Michael: So obviously...so I guess of 75 staff members, how many are actually in advisor roles, client-facing advisor roles in the first place?

Ali: Yeah, so I would say about half, maybe slightly more than half are on our advisory staff.

Michael: Okay.

Ali: But I will say people that may not be considered part of our advisory staff and delivering advice directly to clients still have a massive role in the support of the advisors and the firm itself. When I think about departments that might fall outside of the advisory staff like our client service team and like our operations team, those two teams are so vital to supporting advisors and the clients from an execution standpoint and also a technology standpoint. When I think about our operations team and how we can do things better, more efficient, faster than some of our industry competitors, I think that's an important part of how we scale in the future. I think about growth and scale in two different facets, if you will. When I think about growth, I think about adding revenue, adding clients, adding staff headcount but when I think about scaling, I think about can our team do things in a more efficient, faster way with technology in the future.

And inevitably, you just figure those things out. I remember coming to Waldron in my first year. It was my first year joining the ultra-high-net-worth space. And it took me hours to figure out a tax return just from a human element. But as you get those reps and you go through your career, you're able to do those things much faster and more efficiently.

Michael: So, I'm just thinking about this in practice. So, if about half or a little more of the team are advisory staff, it's 30-something, almost 40 advisory staff relative to a little under 300 clients. So, I'm sure individuals vary up and down but this is a world of any particular advisor may only have 8 to 10 clients that they're primarily responsible for. Does that feel about right for where the ratios sit on just how many families a lead ends up being responsible for?

Ali: It could be. And there are some people in our firm that work on two families because the families are so large and the number of family members that may be part of that family. So, we actually do have those engagements, where a very small handful of families is somebody's entire role.

Michael: And so, I guess just help us visualize further. If you're living in a world with less than 10 families or all the way down to 2 families, just what do you do every day, every week to fill your time that it's like, "Oh, I've got 2 families. I don't know if I could take a third." What are they doing all day, every day?

Ali: Michael, I absolutely love that question because that is the exact question that I asked in my interview process at Waldron because...

Michael: Because you came from a retail brokerage world of hundreds of clients.

Ali: Exactly.

Michael: You went from 400 to 10. What do you do all day?

Ali: Honestly, and I felt that way. I remember asking that question in my interview because in my time at Fidelity, I was between 350 and 400 households when I transitioned from Fidelity to Waldron. At that time, I was expected to run between 15 and 20 meetings at Fidelity. That was the expectation. And I remember asking the folks at Waldron, "How many meetings are you running a week? What are you doing to keep yourself busy?" I honestly wondered in the back of my mind, "Am I going to be bored?"

Michael: Yeah, when you come from a world of 15 to 20 meetings a week, week in, week out and hundreds of households, you're going to get rid of 97% of my households. What am I going to do every day and every week? So, what does everyone do? Where does that time go?

Ali: Yes. It was really eye-opening, the level of complexity and the depth that we went to. So, I'll give you some concrete examples of how my role changed. So, at Fidelity, it's very much a guidance-based system. Advice was a four-letter word in a broker dealer type of environment. So, one concrete example is tax planning. I was not taught to go through a 1040 or any other type of tax return in my time at Fidelity because we weren't allowed to provide that advice. But here at Waldron, you pretty much have to be fluent in various tax forms of whether it's a 1040, a 709, a 706. Being able to dig through those documents for several reasons. Number one, to create summaries of client tax situations over time but also to be able to provide advice to the client and triage with the accountant.

Clients here are not using TurboTax generally speaking. They have an accountant, CPAs, tax preparers that they use. And so being able to be fluent in some tax forms, that takes a lot of time. So that's one example. Trust planning and being able to comb through a trust document and identify relevant things that a client needs to know within a document and then also being able to triage with the estate planning attorneys on proposed strategies. And also understanding the overall business and family dynamics. We have very deep relationships with our clients and there are some clients we talk to...some, every day, candidly. There are clients that we talk to almost every day and at a minimum, probably once a week or every other week. And comparing and contrasting that to my time at Fidelity, I might hold a quarterly meeting or an every six-month meeting.

Michael: What are you talking to clients about one or several times per week? It's a lot of conversations.

Ali: You would be amazed at the amount of things that clients have going on whether it's a mortgage refinance, an intrafamily loan, placing life insurance in a split dollar strategy that requires a lot of time and effort to get up and running, family meetings, family governance, and conducting family meetings to ensure the communication amongst multigenerational families is occurring. Over the last several years, we've had several owners that are transacting their businesses. So, there are evaluations, there are estate planning strategies that go into planning for that. The list is just a little bit endless with the amount of things that ultra-high net worth families have going on.

Michael: And so, a wealth planner in your environments ends out in this world of...yeah, you might have 10 clients or fewer. I guess 10 families or fewer that you're going through this with. And you had mentioned families can get larger. So, I guess to be fair in your context, this is more than a lot of advisors who might talk about client families or client households because it's a couple or maybe a couple and one or two of their adult children. It sounds like you are living more broadly and deeply in the family tree as well. Do you actually end out with relationships with lots of different people in the same family tree?

Ali: We do. And I won't say that we don't work with a traditional family that's husband and wife and a couple of children. We definitely have those relationships. But many of the ultra-high net worth families that we work with could be three generations. So, you may be looking at parents, parents that have 2 to 3 children, sometimes more, and then they now have grandchildren. And maybe if we're very lucky and blessed to maintain those relationships and longevity, you might even have a fourth generation that is alive during that time. I have G1 that was in their 80s, G2 in their 60s, G3 in their 40s, and have a G4 that has toddlers. That's a common scenario.

Utilizing A ‘GAP Process’ To Find Prospective Clients’ Pain Points [34:02]

Michael: So then help us understand further just I guess breadth of services. Just what does the firm do for clients, or I guess how do you even explain to them the breadth of all the things that you're going to do if you're talking to an ultra-high-net-worth business owner family that's trying to understand what are you all going to do for me for this retainer I'm supposed to pay you?

Ali: Yeah, that's a great question. And we have a family office service menu. So, we actually have a menu that provides all of our services. And candidly, Michael, we don't use it very often because it can be overwhelming. Our role as...

Michael: Out of curiosity, is that something you're able to share? I'm just curious if that's something we can actually share out to people who just want to see what does an entire family office service menu look like.

Ali: Yeah, I could certainly provide that. That's no problem at all.

Michael: All right. So, for folks who are listening, this is episode 318. So, if you go to kitces.com/318, we'll have a link to a download so you can see what a full family office service menu looks like. But as you were saying, Ali, so in practice, you don't even... you're not using it very often with prospects?

Ali: We don't because it can be overwhelming. We have used it at a very high level if somebody really wants to know everything that we can do but we believe that our role kind of throughout our sales process, if you will, is to be able to identify the top three to five extreme pain points for the prospect and be able to address those because being able to go five miles deep on a couple of qualitative issues and be able to drive those home and show our value that way is more meaningful than saying, "Hey, we can do these 98 things for you," and them get overwhelmed, honestly. So yeah. As part of our GAP process, which is gather, analyze, and present, we take every prospect through our GAP process. It's really identifying those pain points and most importantly, what's important to the client because we may identify an estate planning problem but maybe their big thing is, "Hey, communication is really bad within my family and I need you guys to help me with that."

Michael: Interesting. So, I guess can you give some examples of just what are the pain point issues that usually come up in practice since, as you noted, sometimes it's...you see an estate tax planning problem and they are entirely concerned about, "Yeah, our family communication just isn't good. I don't know how to talk to my kids about wealth." So, what are the pain points that you often see come up in practice that become those triggers for ultra-high-net-worth clients?

Ali: Yeah, so I would probably segment them into three broad things which would be estate planning. So, they're well above the federal exemption and as you know, the money's going either to Uncle Sam, to charity, or to beneficiaries. So, helping identify those issues on the estate planning side. Tax planning. We have a lot of business owner clients that say, "I'm getting ready to transact this business and I'm going to owe this large sum of taxes. Is there anything that we can do to mitigate this?"

Michael: Right.

Ali: And then family dynamics. We have a lot of families that will come to us and retain our services for being able to facilitate those multigenerational issues. And honestly, there may be no clear issues at that point in time but multigenerational families, generally speaking, know the value of ensuring that communication is strong throughout the family because we've all heard the statistics to where 70% of wealth is gone by the second generation and 90% is gone by the third. Those are statistics that are out there and true. So, families are usually aware of those challenges and want to make sure that they're playing offense to stay away from those types of statistics.

Michael: Interesting. And I guess per the earlier comment, it's usually not, "I'm not sure how to invest my $22 million portfolio."

Ali: That's usually not the main driver. We certainly have clients that are interested in nontraditional asset management because they're new to it. So, let's say that you have...and we've had this instance happen to where you quite literally have a business owner who did blood, sweat and tears into their business and their business was their entire net worth. And all of a sudden, their liquidity basically went from zero to $20 million.

Michael: Right.

Ali: In that instance, you do get a lot of interest on, "Oh, my gosh. What else is out there except for mutual funds and exchange-traded funds?" Because most people know about those but a lot of people get interested in private equity or alternatives and how we look at those. And we do have some extensive partnerships with alternative strategies, with private equity strategies. I don't want to downplay the things that we can do that many firms maybe don't have access to but that's just not usually the main driver of why people come to us.

Michael: Okay. So, you'd mentioned a GAP process as well. So, can you help us understand what that process is?

Ali: Yeah, so our gather, analyze, present process is essentially our sales process that we put every prospect through. And we can usually run it one of two ways. We have prospects that are willing to give us anything and everything we ask for. So, if we ask for tax returns, investment statements, existing estate documents, some people will provide that and we're able to dig through all of that, have many conversations with the prospect and be able to identify those 3 to 5 pain points that I mentioned earlier. Other times a prospect may not be willing to divulge all of that information. So, we're constructing our proposals purely off of conversation. It's very helpful to have something like a tax return because a client may not be aware of certain things that we would see on tax returns. But it's usually one way or the other. Either we're getting a ton of documents or we're getting no documents and it's up to us to identify those pain points and present them to the client and push on those just enough to make them realize they need to hire us to fix all of these problems that we just identified.

Michael: And so how does this process flow in practice? Is this... there are two meetings. The first one, we gather data, and the second, we deliver a proposal. Is this a multi-meeting process? Is there other stuff going on? How does this actually work if I've reached out and said, "Ali, I'm kind of interested in working with your firm. I've heard about it and want to learn more." And you're going to take me through this process. What actually happens next?

Ali: Sure. So, the length of the process really depends on the complexity and size of the prospect. If you have a prospect that has a little bit lower complexity and pretty straightforward things going on, we might be able to get through our GAP process in three weeks. Especially if a prospect is willing to continue to be very engaged in the process, we want to be talking with those prospects every week to say, "Oh, hey, we were going through your documents and we saw this. Did you mean to do that? Can you give us some explanation on that?" And it's a way to keep a prospect engaged throughout the whole process. But candidly, there is also a six-month process to where if you have 20 to 30 entities and hundreds of millions of dollars and 30 trusts outstanding, those decisions cannot be made in 3 weeks.

Michael: Right.

Ali: Not only from us untangling the web but getting to the point of being able to provide recommendations and getting that size of prospect comfortable with us. On that size of prospect, it would be very common to have a 4-to-6-month process as you're going through that. And usually those longer processes often involve multiple family members. It's not 1 decisionmaker. It's oftentimes siblings or parents and children comanaging this decision. So anywhere between 3 weeks and 6 months, I guess to put it easily.

Michael: And is this ultimately a version of a financial plan offering? We're going to gather information, then we're going to do analysis in some kind of planning software and then we're going to present a plan to clients.

Ali: Yeah, some form of that. I will say on our very complex clients, some financial planning software doesn't quite meet the mark for how we would want to illustrate these very complex strategies to a prospect that has no idea what we're talking about in the very beginning. So oftentimes, we're creating those deliverables through flowchart software. It's sometimes even through an Excel deliverable so we're able to create a customized game plan for that particular client to be able to display a concept. But I will say for some lower complexity, we do utilize eMoney. eMoney is our financial planning software that we utilize. And we have a couple of other ancillary softwares that we use for flowchart building and things like that.

Michael: I'm curious what do you use for ancillary or beyond eMoney.

Ali: Yeah, so we use a program called Lucidcharts for our flowchart building which is a very user-friendly program. And then we're in the very beginning stages of testing out a software called Vanilla. And I know in some of your other episodes you've had people in the fintech space on your podcast and these new emerging technologies that are out there. So, it's my understanding that Vanilla is some sort of byproduct of Steve Lockshin who I know you've had on as a guest.

Michael: Also does a lot of work in the ultra-high-net-worth space and was trying to build estate planning tools to help facilitate working with ultra-high-net-worth clients.

Ali: Yeah. And with Vanilla, it's in its infancy. Vanilla's only been around a couple of years. But the goal that we are looking for with Vanilla, and I think this will evolve over time, is they do a good job of document extraction and being able to put together deliverables that we're putting together by hand right now. So that kind of comes into scaling and how we can use technology to scale our firm. So instead of us manually creating these deliverables, if we're able to utilize something like AI technology or document extraction to be able to build a beautiful deliverable that we're not doing by hand, I think that that could be a good win.

And Vanilla also in a future state hopes to have things like a living balance sheet to help track net worth and build very nice net worth statements that right now we also build by hand.

Michael: And I'm presuming then not in planning software. You're building by hand in Excel kind of thing?

Ali: That's correct, yes.

Michael: Okay. So, is delivery for you ultimately the end of this GAP? The present process, is the delivery of a high-net-worth financial plan and a series of recommendations that go along with it?

Ali: It is, yeah. We would seek to identify those three to five pain points, provide solutions for those three to five pain points and hopefully at the end convince the client that we're the right firm to execute on those wishes.

Michael: So, I'm struck by that. So, at the end of the day, this whole planning process for you that takes weeks or potentially literally months is all with the prospect. So, do they still have to pay for this GAP planning process and then separately decide if they're going to work with you ongoing or is this something you do without a charge to win the business because then they become clients for life once you help them implement it?

Ali: Right. Our GAP process is completely free of charge. It's complimentary. And one of our goals at the end of that process is also to make the prospect feel like they're firing us because at this point we've probably found out so much about their financial situation and started to build those relationships that we want them to feel like they would be firing us at the end of that process by saying no.

Michael: Interesting. That's a powerful framing. So as opposed to just, "We're going to do some stuff for the client to try to show our value in the hopes that they hire us," your mentality is, "We want to go so deep into already doing the planning, showing them exactly what they need, crafting recommendations and making them see and feel value that it would feel like firing us if they didn't follow through and continue... just continue to the next stage with us."

Ali: That's right.

Michael: Okay. That's a really interesting framing. So, I guess I'm just wondering how well does this work for you in practice. How many clients actually do follow through at the end? Because I'm just envisioning weeks or months of work, dozens of hours put in to go through this for a high-net-worth client who then ultimately says no has to feel pretty sort of crushingly awful at that point for all the work that you've invested into. How often do you go through in this much depth and then they don't say yes at the end?

Ali: Every year is a little bit different but I think in the essence of being very candid, I will say this year I believe our closing ratio was about 68%. So, if you look at all of the people that have gone through our GAP process, it's 68% close rate.

Michael: So, 2 out of 3 follow through.

Ali: Yes. And as a team, we...specifically with the wealth planning team, we drive a lot of our GAP process. And so, as a team, we want our minimum closing ratio to be 50. And I will say as a segue, we are wanting to grow in different markets throughout the country. So, we have actually set a higher close rate for different areas of the country in 2023. So, we want to close 55% to 60% in different cities outside of Pittsburg in order to be able to grow those markets. But this year it was 68% so far.

How Waldron Organizes Their Team Structures [49:58]

Michael: Interesting. So now help us understand a little bit more of the...I guess just the team and business infrastructure that makes all of this happen, that brings this together. So, you've mentioned a few times the wealth planning team but I guess can you just help us understand overall the teams or the departments or just what this org chart looks like at a 75-person firm like yours?

Ali: Yeah, absolutely. And I think our overall org chart is a very interesting story in how it's evolved over the last 5 years in particular. So, in 2018 when I joined the firm, we had a very flat organization. And what I mean by that is each department had a manager and then they had people that were underneath of that manager. So, for example, wealth planning had 1 manager and I think there were 8 of us that all had the title of wealth planner. And that really didn't work for a growing organization because you had people in wealth planning that were called wealth planners that had vastly different experience levels, vastly different knowledge levels and the career pathing was completely opaque and unclear.

Michael: Right, so it works for a while when you're I guess small to midsize. We have multiple planners. We need someone to manage them.

Ali: Yes.

Michael: Okay. We make a department and someone's in charge and then the wealth planners are doing their thing. And then you grow to a point where you get larger and it's like this is kind of breaking now. Too many people reporting up, they're at different places, they want career paths, they're not all following the same career path, the variability within the level is getting very high. We have to start making tiers.

Ali: Yes, exactly. So, when I joined, I think I was employee number 42 to put it in context. So, I think there were 42 people in the organization at that point and we're 75 now. So shortly after I joined, there was a lot of discussion about how to create a better organizational structure from the top down. And so, what resulted from that specifically with the wealth planning team, you ended up having a managing director who ran the team. You had three directors. So, some people that were called wealth planners previously were given the title of director based upon their experience level. So, you had myself and I think 2 other individuals at that time who had close to 10 years of experience so we were directors.

Michael: Okay.

Ali: And then each director managed analysts and now associates. And so, when you think about an associate, usually you're thinking about somebody that's coming straight out of college with less than two years of experience. Generally speaking, analyst may have two to five, two to six years of experience. And so, we created a structure there, a better reporting structure and a semblance of career pathing.

Michael: Well, now you can just literally handle more people because you're breaking the department now into 3 directors who each have analysts, associates reporting to them. So, you've got...each of them can handle a bunch of people. So now suddenly you can have 15 or 20 people in this department or more and they report up to directors and directors report up to a managing director. So just you get layering, but now you've got more capacity to do the management at each layer.

Ali: That's right. And it all sounds so simple when I talk about it now but the reality was, Michael, I had never managed anybody in my career. So, I had always just been an individual contributor. I had been an advisor who managed clients and that was my job. I never had to manage or develop other people. And so, all of a sudden, I found myself in this role where I'm managing client relationships but I'm also starting to manage people. And that was a learning curve for me. A welcomed one. I was very excited about the challenge and we'll get to this but one of the reasons I departed from Fidelity was because I was starting to want something more in my career and one of those something mores was coaching, mentoring and people development. So, I just happened to walk into that at Waldron unbeknownst to me of what that was going to entail. And then fast-forward five years from when I started, our organization looks even different because now we have a chief planning officer, a managing director, three directors and then it goes strategist, senior analyst, analyst, associate. So, we have an even, I guess, higher, wider hierarchy today in 2022, 2023 than we did a couple of years ago.

And we find that creating new roles within our organization allows people to create their own career path and not have only one direction because a lot of people in financial services, especially within an RIA model...when I think about our firm, we have people that generally speaking want to do one of four things to really narrow it down. People at Waldron want to manage client relationships. They might want to manage people. They might want to do business development. So, source business, do the networking, bring in clients or they might want to do none of that and just be a technical expert. We have some really, really intelligent, smart people here that are a value to our firm and we had to be able to provide these different career paths to satisfy one or a couple of those four things or you're inevitably going to lose talent.

Michael: I'm struck by this as well. So, on the one hand, we'll admit, is you were ladling it off like chief... I think the layers are chief planning officer, managing director, director, strategist, senior analyst, analyst associate. There's a part of me that sort of has this gut reaction like, "That's a lot of layers. That's a lot of steps and stuff to manage and just layers of organization and communication." But then I'm struck from the other side that it's 75 people and growing. Just that's what starts to happen. Otherwise, leaders end out with too many direct reports and can't effectively manage and develop their people. And as you've noted for folks within the organization that want to grow their careers, as much as the industry talks a lot about career tracks, I think part of what this highlights well is you kind of need a certain size and just mass of organization and people and different roles and different levels of roles to really be able to flesh out a full breadth of career tracks because just there has to be a certain number of seats on the bus before people can actually craft their own path through the seats. Otherwise, you don't have enough roles for the people to path through.

And it seems like you're really now going through that transition and having the layers of...yes, it's a lot of layers but this is also how we actually have true career paths with multiple journeys to fit whatever a particular person wants to do in their career.

Ali: Yeah, I completely agree with that. And I'll give you an example with the strategist role. The strategist role was newly created in 2022 and came from a gap that we were hearing from our staff. Because in the previous hierarchy, you went from a senior analyst up to a director. And that jump generally speaking meant that you had to manage clients and you had to manage people because the role of a director manages clients and manages people. And so, we had people coming to us saying, "Well, if I don't want to manage clients and I don't want to manage people, where am I going to go? Because I'm in the senior analyst role right now, and I want to stay here and I want to advance my career and I want to grow my income, but the only next seat on the bus is director and I don't want to do that."

And so, we created the strategist which sits between senior analyst and director. And everybody that's in a strategist role has a track. And it's one of those four tracks that I mentioned which is people development, client relationships, business development or technical expertise. And so, we have a couple of people that advanced into that strategist role that year and there's one woman that is on the track to be a director. She wants to manage clients. She wants to manage people. We've also had people interested in the strategist role to go on the technical track. But it really stemmed from a way to provide employees another place to go to really let them hone their skills and be able to allow them to advance in the organization and grow their income at the same time.

Michael: So, then what are the other teams or verticals? You've said sort of chief planning officer and it comes all the way down. This kind of feels just like the wealth planning division. It's where the advisors are. So, are there other verticals within the organization? What other departments are there?

Ali: Yeah, so there are other verticals within the organization and we try to be very consistent with our titling so that it doesn't get really confusing. So, the wealth planning team mirrors the investment department. So, with our investment team, same thing. You have a chief investment officer, managing director, directors, all the way down.

Michael: Okay.

Ali: So, wealth planning and investment have the same structure. And we're the largest departments in the firm which is kind of to be expected.

Michael: Yep.

Ali: And then we have our client service team. So similar structure there. You have a director and then different directors and team leads there. So, client service. We have our business development team which kind of houses our marketing people that are responsible for doing social media, events, all things business development on that end. And then we also have HR and we have operations. We have accounting and legal. So, we've got those main departments there and some of these are new this year as well. We never had a formal HR team until 2022. Operations was kind of a mismatch of operational and technology and HR and people doing a lot of different things and wearing different hats. And to your point earlier, we just got to the point where we had to have a dedicated HR director. And same thing with compliance and legal. In the past, we had used law firms for a lot of our compliance and legal and outsourced that but we've gotten to the point we're big enough. We needed inhouse counsel. So, we hired somebody on inhouse counsel for the first time this year. So, all things of a growing organization.

And that creates challenges because we're hiring for roles that we've never had before. What does this role look like? What does this role do? There's been a lot of that growing over the last couple of years.

Michael: And so overall, this all reports up to, I guess, some kind of senior leadership team. What does it look like at the top?

Ali: Yeah, so we do have a senior leadership team which is, I guess, essentially comprised of partners. You could call them the partners because that's what we call them. So, the wealth planning team all rolls up to our head of wealth advisory who is a partner.

Michael: Okay.

Ali: Same thing with the investment team, rolls up to the chief investment officer who is a partner. So, all of those kind of roll up. We have a chief operating officer who is a partner and that's who HR and operations rolls up to. So, the long answer to your question is yes, all of it rolls up to a partner at the top.

Michael: So, I'm just fascinated. What are the rest of those roles? So, a head of wealth advisory, a chief investment officer, a chief operating officer. Who else is at that level or what other departments roll up there?

Ali: Yeah, we have a president. The chief operating officer, the chief investment officer, and our head of wealth advisory report to the president. And then of course there is John Waldron who is partner, founder, CEO, all of the titles.

Michael: Okay. And one other question I had on this. Just you said there is a business development team which is kind of distinct from wealth planning but you talked about part of wealth planning or at least one of the tracks for wealth planning is folks that like to do business development, that want to bring in clients. So how does business development get divvied up between what is wealth planning do and responsible for and what's the business development doing and responsible for?

Ali: Yeah, so our business development team...there's a couple of people that could be within that. So, in our business development team, we have folks that focus on marketing, social media, the back-office type roles. And we haven't even really talked about the actual wealth advisors within our firm. We do have a title of wealth advisor and senior wealth advisor within our firm that they are responsible for bringing in new clients and doing business development, is their primary function. And they also serve on client relationships. So, we are not of the model to where we just have "rainmakers" that bring in business and then they never serve clients. We don't operate that way. So, we do have wealth advisors that source clients. And then candidly, we all have relationships across the firms. It's very common for somebody from our investment team that has a relationship with an accountant or an estate planning attorney to get that referral. So, clients are sourced from many different departments within our company by the nature of our relationships.

Michael: And is that something that gets compensated if other advisors or folks in wealth planning with a relationship to an attorney or an accounting bring in a client opportunity?

Ali: Yes. So, there is sourcing that is available for anybody in our firm who brings in business. So, you could be an intern with our firm and if you're an intern and you happen to have a relationship that results in a referral, an intern can get paid on sourcing that business.

Michael: And how do you guys handle that? is that a flat dollar amount, a percentage of the revenue? How do bonuses work for bringing in clients?

Ali: Yeah, it's a percentage of the revenue. Yeah.

Michael: Ongoing or a one-time payment?

Ali: It's trailed over 3 years. So, you get an upfront payment in year 1 and then trails in years 2 and 3.

Michael: Okay. And so, help me understand what's the difference between wealth planning and wealth advisors.

Ali: Yeah, so wealth planning and wealth advisors have 2 distinctive job roles. So, the wealth advisors are responsible for business development. That's their main goal to where if you're in wealth planning, you're behind the thought leadership and the brain child of doing all of the financial planning and really all the core curriculums of a CFP basically. I didn't mention this but it's probably worth noting. Anybody within wealth planning that is an analyst or above is required to have an advanced designation.

Michael: Okay. CFP or some other alternative?

Ali: Correct.

Michael: So, from a client's end, if I came to the firm through a wealth advisor...they business developed me, as it were. Does the wealth advisor stay as part of this relationship or once I'm an ongoing client, I'm primarily with someone in wealth planning who's my go-to, my main advisor? If I'm a client, who's my advisor or my main advisor? Who am I calling my primary advisor at the firm?

Ali: Sure. So, we're very relationship focused and oftentimes if a wealth advisor sources business, it's because they have a specific relationship with that prospect. So, we don't envision them stepping out of the relationship. They may play...I don't want to call it a lesser role because I don't like that word but they may play a strategic role with somebody else that is leading the day to day. So, somebody from wealth planning or from investments may be the day-to-day lead advisor on that relationship with a wealth advisor being there for the touchy feely and the relationship aspect too.

Why Ali Left The Retail Brokerage World To Serve UNHW Clients [1:08:12]

Michael: Okay. So, help us understand more broadly just this journey. The leap from retail brokerage at Fidelity with hundreds of clients to a multi-family office like this is just so, so different. So, help us understand this. What was going on that you made a change and made a change this dramatic to go from Fidelity retail to Waldron Private Wealth?

Ali: Yeah, and I would think I'd be remiss if I didn't talk so positively about my experience at Fidelity because I was at Fidelity for almost 8 years really in my formative years from 24 years old to 31 years old, I think. And I joined Fidelity after being in the insurance space for a very short stint. I did about a 6-month insurance stint at the very beginning of my career pretty much just to get into the industry. But I quickly realized the commission-based structure of the insurance space was not what I wanted to do. So, I quickly moved away from that into Fidelity which was much more of a relationship consultative type of advisory relationship. And I started off at Fidelity in a back-office role, back-office role supporting advisors. So, I learned early on what it meant to be an advisor and run a book of business because I was supporting those advisors. And Fidelity being a big organization had excellent training programs teaching you how to run a client relationship, how to talk to clients, how to really do the practice management. If I had to think of the big phrase, it's practice management. I learned all of my practice management through my experience at Fidelity and how to run a client engagement and provide recommendations to clients and really word all of those things on a client-facing nature.

And I did come into Fidelity with a sales-based mindset, I guess, because I had been in the insurance world which was sales driven, sales and product-driven. So, I came into Fidelity with this business mindset, and honestly, that was one of the things that started to differentiate me a little bit at Fidelity because in a back-office advisor supporting role, that was historically what the role was, was I just kind of support these advisors and I do whatever they tell me to do or whatever they need. But I started doing little things like I would comb their book of business for outside assets or cash that was billed up or trying to identify if there is an insurance need. And that was a novel concept at the time. You didn't have an advisory support role actively working to advance business development within that role. It just wasn't really heard of. So that started to get me some accolades that were very beneficial early on in my career as a 24-, 25-year-old who probably didn't really know what they were doing.

But somebody told me...I want to get this phrase right. Hard work will beat talent until talent works hard. And I just felt like if I worked harder than everybody else and I tried to do things that nobody else was doing that it would pay off in the long run. And that was just the mindset that I have and I ran with it.

Michael: I like that framing, hard work will beat talent until talent works hard.

Ali: Yeah. I had a mentor say that to me very early on in my career and I'm like, "Wow, that's a really cool phrase." And that one sunk in.

Michael: So, I want to make sure I'm understanding. So, you came in the industry out of the gate into the insurance world and then discovered how commission based and sales oriented it was, said, "I don't want to be in that environment." So, you went to Fidelity but not into an advisor role initially. Into an advisor support role, into a back-office role. But as you were in that role, you started trying to figure out how to help the advisors find more of their own opportunities, look for outside assets for their clients or folks that had cash or some other need opportunity so that they could find a business development opportunity with the clients. And you're doing this proactively on your own while in a support role which is what got you noticed to then have an opportunity to move up out of the support role.

Ali: That's 100% accurate. Yeah. And it was early on at Fidelity. I joined Fidelity in 2010 and I started my CFP curriculum in 2011. So, I quickly realized I wanted to be an advisor and I wanted to advance my knowledge and doing the CFP curriculum was a natural next step. They paid for it. Back then, online really wasn't a thing so I did the Duquesne University program here in Pittsburg to where you went to classes every Friday night and every Saturday or maybe it was every other Saturday. But it was Friday nights and Saturdays in my early 20s which was a little bit tough. Not every Friday nights wants to be spent in a classroom but the classes were in person and they were taught by industry professionals here in Pittsburg with estate planning attorneys and other advisors. So that was my first real big experience of networking within the industry because I was surrounded by my peers. There were people from BNY Mellon and PNC Bank and Merrill Lynch and Morgan Stanley and ironically, Waldron Private Wealth. And that was really where, I think, the first time I met somebody that worked for Waldron Private Wealth and I got to know him in a couple of my groups and we just became friends. And I happened to run into him and other people at Waldron once I started attending FPA events in Pittsburg.

I actively attended FPA events where other people were. And so that was early on. And remember, I didn't join Waldron until…

Michael: What was taking you to FPA events?

Ali: Networking, CFP credits, knowledge. Everything was still in person at that time and I wanted to know what other people knew. I was young and in my early 20s and I felt like if I went to FPA events, I would learn things that I didn't otherwise know.

Michael: And was Fidelity supportive of that? Did they cover the costs for joining organizations like that or did you just do it on your own?

Ali: They covered the costs for it. Yeah, they covered the cost for my CFP and also FPA planning fees and event fees, yeah.

Michael: Okay. So, at what point did you move out of the support role and into a full advisor role?

Ali: Yeah, so I started to move into an advisory role fairly quickly in 2012. So, it was about two years into my time at Fidelity. And I would also be remiss if I didn't talk about the wonderful leadership that I experienced at Fidelity. Particularly on the female side. When I hear the statistics about females in the industry and how rare we seem to be, I guess I never really thought about that and the reason I didn't think about it...because I was surrounded by women at Fidelity. There were two women advisors in the director office that I worked in. There were two women that provided branch support to the branch that I worked in. Our market manager for our entire region was a female. And then if you go on up the chain to executive women, you had Kathy Murphy as the head of personal investing and then of course Abbie Johnson. So, all I saw were females above me and around me. And they were so supportive. I think some women may have experience where you have a little bit of a catty competition maybe if you're all advisors within an office but the two women that were in my office were just so vital to my development as a woman, as an advisor, as a professional in this space.

Michael: So, you're having this great experience at Fidelity. Obviously still not there now. So, what happened? What changed?

Ali: What really changed was I would say the inner section of life and maybe a little bit of luck. So, I was loving Fidelity. I was very happy there. Really had no thought of ever leaving. And in 2016, my husband and I decided we wanted to start a family. And as that time approached, I think as a woman you have no clue what's going to actually change when you start down that path of wanting to start a family and what it means to have a child. And once I got pregnant with our son, I just began to think about what does this look like for our family. And fast-forward, I was in a full advisor role at this time so I had a book of business. And I was an advisor at Fidelity but being candid, you were responsible for a lot of business development in having a book of business. And so, with that role, I was doing great as an advisor and thriving and meeting all of the business development metrics such as bringing in new assets and things like that that were expected of me. But it was hard. I will be the first to admit sometimes meeting those business development requirements were hard.

And the weeks or months that you miss those goals were really hard because you felt the pressure of management. And candidly, your income felt it too because in any firm, it doesn't matter if it's Fidelity or anybody else, if you're in a business development type of role, there is some relationship to the amount of business that you bring in and the amount of income that you're going to receive for doing that.

Michael: Yep.

Ali: And so, I found myself being our family's breadwinner which I think is an interesting dynamic as well because many females don't necessarily talk about being a breadwinner. I feel like that's still a taboo topic. But I found myself being the breadwinner for our family and being pregnant and having this panic moment of like, "Oh, my goodness. Am I going to want to continue to stay on this path of business development once I have our son? I don't even know what that looks like." And while I was pregnant, a recruiter reached out to me, a headhunter reached out to me. And I took his call which was very uncharacteristic of me because this recruiter... this was in 2017 at this point. The recruiter had reached out to me previously in 2014 and in 2012 and I had blown him off, honestly. I said, "No, I'm not interested in leaving Fidelity. You can call me later."

But this time I entertained him. And I don't know what made me entertain his call but I did. It was probably all of that anxiety rolled into one. And I just started learning about the opportunity with Waldron. But at that time, it was not the right time for me to leave Fidelity because I was expecting our first child and Fidelity had an amazing maternity leave policy to where you got 16 weeks at 100% pay which was unheard of to be able to take 4 months off at 100% pay. So, I ended up taking the full 16 weeks off with my son. And then I took 2 weeks of vacation. So, I was actually off, completely off for 18 weeks with my son and I was not going to leave a firm and forego that benefit for the unknown.

Michael: So, at some point after you came back from that, you ultimately decided, "No, I think I do want to transition."

Ali: That's right. so, after I had my son and I returned to work, I gave it some additional thought. And I also had more clarity because I had had my son, I was getting acclimated to motherhood. I had a much more clear head than I did while I was still expecting with him. And I decided to make the leap. And I remember in my interviewing process with Waldron I was very candid about the fact that I wanted to continue to grow my family. I wanted a second child eventually. And as I look back now, some women...when I tell that story, some women will be like, "I can't believe you told an employer that you want to have another baby and you're going to go on maternity leave and all of these things," because I feel like they're such taboo topics. But it was very important to me. Being a mother and being present in my children's lives is very important to me. So, I my mind, if I couldn't have these conversations with somebody that I was potentially going to work for, then they weren't going to be the right firm anyway.

So, I remember telling Waldron, "I want to have another child eventually." And at this point I knew Waldron was a smaller firm. They were less than 50 people. They had no formal maternity leave policy. They weren't even... they didn't even have to comply with FMLA because they didn't have 50 employees.

Michael: Right.

Ali: And so, in my interview process I said politely, "I'm not joining your firm unless there's a maternity leave policy."

Michael: So, you actually required them to create one to have the privilege of hiring you?

Ali: Yes. When you put it that way, it sounds very abrasive.

Michael: I think it's fantastic. You're there so I'm assuming you found a pretty good way to deliver that.

Ali: Yeah. And so, I did. I had those conversations and who knows what they were thinking at this time of like, "Oh, my gosh." But they did. In my offer letter, they provided me with the updated policy, the updated company policy. So, it was pretty makeshift at that point. They had never had a woman at Waldron have a child. There had been plenty of children born to male advisors or male employees throughout the firm but a woman had never had a child at Waldron so they had never dealt with it before.

Michael: It's kind of impressive. You said you were employee number 42. They got that far and not a single woman had had a baby while employed there.

Ali: Not a single one. So, fast-forward. I joined Waldron in 2018. And I did end up going on to have my daughter in 2019 becoming the first woman at Waldron to have a baby. And in that process, I crafted my own maternity leave policy. They did create a makeshift policy which basically said, "We'll abide by FMLA. You can have 6 or 8 weeks depending on your method of delivery." But that's what it is. And so, kind of sticking with this trailblazing mentality, I negotiated my maternity leave with my daughter and I was off 14 weeks. So, we structured it as a mixture of short-term disability for 6 weeks. And I did unpaid leave. I planned for that with my family. So, I did take some unpaid leave and a mixture of PTO. So, I had accumulated days off to take PTO so I was off a total of 14 weeks with my daughter when I had her in 2019.

The Surprises And Low Points Ali Encountered On Her Journey [1:25:23]

Michael: So, what surprised you the most about this journey of building your career in the advisory business?

Ali: I think the most surprising thing is the ability to be unapologetically myself and resilient. And really why that sticks out to me is because you hear all of the statistics out there about women in the financial services industry and I think there's a lot of stereotypes still to this day. And I have just always operated under the mentality that if I'm pursuing the mission for myself, for my firm, for my clients, for my family, then everything is just going to work out in the end. And when you start to deviate from those things, that's when things go off the rails. I think a lot about imposter syndrome with women in this industry because there are so many times, Michael, that I was the only woman in the room at some events or you're looked at or treated a particular way because you're young or because you're a female or whatever. And I just always believed if I did the right things for my clients, for the firm, for everybody around me that...and to stay true to myself that things would work out. And they have.

Michael: So, what was the low point in this journey?

Ali: I would say the low point...there are a couple of them but I would consider the whole transition from Fidelity to Waldron a bit of a low point because I had no clue what to expect. Everything seemed to feel in flux at that point. I was becoming a new mom. I didn't know how my income would be impacted. And another relevant note probably on the personal front is my husband had joined a new company right before our son was born and he definitely had a lot of buyer's remorse with switching companies. And I saw him go through this and I thought, "Oh, my gosh. I'm getting ready to switch companies. Am I going to have the same experience?" Seeing his experience scared me. The fear of change. That was really hard.

Michael: Why was there a question mark on how income would be impacted? Just I would presume you had some kind of offer letter or compensation structure from Waldron. Was it just there was a lot of variable comp to it so you weren't sure how it was going to add up in practice?

Ali: So, I'll answer that question two ways. There was questions about my income at Fidelity because, candidly, I didn't know if I was going to be able to work the amount of hours that I was working at Fidelity after I became a mother. And if it meant reduced hours, it probably meant reduced business development which probably would have meant reduced income. I don't know that for sure. But that was where my head was at thinking about my income at Fidelity after becoming a mother.

Michael: Okay.

Ali: And then when I did transition to Waldron, I'm very open and honest about this. I did take a reduction in salary and income because I was coming out of a very successful business development role at Fidelity and moving into a nonbusiness development role at Waldron. So, I couldn't have expected to make the same amount of money.

Michael: Right.

Ali: But that was hard. I had a 6-month-old baby, I was the breadwinner and negotiating my salary to come to Waldron took many, many phone calls because I had a minimum number that I needed to meet. So, they were very good to work with me on that. And obviously that decision worked out very well with where I am now as a partner and a managing director with this firm. It was the right move but 5 years ago, it was very fuzzy.

Michael: So again, just why did you take this leap into uncertainty while your husband's having buyer's remorse in order to take a salary cut? What pushed you over this edge?

Ali: Faith in the future of this company. Right around that time I had read Sally Krawcheck’s book and I forget if it was in her book or in an article that I read by Sally but she said at some point that she took a step back to go forward. And that stuck with me. So, I took a step back income wise with the hopes of going forward and I remember joining Waldron and saying, "I could be a partner at this firm by the time I'm 40." And that gave me a nine-year time horizon at the time. And now I'm a partner at 36. So, I got to my goal in five years when I gave myself a nine-year runway. And I can only say I took a leap of faith and believed in the mission of the company and what I could do within an organization and the people. We have amazing people here that I get to work with every day. And I genuinely have so much respect for all of my coworkers. It doesn't feel like I'm coming to work every day with the people that I get to work with.

The Advice That Ali Would Give Her Former Self And Newer, Younger Advisors [1:30:39]

Michael: So, anything else that you know now that you wish you could go back and tell you from 10 plus years ago as you were just getting started as an advisor?

Ali: I would tell myself to keep persevering because there were so many times that I questioned myself, my abilities. If I was going to continue to be able to advance myself in an advisory role and advance my income for my family and have the balance that I do now...I hate the word balance but have the flexibility of work and motherhood and my children. Just keep persevering because you...if you keep doing the right things, good things are going to happen.

Michael: Any other advice you would give for younger, newer advisors coming into the industry today?

Ali: Yeah, so I think the biggest piece of advice would be to define your mission and know that that will evolve over time. Because in the very beginning of my career, I just wanted to serve clients. I just wanted to be able to help families make better financial decisions and help them have good financial outcomes. And that evolved into wanting to develop other people and other advisors. And then that developed into wanting to be a leader at this firm and grow this firm into all of its potential. So, defining that mission but also knowing that it's going to evolve over time as you as a person and professional evolve over time too. But you have to have that why. I call it a mission but I think other people probably call it a why, what's your why. And as long as you have that and you keep doing every decision based upon your mission or your why, you'll have great success.

What Success Means To Ali [1:32:29]

Michael: So, this is a podcast about success and one of the things just about the word success is that it means very different things to different people. And so, you're on this wonderful path for success. You're now becoming a partner at Waldron at 36 years old, of a firm serving these incredible ultra-high net worth clients. And so, career is flowing very, very successfully for you. How do you define success for yourself at this point?

Ali: When I think about success for me, it kind of falls into three categories and they all start with F. So, it's family, finance, and fitness which... really, I translate fitness into my health. It's just easier to call it three Fs because it sounds cooler. But as long as our company is growing its revenue and adding clients and me, myself am continuing to advance myself in my career, that's kind of the finance end of it, is just continuing to grow and strive towards those goals. It's family. I'm very big on wanting to be there for my kids. I want to be the mom that is at every practice, every game, every Christmas program because I didn't have that. My mom wasn't able to attend that kind of stuff. My dad never attended that kind of stuff. So, I want to be a present family member. And then with fitness, being able to enjoy the things that I want to do whether it's the Peloton or strength training or keeping myself healthy because within our family, we've had two long-term care events with grandparents and with uncles and so I've seen what it means to have health and fitness deteriorate over time.

And so, if those three are not in alignment for me, it means I need to do something differently because those three always need to be in alignment. And granted, there are going to be times that I might have to travel for work and I miss something. But I'm going to make it up on a different day. It always ebbs and flows.

Michael: Well, I guess that's the work-life balance or harmony or however you want to frame it. Doesn't line up perfectly with the schedule but you figure out how to move things around so it balances out over time.

Ali: Right, exactly.

Michael: Oh, I love it. Thank you so much, Ali, for joining us on the "Financial Advisor Success" podcast.

Ali: Thank you for having me, Michael. This has been an honor.

Michael: Thank you. Thank you.