#FASuccess Ep 413: Building An Internal Advisor Training Program To Solve The Talent Pipeline As A Growing $4B Advisory Firm, With Kevin Leahy

Resources Featured In This Episode:

• Kevin Leahy: Website | LinkedIn
• Diamond Teams
• PlaybookBuilder
• Brett Danko

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Full Transcript:

Michael: Welcome, Kevin Leahy, to the "Financial Advisor Success" podcast.

Kevin: Hey, Michael. How are you?

Michael: I'm doing well. I'm excited about today's episode and to get to talk a little bit about, I guess, advisor development and the ways and paths that we're bringing people into the industry these days. I find there's a really broad discussion in the industry, overall, right now about our talent shortage. We're not minting enough CFP professionals coming into the profession. There's this wave of baby boomer advisors who are expected to retire over the next 10 years. Yet, I find, for a lot of advisory firms, there's this weird challenge around even getting firms to hire younger talent. It's something Daniel Yerger aptly has started calling the “Christmas tree hiring phenomenon,” which is, if you make a chart of how much demand there is for advisors and count up how many years of experience they have, the first 3 years of experience is the tree trunk of the Christmas tree. No one's there. And then once you get 3 years of experience, it blossoms out wonderfully. Everybody would hire an advisor who's got their CFP marks, several years of experience, ready to hit the ground running with clients. And nobody seems to really want to hire the ones to get them to the point that they've got their licenses and their CFP Marks and are comfortable in front of clients. And half joking, half seriously, I've talked to a lot of advisors lately that have spent the past 7 years trying to find a really good advisor with 5 years of experience. You'd already have started 7 years ago.

Kevin: We call them the unicorn.

Michael: But we get stuck in this trap. We'll spend more time trying to find an experienced advisor sometimes than it takes to just develop an experienced advisor from not experienced to experienced. And I know you have been building a lot of this out in your firm and trying to figure this out in real time, how you do it as you scale up the business. And so I'm excited to talk about what it looks like when you decide, "I'm ready to just," just is a bad label, "I'm ready to just hire the 22-year-olds and bring them in and figure out how to train them and turn them into advisors."

Creating A Hiring Process To Find Candidates Who Match The Firm's Core Values [05:58]

Michael: So, what is it that brought you to a path of saying, "Okay, we're actually going to try to train the young new advisors" when just I find so many other advisory firms don't really quite want to do it. We say we'd like to, but then we get into the work that it takes to do, and we're like, "Maybe I'm just going to find someone with 3 or 5 years of experience."

Kevin: Yeah. Well, I was going to...I'm not sure this is entirely true, but I'm not sure we wanted to as much as we recognize we had to. We're growing. We were growing, which was humbling, in and of itself, and realized, "Oh, my gosh, the machine, if you will, is going to break." And there was a time when I couldn't have imagined where we'd get our next client, and then it was, "Oh, my gosh, I don't know how to staff for all the clients we're getting," right? And so we sat there and said, "Okay, we need people with 3 years of experience, with 5 years of experience, with 7 years of experience. And we weren't finding them. And if we were, generally speaking, they weren't a fit for one reason or another. And a year goes by, 2 years goes by, 3 years goes by, and then you think, "Wait a second, had we just trained somebody, we'd have someone with 3 years of experience. Hello? Right? It's not that complicated.

And so, at some point in time, these are kind of a silly way to say it, but I challenged the team to...I think I said something along the lines of, "We need more interns, and we need our interns operating like they're first-year folks, and we need our first-year folks operating like they're 3-year folks," and so on down the line, which I know is probably an exaggeration. But the challenge was, how do we really make sure that we have good training? It's centralized. It's not just a, "Hey, youngster, 22-year-old, go work with Jared, and Jared is going to tell you what...go sit next to him and listen to how he talks to his clients on the phone. Good luck. And we'll see you in 3 years." We really needed to centralize that and think about what the best practices were to get where we wanted to go.

Michael: So, a couple of questions in this path. So you said, initially, the goal for you as well was we started going out and just trying to find the people that had 3, 5, 7 years of experience. You said, either we weren't finding them or when we did, they weren't a fit. So, what was making them not a fit? What wasn't working, that even when you found people, you would go through a hiring process and say, "Maybe not?"

Kevin: Yeah. I always feel the need to kind of explain our core values a little bit. We have core values, and we really truly live by them. The marketing department didn't come up with them. The leadership of the firm many years ago came up with them. And it was just a lot of...we're very team-oriented, and a lot of the folks that we would find, not all, by the way, just for the record, we've hired some really wonderful experienced people, but certainly not enough, right? And the ones that generally weren't fits were not nearly as interested in being part of a team as we are interested in being a team, right? We're all about a team. Everything that we do is team first, the way our compensation is structured, the way we manage our clients. It's all about the team. And that's not to say someone who wants to be more of an individual contributor is bad. It's just not a good fit here.

And so a lot of the, I'll call them, sales-based organizations grew young professionals or professionals who just really weren't a fit. They were more about me…me, me, me compensation. And again, I don't begrudge anybody for that, but it just tended not to be a great fit here. Also, we're super planning-centric. And again, those that are really interested in really being heavy, heavy, heavy on the investment side, again, not a great fit for our firm.

Michael: So, how do you suss out in practice that someone is not team-oriented enough to fit in your environment? Is this something you could determine in the interviewing process, or did you actually have to go through a series of we hired them and then realized after 6 or 12 months that this wasn't working because they weren't that team-oriented and had to have the turnover of people to figure out after the fact?

Kevin: All the above, right? Both of those. We've absolutely stubbed our toe again and again and again. I'd like to think we've gotten better. I think some people get exhausted by our approach, but we end up having people come into the office a number of times and meet with an enormous amount of people. And we try not to apologize for it. Listen, this is our process. It's really important. And it goes both ways, right? We don't want to trick somebody into coming here that's not going to want to be here. It's not good for us, and it's certainly not good for them either. Nobody wants to waste a year or 6 months or 3 years, whatever it is. So we do…and again, are we perfect at it? Absolutely not. But we try really, really, really hard.

And some of that, Michael, I think is simply just talking about the team approach we use, more or less, the diamond team approach. And this is the role we perceive you to have, and it's going to probably be a lot of working with your teammates. And a lot of it's going to be behind the scenes and for some period of time or with limited access to or direct communication with clients until we hit certain metrics. And sometimes people say, "Whoa, whoa, whoa, wait a second. I already have my clients." Okay, that's fine. But that's not the way we do things here. And so just a lot of conversations.

Michael: So, can I ask then if you know offhand, how many interviews is it? How long does the process take? How many times do you bring people in to talk to all the people that they have to talk to when you're evaluating someone?

Kevin: Obviously, it varies based on...right, if somebody isn't a fit, obviously, for the...number one.

Michael: We, I guess, if you screen them already, then this ends early in the process.

Kevin: Yeah. But somebody that comes along, it's 3 or 4 visits. And when I say visits, in the modern world, if that's the right way to say that, sometimes they're Zoom, or we use Microsoft Teams. But we really do...maybe it's my age, but I really do like the face-to-face a lot. I think you can learn an awful lot just, again, how somebody comes into the office, how they greet, right? As I've told my now-adult children, right, everybody matters in this process. You walk into the building, it doesn't matter who you see, everybody matters. You need to assume that everybody's part of the hiring process. And that's true here, right? How you treat somebody is how you probably treat everybody. And so, yeah, 3 or 4 visits or meetings.

Michael: Interesting. And then what are the core values themselves that you guys build around?

Kevin: So we've tried to whittle them down. Everybody tells us that 8 are way too many core values to have, that we should have 4. And we can't. Now, 2 of them, we kind of stick together because they're very similar, but we also have agreed that they are different enough. So authentic, collaborative, empathetic. The next 2, drive and grit, are the 2 that we kind of...sometimes people will talk about them as though they're 1. They're really 2. Integrity, positive or positivity, and supportive. And for the record, we have huddle rooms in the office named after each of them.

Michael: And do you worry that, I guess, this extended interview process where they're coming back in 3 or 4 times and going through all the details of the teams and the core values, do you worry that interview process gets so long, you lose people or someone else gives them an offer when you were still on stage three out of five?

Kevin: Yeah. Yeah. Yeah, of course. Of course. Again, we are not perfect at this, by any stretch. And so to say that it's always exactly that is not true, right? Sometimes it's sped up and sometimes it's elongated. But I think we definitely would rather err on the side of more...I think, generally, and again, this is a little anecdotal, but I think generally where we have been very, I'll call it, extra thoughtful, our process tends to be better. Our results tend to be better. And sometimes you get it, "Oh, my gosh, this person," and everybody says they're great and they've got all these clients and they're all over the place, they're at all the country clubs, and they're speaking and all that, sometimes we get really excited and get ahead of ourselves.

And in those instances, it feels like maybe, more often than not, there's a little more sizzle than there is steak, if that makes any sense. And again, you get caught up in, "Oh, they must know what they're doing because they have a bunch of clients," or they're in the community kind of up on stage. And when we've gotten ahead of ourselves, I think, more often than not, are the times when we've stubbed our toes. But it's a balance, right? Yeah. At some point in time, you don't want people to go, "My gosh, what's wrong with these people? They can't make a decision." So we really do try to be thoughtful.

Michael: Do you know how long the process typically takes for you guys overall as you go through all these steps and all these meetings?

Kevin: Yeah, I would say somewhere between a couple of weeks and maybe a month, depending on, again, kind of the level in the process, right? The higher the level. And let me back up and say, when we're talking about a college graduate, a 22-year-old, 23-year-old, that process is much different. When we're talking about a very experienced person, I think that's where we're spending much, much more time making sure that that person is a good fit.

Michael: I guess, over the span of up to a month, so at least as I infer that, there's not a lot of dilly-dallying, as it were, in the process. It's just, we did the meetings this week, and there'll be more meetings next week, and there'll be another meeting the following week. We're not stretching it out multiple weeks at a time in between stages but, I guess, every time you make it through a step of the process. And next week, we have a few more people for you to meet with. Congratulations. You're still in the process.

Kevin: And at the end, what we've done, and it's really been helpful, is we give them a case study or a presentation to make. And so we can see how they think about things, how they dissect information, and ultimately, how they present, it's not a big group, but how they present to a small group. And it was stunning how, I can think of a couple of times where we had a candidate that we thought was really, really good on paper, really good. And I say this, I'm a terrible interviewer. I just like nice people, "They're great." But you go through a nice interview process, a nice conversation, maybe like this, and you go, "Wow, this is okay. This is good." And then, all of a sudden, they're on stage and the thoughtfulness just isn't there. The articulation isn't there. And you think, "Oh, my gosh, it's a different person." And that was not my idea, by the way, I wish it was, because it has absolutely improved our process.

Michael: So, what kinds of things do you give them? Is this a client case study...

Kevin: Yeah, in some cases...

Michael: ..."Here's a hypothetical client. Present to a few of us how you would analyze it and what you would recommend for the client," that kind of setup?

Kevin: Yeah, exactly right. And honestly, it's a lot less about the technical and a lot more about…and again, if we're talking about somebody with 3 years of experience, you're not expecting them to be expert in everything, right? And even 5 and 7 years. But you're hoping to find a level of thoughtfulness and preparation and maybe even asking good questions in advance. And again, just having a well-thought-out beginning, middle, and an end to the conversation. And it's stunning how good some of them are, and it's honestly stunning how poor some of them are.

Michael: Interesting.

Kevin: And it's still just one data point, right? Just the way somebody presents is just one thing. I don't know that it absolutely makes or breaks a candidate. But in a couple of times, it was really eye-opening when they were just really, really poor, and you just thought, "Wow, they mailed it in. They really mailed it in." And you just thought, "Okay, that's not...we don't mail it in here."

What Connecticut Wealth Management Looks Like Today [19:22]

Michael: Right. So I want to get much deeper in a moment into really how this training program works that you built out when you decided, "We need to centralize the training." But I think before we get there, just give us a little bit of context overall for the advisory firm in the aggregate.

Kevin: So we're one office here in Connecticut. Hoping, honestly, to, through a merger, open a second office, but that's not yet. We're about to crest $4 billion [Assets Under Management], about 1,100 clients. We're, I think, 66 or so…we're growing up to 70 people. And again, we use really the diamond team structure for the most part, and we have 8 different teams. They're varying sizes based on growth and people evolving away from the team they used to be on and now having grown up to take on their own team and somebody merging in and all that.

Michael: And can I ask the revenue for the enterprise in total?

Kevin: Yeah, we're low 20s, 22 [million dollars]. I think we'll do 22 or 23 million.

Michael: Okay. So I'm just kind of doing general math here. You've got a pretty sizable clientele. Your average client is a $2 million or $3 million client, it sounds like. Obviously, there's a dispersion around that, as we all have. But you've got a pretty sizable typical client.

Kevin: Yeah, we do. And I guess it's all relative, right? I remember thinking, oh, my gosh, back when our financial planning fees were $1,500 and our minimum account size was 500 [thousand dollars] or something. And now I felt, oh, my gosh, the joke around, and I'm not sure we should admit to these things, but the joke was someone had $3 million, it was everybody's best suit, "Wear your best suit tomorrow. We got a big prospect."

Michael: Oh, yes.

Kevin: And the best suit test kind of changes over time, right? Wait a second. Okay, there's an extra digit sometimes, right? But we've been very fortunate, having grown. You hope to, not to get too, so boxy here, but you hope to never forget about the clients even if they have smaller asset sizes or revenue sizes, the people that were loyal to you and got you where you are. But our minimum has grown to $2.5 million because...and this is back to finding people. But how do we staff for the new clients that we're getting? Well, we have to be thoughtful about the new clients that we're getting, right? And at some point, as, again, you well know personally and through all your interviews, sometimes you just have to say no to some people.

Building An Effective Advisor Training Program [22:40]

Michael: Yeah. So now, with that as context, help us understand a little bit more about how you started building advisor training. I think you'd said earlier, you realized the growth is going, you get to that fascinating shift that comes if we can get a good growth engine for the firm, where there's this mental mindset shift for years and years and years, “Where's the next client going to come from?” And then, when that really gets solid about a growth engine, all of a sudden, the question is, where are we going to get all the people to serve the clients?

Kevin: Yes. Oh, it's crazy.

Michael: And so you went through that shift, and the conclusion was, "We're having trouble finding the people who are the right fit for our culture, for our core values, for our team. We spent 3 years trying to find someone with a couple of years of experience and then realized we could have just hired them and trained them. And then we would have to put a couple of years of experience by now." So the decision was, "Okay, we need to centralize training and start to develop people." So, where did you start? What was version 1.0 of the training program?

Kevin: Yeah. So you say, "Where did you start?" just to be clear. The “you” here is much smarter and more thoughtful people than me. So, yeah, I'm going to be clear, I should not get any credit for this whatsoever other than maybe the challenge to say, "Hey, we need to hire some young people and get them trained up," or inexperienced people, I should say. So it's really, Michael, I think the first, what preempted this a little bit, which maybe is obvious, but what we call growth grids, really just write job descriptions for each level. We call entry-level folks analysts, and then financial advisors, senior financial advisors, and then, ultimately, managing advisors if you're top of the diamond, so to speak. It's really just being thoughtful about what technical and practical skills those folks needed, and so forth.

Michael: So you took the...I'm struck by this. We're talking about training program, but your starting point was, at least as I think our industry talks about it, career track evolution that you're going to go through, if I heard right, 4 tiers for you guys, analyst, advisor, senior advisor, managing advisor.

Kevin: Yep. Yep.

Michael: So we're going to have these 4 tiers. We're going to get clear about what level you should be at in each tier.

Kevin: Yes.

Michael: And then, presumably, and then you try to figure out, "Well, what do we actually have to teach them to be good at the things in the tier that they're in and get to the next tier?"

Kevin: Yeah, yeah. And honestly, this is back...stop me if I'm going too deep, but this goes back to kind of all those interviews where sometimes, far along, we're trying to help determine if someone, on paper, they say or maybe even are, at their current firm, a senior financial advisor. Are they really at our firm? And again, it's not meant to be punitive. It's not meant to say, "We want to pay you less money." It's more about, "Hey, let's set expectations so this is going to be okay." So you're not going to come in and then you're going to be disappointed, we're going to be disappointed.

So sometimes that is a process, and sometimes people, the best people, I will tell you, painting with a broad brush, of course, but I'm thinking of a couple of times where people said, "You know what, I'm not an SFA. I'm not a senior financial advisor. I'm a financial advisor." And you just go, "Wow, that was awesome," right? They didn't ask what the difference is in compensation. They say, "I want to be here, and this is where I am. And I think I can be at the next level pretty soon, but if I'm being honest with myself, at your firm, this is where I am." And you go, "Wow, those people get it," right? Those people get where they are part of the team, and so on, and so forth.

So back to your question about training, and in this case, I'm really talking about, I'll call it entry-level training. The first stage, 1.0 if you will, as you put it, is 90 days. It's 3 months of all the aspects of planning or what we call the curriculum, right? Our new client process, our financial planning process, if you will, for a new client is 5 or 6 meetings, and for the most part, each one of those meetings is a different part of the planning process, right? So they are learning, by the way, these analysts are learning how to review data, right? We have redacted statements from, "Here's a real client, and here's some stuff. Here's some brokerage statements, and here's some insurance statements," the shoebox full of stuff that you get from a client. Learn how to review it. Learn how to organize it. Do some research, right? Be thoughtful about what all this stuff means. And ultimately teaching them to build a balance sheet, cash flow, looking at investments and rebalancing, and all the parts of the planning process.

And some of that is self-study, right? It's videos that we put together through PlaybookBuilder, which is a tool where we organize our training, and so forth. And some of it is, as we've grown a little bit, instead of hiring 1 person at a time, we now sometimes have 3, 4, and 5 people. So we have cohorts, which is kind of, one, it's mind-blowing, by the way, that we actually have cohorts. It makes me giggle as someone who once thought we would be 7 people forever. And now we have a cohort of more than half of that. But they're right there. So they're helping each other, back to the team concept, they're helping each other, and they're going through this process with more senior people teaching them as well.

Using Software To Create A Consistent, Systematized Training Process [28:57]

Michael: So I want to go back for a moment. What is PlaybookBuilder? Is it actually like a tool, like a software?

Kevin: Yeah. Yep. It's a tool. So there were all sorts of information recorded in there, right? So it's, by the way, me, Denis Horrigan, my fellow founding partner, talking about the old days, the dinosaur days. So for new people who want to know who are coming to the firm, this is our history. And benefits and training, it's recorded in there. How do I do something if I need to wire something out somewhere? Now, we're still a small enough firm that, for the most part, you can look to your left or look to your right and say, "Hey, how do I do this? I need to...I'm brand new here, and I can't remember what I was told about wiring something." You can certainly look to your left or look to your right. But you can also go into PlaybookBuilder and look at the materials over there. And usually, it's a video. Sometimes it's a PowerPoint, or sometimes it's a Word document, but oftentimes, it's actually a video as well of one of our colleagues walking you through the process, right? So it's centralized and a little bit more efficient than every time somebody is hired at the firm, we all have the same meeting, and we all tell the same story. Some of it is collected there.

Michael: So, should I be thinking of this as the equivalent of a firm's processes and procedures manual?

Kevin: That's exactly right. And what it really started as is really kind of mostly HR stuff, right. This is onboarding, this is how you get on board. And it was, "Wait a second, holy cow, we can do training in here." And so to suggest that it's fully built out and we're humming on all cylinders would be a gross exaggeration. But in this particular case, where we're talking about training for brand-new professionals, it is pretty awesome. It really is.

Michael: So it sounds like it really did start as processes and procedures from HR to do all the core things of the business that we kind of have to do any time we're onboarding someone. But when you're getting the dozens of team members, and then you, I was going to say, appropriated the software, expanded the software to say, "Hey, if this is a good piece of tech to build some process and training videos, let's start building our advisor training directly in this system rather than, I guess, building something else or going and getting a new learning management system just to do a separate training program."

Kevin: Yeah, yeah. And just like with any other process and procedure when we were smaller and didn't have the capacity to do these sorts of things, you train somebody up or you tell...you have a process that everybody knows, but it's not documented anywhere. And then you hire someone, and someone tells them the process…mostly. They tell them 80% of it or 90%, or they tell them the process, and then someone else tells them the process. And you realize that they were told two different things, and you go, "Wait a second, there's got to be a better way. There's got to be a more efficient way." And so, onboarding people, when you go, "Okay, they got, I'll call it, the founder's talk from Dennis and Kevin," but the founder's talk, this time, it didn't include this thing or that thing, right? And not overly critical, but some of the other conversations, you go, "Okay, wait a second, maybe there's a more efficient way to make sure that they go exactly the way we want them to go."

By the way, I would also say, it pains me, again, and my kids just...I have twins who just graduated college fairly recently and have gone through this kind of process at the organizations where they each now work, and you also realize, "Wow, you don't want anybody sitting there for days on end, just watching videos," right? In my opinion, there's a fine balance between, "Hey, let's make sure a bunch of this stuff is done well and efficiently, and also, let's have real human interactions too as we onboard people."

Michael: I was going to ask, I guess, sort of twofold. Who builds all these training videos for the advisors? If this is your advisor training program, who's building and recording all the "Here's a client statement, and here's how to walk through it. And here's how we build a balance sheet. And here's our planning process?" Who builds it?

Kevin: Yeah. Well, so not me. The easy answer is not me. I don't know if I'd call it unique anymore, but I think it was at some point in time, we have a centralized planning team. And the reason for that, bear with me here as I tell you the reason why they exist, is we wanted, way back when, we wanted to make sure that we were not ever stepping over…this is, my partner, Denis, said, a Denisism. We don't want to ever step over an existing client for a new client, right? And so, how do we do that? We thought, we need people, and we're very heavy on the planning side. Every new client goes through the planning process. Again, and honestly, we've always said, "Boy, if we can do it in 4 meetings, we're going to do it in 5. If we can do it in 5 meetings, we're going to do it in 6." On some level, that seems so absurd, but what we realized was we were building really deep relationships with these clients. And we did, we made it fun so they would actually want to come back and not be so upset by talking about death and disability and all these things.

And so we recognized we needed some centralized folks. Folks, it was a person, a department of one way back when. That person's job was to work on new clients. And that kind of morphed into also the R&D of the firm, right? When new tax legislation is coming out or whatever it might be, they're researching things. They're making sure that our 35 advisors are all individually saying, "Oh, geez, okay, what's the Republican tax plan? What's the Democratic tax plan?" They're centralizing all of that. So those are the folks that, really, we leaned on to create this program. It was absolutely an effort from a bunch of people across the organization, but it's mostly those folks.

Michael: So this is a director of financial planning-style role.

Kevin: Bingo. Bingo.

Michael: And how big is that team or department relative to the organization overall?

Kevin: That team is now 5 people.

Michael: Okay, 5 people out of the almost 70, kind of like. 5 to 10% of the company is this centralized planning team. Because I'm assuming it's kind of scaled with you. It was 1 person when you had 10 or 20 people, and then it became 2, and then it became 3, 4, 5.

Kevin: Bingo, yep, that's exactly right.

Michael: Okay.

Kevin: Yeah, yeah. So again, they're R&D, and they make sure things are efficient and consistent across teams, right? So we have 8 advisory teams, and they're sitting in on new client meetings with each one of those teams, as those teams have clients or new prospective clients come in. And so it's also worked beautifully to make sure that our teams are...nobody's forcing people to talk like robots and use the same language exactly, but the process is consistent. And that's ensured by this team. And, therefore, they're the obvious ones to train up our young folks who are just learning this stuff.

Michael: So the first 90 days, it sounds like, is very internal to the company itself, your planning process and the different stages of the planning meeting, how you go through building a balance sheet for the clients, what you look for in their statements and such. You're not necessarily in the standard CFP curriculum, the "teach them financial planning things" as the general body of knowledge. This sounds like it's really specific to how your firm does financial planning.

Kevin: Yeah, I think so. Yeah, which is not wildly different than what you're... I would say it's a bit of both, honestly. We're not paving completely new ground here, but yes. And some of it is just software. We use eMoney. We use Holistiplan. It's learning the software. It's as simple as you take this and you put it in that box.

Michael: Because you're hiring a lot of advisors as you're growing and scaling, you moved away from, "Bob will teach you how to use eMoney," into Bob recorded his eMoney training walkthrough in PlaybookBuilder, and now everybody can go watch the PlaybookBuilder video on how to use eMoney and enter the right numbers in the right place.

Kevin: Yeah. And I would say it's more of an "and". It's a, "Go listen to Bob, go watch Bob, and, and go do this part of the process." And then, on Tuesday morning, you're actually going to sit in a room, the 4 of you are going to sit in the room, with Bob, and you're going to talk about it too, and you're going to walk through the process and talk about the challenges and the struggles and help each other. So yeah, it's a little bit of both.

Training New Hires On Client Communication Best Practices [39:17]

Michael: Okay. So then, what comes next? You said, this is sort of stage 1, first 90 days. So, what's stage 2? What comes after the first 90 days?

Kevin: Yeah. And obviously, this continues on. To suggest that somebody knows everything after 90 days, in the same way they would 15 years into this, it's obviously not true. But after that, there's what we call articulation training. So it is, "Okay, how do you talk about these things?" And again, these people are a long way away from sitting in front of clients and actually having to walk through these things. But what we found is, when you have to explain a concept, even just in front of your fellow recent college graduates, boy, you really learn things at a deeper level. So we teach people how to talk about things and then actually have them in a really...I'd like to think it's a really kind of caring environment. This isn't, "Okay, you're going to sit in front of 4 senior partners, and they're going to throw tomatoes at you as you screw up, and then you're going to get fired." Just the opposite, it's, "Hey, we're just learning here, and it's okay, right? We're going to struggle through this. It's going to be painful at times, but we're going to learn this stuff."

And so it's really been cool. Honestly, I'll be honest, I thought it was really premature. What do we do in articulation training? That should be, forget the 91st day. That shouldn't be for year 3 or something. But it's really neat to see people, again, really step up and learn stuff so that they can explain it to other people. It's been really neat. And that lasts, Michael, for...that's another 90 days. So we're now 6 months in.

Michael: So, can you talk a little bit more about what articulation training is? Just what do you do to train this?

Kevin: So you're pretending that you're standing…so what we do, we tend not to print paper, and we have...I'm not sure this matters, but we have smart boards in each of our conference rooms. And our client meetings are you're standing and you're presenting. And usually, the first thing we ever present is a balance sheet. And so it's literally just, "Mr. and Mrs. Jones, we've put together your balance sheet, as you can see here," right? And it's hard sometimes to remember, at least for me, but it's, "Wow, did I really even know what a money market account was relative to a savings account?"

So it's just articulating those simple concepts, "This is what a balance sheet is. And Mr. Jones, these are the assets that are titled in your name. And, Mrs. Jones, these are the assets." Just walking through those simple concepts, right? And then the same thing with cash flow and then the same thing with some risk management, insurance concepts, etc., etc. And again, it's less about making them ready for prime time, so to speak, and more about helping them, I was going to say forcing, that's a strong word, helping them learn through having to articulate these concepts to their peers and the financial planners that are helping them.

Michael: I was going to say, so can you clarify, who are they presenting to?

Kevin: To their cohort. And maybe sometimes it really depends. Sometimes they'll say, "Hey, the analysts are presenting on cash flow today. If a couple of you are available, if you want to sit in, we're ordering lunch," or something. So again, we don't want too many people, right? We want it to be positive. We don't want people to be super, super nervous. But it is their cohort, right? So again, think somewhere between 2 and 4 or 5 recent college graduates and a planner or 2 who have helped train them and maybe a couple other folks from the office.

And after they do it, Michael, which is really, this is when it's just tremendous, right? People will go around the room and say, "Oh, man, I loved when you said...the way you explained this…was really awesome." And then the leader of the group will say, "Okay. And where do you think Sarah could have maybe improved a little bit?" "Well, she kind of stumbled on this." And it's just, again, I can't say it enough, it's really been neat to watch this. And by the way, it was much less than a well-oiled machine early on. It's still far from perfect, but we've stumbled through this to get to this point where it actually looks like, "Huh, we're running a little...we've got little classrooms going on here."

Michael: So it sounds like just feedback is part of the process built in. You will go around the room at the end to give the, "You explained this well, but you could have improved on that," I guess, both from the leader and the other advisors that sit in and even cohort members kind of giving, critiquing each other as well.

Kevin: Especially the cohorts. Yep. Yep. And again, not to get too corny, but I'll go back to our core values, right? We're collaborative, we're empathetic, we're positive, we're supportive, right? So those are all things that we try to hopefully live in moments just like that.

Michael: So, how long do they present?

Kevin: Oh, each one, it's usually pretty short. We're talking about 10 minutes, 15 minutes, probably at a clip.

Michael: Okay.

Kevin: And sometimes even less, right? It's a simple balance sheet. It might be 5 minutes.

Michael: Okay. So it's not like we're practicing an entire comprehensive financial plan delivery meeting.

Kevin: No. No, just a little bit at a time, right? And again, if we're talking about 22- and 23-year-olds, even the estate planning concepts sometimes are not...that's well down the road.

Michael: And how often are they presenting? Do they have to take a month to learn about balance sheets, and then it builds up to the one-month presentation scenario? Or is this more of, "Every Friday, you're going to have a new thing to present. We're in training mode."?

Kevin: Well, there are weekly objectives for the training. But in terms of the presentation, off the top of my head, I would tell you it's every 2 to 3 weeks. It's probably every 2 to 3 weeks.

Michael: Okay. And I guess, because you built these already, you're giving them the case study. The hypothetical Mr. and Mrs. Jones clients and the balance sheet, you've built that already. Each cohort learns the Jones case and their balance sheets, and then they practice presenting it. So it's repeatable from that end, from your end.

Kevin: Exactly. And that's kind of where, the first time around, it was, "Oh, my gosh, okay, we need a scenario. Which of our actual clients can we redact a little bit and make them Mr. and Mrs. Jones?" And then you do it, and you go, "Wow, we'd kind of miss this, and, boy, that was clunky," right? And now, gosh, what are we, 4 or 5 years into this? It's a pretty clean process.

Michael: And then, what's next? So articulation training, you said, goes basically another 90 days. So we're getting some reps in. What comes after that?

Kevin: So they are then assigned. Each one of these folks are assigned to a team. So in most cases, they're assigned to one of those diamond advisory teams. In a case or two, we're actually assigning them to the planning department. In a perfect world, I think we'd love to find a way to have more people go through the planning department and really learn.

Michael: Why is that your ideal?

Kevin: Just heavier planning work.  And you're sent to an advisory team, you might be helping out with some more administrative functions, which, on one hand, there's nothing wrong with that, and it's super helpful, but on the other hand, again, if we want our interns to work like first-years and our first-years to work like third years, man, I want them to learn that planning process. I want them to build the technical skills, build the articulation skills and make sure that they are as capable as possible to do everything and learning it in a centralized way, right? So it's not the way Bob does it versus the way Jen does it. It's the firm way, not the individual way. And the best way to do that, we found, is obviously centralizing. So with that said, we can't have 5 recent college graduates sitting there on their hands, waiting for the financial planning department to say, "Okay, I work for you."

Michael: When you got 8 teams supported by 4 or 5 people in the centralized planning department, the relative ratios are such that you can't put every new advisor through the centralized planning department because you need way more advisors than you just need and can staff in centralized planning.

Kevin: Yeah. Yeah. So we fooled around with rotations a little bit, say, "Okay, be with this team for a little while and that team a little while." But the answer to the question is then they're assigned to a team and then it's really kind of applying that knowledge. I envision, let's call it, training 3.0 and 4.0 where it's the next 90 days and the next 90 days. We are not there. We are, "Okay, now you're kind of assigned to your team, and you're going to learn more from here on out from your team." And occasionally, we have, the typical recurring training that everybody will have, but it's less structured as the 6-month process.

Matching New Hires With The Right Client Service Team [50:27]

Michael: So, how do you decide who goes on which diamond team or diamond team versus planning department when the time comes to put them through?

Kevin: That's a good question. Certainly, need, right? Some teams simply don't have a need, and other teams have a tremendous need. And then, it's demographics, personality, right? It's kind of, "Okay, if this is going to work out, how do we foresee…" Again, as probably you and most of your listeners know, advisors tend to have, at least our experiences, I should say, our advisors tend…their clients have a personality that's usually more similar to theirs than not. So, are we setting these people up for success? And we have, to be honest, we've made some silly mistakes when you wake up a few years in and you go, "Wow, why did we think that person would be a great fit?" As they mature and they eventually would lead some of these relationships, it's not a great fit, right?

Michael: Right. Jenny is super awesomely analytical, and her clients love how she brings a spreadsheet to all of it, with all the detail, because she's got detail-oriented clients who love that stuff. And we assigned her Jimmy, who's awesome at the articulation, but spreadsheets are not his gift.

Kevin: Totally, yeah.

Michael: And now, we're getting this mismatch in a while because Jenny's clients, who love all the analytical detail, are moving to an advisor that has other gifts but is not bringing that.

Kevin: Yeah. Yeah. In the absence of other options, it would be fine, right? But there are other options. And so, again, kind of one of those, you just go, "Oh, yeah, of course. Of course, we could have done a better job with that." So that's really it. And again, the beauty is early on, right? We can absolutely rotate people around. It's not like you're disturbing client relationships when you say, "Oh, my gosh, at the end of year one, superstar analyst is actually moving to the other team most clients don't even know."

Michael: I guess, do the advisors kind of say, "I spent the past six months really trying to get to know Jimmy and work with Jimmy better. And now you're rotating Jimmy away from me?"

Kevin: Yep. Yep, they do.

Michael: Okay.

Kevin: Yeah. Exactly. And then you go, "Remember, we're a firm." Again, you're kind of, "Yeah, let's try not to do that again. Let's try not to upset people. And maybe we could do a better job of..."

Michael: So that's the goal. If we can match them better, maybe we won't have to rotate them. And then people get less flustered about feeling like they put training into someone who moves away from them.

Kevin: Yeah. Yeah. Yeah, exactly. And I will say as well that, to me, there's the pluses and minuses. It's also great to just have someone...again, to your point, we've got some super analytical people, and we have some more touchy-feely people. Isn't it kind of neat to get training from both and kind of find your own voice and kind of find, "It's okay. You don't have to say it that way. You can say it that way too. It's equally as effective." And so I do love that idea. And I also recognize, people need to get stuff done too. And so there's a fine line, for sure.

Michael: I'm struck in that, at least my inference, the way you're framing this up, when you're actually assigning an advisor, an analyst onto a team to work with an advisor, it's more about matching for, in my words, it's more about matching for similarity than being complementary. If you're analytical, I'd rather give you an analytical analyst who will align to you and your clients, not the complementary version of, "Well, you're really analytical. I'm going to give you the person who is really great at the articulation but doesn't do the analytical stuff as well because you're a team and you can play with each other's strengths."

Kevin: No, you are making a super great point. And that's where...yeah, I would say the answer to that is yes, generally. And also, we recognize the fault in that, the potential fault in that, where you end up with three or four or five of the same exact people. And that's not always the best.

Michael: You know where to assign the next engineer clients, at least.

Kevin: Yeah, Well, yes, exactly. Exactly. And by the way, again, this can be wildly frustrating, and it can be really fun, right? If you have a little bit of confidence, you know what, if I make a mistake, we can change.

Michael: So, are the analysts, I don't mean this in a harsh way, but are the analysts providing any value to the firm in the first 6 months? Can you get value out of this from the firm end, or is this all just firm investment, "I have to eat 6 months' worth of salary and team training effort to get my talent pipeline to where I want it to be?"

Kevin: I don't know. Again, I hate, even though I may have said this internally just yesterday, that the answer to that is no, there is no value. Is there some value? I'm sure there is. But is it absolutely? And again, it's an investment. And we're delighted to make that investment. I would say, is there value? Yes, of course, there's something, There's something here and there's something there. But more often than not, we are absolutely saying, "Listen, we don't actually want you to have much responsibility." This is absolutely a long-term investment. I really do hope that, we hope that each one of these folks someday, in this world, in 2024, maybe this is a pipe dream, but I hope that someday, 30 years from now, if I'm still around, people say, "Oh, my gosh, I can't believe I had a one-company career, right? This was the place for me." I really hope we're creating those sorts of careers for people.

Michael: Do you have a sense, now that you've been doing this a while, how many stick and actually do grow up with the firm over the long term versus you hire them and they don't stay in the industry or you hire them and then they go somewhere else?

Kevin: Yeah, we've not, I'm knocking on wood, we've not had...we've absolutely had some turnover, but it's been coaching out. We've not lost people. We've not lost people to competitors. Gosh, I'm really knocking on woods here. We just haven't.

Michael: How many have you put through?

Kevin: The training program?

Michael: Yeah.

Kevin: Boy, I think we're on 15.

Michael: And they're basically all still there?

Kevin: They are all. I'm thinking of one that was coached out. I think one was coached out.

Michael: That was on your end. You've put enough people through. Unfortunately, sometimes not everybody can get to where you need them to be. So I guess my inference then, if you get them through 6 months and it's going well, they at least get to the 3-year mark, which I just find, for a lot of people, if the job's not terrible in the first couple of months and things are going okay, a lot of people, I find, tend to stay for about 3 years, and then, by 3 years, it's like, "Okay, I kind of got the gist. I've made some pretty good progress." You pick your head up and look around and say, "What's next?" either at the firm or somewhere else. So you're getting them to the 3-year mark, but then you still have to deal with anyone in an employee role, after 3 years, sometimes pauses and looks around and says, "Is this where I want to do the next stint after the past 3 years?" And some will say yes, and some will say no, for all the varied reasons that people sometimes decide to move and relocate and change.

Kevin: The last thing you want, I say it all the time, we don't want to train somebody else's 3-year person or 5-year person. It's absolutely critical that we keep the people that we're investing in, without a doubt, and hopefully, we're providing a great experience so they will stay.

Creating New Hire Cohorts To Make The Training Process More Efficient [58:47]

Michael: So I heard you say as well that you tend to hire and train in cohorts. I'm assuming that's part of the...if we're doing this in a systematized process, it's kind of easier to take them through the first 90 days and the second 90 days together in a group rather than literally having every advisor at a different stage of the process because they're staggered.

Kevin: Yep. Yeah. Yeah. Yeah. And honestly, just as we've grown, it went from, "Okay, we need one person." Like an idiot, I once said, "Boy, if we hire one more person, we'll be good for a couple of years," right? And then, 9 months goes by and you go, "Wow, that was foolish. We need 2 people, and then we need 3 people." And so, just as the firm has grown, part of, we didn't talk about this, but we've done a handful of acquisitions, and they've tended to...they're wonderful opportunities for acquiring clients and also teams, but they've been light on the advisory side.

We realized we need to, if we're going to continue to do that, and our plan is to, presuming we can find the right firms, we're going to need to staff up for that inorganic growth just as much as the organic growth. And so that has, again, kind of changed the dynamic a little bit from, "Okay, we need 1 or 2 people, 1 or 2 analysts, 2 or 3 analysts," to, "Okay, we really need to be thoughtful about how many…" So in a theoretical world, you're having interns come in, you're vetting folks, and then you're making full-time hires for when they're graduating in May and June. And hiring, in this case, I think our recent class was 4 or 5 folks, yeah.

Michael: And as you go through this process, where do things like CFP certification fit in? Is it still somewhere in the training process as well?

Kevin: Aha, yeah, good question. Yes, absolutely. So Series 65, absolutely part of the very beginning. The first 90 days is supporting folks, mostly with just the external materials, but supporting folks, making sure they have time, which, again, my old self when I studied for the CPA exam and then the CFP exam, and so forth, it was no firm time. It was, you do it on your own. But it's a different world, and so we want to make sure that people feel supported, have that time, have the materials for the 65, and then, fast forward, absolutely support them both in terms of acquiring the materials and paying for the off-site Danko training, etc., etc., etc., as well as putting together...the beauty of having the cohorts, right?

And it doesn't mean that everybody sits for the exam at the same time, but there's usually a couple. We actually had 5 folks take the exam within a few weeks just a couple of months ago, and it was awesome. Everybody passed. We're now, gosh, I think it's 15 for 15, something like that, 14 for 14, maybe it is, and it's pretty awesome. There's a lot of pressure now. Someone's got to be the break.

Michael: Yeah, someone. No one wants to be the combo breaker at this point.

Kevin: They're, "Oh, my gosh, so and so is taking the exam this morning." "Oh, God, please let them pass. Please let them pass." But it's been fun. It's been really, really neat to see that support and then people... We have happy hours and lunches, and everybody's high-fiving and hugging and fist-bumping. It's really cool. Culturally, it's been really, really neat to see people just kind of take the young folks under their wing.

Where Connecticut Wealth Management Finds Candidates For Entry-Level Positions [1:02:58]

Michael: And so, where do you find the advisors that you hire into this analyst program in the first place?

Kevin: Yeah, local colleges, right? In most cases, we're taking finance majors and accounting majors and marketing, just good folks. I always want to say kids. Good kids that become interns, and so forth. And in some ways, it feels like it doesn't matter what they studied. And with that said, we've got somebody from Virginia Tech, we've got somebody from Bentley, we've got somebody from Michigan State that actually did go through the planning curriculums at those schools. And boy, what a difference. What a difference, right? They already have a leg up. And so, boy, it would be wonderful if we could...

Michael: But you don't necessarily seek out folks that have been through a CFP program or were a financial planning major as an undergrad. That's not necessarily...

Kevin: Well, we would. And, Michael, I would say no, and that is because there's just not a lot near us here in Connecticut.

Michael: Okay. And you're a local in-person firm.

Kevin: We're a local in-person firm, at least for now, with a couple of exceptions, yeah.

Michael: Okay. And so, if you can't hire for financial planning degrees, I guess I'm just trying to visualize, what do you hire for? What do you screen for? What do you do to evaluate a 22-, 23-year-old with no financial planning experience and no financial planning degree to figure out whether they're going to be a good fit for you to invest into this training?

Kevin: Yeah. Summer intern is the home run, right? It wasn't that long ago that we hired one summer intern to do scanning and copying and very, I'll call, menial tasks, administrative tasks. And now, we've realized, "Wait a second, this is a great opportunity." So I will say, we over-hire. Our interns are not at all about finding people to do work. Our interns are all about screening. What a wonderful low-cost opportunity to test people out, right? And so we're giving them real work to do and case studies, and some of that training begins as an intern. And we're figuring out. I think when I say we, again, I mean others, not me, are doing a really good job of screening those kids and getting talented folks and seeing if they're hardworking and seeing if they live our core values. Do they have drive and grit? And are they positive and supportive of their colleagues? Are they trying to one-up the other interns and that sort of stuff? And it's been really, really, it's been wonderful.

Michael: So, how many interns do you hire, and what do you have them do?

Kevin: So, honestly, the answer is we're really just starting to. We've had somewhere between 3 and 5 interns the last few summers. We really need to...I just asked somebody the other day to really map out our expected hiring off into the future, right? Because we should be able to, instead of just saying, "We could probably have...we could find work for 3 people," which is what we've historically done, no, we need to know how many, if we want to hire 5 kids or 5 young adults next June, well, how many interns do we need this year to fuel that? A, they're not all going to be...we're not going to want them to come back. B, some of them aren't going to want to come back. They're going to want to do something else, right? And this presumes, of course, they're all rising seniors. So, honestly, I think we need to be more thoughtful than we have been, and we're about to be, right? This is crazy to me, but the reality is maybe we'll be hiring 7 or 8 of them, knowing that we're going to hire 4 or 5 of them full-time, or whatever the numbers will play out to be, if that makes sense.

Michael: And so it sounds like the goal from your end is, this is how we get to see the quality and capability of these people is we're just literally going to give them work to do for a couple of months.

Kevin: Give them work to do. Also, kind of back to that screening process, we give them stuff to present. They have a project at the end of the summer, and they present to a group, which is... And it's not super heavy lifting. I think this last summer, it was how we could use AI in the business. You can really kind of pick and choose. But we made sure that they need to, again, show, are they capable of doing the work and doing some research and really being thoughtful about their presentation? And they're not left alone, by the way. They can ask anyone for help. They can work together on...they can help each other, other interns, but it's really an individual project. And again, that's not my idea. I wish it was. That's been genius. And you really see the folks, the young folks who are really interested in a career here or, "That was a nice job. That was nice. I made some summer money."

Michael: And I'm presuming these are paid internships for you.

Kevin: Yes. Yeah. Yep. And, again, on some level, it's not inexpensive. In the whole scheme of things, it's really about the greatest investment we could make, right? It's really small dollars to vet the future of our firm, the future of our firm, for sure.

Growing The Firm Through Client Referrals And Acquisitions [1:09:01]

Michael: So you said a lot of this ultimately kicked off for you in the context of, we have this ongoing flow of growth, so now we're trying to figure out how to staff and manage to it. So just, where does the growth come from for you guys that this is the problem you're trying to cope with?

Kevin: Yeah. We've been just enormously lucky that we have great clients. They really love what we do. Our retention is first and foremost. The most important measurement relative to our clients is retention, and it's 99.5% or something, right? So we measure that. Bonuses are paid, at least in part, based on that metric. And our experience has been, when that happens, when people just try to wow our clients with everything that one can wow a client with, guess what happens, right? They tell other people, and that has fueled our growth.

When we started the firm, we had $180 million, there were 7 of us, nobody knew us. And over time, the more successful we became, all of a sudden, we bought a building, and our logo was on the building, and we're in a community where we just became more recognizable. And some of my partners are really good business developers and just the traditional, in the community, at the golf course, at church, all the other places. And all of a sudden, we're cranking along and writing significant amounts of clients and very, very successful. We've ended up, Michael, with a bit of a niche in the business owner community, and that has just taken off. That has just taken off. And it's one of those things where I say, "Oh, my gosh, we bring in more assets on an annual basis than the entire firm used to manage."

Michael: So I guess I'm wondering just, why does growth rate seem to be sustaining for you more than a lot of advisory firms I find where that number starts to really flatten, sometimes just entirely to 0 by the time you get to $2 billion to $3 billion under management where just a couple percent of attrition due to client death and a couple percent of dollars out due to retirement withdrawals, and you can be net negative $100 million on January 1st? You have to overcome and then grow through.

Kevin: Yeah. Boy, you're scaring me. This was a good conversation up until now. I don't know. And I will tell you, again, we've done some acquisitions. Let me not fool you into thinking it's been all organic. Those acquisitions we've done, we famously say, "We've done six net five." We had to undo one in the last 14 years or the last 12 years, I guess. But those have been...again, we have some really just wonderful advisors, really dynamic folks who are just doing really great work for our clients. And they're 30- and 40-somethings who are just killing it. And when it all starts clicking, again, we all know the story, it's just clicking, and things are going really well.

And then we've merged in some firms, acquired some firms where, and this isn't to knock anyone, but I think when those clients come in and they get an elevated experience, just an elevated experience because of the depth and breadth that we can offer them, it's not immediate, but 12 months goes by, 18 months goes by, all of a sudden, we call them additions. There's new business and then there's additions. New business is a new, new client. Additions are an existing client that adds more assets, adds more wallet share, however you want to describe it. It's almost magical how that tends to happen. And some of those come, "Boy, I really liked what we had before, but this is even better. Oh, my gosh." And again, what happens? They tell people.

Michael: I am struck, though. So I guess you said almost 70 people total. How much of that is advisor headcount versus other team members?

Kevin: I'd say about 35 advisors and about another 5 planners, the planning department. So depending on, we call them a different title, but in terms of their technical skills, they're very similar, so I'd say about 35 to 40 folks.

Michael: So I'm struck. So I find fairly similar for a lot of advisory firms, you're roughly half the team is advisor-oriented and the other half is all the rest of the infrastructure we need to run the business. But I'm struck by that, relative to 1,100 clients, I think that you said you had at the beginning, you've got a client-to-staff ratio that's like 30-something.

Kevin: Yes. Yeah. Yes.

Michael: So it's a deep staffing level, which, I guess, mathematically works when your average client is $2 million or $3 million and generates $10,000, $20,000 of revenue per client. But just I'm struck. You've got a higher dollar clientele that lets you staff to a higher dollar clientele that I would presume then also lets you have a deeper level of service and engagement with them because the math kind of works in the aggregate at that point.

Kevin: Well, and that's our calling card, right? That is our calling card. We've got a couple of calling cards, right? We're planning-centric, which is becoming less and less of a differentiator, as you know better than I do. Our team orientation, the fact that there are no sales goals, there are no...we're all in it together. We succeed and/or fail as a team. We are truly, just in every way, operating as a team. And our client-to-advisor ratio, it's roughly 35 to 1. And it's been that for...it's a little less, a little more, depending on acquisition, a merger, or something, but that is...and boy, when you explain that to a client, by the way, maybe they're skeptical, "How are you different again?" Well, this is how. And then they can see, "Oh, my gosh, you're not just saying you're going to do more and you can spend more time either with us or on our behalf doing stuff."

That's how. We have more people than where you are now or the other, the competition. And that is really, really, really meaningful. And I do think, again, that is, I can't prove it other than anecdotally, I think our retention and that might be the most important thing might be that, and that drives our retention, if that makes sense.

Michael: Yep. Interesting. Interesting.

What Surprised Kevin The Most Building His Advisory Business [1:16:30]

Michael: So now, as you look back on this journey, what surprised you the most about building the advisory business?

Kevin: Honestly, I think, Michael, it's what we talked about a minute ago. It's not all that complicated. Again, as I was a young accountant trying to become a financial planner, I thought, "Oh, my God, there's so much to learn." And I went, and you're right, I got a master's degree in finance, sorry, a master's degree in tax, with a concentration in financial planning, because there wasn't any such degree around here that I could, a financial planning degree. Then I got my CFP, and then I went and got my CIMA. And I just assumed I needed to learn all this technical stuff, which maybe I did, maybe I didn't. But practically, it's about how you treat people and teammates and our clients. And on some level, and again, I'm knocking on wood again, I don't want to claim victory, but there is something so simple and pure about just kind of, again, so boxy, but doing the right thing and things work out. It's almost...my imposter syndrome goes away when I think about that and go, "Wow, we just treat people really well."

Michael: I am struck relative to a lot of advisory firms out there, that just your metrics give you financial room to do that. I see some firms, “We really try to treat everyone well, but we're also trying to navigate to the fact that we have 123 clients per advisor because we've got big clients and very small clients, and it's hard to serve them evenly, and we don't really want to raise our minimums because we feel bad about that for understandable reasons. But then we don't really have the dollars to go around to attract and retain the talent we want.” It starts to tie together, and just I can't help but look at some of the numbers that you've shared here, just raw numbers, 22 million of revenue, roughly, and about 1,100 clients, $20,000 of revenue per client. You get a lot of room, in a positive way, you get a lot of room to invest in the people and invest in the clients and try to really focus on serving them well when you've got healthy financial metrics in the first place.

Kevin: Well, for sure. And again, I don't take that for granted, right? The moments where I start to feel really smart, I go, "Yeah, wait a second, buddy, you're in an industry that happens to be really profitable. Don't get ahead of yourself here." But the credit, I guess, we'll take is we are trying to be thoughtful and make sure we're reinvesting that into the firm and future and advisors and teammates, not just advisors but teammates in general, that are going to allow this thing to be, if not perpetual firm, certainly, a lasting firm.

The Low Point On Kevin's Journey [1:19:25]

Michael: So, what was the low point for you on this journey?

Kevin: We didn't talk about kind of the genesis, but we bought…I led this small firm, 7 people, at an accounting firm. And we bought it away. I bought it away. And it was really hard. That negotiation, it was really challenging. It became acrimonious despite my best efforts and some best efforts on the other side. It's just one of those things where you just go, "Gosh, I wish it went better." It ended up fine. Everybody ended up fine. But in those moments, I was 39 years old, I had young kids. It was super stressful. It felt horrible that people...I really think some people hated me and thought I was trying to steal a firm away. And that's really not what we were trying to do. And so that was really hard.

Michael: So this was because, you said earlier, you were a CPA by background, by training. So you started an accounting firm, broke away to do your own thing, and this was the messy separation, trying to break out of the accounting firm.

Kevin: Yeah. Yeah, it was. And again, I'll spare you the longer story, but it just was kind of... I'm sure you're familiar with this a little bit, every accounting firm just about in the country back in the '90s, we're starting wealth management firms or at least thinking about it, and this went fine until we were fighting for every computer to be fixed. I was the 17th partner in a 16-partner accounting firm, if that makes any sense. So after a while, it was kind of, "Ah, this is...we can do better." Again, back to that, we could be treating our clients better, our team could be better.

What Kevin Would Tell His Younger Self [1:21:09]

Michael: So anything you know now that you wish you could go back and tell you 15+ years ago as you were exploring this path?

Kevin: Oh, my God, yes. Oh, God, yes. Yes. The entrepreneurial experiment is amazing. I really do, it's one of those things…maybe my partners and colleagues would say that this is untrue, but I really do. I was a young accountant and just thought, "God, I don't like this." And then I was, "I was supposed to be a financial planner. I read Money Magazine like my dad did." And then I realized, "I think I'm actually...I think I was meant to do this, to kind of run a firm, right? I don't really see a lot of clients anymore. I really think I'm good at this." And I wish I had the confidence to know that way back when, because I think we could have made some better, faster decisions. I'm not sure what the outcome would have been, frankly, but I remember just thinking, operating out of fear almost as opposed to with courage and confidence.

Michael: So, is it that you didn't know you'd enjoy the business ownership end or deep down, it was there, you just didn't realize or have the confidence? I guess I'm trying to say, did something change or did you just become more aware that this was actually your thing after all?

Kevin: I think it was the latter. Honestly, I was not a leader, right? I can't manage people. I was definitely not a leader. Again, it's the reason I became an accountant, an accounting major, right? I was a little bit shy, and all that. And I think, I hope I've become a decent leader. I've certainly spent an enormous amount of time trying to become a leader and a good leader. And I think it's that. It's to realize that you can learn those things and you don't need to be the killer sales guy, the "make people run through the brick wall" guy to be, or woman, to be a good leader. I had this misunderstanding, if you will, or this belief that that's who leaders were, right? They were the star quarterback. They were the rah-rah person or however you want to say that. And that was not me.

And over time, I realized, "Wait a second, there is a place for people like me. We can lead organizations."

The Advice Kevin Would Give To Newer Advisors [1:23:39]

Michael: So, any other advice you would give younger, newer advisors looking to become a planner today?

Kevin: Oh, it's the best career, right? It's the best career. I said a minute ago, I don't really see clients anymore, but we happen to have an event. We have a client appreciation party every year. We adopted early on, and we were going to do a Christmas party. And then, early on, again, my partner said, boy, Denis said, "We should have a Thanksgiving party. We should give thanks to our clients. We exist because of them." And honestly, because of weather and whatnot, it's gotten a little earlier and a little earlier, but the idea is we have this client appreciation party. And just a couple of weeks ago, almost 300 people showed up at our office, which, by the way, required a tent and all this craziness.

Some of the clients that used to be my clients now are overseen by others, and a bunch of people I have never met before come up to me because of my title and say, "Oh, my gosh, I want to introduce myself," or, "Hey, it's good to see you again. I just want to remind you that your team, the people here have changed our lives. We wouldn't have…" and you can fill in the blank. You know the stories. We wouldn't have bought the beach house. We wouldn't have gone on these unbelievable vacations. We wouldn't be helping the charity that's so meaningful. All these. They come up to me and say... What a career that is where you can do that. You can help people. Oh, and by the way, it's a profitable industry where you can make a really good living. My gosh.

So my son is in this business now, not in our firm but somewhere else. And he once asked, I think it was in eighth grade, we were driving to a hockey tournament, and he said, I hung up the phone, I was on a call and he said, "Hey, dad, are all your clients your friends?" This was years ago, right? And I said, "Geez, that's a good question. No. Why do you ask?" And he said, "Well, you know, when you're talking to Mr. K and Dr. Bob, you're talking about business half the time, but then you're also friends. And is that all?" And I said, "Well, that's an interesting observation. No. But a lot of clients are friends." And he goes, "Is that a good job?" And I said, I go, "Yeah, I make a pretty good living. We're able to go to a hockey tournament." And he goes, "No, no, no, I don't mean money-wise. I mean, is that a fun job to have?"

And it's funny, right? That was a long time ago. And I think, in that moment, yeah, really, it's an awesome job. You get invited to people's homes and weddings. And ultimately, if you do a good job, get thanked. By the way, they do the hard work. And we get a lot of the credit. So, yeah, it's amazing. It's absolutely amazing.

What Success Means To Kevin [1:26:25]

Michael: So as we wrap up, this is a podcast about success, and just one of the themes that always comes up is the word success means different things to different people. And so, clearly, you've built this multi-billion-dollar advisory firm to an incredibly successful place. And so the business is doing so well now. How do you define success for yourself at this point?

Kevin: Yeah. And again, I think you've mentioned this in other podcasts, it certainly changed over time. I certainly didn't think this way early on. But it really is. It really is. And again, I got to knock on wood as I say things like this, I don't have to worry about my own or my family's financial ability to retire or to live a decent life. Really, what's meaningful to me, and this goes back to like training, is really trying to grow careers for our teammates who take care of our clients is a beautifully virtuous circle, as we try to take care of people who take care of our clients. And it all works.

I don't think I've mentioned that our core belief is to turn life aspirations into reality for our clients and team. Our mission is the word I was searching for. It is, again, words that most people probably think a marketing department came up with, but it really is true. And the reality is my team, our team, takes care of our clients. They help our clients turn aspirations into reality. It's my job, and I love it, to try to do the same for my teammates. So the 22-year-old or the 42-year-old is, I get such a rush from their success. And, boy, again, I recognize, if I help them, boy, it's good for me too, and it's good for the firm. So that's just been an absolute highlight. And ultimately, I think how, I'll call us the elder statesmen, myself and my partners have been around for a long time, really kind of think about success.

Michael: Well, and I can see now why the analyst training program then has formed into what it has, as you keep making investments into it, because that's the building, investing into our teammates so that they have successful careers and achieve their goals, because that also turns out to be a pretty good thing for serving clients well and making the business succeed as well.

Kevin: Michael, I hope so. I hope so.

Michael: Amen. Amen. Well, thank you so much, Kevin, for joining us on the "Financial Advisor Success" podcast.

Kevin: Well, thank you.