#FASuccess Ep 084: Re-Energizing After A Mid-Career Crisis With A Focus On Next-Generation Talent Development With Diane Compardo

What You’ll Learn In This Podcast Episode

• An overview of Moneta Group and its clients. [3:36]
• How the firm has evolved over its 100 years of service. [4:46]
• Moneta’s unique partnership structure. [11:02]
• How the firm structures compensation and revenue sharing agreements with teams. [25:10]
• The key advice she received about hiring talent. [38:12]
• How her niche in working for corporate executives evolved. [45:10]
• Why she doesn’t bill hourly. [51:32]
• Diane’s path into Moneta. [1:00:29]
• What Moneta is doing to get more national recognition. [1:07:39]
• How she structures her team meetings with clients to improve client service and develop new advisors. [1:18:35]
• What Diane does to balance her time between work and her personal life. [1:30:36]
• Advice for planners new to the industry. [1:33:27]
• How she created a support network for herself. [1:35:51]

Resources Featured In This Episode:

• Diane Compardo
• Moneta Group
• Women Presidents' Organization
• Investment News 2017 Women To Watch
• PriceWaterhouseCoopers (PwC)

Full Transcript: Re-Energizing After A Mid-Career Crisis With A Focus On Next Generation Talent Development With Diane Compardo

Michael: Welcome, everyone. Welcome to the 84th episode of the "Financial Advisor Success" podcast. My guest on today's podcast is Diane Compardo. Diane is a partner and team leader at the Moneta Group, an independent RIA with nearly $20 billion of assets under advisement and 40 partners, in which Diane leads a 16-person team with 4 partners and $1.4 billion of AUA, and has served as the chair of their Governance Committee as well. What's unique about Diane, though, is that after nearly 20 years of building an incredibly successful advisory practice working with corporate executives at Moneta, she decided to substantially increase the size of her team and shift her own focus towards building and developing new advisors and partners at the firm... not just to grow the business, but as a way to reenergize herself after a proverbial mid-career crisis.

In this episode, we talk in depth about the unique Moneta Group structure that provides shared centralized administrative compliance and support services for more than 20 independent teams of advisors affiliated with the firm, how the firm structures its compensation and revenue-sharing agreements with teams, the unique partnership structure of the firm based on their relative contribution of profits to the firm, and how Moneta evolved into creating a governance board that sets strategy for the firm but is separate from the management team that runs the day-to-day business.

We also talk about how Diane's own niche in working for corporate executives evolved. How she first created a specialization in working with them during her early days as a CPA at Price Waterhouse, working long hours and cramming 10 years of experience into just 5 years, why she ultimately left PwC to join Moneta and forge her own pathway to partnership, and how Diane structures her team meetings today with clients both as a way to improve client service and also to develop new advisors themselves.

And be certain to listen to the end, where Diane talks about how she uses checklists in her calendar to balance her time between work and personal life, the support system she's created for herself by getting involved in local networking groups like the Women Presidents' Organization, and how she reenergized herself from the low point of her career with the strategic and deliberate shift in how she was spending her own time in the business.

And so with that introduction, I hope you enjoy this episode of the "Financial Advisor Success" podcast with Diane Compardo.

Welcome, Diane Compardo, to the "Financial Advisor Success" podcast.

Diane: Thank you for having me, Michael. I'm really excited to be part of the series.

Michael: I'm excited to have you join us both because you have a very interesting career path of your own, coming out of big four accounting world  – or I guess it was big six or big eight or whatever the count was as it's evolved over time – and moved in the advisor world and built into a very ultra-high-net-worth kind of family office direction with your team. And you're also part of an interesting firm itself called the Moneta Group that has its own kind of unique structure of advisors and teams and centralized staff resources to support all the advisors. And so I'm kind of excited to talk about both sides, the team that you built and kind of the larger organization that you work within as well.

Diane: Great.

Michael: So as a starting point, can you just talk to us a little bit about the firm, about Moneta Group as it exists today?

An Overview Of Moneta Group And Its Clients [3:36]

Diane: We are an independent registered investment advisor, and we have over $20 billion of assets under advisement. We definitely serve as a fiduciary for our clients. And that was a big push that we made over the last really 10 years, to become completely independent and not really have any products that we would sell. And we never really sold any types of investments, but we did have some commission-based work that we've now, as a firm, committed to remove and become completely independent for our clients.

So we broadly serve the high-net-worth and ultra-high-net-worth clientele, and really, I always say just with whatever financial matters that are of pressing issue for them. So we don't really limit our boundaries of what we can do for our clients. It's whatever is most important for any individual client is what we will attempt to advise and counsel them on.

Michael: So you've gone through this evolution as so many firms have done in our industry over the years. I guess you were a blend of fees and doing some commission work and you've decided to move the firm in the direction of just doing the fee work and letting go of the commission side of the business?

How The Firm Has Evolved Over Its 100 Years Of Service [4:46]

Diane: Absolutely. And Moneta actually is over 100 years old, and so I would say in the past 30 years, that's been started… the evolution of the industry, really, our leader at the time, changed our perspective on, "Where do we want to go with this? And we want to be this broad planner." 

Michael: Interesting evolution. So you were… I guess so you let go of the investment commission side and then you're working down the insurance commission side I take it?

Diane: Right. That was sort of the last element of it is the insurance commission side that we let go. And I would say 10 years ago, we really reevaluated the investment aspect and decided as partners to build out a platform internally of investment professionals that could research anything that we wanted to utilize for our clients and really look at the gamut of vehicles in the industry and make sure we're just honing it down to what we think are best – and focusing on costs… best and lowest cost vehicles to utilize for our clientele so that we know that when we look at our list of things that we want to use and build out for our portfolio, we know that we've done the research personally as a firm and have figured out what we feel is best for them. And that continues to expand for sure because we continue to build and build on that.

Michael: So I'm curious about this kind of evolution for the firm. When you're a 100-year-old firm and you've… well, you've literally seen all the balls that we've had in our industry because you're going back to the start of our industry and private firms… so as a firm like yours looks at this evolution, I'm going to presume after you survive for the first 80 or 90 years, the odds are pretty good you're going to be able to hold on your clients in any of these particular models. I don't think very many of them are firing you for doing insurance business at this point. So how does a firm like yours think through that decision of whether to let go or wind down what I'm presuming is decades of insurance-based business that's been done over the years and probably not a trivial amount of revenue for you just given the size of the firm?

And I know you work with some pretty affluent clients where there can be some very sizeable insurance sales and a lot of dollars on the table. I know this has been a challenge for a lot of particularly large RIAs that work with some very affluent clients, where just, there are really big insurance premiums that get done, and the clients are sophisticated. You can't really take advantage of them very effectively either way, but there's just a lot of dollars at stake, and it makes it hard for a lot of firms to let go. So I know there's still a lot of large firms that are fee-only on the investment side but continue to do a little bit of insurance commissions. So how does a firm like yours go through that decision-making process or weigh those things?

Diane: It was tough. We did it very slowly, and it did take us a lot of time. And in fact, we've really just… last year I led governance and the year before, and it was one of those big pushes as part of the leader of our Governance Committee to really strategically think longer term, "Who do we want to be as a firm for our clients?" And overwhelmingly, the group of partners said, "We want to be completely objective and completely sitting on the same side of the table as our clients as they get advice so that the client knows that they're getting our best advice." And there's no issues of, "What are you going to earn on the side?" It's just, "This is our best advice, and you're getting it because we're not getting compensated otherwise to give you anything but our best advice."

So, overwhelmingly, 85% of our partners absolutely believe that and really wanted to move in that direction and really felt like the industry was moving in that direction. And we wanted to take that step forward. It didn't mean it wasn't really hard to do. But starting really at the beginning of this year – the beginning of 2018 – we had put a policy in place and decided that that's where we wanted to go and everyone got on board. And I'm excited to say we're there.

Michael: So I've got to ask, you had a striking part to me in that that you pointed out. "85% of our partners absolutely believe that," about this kind of path forward of greater independence. So that raises a couple of questions for me. One, just maybe you can clarify how many partners overall are in the Moneta structure now? And talk just a little bit more about what governance looks like that you can say, "85% of our partners are on board, so we're moving forward." Because for a lot of firms, if we can't get to 100% and full partner consensus, they don't do things. So figuring out how to move forward with 85% is actually kind of a big deal for my governance structure.

Diane: It is a big deal. Now, I say 85%, we definitely didn't want to move forward unless everyone really did get… you know, we wanted everybody on board, but we do (from a governance perspective) believe that if we've got that level of buy-in, then those who aren't quite there, speak your mind, speak your piece. But if we're going to become this great partnership or continue this great partnership then if everyone else around me believes this then we just have to get to a point that, "This is what we'll do as a partnership. And for those who didn't agree, you've just got to get on board and let's all move forward together." And, it's the challenges of the partnership and having everyone have an equal voice, or having some voice, but also making sure that we understand as a committee and as a government structure that if there is majority then we all need to move forward with the majority.

Michael: So how many partners are there in Moneta that are part of this aggregate decision-making process? Or maybe, I guess I should separate: how many partners are there, and separately, how many of them are actually part of the decision-making process?

Moneta’s Unique Partnership Structure [11:02]

Diane: Yes, there's 40 partners today. And that's recent, we made 3 new partners as of the start of 2018. And the board is going to drive a big part of that decision-making. So, the board is made up of 10 to 12 partners. And so first and foremost, the board has to come to a resolution that, "We're going to propose this as a change in the firm structure." But, the board only makes up a certain percent and not a majority percent of the partners.

So we don't just say, "Okay, the board says this," and we go. We definitely have meetings as part of a partner group to discuss this issue and make sure that there aren't any concerns out there. And really get a feel of what the full body of the partnership is thinking and feeling about this change before we'll actually move forward and just shove something through the board level… especially for a decision as big as this, because this impacts an individual's bottom line. And we can't just whole-handedly say board is pushing this through without talking to those individuals that may not be on the board with representation that could have reasonably significant insurance business that they still appreciate to have in their revenue stream. So, again, it was a long process. I think we've been talking about this for five years and really just made it a focus of governance at the last couple.

Michael: Interesting. And so this governance structure overall, like, how do people get set to the board? Is that itself a partner vote, democratic-style process or more of an appointment structure? How do you get the 10 to 12 up there that start the process on these major firm-wide decisions?

Diane: We have a… you know, the board of Moneta has evolved also. We're a growing firm. We have quite a few of the 40 partners that have been here for 20-plus years. And so before – maybe 10 years ago – there was a set board and that board didn't rotate. And as the next-gen sort of came into play and that board was essentially set at the senior leadership partners in the firm, and it stayed. And then as time went, next-gen started speaking up and saying, "You know, let's talk about having a structure where we rotate those board positions and that there's terms and then there's breaks in terms." And I'd say we're still evolving there.

But what has happened really over the last 10 years is there have been… we've added new people to the board. And I was on the board when we started really talking about this, about the fact that there hasn't been a whole lot of change. And I was one of the newer members at the time and how important it should be for us to allow the next-gen to come up and experience governance and experience board decision-making at a firm level so that when some of our senior partnership or senior leaders start phasing out, we have some experience behind us to start understanding what this process is going to look like and how to make these decisions as the next-gen moves up.

So it's been an evolution. We do now have rotating terms, and every year we have three members that will potentially rotate off. The process is still a little gray in terms of how we ultimately should do it, but each of those members is allowed to re-up up if they'd like. And they get the voice of whether they want to re-up or not. But we attempt to rotate one off and bring somebody new on every year. And then there's also what I guess I would refer to as the board “jump seat”, which is a junior member of the firm or an up-and-coming partner that sits sort of as a non-voting board member at every board meeting to just observe and understand the process so that… and that person sitting in that seat tends to be the one that if we have an open position, that that person would jump into that new position.

Michael: It's an interesting role, a board jump seat specifically for up-and-coming partners as a… you know, it's leadership development for them, it's, well, just a chance for them to get in and see like, "So if you come on board, here's what's going to look like. Let's get really real. Here's what board meetings actually look like." And I would think even as a non-voting member, they're probably still going to get engaged at some point along the way. So just as a partnership group, you get to see how do they interact with other partners? How do they interact with the board? Some people are better at understanding those lines than others. So you get just a feel for what it would be like to make them your partner.

Diane: Absolutely. And it's an important part of the process for sure.

Michael: And then how often does the board meet to do what it does?

Diane: We’re attempting to ratchet it back to four quarterly [meetings]. We have been meeting more often. We've been going through some leadership changes and some changes to start transitioning to next-gen. So we had been meeting really every two months. And so I think we've gotten through a lot of those issues and now we're going back to a standard quarterly meeting that will address any upcoming issues or concerns within the firm and have those discussions on a quarterly basis.

Michael: Okay. So this is truly like a governance-level board. This is not the group of people that make the day-to-day and week-to-week decisions to run the firm and execute it. This is really just a separated out governance, strategic-level board.

Diane: Yes, although I would say we have just recently gone to that level. I would say the board in the past, maybe, two or three, four years ago was operating too much on the day-to-day level, and we were really trying to change that structure and get back into that we are there for strategy and not for day-to-day activities. So we've had to evolve from that. And that kind of went that direction. Again, historically as we were a much smaller firm and grew, the board operated in a different way when we were smaller, and now we wanted to operate more like a board should be operating. And it also kind of coincided with the fact of a leadership transition and board wanting to stay in the weeds of the day-to-day because of that transition. And really, I think a lot of the next-gen wanted… we kept pushing, "Let's bring this back to what we really should be doing at the board level."

Michael: So this structure with 40 partners and $20 billion of assets under advisement, you've got this senior-level board group, so what's the next level down in the hierarchy of how the firm gets run?

Diane: Well, we've really in the past two years committed to building out a really solid management team consisting of your typical chief operating officer and chief financial officer and chief information officer, and chief investment officer, chief compliance officer. So we really have built out a significant management team, which again is different than what we had structured ourselves previously because I think the board was operating a lot of the management role. So we've taken a big step forward in that path and have hired some amazing people that then is allowing the board to do what they should do and take a step back and look at strategies because these day-to-day operations are being run by our key chief of every area that we have.

Michael: Interesting. And what drove the change? That's a big shift to hire some of those positions and move them away from traditional board roles. Was that just like, "It's just not working because there's too many things for the board to do," or were there other strategic pushes that made you want to do that shift?

Diane: Well, I think one main strategic push is just the fact that we were recognizing as a firm that in order for us to continue to grow at the levels that we really wanted to grow at and really needed to grow at, we needed our partners to be doing what they were best at doing, which was client relationship, business development, growing their practices. And when you get a partner that's on the board and the board is managing day-to-day, it takes away so much time from that aspect of growing their own businesses, and that ends up longer-term hurting the firm. So I think we all were recognizing that and recognizing that we had gotten too much in the day-to-day, and it was taking away from us focusing on our businesses, which we wanted to get in front of that and make sure that we didn't get too far down that path and then all of a sudden we stagnate. So I think that was really one of the biggest pushes is why we really said, "Let's get this right. Let's get a management team in place to make these decisions for us."

Michael: Because like most firms in our industry, the partners were also relationship managers who have clients and responsibilities on that end, and by the time you service your clients and manage your team and manage the firm and grow the business, the fourth one kind of runs out of room by the time you've done all the rest and growth starts flattening out?

Diane: Absolutely.

Michael: So talk to us more broadly about this structure of Moneta, this huge asset base, 40 partners. How many staff members then fill out the rest of the organization and what does that structure look like?

Diane: Well, it's interesting. I think everybody is built a little differently in our industry. We're built to have what we called a shared services group, which is our support structure for all the partner groups. And they'll take care of our compliance. And we've got the investment department that supports us, and we have accounting that supports us. And so all of the day-to-day running of Moneta is done by this shared services group – or enterprise services – that then is led by the management team.

Then that allows each of the 40 partners to really say, "Okay, what is my practice going to look like?" We look similar to a law firm in the fact that attorneys will have their own book of business and manage their own book. And each individual partner does that. And we personally get to build our own team the way we want to build it. So we do our own hiring in terms of the types of people we want to hire, with the support of our HR department. And we've got a recruiting department that gives us or finds us the talent. But then me as the partner of my team, I get to decide what my team is going to look like in terms of who I want to hire and what kind of resources I need on the team to help me service the clients.

So there's a wonderful balance between what I don't have to do on a day-to-day basis. I'm not doing compliance. I'm not out there researching investments. I'm getting all that support and I can totally stay focused on, "What is this going to look like? What kind of people do I want here to service my clientele? And what do I need from a resource perspective?" More from a technical standpoint. We also have actually of resource internally that's an estate attorney resource that we can utilize if we need help in that area in terms of strategy and things like that. So there's a great support system that just essentially allows me to run my business the way I want to run it.

Michael: Interesting. It sort of reminds me in many ways of the independent broker-dealer model, where there's this centralized firm that does compliance and has an investment department and has its own management team and the advisors are all independent and able to set their own team structures and services to clients using these centralized resources, with kind of the big caveat and asterisk like except you don't actually have the FINRA compliance and the product part that traditional broker-dealers do because your structure is an RIA and so you're on the investments and financial advice end, but kind of that similar, centralized shared infrastructure independent advisors who can then use that central platform to build their client base in the direction that they want to go.

Diane: Right.

Michael: In a structure like that, how do you figure out who's a new advisor with their own group or team versus joining an existing one? How do you get to 40 partners, and does that mean there are actually 40 different kind of individual silos of advisors doing their thing with their clients or are they grouped differently?

Diane: Well, that's a great question. There are 40 partners. So for example, on my team, we have four partners. So we'll operate in sort of… silo is a strong word, we're not operating completely independent of the firm because we do share resources and we do joint work if we feel like another team might have a skill set that my team doesn't have or vice-versa. We can come together and pool those resources together as teams. But in general, my team will service the clientele that I have built and that I continue to bring in. And only if I need that additional resource will I pull in a senior partner from another team to help and provide perspective. So generally, we operate independently but there is that cross-training also.

Michael: And then how does it get structured with the firm? Do all the partners get their salary for their partner duties and then the firm rolls up an aggregate profit and just distributes it out to all the partners in their respective shares or do you have more of a revenue-sharing-style model that says, "Our team keeps X% of the revenue that the team generates and then the remainder goes back to cover all the shared resources," and you do a revenue split so the team gets its dollars and the shared resources get their dollars? How do you structure something like this?

How The Firm Structures Compensation And Revenue Sharing Agreements With Teams [25:10]

Diane: Well, we are… since we're privately owned and all the partners do have equity ownership and really are required to own some equity as they become partners, there is an allocation that we pay to really internal for the shared services. So there's a percent that they take off the top that allows us to build out the infrastructure we need to support all of us. And we all pay at different levels, different tiers based on our revenue basically.

Michael: Okay. So kind of like a percentage of revenues with a graduated schedule because it doesn't take as much to serve a $1 billion team, or it doesn't take twice as much to serve a $1 billion dollar team as a half a billion dollar team right? Same reason why we have graduated fee schedules with our clients as well.

Diane: Absolutely. Right, exactly. And that's kind of the structure we're under. And then the firm doesn't really run… we attempt to have a firm profitability. It's nothing significant but it's something that actually is allocated back to the equity owners. And our ownership of equity is really based on our profitability of the firm. So our share of ownership is our contribution to profit, and that's what we actually have to buy as the team is, "What are we contributing to profit?" And that's our share that we're essentially required to buy. So if I continue to grow, I'm going to have to buy more equity. And if somebody is not growing, they might have to sell some of their equity. So it aligns with ownership, aligning with those teams that are growing.

Michael: Oh, interesting. So your ownership percentages actually rejigger what, from year to year every couple of years as you look back and say who's contributing what to aggregate growth and profitability?

Diane: Right, our reshuffle process is about every three years we take a look. It's kind of a three-year look-back...  an average of what things look like.

Michael: So I guess from a legal tax perspective, you're an LLC structure and people are buying LLC profit interest as opposed to simply buying capital interest with pro rata shares?

Diane: Right.

Michael: Okay, it's an interesting structure. I don't know a lot of firms out there with it, including that… if you're increasing your profits and your relative ownership, you actually have to reshuffle and buy in to buy off the shares of the people whose books are declining and should, in theory, be participating less.

Diane: Yeah, there's not really a forced buy-in. I mean, you can say no.

Michael: You would think you would want to say yes since you're driving profitability and this is how you participate in it.

Diane: Right, exactly. So yes, that's right. And so generally, we don't have people declining the equity ownership part of it.

Michael: And I guess from a practical perspective it's… since you're participating in the profits of your client base directly off of the revenue and then whatever is left over after it goes to shared services is a net profit that comes back to you as well, there's kind of a… you don't need to run a high margin as a firm because the dollars would come to you either way, at least as long as you bought your shares in the respective representation of your contribution to profits in the first place. The whole model is just kind of built to line up that way no matter what?

Diane: Right, exactly.

Michael: Okay. And so how many different teams then are there that are structured under the broad umbrella? You said your team has four partners involved.

Diane: Right.

Michael: How many other teams are out there?

Diane: That's a great question. I knew you were going to ask me that. Well, there's over 20 other teams.

Michael: I'm not going to ask you to name all 40 partners because that’s a lot of people.

Diane: I could probably name all 40 partners. I might not be able to break it down by team.

Michael: I can't do family 40 members in a family reunion, so I'm not going to test you.

Diane: Exactly.

Michael: So, 20-something teams. So some are more multi-partner the way yours are, some then I'm presuming are individuals or two-person partner teams, and you've just got a mixture of them?

Diane: Right. Yeah, and we've had a team already feel like they got to a size where they wanted to break apart, and solely because they felt like they would operate more efficiently if they broke into a couple different teams or three different teams. So we've also seen that as we've evolved in this growing partners from inside. And I'm a four-partner team because I intentionally seven years ago hired a couple of advisors that I knew were of the… had the ability and the mentality to become a partner. And the firm initiative is to continue to kind of have this farm system in place where we grow partners from inside and teach them our culture and teach them our technical skills. And I intentionally hired two people then to become that for my team because I wanted to be one of those people that was the trainer and teacher and could bring up the next-gen and continue to think about growing this firm. So we just became a four-partner team on January 1.

Michael: Okay, interesting. And how big is the total size of your team, because you've got more than just the four partners at the top?

Diane: Right. And so my team or our team is now 17-team members strong. So we now have the four partners. We have four advisors in place essentially that will be continuing the path into… ultimately potentially into the partnership. And really when I think about hiring, I don't ever… I always have the vision that no matter who I hire, they're always going to have this path of opportunity to get to the partnership. And it really changed sort of that, "Who am I hiring and why?" And this all really, again, took place about seven years ago. And I made an intentional move to think about training and teaching and growing and providing a career path for no matter what level they came in at so that I could really be focused on getting best talent. Because you can't expect to get best talent if you're not going to have a path for them to move up and grow and succeed in a way that they might want to.

Michael: I think that's a powerful point to make. You can't expect to get best talent if you don't have a path for them to succeed and move up and grow into.

Diane: That's right.

Michael: And so what does that path look like in Moneta? Or I guess really for your team, because if they come in their path is with your team. What does that structure look like? If I'm interviewing for a job with Compardo team, and I'm pretty talented, why should I come work for your team? What is that path or the pitch you make to them of, "Here's the opportunity if you come and work on my team?"

Diane: Great question. I probably structure – and Moneta has gone this direction too – the path very similar to the accounting world because that's where I started. And so where the accounting profession has the… you start as a staff and then you become a senior staff, and then you become a manager, and then you become a senior manager, and then you have the opportunity to become a partner or a director in the firm. We just call people something different. So there will be a client service manager, then a senior client service manager, then an advisor, then a senior advisor, and that's when the opportunity is to step into that partnership. That's the path, and I think we're still defining that path because this is, again, one of those broad changes we're making as a firm in terms of the commitment to have the partners really think about building sustainable businesses and not just thinking about succession planning, because they're two very different things.

Michael: So how do you see those differently, succession planning versus sustainable business?

Diane: Well, when you think about what's going to make Moneta's momentum still go and grow, we've got to have partners that have the ability to bring in business for one thing. They have to have an ability to grow. If I was here and I'm ready to slow down, you know, at a point when I'm ready to slow down, if I was thinking succession, I would just have a person that would just step right into my shoes, take over my book and probably not really be able to add any more business because it's already maxed out with the book they just inherited from me. So, therefore, you have a partner that really has no motivation to do anything else other than service the clients that they were given because they were lucky enough to get the history of my book.

What I envision differently than that is, for every partner at Moneta, I think there should be at least two people that would step into the shoes of that partner. So they're inheriting half a book, which gives them some momentum behind themselves to continue to grow, but they have the capacity to grow still. And they really should continue to grow in it. And if under every partner have two… that book get split twice and then that person's book gets split twice, and you build this sustainability model. And that person that's getting half the book has motivation to grow but also has to be taught how to do it. So there's a lot of training that's going to go on as we think about growing people from inside. And it's not only going to be technical training, it's going to be leadership skills, it's going to be business development skills. Lots of things that's going to make them successful as a partner and continue to grow this firm as we see it growing today.

Michael: It's an interesting distinction of just the dynamics of taking over a client base versus doing the… I mean, to me, the real distinction you're talking about is it's the leadership and growth dynamics that define the sustainable business track as opposed to the succession planning track? The succession planning track ensures the continuity of client service, they're well taken care of by an advisor who does what needs to be done to service them appropriately but not necessarily with the mind or an eye towards growth and sustained leadership and management infrastructure the way that you're talking about it when you talk about it as the sustainable business.

And so that just becomes an issue at your size. Your company has been around 100 years, you've got literally multiple generations that have gone through at this point, so you have to have future leaders and future managers or you don't have a business, or at least you don't have a growing business. You can keep the clients, but eventually they'll pass away, and if there's no one to get more of them, the business eventually dies on the vine.

Diane: Right. And they can sell that business but then it dies on the vine. And I think it's an industry thing. When you look at the industry right now…  we're aging. We're aging as an industry. There's significant amount of practices out there that are looking for a succession plan. And what happens when that partner sells that business to this person but there's no motivation for that person to continue to grow? And really, should they be looking at it as, "Let me…."

I guess I'd look at it as, this is the growth of the next-gen. We've got to be committed to growing the next-gen into great advisors. And the only way you do that is through this process of sustainability… or at least you get the most impact from it.

Michael: Well, and, playing devil's advocate on the other end, I think there are a lot of advisors out there that would just be thrilled if they can have a base of clients they can serve well, retain those clients, and get paid well for them. They're not particularly hungry or excited to do all this stuff that's involved in building a business because it's complex and it's messy and there's a lot of unique stresses that come specifically with the business part aside from the servicing clients part.

And that we just have, I don't know, just a separation in the industry. I've taken to start calling them, the business owner-entrepreneurs versus the be-your-own-boss types. Where both of them want that level of independence and control of being on their own and being able to call the shots with how they serve their clients, but one group is there to serve their clients and be paid well, and the other one is literally trying to build a business that grows beyond them. And it's not about what's right or wrong, you can make some pretty good money in either of those paths.

Diane: Oh, absolutely. I agree. And I guess it's become a little more in front of us because of our size like you said. Because I completely agree with your comments.

Michael: When you get to a certain size, you can't go backwards at this point. If you do, lots of people's livelihoods are not going to work out very well. There's kind of a challenge in the business world once you grow to a certain size that there's no good way to go backwards once you get there. So if you're going to cross that divide, make sure you mean it. But once you're there, you have to keep growing, not because you want to make more money or grow a bigger business or just kind of the ego dynamics that I think are sometimes sort of cast about for people that always want to grow, it's just if you want to keep good people and you want to give them opportunities and you want to give their families opportunities, you have to grow. It's the only way. The organization getting larger is [how] they can get promotions and move up and have a reason to stay.

The Key Advice Diane Received About Hiring Talent [38:12]

Diane: Right, absolutely. And again, the reason you will be able to find best talent in the industry. Maybe that's partly a bias of mine, as I think about the change in the way I was working 7 to 10 years ago versus what I do today. And a very insightful person said to me, "If you don't hire best talent, you will not delegate. They've got to be able to be somebody that can do it just as good as you." And I said, "I agree. You're right. Good insight for me to hear that." And I didn't look back after that comment. And I'm in a completely different place today than where I was 10 years ago, and actually what I do on a day-to-day basis.

Michael: There's a powerful point there that… I know for a lot of advisors, we build our businesses serving clients. We get very attached to how we do it and how we serve them and seeing things done a certain way, and it makes it really hard to delegate because you have a latent fear, like a real fear that the people you hand it off to are not going to do it the right way or not going to do it as well and diligently and effectively as you would have. You make a good point that well, that's why you have to try to hire better talent and be willing to pay a little more and be willing to set career tracks and create the opportunities because that's how you get the really good people. And when you get the really good people, you can actually let go of these things and hand it off to them and it'll be okay because they're really good.

Diane: Right.

Michael: So when you talk about this kind of five-step career path – client service manager, senior CSM, advisor, senior advisor and up to partner – I've got a few questions about that. One is just: how do people usually progress through this? Or is there an expectation you set for them of like, "You're going to do client service for two years and then you'll do senior CSM for two more and then you can move to advisor, and you have to do that for at least three years?" Is there a whole time roadmap of what this looks like or do you use some other criterion just to decide who moves up and when and how?

Diane: Yeah, it's interesting. We're working through that. I mean, we're still in the early stages of all of this at the firm level and we're still trying to formalize that process. We just promoted a person from a senior CSM to a manager or an advisor. And so that path in my mind is… when you look at the clients that we're dealing with, the technical skill set is so important at those levels. And so in order for somebody to get truly deeply technical, you know, two years as a client service manager, around two years as a senior client service manager so that when you hit your fifth year or fourth to fifth year, you're now able to be an advisor but you're still under the guidance of a partner. So it's not as if you're on your own as an advisor because you're still very early in your career. A couple few years as an advisor, and then you move up from there.

Michael: You can go through learning all the technical stuff that you need to know in those years as a client service manager and a senior CSM to get to the advisor stage, but it doesn't necessarily mean you have any experience actually communicating that stuff effectively for clients, you know, building client relationships, how to talk people off the ledge. I tend to think of it as the first stage you just go through learning all the technical skills that you've got to know. Because if you don't know the technical skills and give clients wrong information, you're going to be out pretty quickly. But then once you get through the technical stuff then you've got to actually learn how to do all that relationship management stuff that some people are a little better wired for than others and some pick it up faster than others. But the technical knowledge is necessary but not sufficient. And so then you've got to spend a couple more years as an advisor to get through that point to where you can work with clients independently.

Diane: Right. I call that the extra 51%, which honestly is a more important part of the picture than even the technical skills. I feel like you can train technical. The relational skills and the ability to build a relationship with somebody and have them trust you and lean on you, and that's a whole different skill set. And it's interesting because people that are really technically competent don't always have that part of it. And if they don't have that, it's going to be really hard to make it in this business because we are in a relationship business. And so, when I'm interviewing people, if a kid comes out of college with a master's in whatever, economics or accounting, I'm looking for the relational skills more than I am the technical because we can teach technical. I'm making sure that they're going to have that extra 51% that's going to carry them a lot farther than just learning all the technical side of it.

Michael: It's an interesting point. We can teach the technical, so you're hiring primarily for relationship skills. You said you like to hire folks out of the accounting world as well and CPAs, so do they all come into this CSM-level role, this client service management role and then move up from there or if they come to the table with that much in technical skills and background already you're going to start them as an advisor so you're really focused on whether they're going to pick up the relationship side quickly because that's the tier they're starting at? How does the hiring come in? How do they come in?

Diane: Well, and we do both. I mean, we do both. We always are looking for both. With the four… or four advisors we have today, two of them were hired out of college and two of them were hired out of industry. And not necessarily… I tend to like accountants because that's who I was and I tend to lean on that industry a lot. But both actually did come out of the accounting world. One was a manager at Ernst & Young in the tax area and the other was… did some individual tax work early on in her career and she then transitioned to a trust company, a local trust company, and was doing a lot of philanthropic but also tax work around 990s and things like that. So both pulled out of industry not necessarily doing what we were doing but had a great complementary skill set. I always think taxes are one of the hardest things to teach. So if they've got that background, it's a lot easier to teach some of the other things.

Michael: And so for this team and the work that you're doing, who do you serve? Can you tell us a little about what your client base looks like? Or I guess just let me start with how big is the team? I don't know if you measure by number of clients or assets under management or revenue or some other metrics. How big is the client base for the team, and then what do those clients look like?

How Diane’s Niche In Working For Corporate Executives Evolved [45:10]

Diane: Well, we have… we measure in different ways but mainly we'll measure as assets under advisement. So my team is advising over $1.4 billion of assets. We generally… and this is probably a little bit biased because of my background, but when I started in the industry at Price Waterhouse, I was in a group that did counseling for top-tier executives here in St. Louis. So we had relationships with all the big firms at the time and did the work for all of the key executives of those firms. Back then, 25 years ago, a lot of these firms had… it was a perk for the executives to get counseling paid for. So Price Waterhouse had a number of those relationships. So I got very much involved in the high-net-worth planning and planning around benefits and stock options and restricted shares and all kinds of awards that you get through companies. So a big bulk of our clients right now still are that historical executive that has all the complexities around the benefits that go along with being a leading executive at a public company.

Michael: And it's worth noting, you're based in the St. Louis area, which has a high density of large firms, lots of Fortune 500. I guess unfortunately slightly fewer than were there a few years ago because I know a couple of high-profile firms have shifted away from St. Louis. But you've got a lot of very big firm industry there, so there really is a natural population of high-level executives based around the St. Louis area?

Diane: Absolutely. And if you're involved in and when you're getting really in tune with the benefits of these big companies, the executives find that very valuable that they can come to you for counseling around their benefits versus having to go to their HR department and use them as a resource. So it's become a little niche that we've had very good success in really understanding benefits of big corporations and really understanding specifically to each entity or each organization what those quirks are of their plans that we can help advise on.

Michael: So at this point are you really niched down to just there's… I don't know whatever it is, three companies or five companies or seven companies where just, "We know these benefits and this space cold, we've got most of the executives at these, couple of mega-companies," and just every time they make a new executive you get a new client and the business continues to grow?

Diane: I wish it was that easy.

Michael: All right.

Diane: Yeah, we do. We do have a few companies that were real solid and know their benefits, and we do get business because of that knowledge. It's not as easy as it's just that you promote a new one and it comes our way.

Michael: Worked that way probably in the PwC days when there was a contract.

Diane: It did actually when there was programs.

Michael: Yes, yes.

Diane: Yeah, well, because back in those days, there was a list that they picked from, and the executive picked from… because the companies would put you on the list, and so they picked from the list.

Michael: Pay for the list usually, right? It was a perk for the employees.

Diane: Right, it was a perk for them. So it was a lot easier than… but once you get known within a company, word does spread and you do benefit from that for sure.

We also intentionally knowing that my concentration was in and my, really, expertise was in that large corporate executive, when we hired on a couple of our new partners, one came out of an accounting firm, again, he's a partner as of January 1. And he did a lot of private company and was in their audit area, had also done some individual tax work. But he had that private company audit financial experience. And it was an element that I knew I was missing from a skill set in terms of really understanding that space. And we brought him on in particular to say, "Okay, there's a lot of private companies in St. Louis, and if there are companies out there that we're missing because they're private and that's not… let's expand into that space and try to build out that skill set and bring somebody in that can help support for that area."

Michael: Interesting. So you're still primarily at least in this niche of high-level executives and all the executive compensation complexity that goes with it, options, well, I guess less so these days restricted stock, deferred compensation. All of those structures that you're advising on. So what does the model look like for them then? I noticed you frame this as assets under advisement but not necessarily under management. So are you also managing and charging AUM fees? Are you doing more of the PwC model where there's just a flat fee or a flat fee based on complexity and you charge these executives planning fees and then just manage whatever they want to manage but it's not separate? How does the business model work for you?

Diane: Well, at this point, and again, I think we're evolving, mainly we're doing an assets under management fee, but I don't count… if they've got a concentrated stock position in their company, even though we're advising on that, we're not necessarily billing on it.

Michael: Okay.

Diane: Now, if they didn't have significant enough assets on the outside of those concentrated positions, we would do a planning fee that we would just be charging every year until some liquidation event and then we just renegotiate, "How do we want to bill and structure?"

Michael: So kind of like an AUM model with a minimum planning fee just to get to the minimum revenue per client that you need.

Diane: Right, because we don't limit what we're doing just because they're not liquid. And we had to have that kind of platform too if we were going to help private company CEOs and where they're very concentrated in their ownership of their company and not necessarily liquid on the outside.

Michael: Yeah, I've long been a fan of minimum fees as opposed to minimum assets as a way to handle this. Because, particularly if you're working in more affluent spaces, just there can be a lot of dollars, but they can be very illiquid. And they may have ample income and cash flow to be able to write you a check either out of their pocket or out of the business's pocket if it's a business owner… they’re kind of the same pockets. They don't have a problem paying for advice and they may be fine with paying a substantial fee, but if you make an asset minimum, they just flat-out can't work with you. And if you make a minimum fee, you can still generate the revenue you need to make it a profitable client and deliver the value you're going to deliver, and you don't have to get hung up on whether the assets are available and on the table literally to manage or not.

Why Diane Doesn’t Bill Hourly [51:32]

Diane: Right. We still gauge the way that we set that fee. Assets always kind of give you a picture of complexity anyway, so the fee can be still gauged on the hours it's going to take us to work with a client so that the fee falls within the guidelines of, "If we were going to charge by the hour, what would this look like?" I never want to go back to that model, though, because it's very tedious and time-consuming to charge by the hour. But that's how I sort of still get my gut check on, "Is this a fair fee based on what we're seeing and based on the complexity of the situation or what we think we'll be doing?"

Michael: Okay, so you do your gut check of the fee based on estimated hours but then don't actually bill on the hours.

Diane: No, right.

Michael: You'll absorb that risk once you've quoted it and just don't like billing clients on the clock.

Diane: Right. Well, because I feel like you always… clients don't… and they will tell you this when they're calling their attorney, "Well, I don't want to call them, they'll start billing me." And I don't ever want to have that kind of relationship with a client. I want them to call me for anything. And I don't really care what it is, and I don't want them to ever hesitate to do that. And I think when you start billing by the hour, there's always going to be that little hesitation, "Well, maybe I shouldn't call them." And the more we know about our clients, the better, even if it's just little bitty things that I want them to tell me about because it'll put perspective around who they are as a family and help us guide them more holistically the more we know.

So that's one reason. Other than the tedious aspect of billing by the hour, I'd never want to go back to an hourly because of that dynamic that goes on when somebody picks up the phone and they have to say, "Well, we've got to make this conversation quick because they're going to bill me." And I just don't ever want to kind of get back to that world. Because I was in that world. Price Waterhouse was, you know, even though we got the…

Michael: Accounting model. Yeah.

Diane: Yeah, it is the accounting model. And even though we had the consulting fee that was being paid by the corporations, we still had to track our time so that we knew whether we were going over the hours that were relative to that fee.

Michael: And so, what does the wealth in dollars for these clients add up to? Are you working with executives with millions of dollars? Are you working with executives with tens of millions of dollars? What is this client base?

Diane: Yeah, as luck would have it, we've had some very successful companies, and so it's tens of millions of dollars, that would be an average client for us. We're dealing with some really pretty significant wealth on average.

Michael: So help us understand, what does service and financial planning look like for clients that are at tens of millions of dollars?

Diane: Again, I really encourage any client we have to call us for everything. And I love the fact that most of my clients take that to heart and really do call us for lots of things. Things that you would say, "Why would I call my advisor for that?" And, I mean, it's simple…

Michael: Can you give us examples? I feel like we all say, "Yeah, we're there for our clients in all of their financial issues," but we kind of do that to varying degrees. When you talk about this, what do you get into that maybe other advisors don't?

Diane: Well, I'll give you some silly examples but I loved that they called me. I had a client that got a ticket in Florida and she wasn't sure what she should do with it, a speeding ticket.

Michael: Okay.

Diane: Well, that's obviously not my… you know, I'm not in Florida. But I was able to help her right then and there because she was a little anxious about it and she wasn't sure who else to call other than me. And so she called me and I helped her kind of just talk through it, "And here's what you should do." And then I reached out to their… without giving their name, I reached out to their insurance agent and said, "Hey, I have a hypothetical, if something like this happened, what would you tell them to do?"

Michael: "Yeah, just hypothetically ignoring your clients we may or may not have, just hypothetically, what would you do in a situation like this?"

Diane: And that's kind of a silly example, but it was an example that happened the other day. I also had a – this is another car issue which maybe this is telling of some of my clients – I had a client that was pulling into her garage and accidentally hit the accelerator and pushed her car through the back end of the garage.

Michael: Ohhhh!

Diane: I was her first call.

Michael: Okay.

Diane: And again, these are just little issues that came up. But it's kind of telling that even that little of a thing, was their first… would normally a first point of contact be your advisor? You know,  "Oh, the only person I need to call in this is my financial advisor." Not usually, but they wanted a perspective from me first before they made any other phone calls to make sure they were doing the right thing.

Michael: In the truest sense, they're calling you for anything that might have financial consequences, right? Because all these things have financial consequences.

Diane: Absolutely.

Michael: My speeding ticket and my putting the car through the back end of the garage.

Diane: Right, my insurance issues I'm going to have with… yes. But I had a client call the other day, and this is a higher-level issue. They were buying a significant piece of artwork and they wanted to understand the taxability of what would happen since they were buying it in New York and it was coming to St. Louis and who pays sales tax. And they were telling me what their art dealer was telling them in terms of what should be done. And I told them that wasn't right and we needed to rethink this. And so I got involved in the middle of that transaction to make sure it was done in the way that was most prudent and the right tax answer ultimately.

So, that's a significant financial consequence. But most people might have said, "I need to call my tax guy," but they really called us first. And then if I need to, I wrap in the tax guy, but my experience is in tax, and I was able to use some of my resources to make sure I understood we were giving them the best advice on how to handle this transaction.

Michael: And so how does servicing these ultra-high-net-worth clients work? I know there's long a challenge for a lot of advisors in this space in particular that executives at the top tend to like to work with people at the top, which creates a challenge when there's only one you and a lot of clients to serve. So how does that work? Are you still involved to some degree in all the clients on your team or have you been able to successfully get even these very high-net-worth clients to say, "No, no, our whole team is good, you can work with this other advisor on our team, you're still going to be well taken care of, you don't need me personally?" How does that work in a high-net-worth context like this?

Diane: Well, I'm not anywhere near stopping working so I have the luxury to say, "I'm going to stay focused on the top-tier clients because I do have the most technical knowledge on the team still and don't want to step away from those relationships because I'm still very passionate about serving clients." And I do want that to mean be a big part of what I do on a day-to-day basis. Luckily, I hired a person on my team who was a partner at Ernst & Young that is really helping me with strategy. And he's really become our CFO, our COO, our chief strategist. And so I recognized that I don't love that stuff, that's not what I'm best at and needed somebody to support me to do that. So it gives me the luxury to stay focused on clients.

But we are transitioning. I'm staying on the clients that are significant. But we are starting to transition as we've got two new partners then the partner, then we're reshifting and saying, "Okay, there really shouldn't be two partners on every relationship. And which ones of those am I able to transition off because either we've got a new partner or the advisor has been in the relationship long enough?" And it takes a while. I would say in order to transition a client and have them be really comfortable, it's a five to seven-year horizon of a person with some consistency that they then become comfortable with. It was really no different than what I experienced when I came to Moneta as really the first advisor ever here and how long it took to sort of win over some of the relationships so the partner I was working for could continue to step away and stay focused on building business and growing and things like that.

Michael: So what was your path coming into Moneta? Or I guess, let me take a step back and just your path coming into the industry. You said you worked at PwC for a period of time, so was that the initial career, you were an accounting major, went to PwC and then changed to this at financial advising world or I guess went to independent advising firms? How did that evolve?

Diane’s Path Into Moneta [1:00:29]

Diane: Right. Well… so I came out of college with a master's in accounting, and my concentration was in taxation. So that led me into the big eight at the time, or it may have been big six. But the interesting thing is I went into PwC's individual practice, which was more than individual taxes because, at the time, it was the consulting aspect of it too. And we actually at the time were helping advise on investments. At Price, we could advise, we just couldn't implement is the best way to put it. You could tell the client what to do, but you actually couldn't do it for them. So from really day one, I was doing financial advisory work pretty broadly, you know, benefit counseling, kind of the same things I do here today. I just had to do the tax work also and actual preparation of taxes.

I always say my jump into Moneta took away everything I loved about my job at Price except where I didn't have to prepare taxes anymore. So it was the exact same role, same thing, maybe broader. I would say we at Price probably didn't get real in-depth on the estate work because the estate attorneys sort of took the lead there and we didn't necessarily always get involved in that. That might have been a element that I didn't have when I started here, but have definitely built out that as a knowledge base for myself so that we can help clients think through that on the front end and not necessarily have to… just give them perspective on what they should be thinking about so that when we do meet with the estate attorney they actually have been warmed up in terms of the concepts and things that they need to be thinking about. So I've really been doing the same thing for 25 years.

Michael: So you started in PwC, you're doing this work and access to high-net-worth executives, so how did you end up at Moneta? What changed at PwC that you were at this firm doing this work with the access to the clients and then you weren't?

Diane: Well, actually nothing. I wasn't really looking to leave PwC. I enjoyed my job there. I didn't really… busy season was busy season, and it was a lot of hours. And that was probably the only downside to the role there. But big accounting I always say is a great place to start because they've really got the training process down. They really know how to teach a… I always say I got 10 years of experience in about 5 years with the number of hours I was working and the level of the processes they had in place to actually teach, which was amazing.

I was hired away by a… when I look at the group that was at Price Waterhouse, there were quite a few of us that are actually here now. And I got hired away by somebody that had left that group probably five years ahead of me, and he was given my name by one of my senior managers at the time who I called my first boss. And he gave him my name to think about building his practice in a different way. And so when I decided to join Dan, I was the first ever in Moneta to come in that was a professional but wasn't a partner. So back 20 years ago, it was the old platform of, you had a partner that ran the business and served the clients and you had an administrative underneath him. And that was it. There was no relationship person in there, there was no advisor in there. The partner really was the relationship, did all the technical work, and had admin to help prepare things, but they were doing everything.

So Dan also had come out of Price Waterhouse and believed in the process that the big accounting firms had in place in terms of having people underneath you that could be very technically competent and help you support a client so that it would allow him to stay more focused on his business and growing his business. And he had gotten to a point on his own that he needed support in that way, otherwise he would have continued to have to bring in other partners at Moneta to share the work because he couldn't do it all himself. So it was stage one of, "What is this going to look like?" So I came in with the full intention that I would become a partner. I'm not sure anyone here knew that at the time.

Michael: You were aspirational and ambitious.

Diane: I was. Well, and probably more because I came out of an environment where that was what you shot for. You were a staff and you were going to try to stay and shoot for partner potential if you really wanted to maximize your potential. So I was that first person here. And we've since… I mean, that was 20 years ago… and since have continued to evolve that role, grow it. Now we're in this path of looking at the different roles. Because I really didn't come in as a staff, I actually came in as an advisor because I was five years into my career already.

So now we're hiring people as staff and/or client service managers and growing them into advisors. And there are actually I think over 50 advisors now at Moneta that are following the path that I created or that I started. And I should attribute that to Dan and I starting it. We had a very successful business together. We doubled our business very quickly, and then at one point decided that it was best if we'd go ahead and divide and continue to grow independent of each other. And that was a learning experience for the firm too is how do you do that and how do you… if it doesn't make sense for the partnership to continue for whatever reason, how do you then divide and make these two teams that continue to grow significantly? And then out of those 50 advisors, we've made over 10 new partners now out of that group. So it's exciting to see the evolution of that role.

Michael: So can you talk to us a little bit more? How did that pathway evolve for you to… ? You said there's now almost 50 advisors following the path you had the great joy of trailblazing it the first time and hewing through the wilderness. What was that path? How did it evolve for you from, you get a phone call at PwC, "Hey, do you want to come over with us?" to some number of years later you're a partner running a team?

Diane: I think I just… it was a very interesting time. I kept my head down and I worked really hard, and I was very, very focused on my role for Dan as the partner was for me to build client relationships with his existing base, service the heck out of them, and hopefully get referrals from that. And so it became a growth mechanism for Dan if he hired the right person to do this. There wasn't a path. It wasn't a name for me. When I first got hired, they said, "Well, what do you want to call yourself?" I picked my own title and….

Michael: "Diane. Can I call myself Diane?" Like, "Oh, a job title. Okay."

What Moneta Is Doing To Get More National Recognition [1:07:39]

Diane: Right, yes. So that title just stayed with me until there was a point… and then Dan and I just kind of worked together in terms of how I was growing and how this was looking and sort of just evolved on its own. Clients started leaning towards me more than they leaned towards Dan. So Dan was able to step away at times and be able to continue to build. And so it's really no different than the model that's being created today. We're just formalizing it and making sure that there are paths in place that are very apparent that we have support around that. We've actually just rolled out what we call Moneta University, which has got a tremendous amount of leadership and technical and lots of support for these people that are wanting to move through the system and grow. And we're going to really formalize what courses are you required to have taken before you're even considered for each stage of the career?

So, we're very early in the stages of actually making this a truly formal process, but it's out there and everyone knows it's out there. And there is that opportunity. The challenges, when we look to hire and recruit, Moneta is not necessarily a national brand right now. We're trying to get our name out there. We are a really big firm in our industry yet we're kind of known in St. Louis only, which is an interesting dynamic. And so when you're really trying to hire best talent and the best and brightest out there, if they don't know you, that's one impediment to that. So we're in many ways trying to do things that are going to get us more national recognition so we can continue to recruit at better and bigger levels.

Michael: And how geographically dispersed is the firm and the 40 partners, are you still all based around the greater St. Louis metropolitan area or is the firm more geographically dispersed in its actual physical presence and locations?

Diane: Surprisingly, our 40 partners sit all in one building in the center of St. Louis.

Michael: Wow.

Diane: However, with that said, and with the age of technology, we have 50% of our clients that are not here . So it's not like we're only here in St. Louis, it's just we don't have a physical location outside of St. Louis. However, that's definitely on the radar in terms of something we want to try to do. And whether it means we find another group in whatever other city that wants to join us and tap into our platform and become part of this bigger entity and really utilize our resources. I could see it being a very good fit for that person that's doing their own compliance and doing their own investment research and they just want to say, "No, I don't want to do that anymore. I just want to be my clients' relationship person and I want that handled." So we just feel like we needed to really hone in on that aspect to make sure that the resources we're providing will be attractive for others to tap into.

Michael: Yeah, I feel like there's again, in that whole, "Do you want to actually build an advisory business or are you simply there to be your own boss and do the work with clients?" The more the industry I think separates itself into those two camps and figures out each advisor one at a time, "What do you really want and what are you trying to build? It becomes clearer to ask that question like, "Okay then, do you really want to be doing this on your own," or, "Do you want to affiliate with a larger firm?" And we have all these different models now of, you can completely tuck into a firm and just operate as their employee, you can work as a quasi-independent, you can sort of lease their technology and still run on your own with firms like Dynasty Financial. So this growing range of lots of choices about how you want to build your firm, what things you want to do and what things you want to either outsource or delegate to a larger parent company.

I am struck, though, that you said, half of your clients aren't in St. Louis. That's a lot of clients not there. Is that because you're attracting clients? You're getting executives all over the country because of referrals and word of mouth or is that just because over time when you work particularly with executives, just they move, they get relocated, their jobs relocate them, you continue to work with them and over time you've ended out with just a huge geographic dispersion of clients?

Diane: I think it's a little… probably a little of both. I think the executives we worked with a lot of them do you end up retiring on the coast, and that builds a pretty big base in different areas of the country. I think as clients move, though, we also continue to get referrals in those areas, and because the technology is so easy today in terms of building relationships and not necessarily having to see people face-to-face on a quarterly basis. I had a client refer her sister another day, well, she's in California. And there's plenty of other advisors in California she could utilize, but she knew that her sister trusted us. And so we went out to see her. I tend to think it's really important to see your clients face-to-face at least once a year, and then we'll just do the quarterly meetings via phone otherwise.

But I think it's just a combination of things. It was interesting because we did that study not too long ago. It was interesting to see the number of clients that are not in St. Louis even though we are only here. It was good. It was good to see that because I think it was refreshing to know that we aren't just concentrated in one area even though we are as partners concentrated here.

Michael: So you've had this interesting path, this kind of trailblazing path even within your own firm and working your way up to partner, so I'm wondering, why do you think there aren't more similar situations at other firms? When we look across the industry, the number of female advisors is somewhere between about 15% and 23%, depending on whose numbers you use, the percentage that are partners or in positions of executive leadership is even lower. What is it that worked at your firm? What do you guys seem to have figured out that others haven't? Or what are we missing?

Diane: Well, and I'm not… I wouldn't suggest it's necessarily worked here, we're still as far as ranks of women partners to total are still very much in the minority. We might be a little better than industry but not much. So I don't know that it has worked. I think the industry struggles across the board in finding those women that should be partners. And it worked for me because I guess I never just thought I would be anything other, and I never listened to anybody that told me I couldn't do it. But it takes a pretty strong person to actually say, "I'm going to commit to this and I'm going to deal with whatever comes my way, and I'm just going to plow forward and just do it because I'm passionate about what I do and I love it and no one is going to stop me."

However, as a firm – with that being said that we're not any better than the industry at the top – we are definitely committing to women's initiatives. And I'm really committing as a team to essentially stay 50/50 to the extent I can both I would say ethnic and gender diversity. It's hard. It's really hard to find women client service managers coming out of college. I'm just not seeing the recruits coming out. And I'm hoping we just… we did just hire a new recruiting manager for the firm and I'm hoping we'll see more of that. I'm not sure that the accounting degreed – or people coming out of the accounting programs – are thinking or looking at this as a career path. That probably needs to change. I think we get more finance degreed students coming out and seeing this as an opportunity. So we need to change that in a lot of different… because it really can be a career path for a lot of different degrees I believe is just getting the word out.

Michael: Well, and I have to wonder, you said earlier that when you were at PwC, you already had your eyes on partnership because just that's the system in big accounting firms, that's the pathway, it's relatively well established with some better gender diversity. I know for the accounting profession overall, I think it's actually fairly close to 50/50. I don't know if that's true in positions of leadership, but I know that it is more common than it is in our financial advisor domain. So was there some carryover effect from there? The fact that you started out in the accounting side of the world where it was more natural and normal for pursuing a path to partnership, including being a woman pursuing a path to partnership kind of carried with you here or am I reading that too far?

Diane: No, I agree. Yeah, no, I completely agree. And I think my starting class… well, and I have to admit, I was really lucky when I came out of school that my two most senior leaders were women at Price Waterhouse. That was 25 years ago. That was really unheard of, that I would have had two senior leaders that were really my mentors day one out of school. And one was a partner and one was a manager, and both of them I knew were going to be… well, one was a partner already. So it's almost like I probably… now as I look back think, "Gosh, well, she made it to partner, why can't I?"

And then there was that defined career path, which I think if you've got the defined career path and then it becomes known that there's a defined career path, maybe that will translate into people understanding that this is a career and you can do it, and you can do it even if you get slowed down a bit with all the things that come with life, having a family. All of those challenges I encountered and I just weathered the storm and made it through it. And honestly, our industry gives us flexibility to do that. When you're working with clients, clients love it when they hear that someone is having a child or… and they respect that. And they understand there's time commitments with that. And so it can be a very flexible business even during those more challenging times when time can be of the essence.

Michael: And so what does your typical week look like at this point? Now that you're in this 16-person team with multiple partners and multiple advisors, I know early on you said you were just… you know, it was all the grinding and the hard work and you were fully immersed in doing all the stuff that we do early on. How has that changed? What does a typical week look like for you at this point?

How Diane Structures Her Team Meetings With Clients To Improve Client Service And Develop New Advisors [1:18:35]

Diane: Well, again, because I've hired people to sort of help me manage the team and think strategy and run with it, I still spend 85% of my time with clients in front of clients thinking about new opportunities that we have as a team. Because I'm at that stage of my life where I'm not too old and yet I'm mature enough to really be able to continue to build this business and grow and find new opportunities for us as a team. And that's a really important part of my role. But 85% of my day is still being in front of clients, meeting with clients, talking to clients. However, our meetings, when we have meetings with clients, I generally will have either an advisor or senior advisor sitting next to me, and many times the client service manager is also in the meeting because I want them all to be growing and learning.

And I remember very early in my career how valuable it was for me to sit and listen to my seniors explain things and talk about things, especially when you're getting into some really complex issues that are hard many times to understand. If you can bring it down to a level that makes it easier to understand, I learned so many valuable things by just listening. And so I really think it's important once you have a baseline of knowledge, that's that relational side of it. It's learning how to talk to a client and help them and explain things. And then having the hard conversations. As you said, we're going to be talking them off the ledge eventually again. It's been a while, but we'll have to do that again. And that takes a pretty important skill set that you're not going to find with anybody. But if they can listen and hear me do it a couple times, they'll understand it a little better, a little bit perspective around it.

Michael: So when you have other advisors in the meeting, are there tasks they do or things you assign them as well or do you solely view as like, "We're just going to have them in the meeting. I don't care if they're productive because this is… " You view it like learning a long-term investment in the business of people development.

Diane: Well, it is a long-term investment, but really the advisor role will be to do part of the presentation to the clients because I want them to slowly get more engaged with the client and make sure that they understand that they have the capabilities to actually advise them too. I mean, I'm pretty passionate about… you never know – I have no intention of retiring soon – but if something happened to me tomorrow, I don't want the client to feel like they're lost and they don't have a relationship that they can lean on. So it is a very important step in the transitional process even if it's five to seven years out that that advisor takes a role in the meetings, in the presentation side. It also allows me to coach them in terms of the hard conversations they're to have and how they did and what could have worked better or done differently.

The client service manager… we don't have client service managers in every meeting, but I do let them kind of come in once in a while. And their role really will be to sit and listen and take notes. I'm very much of an extensive note-taker in terms of just capturing our conversations and making sure we heard what the client says, to, you know, as little as writing down what's going on with them personally so that we don't forget what's happening in their personal lives that could have an impact on how we're advising them financially. So we have a pretty extensive process of taking some good, solid notes. And if the advisor is presenting, I'm taking the notes. If I'm presenting, they're taking the notes. So we'll swap back and forth. And it's always good to capture that conversation. So you really need two people in the meeting, no matter what, to capture the conversation. And then we have that documented because I think it's just an important part of the relationship.

Michael: So was there a low point in the career for you? You trekked through a lot of stuff, but where did it get really hard?

Diane: Well, about seven years ago – when Dan and I decided to break our partnership – that wasn't an easy decision. So that was very emotionally challenging as well as kind of draining. But we made it through it. It was the right answer for both of us. We knew that. It was just not easy to do. It was no different than a marriage almost. We'd been together for 14 years and had to figure out how to unwind a lot of things. And I wouldn't say that was a low point, it was somewhat of… it was a challenging point, but it also made me realize that I needed something more than just sitting with clients and advising them. And as much as I loved that, I'd been doing it for 20 years at that point. And I just needed to understand what my next thing was going to be that was going to re-energize me in this business.

And that's where I just shifted and said, "I want to build advisors and new partners that are going to be just as successful as I have been in this business. And I think that I've got a skill set that if I train them right, they're going to be even better than I am." And that's what I want to see is that next generation rise above me and become just even greater in this business. And if I can give them that starting point and those roots to do that, and they will be amazing to see what happens with us. And that was the re-energizing of me in this business.

Michael: Interesting. It almost reminds me… it's sort of the business professional equivalent of the midlife crisis, like, the mid-career crisis. "I've built a successful career, I'm serving all these clients, it's going well, but I've been doing it for 20 years, I'm not energized the way I was before and I need something new that gets me excited and energized." And the answer was this… I guess for you was this shift of, "Then it's going to be more about developing the advisors and future partners rather than solely focused on serving the clients," as you had been as a prior role.

Diane: And I knew it would be wonderful for the company to think that way, too, and to watch the evolution of my team because I feel like I got a couple years head start on this than maybe some of my other partners. And I was one of the youngest ones to do it. I'd seen maybe too many of my partners sort of hit that road and then just kind of coast from there on out, and I wasn't… I was too young to coast, I felt like, and I just needed something to re-energize. And I think we all go through that. I think we all have to find that. Because when you do something for so long, you do kind of hit a wall and say, "Okay, what's next?"

Michael: So how did that conversation go with Dan and the firm? How do you break that news? "Hey, guys, I've been doing this for a while, it's been really great for almost 15 years but I really want to do something different now."

Diane: I'm not sure I told them.

Michael: You just started doing it a little differently?

Diane: I just started to do it a little differently. I'll tell you a little secret. The person that I was speaking of that I hired, that was a partner at Ernst & Young was actually my husband. And he had gone on a little sabbatical from his position as a… he was in their corporate tax area for… he'd been in big accounting for 17 years. Took a little sabbatical to stay at home with our third child because he didn't… he traveled so much with our first two, he didn't want to miss the growing up of our third. And so he took a couple years off. And when he had decided that he was ready to go back, which was when Jack was going to kindergarten, he wasn't ready to go back into the big four at the time because it was a tremendous amount of travel for him. And so he suggested that I consider having him join me and helping run this business. And that coincided with probably a year after Dan and I had decided to operate independent.

And he came in, and it was a very… which was risky. I remember talking to a really good friend of mine and she said, "Are you crazy? You're going to have your husband join?" She's like, "That's just not going to work. It's not good." And I said, "I don't know. I think it can work." I said, "He's not competing to be me, he's just wanting to strategically help me think about what this future could hold and harness what we've got and grow it." And he joined me, and he was the one who said, "Why aren't we hiring the best that we can hire?" And really helped me hone in on what this vision could look like. And that was the start of the re-energy. And it's worked well because he isn't trying to compete with me, and he understands the value… he really understands the value of a woman in our business, which I think sometimes gets missed even with people at his generation, because he promoted many women up through the ranks of Ernst & Young under his guidance.

And so he saw the accounting world already doing that leaps and bounds and saw the value of it and brought that here. And he gave me a real outside perspective. Sometimes when you're with a firm for 20 years, gosh, you know, you just kind of forget what's going on in the world around you in terms of what are other companies doing? You tend to lose a perspective a little bit. I had the old Price Waterhouse perspective, but that was 20 years ago. And he brought a whole new perspective to me as a third-party resource that was so invaluable. And there we went basically, and that's when we started redoing what we thought the future of this team could be. And we're still married.

Michael: Which is good.

Diane: Yes.

Michael: So do you have rules about when you are and are not allowed to talk about the business?

Diane: We do, but we don't adhere to them as well as we should. We try not to… at 6:00 at night, it's over… the talking is over, but sometimes it's hard to – depending on what's going on – it's hard to always adhere to that. But we try to. I don't think I want the kids dealing with that because, you know, kids listen.

Michael: So anything you wish you'd done substantially differently looking back?

Diane: No. Here's things that I think that I see people not doing that I think I somehow found very… I don't know if I found it easily or maybe I just was very committed to it. I always made sure that I had a good balance in my life. And I always made sure I knew where my priorities were. And one of those priorities was, I have three boys, and I said, I always remember saying, "I am not going to have them grow up not knowing who I am. I'm running a business and I have a lot of time that I have to do that, but they are going to know who their mother is." And so through this whole process, I was always home at 5:30 every night, and I spent the hours of 5:30 till bedtime with them and was very focused on them.

Now, I had to have a huge support system around me to do that. During that whole process because Ron was traveling also and I was kind of a single mom during the week. But I had to commit to hiring a nanny because I wanted somebody there all day, every day, and I didn't want to have the worries of a child gets sick and I can't go to work and my schedule gets all off. But that's what worked for me. And I found that balance in life. So not only committing to my family as my priority, because it's so easy for clients to be a priority, and I do make them a priority, but if something comes up with the children, I definitely try to prioritize that over my schedule.

And I was also always very focused on my physical and mental well-being and making sure I stayed in tune with that physically, and most importantly because I think it leads to a good mental stability. So I never gave up during this last 25 years and making sure I was caring for myself personally. And those two things together really kept me in a good place even when there was bad times.

Michael: How do you find the time for it? I feel like a lot of us say, "Yeah, I would love to have more time with my family and more time to exercise and workout and still get all my work stuff done and all the things I need to as a business owner, I just flat out run out of time."

What Diane Does To Balance Her Time Between Work And Her Personal Life [1:30:36]

Diane: Yeah, I make a good checklist every day and say, "Here's what I'm going to do today and these are my priorities," and I make sure I check that list off. I've learned to work very efficiently. I think I probably learned that more at Price. The accounting firms are very good in instilling efficient work practices, you know, accurate but efficient. And so I do work efficiently. Just sometimes it's easy to not become inefficient. So I get in what I know is important. And if I have time beyond that then I just, you know… and so, again, I prioritize in those checklists. It might involve spending some time watching a movie with my 11-year-old. And that's going to be something I'm going to do for the day because I'm committed to my kids and my relationships with the family.

So, there's always something that could be more important. But if I make sure I prioritize, I tend to get in what I need to do. I have had to pull back a little bit on my not-for-profit work because I was piling on a little bit there, and that was causing me a little stress. I don't like to tell people no, so it's one of those things I had to pull back a little bit on that area.

Michael: So do you have a daily routine of, you sit down first thing in the office every morning and say, "Here's my checklist of stuff?" Is it that structured? You actually make one every day or you keep a mental checklist that you're working with?

Diane: Yeah, I'm more on the… during the week, my checklist becomes my calendar. I have many, many meetings during the week. And so that's… my calendar is my checklist during the week. I actually make checklists on the weekend, which is kind of crazy. But if I don't write down "work out," sometimes I won't work out. My husband always jokes that if I've got my checklist, you know it's going to get done. So, I'll just tick it off, "I got it done, let's move on to the next thing." But during the week it's more of a mental checklist. Again, my calendars can be a little crazy, and I see that, and then I work within… knowing what else is… I'm always looking forward that whole week and saying, "Okay, what's coming up and what have we not prepared for that I need to be ready to take a look at?"

Because it's good. I'm in client meetings a lot. When I have to pick up a client meeting packet, I'm strategy now. I look at it solely for strategy. The numbers that are in that packet should be accurate because it's gone through already two review processes. And so I'm really… my time commitment for clients has been pared back because I haven't… I don't have to be the one checking the numbers anymore. I can really think strategically for the client. And that's kind of… it's a very refreshing place to be because it really keeps me in the spot that the client needs me to be in.

Michael: So any other advice for younger planners or just newer planners coming into the industry about what's good path for success for them?

Advice For Planners New To The Industry [1:33:27]

Diane: You know, again, I think our business can be very flexible. And I think when you're in the child-rearing ages, that's important. I needed it, you know, we all need it, but I think we can have that in our business. And so don't shy away from that just because maybe that's a concern because there can be flexibility. And staying somewhat working, even if you are going to take a break and raise the kids and then come back, staying connected is so important. It's an easy industry to come back to too. You've got to stay connected technically, but you could come right back in. I actually love hiring mothers that took a break and want to get back into the business. And I've hired a couple that have done that. And I love it because you get, again, a different perspective from them, a maturity level that is always welcome.

Michael: I'm struck by your comment of, "It's an easy business to leave and come back to." Just that I know a lot of women that are interested in looking to come into the industry, and that's their challenge… there's such a concern about, "What happens if I take time off? Will I be able to get back in and get going if I take time off?" Because so much of this business is just… clients compound and accrue over time. So you don't see that as much of a concern, or if you leave you can still just work your way back in?

Diane: Well, let me clarify that. I would say it would be an easy business to come back into if you're on a team that's like mine, or a team that's built where there's great support around you to where… to get you back up technically, it would be a faster process. Because you have the support around you and you're not necessarily jumping in it and leading client relationships. That would be hard to go out and then come back in and be the sole relationship lead on clients without any kind of support around you.

Michael: Either be on a team when you're in that phase for your own career, or if you're going to build your own business, get to the team stage as quickly as you can so that you've got the infrastructure around you?

Diane: Right.

Michael: Okay. So where do you go at this point for your ideas and inspiration… this evolution from focusing on clients to focusing on advisors and partners and people development? Where do you go for your inspiration now?

How Diane Created A Support Network For Herself [1:35:51]

Diane: You know, I've built some great women networks. I belong to an organization here locally called Women Presidents' Organization. And actually, it's a national organization but it's… we're all business owners and we meet monthly. And we basically serve as an experience-based sounding board for each other. And we're all running businesses but we're all in different industries.

But that's a huge support network for me to be a part of. If I'm going through any kind of challenges with what's going on with the business or even higher level at Moneta, there's usually one or two women in that group who have experienced similar situations and can give… and we give experience-based advice. We basically say, "Here's a similar situation I had. Here's how I handled it and here's how it worked out. Use that information to help guide you." And so that's a really important support network for me. And I commit to that every… once a month on Tuesday afternoons I go to that. And it's invaluable for me to do that.

I'm also very… I'm always looking to stay connected with consultants in the industry that do leadership training because I think it's such an important part for our new partners and our senior advisors to get that aspect of the business down right because they will be our next generation of leaders, and that will become a big part of what Moneta University also has. And as part of that process is just the leadership skills that are so important, especially when you're looking at how we're structuring this new Moneta way. We're all going to have to learn how to become really great leaders of the next-gen. So that's an important piece of it.

Michael: So as we wrap up, this is a podcast about success, and one of the things we've always observed throughout is that just the word success means different things to different people, sometimes different things to us in different stages of our own lives. And so, as someone who's built what I think anyone would objectively call a very successful team in business with 16 people and $1 billion-plus under advisement, at the personal level for you, how do you define success for yourself?

Diane: Well, I'll define it I guess in multiple ways. Personally, I would say I've been successful with my business in terms of, that the clients will be excited when I decide to slow down, that I've given them a team that's going to be amazingly supportive for them and they'll feel no transitional pain at all. I'm so passionate about and caring about everyone I work with. I don't want them… I don't want to say I'm never going to stop, but there will be a point when I stop and I don't want them to feel that.

I also will be amazing to see that the team I've built is extremely competent in not only their technical skills but also the relational abilities that are so important in our business, and that they've grown and been trained and are amazing next-gen and that they pay that forward to their next-gen. Because I really think we can get… if we get this done right, it's going to be an amazing path forward for… or a good path for this whole industry to follow if that's… at least for the bigger firms.

And then home, I just want my kids to know who I am. And I feel like I've been successful there. I don't spend all hours at night at work, I do pay attention to them and I want to see them grow up and be strong in their values, similar to what Ron and I have. So that's a personal success that I am watching every day, and it's kind of… it's fun. It's fun to watch them grow up.

Michael: Yeah. And how old are they now?

Diane: I have a 17-year-old, a 15-year-old and a 12, almost 12-year-old.

Michael: Oh, those are some tough teenage years all at once.

Diane: Yes, it's been very challenging, but we'll survive.

Michael: Is that part of the driver for you? It's just kind of that stage where you really want to have the time to engage with them before they're off to college and out of the house?

Diane: Yeah. And it's amazing how quick that comes. And so, yeah, Alex will be off to college in another year. And so doing some of those college visits will be an important part of this year's journey and a fun part and something we'll do as a family.

Michael: Well, very cool. Well, thank you for joining us and sharing the story, sharing this journey on the "Financial Advisor Success" podcast.

Diane: Again, thank you for having me. I was very excited to be part of this.

Michael: Absolutely. Thank you, Diane.