Hiring A Director Of Talent To Shape The Development Of Next Generation Advisors (And The Lead Advisors Who Train Them): #FASuccess Ep 464 With Katie Calagui

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Resources Featured In This Episode:

• Katie Calagui: Website | LinkedIn
• The Five-Minute Reset – Download (PDF)
• New Hire Onboarding Roadmap – Download (Docx)
• The Coaching Forum
• "Traction: Get a Grip on Your Business" by Gino Wickman
• CliftonStrengths
• EOS

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Full Transcript:

Michael: Welcome, Katie Calagui, to the "Financial Advisor Success" Podcast.

Katie: Hi, Michael. Thanks so much for having me.

Michael: I really appreciate you joining us today. And I'm looking forward to getting to really dig into all the dynamics that crop up when we try to train new advisors in our firm, or I guess sort of the general term, developing talent. It's hard for most of us. Advisory firms, I kind of joke sometimes, we're businesses full of humans serving humans, and humans do human things. Humans are going to human. And that makes it hard for a lot of advisors. It's not necessarily what we got into it for. "I got into this to serve the clients, not to manage people." And I see a lot of very practical challenges with firms. We hire too late because we underestimate how many months or years it takes to get a team member to a certain level. Or we get frustrated that it feels like they're learning too slowly, and that we can't handle things as quickly as we wish. Or we get turnover and then we have to do it all over again, which for some of us is why we say, "I'm just going to stay a solo so I never have to hire a person, then I never have to deal with turnover. And then I won't have to worry about that stuff."

The advice business, at end of the day, is a service business where the services are delivered by people. We're the services between what the tech does. Otherwise someone in Silicon Valley would just make a financial planning tech thing and take all our businesses away. We have to grow by people. And when we look at any industry research, there's an almost perfect linear correlation that every time an advisory firm doubles its clients and revenue, it doubles its people, plus or minus a very small percentage. But almost all of us seem to struggle with the actual training and developing people part. I think, today, I'm excited to get to talk about how we actually bring people in and train them in our firms, and not have this all be a frustrating mess. Not to frame it too negatively.

Katie: No, it's a good description.

Michael: Look, that's where it is. Our whole industry says, "We have a talent shortage." And I'm like, "There's 300 million people in the country. We can't have a talent shortage. At worst, we have a shortage of training of the talent. We can't have a talent shortage when there's 300 million people who don't do financial planning who could be hired into our firms."

Katie: Yep. Right.

Katie's Career Path To Advisor Talent Development [05:00]

Michael: I think, to kick off this discussion, first just give everyone who's listening a little bit of context of just who you are and what you do, so we kind of understand the background here.

Katie: Yeah. I think just to follow that thread, I think the ultimate goal of what I do that I tell people is I really try to make this journey we're on and growth for firms more fun and easy. And that is helping them with the people stuff. Because we can solve our business problems pretty easy. It's the relationships, it's managing people, it's holding each other accountable, giving feedback, all of that human stuff, like you described, that creates friction and stress for us. And so I really work with firms on helping to work with them through those human dynamics so that they can have an easier, more fun ride in this business. I think where I got started was really in this business, I was kind of a science nerd growing up. I loved science and health. I was a biochem major through college. But I watched my father build his advisory firm in the early '90s when I was a child.

I always say I've had a front-row seat to this business from a very young age. He was a stockbroker out of college, did that for a few years. And just really felt very early on that he wasn't aligned with that. And so he was one of the early RIA firms that started back in early '90s, and became a fiduciary. And at the time, that was really difficult. It was a big uphill climb.

Michael: Very difficult. We talk about the independent channels a little bit more, pioneering and build your own stuff. The reality today is there's actually a really big ecosystem of tech providers, and platforms, and things to support you. But back then, it really was like, "Look, I found land. Let me bring a saw and cut down the trees. We'll make a log cabin with our own two hands." There was nothing.

Katie: Yeah. There was nothing there, and there was so much just social headwinds, right? To talk about passive investing or indexing in the early '90s, or talking about being a fiduciary and not bragging about your stock picks and stuff. There were so many uphill battles that I watched him go through. We felt it as a family. It changed our lifestyle. We made a lot of sacrifices for that pursuit. So that's kind of my front row seat to what it took to start this business, kind of what G1 [Generation 1] experienced. And so he convinced me. I started my career in biopharma and drug development, which was a really interesting experience because I was working with these highly cross-functional teams. I just kind of landed in project management. I was on these teams with scientists, and marketing people, and doctors, and business people. It was just this really dynamic group of personalities. And as project managers, our job was to get them to work together, and get a project over the finish line on time. And a big project, right? A clinical study, which had a ton of nuances to it.

I got a lot of really good exposure to human dynamics. And they invest a lot in leadership training in those organizations because of the heavy people dynamics that have to work. I really fell in love with that, and just working with this diverse group of individuals. But my dad convinced me to make a career switch. He pulled me into his firm in my late 20s. And he was at that point where he had to hire people. He was growing. He had a few advisors. It was a pretty siloed model back then. He loved the investments. He loved working with clients. The people stuff and running the business was hard. And my brother was also at the firm at the time. So my brother and I really helped him build the practice and grow it.

I became an advisor. I wanted to learn what it was like to work with clients. It was really rewarding. But I also kind of ran the business for him. And so I immediately started getting involved in a lot of study groups, and people that were thinking about the business now from the internal side. And it was really clear to me that having watched my father do this, I'm like, "Wow. Okay, this idea worked. These businesses are growing. This is going to be really successful. The only way we grow is through people. We don't make a product. We don't make widgets. We only deliver what we do through people." And there wasn't this emphasis on the employee experience the way there was on the client experience. And so I became really passionate about how do we create an employee experience that can attract and keep great talent? How do we develop that talent and create that next generation growth engine for the firm.

I got really passionate there. And being in study groups, I had an opportunity pop up where a growing firm was looking to build out a formal talent department. They wanted to hire a director of talent management. They were very ahead of the game in this way. They were starting to recruit young advisors right out of college, build a bench, and just create this kind of people engine for the business, which was very smart and very, again, ahead of the game at the time. I took that opportunity. Left my dad's firm after being there for almost a decade.

Michael: Wait, sorry. I got to pause there for a moment. Tell me about leaving dad's firm after being there for a decade, running the firm where I'm going to guess there were some heir apparent kinds of assumptions probably building up by then.

Katie: Yeah. I will start by saying my dad is young. My parents had me pretty young. They had me when they were 20 and 21. So at the time that I left, he actually had a very long runway. And that was part of why it was a good time for me to leave, because he and his business partner were not ready to really hand over the reins yet. They really liked what they're doing. It was a family business. And to your point, all businesses, the human dynamics are hard. So we had that extra layer of family dynamics. But I think, one, we were all very committed to our family relationship being the most important. And my father's always been super supportive of wanting me to just...all of us, there's four of us in the family, of really playing to our strengths and going out in the world and doing what we do best. Not to say it was easy. It was a very hard decision. It was a very hard process to go through. A lot of growing pains for the firm, for sure, throughout that. But overall, he was very supportive. My brother was very supportive. We just continued to navigate the business together and be great thought partners.

Michael: What were you being pulled out for or towards? What was this siren song…?

Katie: I really wanted to be in a growth environment. I wanted to really focus on the practice management and building a bigger company. I think, at the time, my father's firm, him and his business partner, they liked being a boutique firm. They were really comfortable with where they were. Weren't looking to hire and expand the team super aggressively at that time. And I was just really excited about growth, and working with more people, and building a team, and learning how to really take this business from a practice to a professional organization. So that was what I was pulled towards was the chance to do that.

I was hired directly onto the leadership team of...at the time it was Hewins Financial, Wipfli Hewins, they were partnered with a large accounting firm in the Midwest. Like I said, they had a huge recruit...they were really trying to build a recruiting engine out of the universities. So I got to go on campus and meet with students, and really help students start to carve their path in the career. But then also work with the advisors who now had to manage and lead people and build teams. Great at working with clients, but not so much at working with people and developing younger talent. So I became kind of the in-house coach for them, which was just a lot of fun. And it was just clear that's where my passion was, was around the people development and leadership side of the business. So that's what I was really drawn to, and why it made really good sense for me.

Michael: I guess, help us understand a little bit more of the firm, the size of the firm, how many people, how many advisors, how many teams. What was the scope here?

Katie: Yeah. So it was a pretty big shift going from a small, boutique RIA where I think there were maybe seven of us at my dad's firm. At the time, Hewins Financial had merged with Wipfli LLP, which is an accounting firm in the Midwest. So they were the wealth management arm for Wipfli. And so in the RIA, we had I think about, gosh, probably 30-ish people. And I think we doubled that over the time I was there. When I left, we were actually about closer to 100.

Michael: Which is over what time period?

Katie: That was over a a five-year time period. So they had one office out in the Bay Area. I am originally from the San Francisco Bay Area. And so I was working out of that office with that team. But then they had advisor teams, there were eight or so offices across the state of Wisconsin, and a few in Minneapolis. So they had these small advisor teams kind of spread throughout Wisconsin and Minneapolis. So, multiple offices. I think they were about $3 billion under management at the time. I don't know, we might have started at $2 billion and grown to about $3 billion. But very high growth. Roger Hewins was the founder of the financial advisory firm, Hewins Financial. And he had just done a really great job early on at investing in the business and he invested in people. He was very tech forward too, but he really, really invested in people. And not just people, but leaders. So he had built a very cross-functional, experienced leadership team. And they all were able to really run their departments autonomously and grow them. So that was a really great thing to see. And I think that's why the firm was able to grow as rapidly as they did.

It was like a full real executive team. It was probably my most favorite team I've ever been on. It really upped my game. It was just a great dynamic on that group. It was really gender balanced, which I think was actually...it worked really, really well. So that was kind of the scope of the company and what we were doing. And we had the overlay of trying to work through this partnership with an accounting firm. Testing that model of can we sync up and grow our businesses together, and whatnot, which has a lot of complexity, as you know. So lots of fun stuff and lots of challenges.

The Factors That Make A Strong Firm Culture [15:48]

Michael: I want to understand a little bit more, just very mechanically, practically how the people development stuff started happening there. But I actually want to go back a moment. You made some very interesting comments about Hewins as they had come in. They had, what you say, real leaders, a real executive team that could run their departments. Can you talk more about what does that mean? What is a real executive team, and how does that contrast to the not so real executive teams that most of us have?

Katie: Yeah. I think, most candidly, it's when it's not founder controlled. Right? It's not like a command and control type of leadership. It's actually a collaborative team that leads together. Everyone on that team was very experienced in their area. So they had knowledge, they had expertise in the area that they were leading. And they had the freedom to operate there. We were really good at collaborating. We talked through things in a very professional way, but we also stayed in our lane. And again, we were able to really focus on those parts of the business. There wasn't a fear to hire. I think that was just such a distinguishing factor, was Roger just didn't have that concern of, "We're over-investing in people, or we're hiring too many people." He just knew that that was the only way we could grow is through people.

And so there was just a mindset and a culture of we go out, we find great talent, we hire them, we train them, and we let them do their job. So from an advisor pathway, they started an internship program, they had already started getting into universities. Having the accounting firm in Wisconsin, we had a great feeder program out of UW-Madison. They have a financial planning program there and just had great students. So we got on campus, started at the intern level, got those interns into associate advisors, were very quick to promote them. There was this culture of, "We want you to grow, and we want to hand over the reins. We don't want to hold people back and make them pay their dues for a decade before they're called an advisor." It was just a kind of a mindset of, "Yeah, we're going to be a big team. And we are going to invest in people." And there just wasn't that fear or concern of, "We got to hold back, or we're hiring too many people."

Michael: I hear the phrase that you said that stuck for me, "We had a culture where we'd go out, we'd find great talent, we'd train them and let them do their job." And there's a part of me that's like, "Well, yeah, if we always went out and got great talents, and then they did a great work at their job, I would hire more people too." It doesn't feel like that's necessarily how it always works out. So what was different that when they went through that process, they got the great talent person who trained up really well and then was wonderfully successful in their job? Because I don't feel like that's necessarily how the story always goes.

Katie: No, it definitely doesn't. Yeah, yeah. So I was lucky. I reported them to Martha Post. She was the COO at the time. And Martha was so, so supportive of everything that I brought in terms of people and leadership training. A lot of times when you talk about people development, and leadership training, and investing in our people, and giving feedback, a lot of people run for the hills. Right? It's not what people want to lean into. But she really believed in that, and gave me a lot of room to bring that into the organization. Starting with coaching the managers, actually calling out to the advisors that we were putting these new advisors on their team, these associates that, "Hey, you have a new skill you have to build. And that is you have to learn how to lead a team and be collaborative with your people and develop these people." So we called it out.

And then we gave them support with it. So whether that was me coaching them, whether that was bringing in outside training. I was in charge of the offsites for the company all year and all of the internal development activities that we did. I worked very closely with every hiring manager. And when they ran into a snag with an employee and things weren't going well, I was on the phone with them coaching them through that. And then if we needed to bring in outside coaches, we did that too. So there was just a mindset and a belief and support to do that, and to invest in it, which is the biggest thing. Right? You have to be willing to invest in it.

Of course we had great advisors, great business developers that were terrible at managing people. It was difficult and a lot of work. It was not smooth sailing. I think the thing that we did that was different was that we recognized that need, and we didn't try to brush over it or fix it with other things. We recognized we have to help people learn how to work together.

Michael: I'm fascinated by this, because I think for a lot of advisors, the first time they go down this road of, "Well, now I'm hiring someone, now I'm working with someone," and there is this, "I have to manage them." No one really says, "I don't want to be collaborative." But in practice, some of us are not actually as collaborative as maybe we think we are. We don't necessarily want to spend the time training and developing the people because I want to serve the clients and do the other things. So I am struck in that world where I see a lot of firms are like, "Well, I know, we'll centralize all the financial planning under a director of financial planning. We'll put all the paraplanners under there. We'll have the director of financial planning try to train them all. And then the advisors won't have to deal with this."

You took this very opposite tack of saying, "No, we're just going to be candid with all of you team leaders. This is part of the gig now. And if you aren't doing it, we're here to help you learn how. You will be learning how." It doesn't sound like it was really optional. It was just sort of like, "Congratulations, old dogs, it's your new tricks day."

Katie: Yeah. Yeah. And we had to start by building that into what their expectations were and what success looked like holistically for their roles. So it was really easy to give them...well, it wasn't easy actually. We had to do this too. Give clear metrics on what does it mean to be a successful advisor. We had to get better and more uniform about doing that.

Key Questions And Metrics To Determine Whether People Development Strategies Are Successful [22:28]

Michael: What metrics showed up? How do you metric that? Especially when you're getting into things like develop your people.

Katie: Right. So on the advisor side, it's client retention. How many clients are you managing? Is your average size client going up? Are you bringing in referrals and closing them? Right? Those are the things that we can evaluate to know is this advisor performing well, right? Are they being successful as an advisor? But we had to add to that what does it look like to be a successful people leader? So it was now this holistic look at, are you retaining your people? Are your people happy? Are they growing and being promoted? Are we giving compensation increases? Because that shows people are developing. Are they sitting in meetings with you and starting to take the lead in meetings? So there was this whole new set of performance outcomes that we had to share with them...well, develop and share with them around what it meant to be successful holistically in their role.

Michael: Can you even take that one step further? What are you measuring? When are you measuring it? Are you retaining your people, and are they happy? Are they getting comp increases? Are these monthly metrics? Are these annual metrics? Some of these I kind of get how to measure. Turnover, retention rates. But are your people happy? I don't know, Bob seems pretty chipper when he comes into the office.

Katie: You know when your people aren't happy. And part of that was we had created a safe culture for that. So we had a great hiring approach. And so we hired pretty top talent. They were not shy about wanting to know what they had to do next to get to the next level about wanting opportunity, wanting to do well. And so if they were feeling stifled or frustrated, I heard about it. So they called me. And so it was really clear. It was pretty easy to know, where are the teams that are having the most friction? Where are we seeing team members that are getting disengaged or frustrated? And it's really obvious when they leave. And that definitely happens. If young advisors especially...and this is now almost a decade ago. At that time, they were in the driver's seat in terms of talent competition. So if you were two years in as a financial planner and you weren't happy, you could get a job pretty easy then. So we had pretty good competition and people weren't hesitant to leave and move if another firm gave them a bump in title or bump in compensation. It was pretty easy to flesh out and see where were teams struggling, and where were they really thriving.

Michael: Then how does that show up for the advisor? The quintessential moments, usually advisor has big client base and great retention, and brought in a lot of assets, and isn't scoring well on some of your people metrics. Are you really going to fire them if they're not doing that well? How does this work?

Katie: Totally. That's the other big part of it is also putting people in the right seat on the bus. We both are Traction folks. There's some advisors where we recognize managing people was not going to be their strength, but they were a huge asset to the organization. They were great with clients. They might have been great at business development. We also tried to be very skillful and strategic about who among our more senior people have more strengths around developing and working with talent, or just naturally show strengths in that area but also want to learn and develop in that area, and have kind of raised their hand. So we try to be strategic about that. And we weren't trying to force anybody who didn't have those strengths into that role because I'm a big...I'm doing a StrengthsFinder workshop in a few hours with a team here. So I'm very much a believer in focus on people's strengths and not their weaknesses. So it wasn't a requirement per se for every advisor, but we had to identify enough that could also be good leader so that we could develop our talent.

Michael: I'm just trying to visualize this across a larger organization. You end out with a series of advisor teams, and some advisor teams just have a person at the top who's doing awesome things for their clients because they're great at the client stuff, and maybe have a little bit of support around them because that just helps. And then other advisors really do have an interest in the people development, in training, and bringing up associate advisors. And so their teams become the ones that are the training grounds with a steady flow of talent coming in and growing up through them.

Katie: Yeah. That was certainly one approach that we took. The other thing that we did then or you could do now that I would consult with clients on is you also can look at the next level. So if your top person, your most senior advisor, isn't a great people leader, look at the people maybe a level below and move them up a little bit faster into a people development role. So that is something that I find very often is that we kind of have this sort of dormant talent sitting there in terms of people that are stronger at managing and leading people. And so just elevating them faster into that role. And they always surprise us. Every time we've done that, whether it's in client service teams or ops teams or advisor teams, when you find people that the rest of the team really likes to work with, they're very collaborative, just supportive leaders, formalizing them into that role sooner than later is another really good strategy.

Katie's Approach To Coaching Current And Rising Firm Leaders [28:11]

Michael: So can you talk a little bit more for the...so you go out to the team and you say, "We're going to be adding new associate advisors to your team, and you have a new skill to build. You need to start learning to be collaborative and actually develop your people." Some team members say, "Awesome, I love that." Some of them say, "Grumble, grumble, leave me alone." And it sounds like you kind of left them alone. And then there's some subset in the middle. I'm assuming they're like, "Okay, kind of sounds interesting. Don't really know how to do that. Really nervous, but hey, I like learning. Okay, maybe I can get good at this." But you have to actually figure out how to train and develop them to be the good managers to then train and develop others. So what do you do? I mean literally, what was the training systems or the process or the tools? What did you have to do to bring up these people who were advisors and said they had a willingness to learn and develop talent, but they still had to learn how to really do that and what that means?

Katie: Yeah. And this kind of goes back to something you said earlier. I'll talk about this in the bigger firm context, and then I can talk about a little bit in terms of what I see now. But when I was working at Hewins Financial in particular, the mindset we had too was that you can't outsource that role to HR. And I think a lot of firms try to do this, right? Having that culture of we're going to teach you how to fish was really important. And so with those natural leaders, coaching was a huge part of it. So whether it was one-on-one coaching with one of our executive team members, because all of them were really good people leaders. So making sure they had a good mentor or person that was coaching them on how to do that. Coaching with me internally or bringing external coaches in.

I think the biggest lift you get, and this is why I do this now full time, is one-on-one coaching. It's super, super powerful when you have a space to really unpack situations that you're facing as a leader. Have somebody who can kind of put a lens to that and help you develop self-awareness and what's going on for you in those situations. And then learn the tools that you can apply to handle those more skillfully. That's where you're going to get the most lift in terms of leadership development. But you augment that with getting them in study groups and around other leaders, going to conferences. We brought in a lot of in-house training. We did pretty regular in-house team events where we did leadership training and skill building there. It should be multi-dimensional. But I think recognizing that there has to be that coaching, whether, again, it's from a direct manager and/or an outside person, how important that is because it's something you have to learn. Like you said, being humans is very challenging. So there's a lot of skills to learn there in terms of developing self-awareness and EQ.

Michael: So when you talk about setting this up internally with mentor, coaching other leaders at the firm, I'm just wondering, is there a structure? Is there a, you always have a weekly one on one with one of the executives for your coaching, mentoring session, or once a month? Or no, no, no, it's just kind of ad hoc? When you're dealing with the thing, this is who you go to who can be your wizened sage? What was the structure to it? Assuming everyone's busy and has a lot of stuff going on.

Katie: Yeah. I'll talk through the lens of my clients now. Because my clients that are doing this, what we do is they've...it's both. So I have a regular cadence of coaching with the executive team leaders. So I coach them as a team, but then also individually. And then they select kind of their next level leaders within the firm and I coach them on a regular cadence as well. Whether that's bi-weekly or monthly, it depends on the role. But getting into a regular cadence of coaching is a really important component. But then also, I am available ad hoc as needed. So my clients can call me if...I mean, things pop up in the middle of the week that we don't expect. And so if there is a situation in the moment, we can get on the phone and kind of talk through that together, and I can kind of help coach them and guide them through those situations. So that works really well. And they've really invested in that. They can see the impact that has on helping them all learn how to, one, work together better, more effectively, but then also develop their talent.

So that's kind of how the coaching works. And then all of my clients get their team offsite at least once a year, some of them three to four times a year, where we come together as a group, and we do some skill building together, work on building relationships, work on practicing those skills, like giving each other feedback, or learning about each other's strengths, whatever it is. But taking time out of the business to learn how to work together and be a team. So, setting that up into kind of more formal trainings and workshops and retreats is another key component of what we do.

Michael: So, now take me back to the advisory firm. I'm still just processing through this. You've told the advisors they need to be better managers or become managers and people developers and be more collaborative. So was there other training or tools you put in place beyond the coaching, or was the coaching the thing, the key, the driver here?

Katie: Yeah. I'm trying to think back in terms of...like I said, we would bring in outside leadership consultants and experts that would do in-house training with us. Being partnered with Wipfli, we had access to...they were a 3,000-person organization, so they had a whole training department. They had actually contracted internal training methodologies and programs that they had that we had access to. So that was great. So that could be a combination of some online learning tools, some workshops that they did throughout the year on a regular basis that we were lucky our employees could go during the workday and pop into those. So it was really kind of diverse approach of some kind of textbook presentation learning, if you will. And then coupled with kind of the in-the-moment coaching that we would do.

How Firms Can Find The Best Coaches And Consultants For Their Needs [34:53]

Michael: So for folks who are listening who have not gone down this road, how do you find the good experts, consultants? If I'm an advisory firm with two or three lead advisors, and, I don't know, probably five to 15 people, or I'm just sort of starting down this road, we've got a couple of lead advisors, we've got a couple of people who's probably not happening well and consistently across the organization about who's developing or not. How do I find the right people or program? What am I even looking for?

Katie: Yeah. I'm lucky I have a very big group of great coach friends that I know. Certainly give me a call, and I've got a big network of folks in the industry. But I think if you're going to study groups, and you're going to industry conferences, talk to your peers about it because a lot of people are starting to engage coaches. It's great to see. And more people are using EOS [Entrepreneurial Operating System] implementers and strategic consultants as well. And so just ask around, and ask about who's had a good experience, and who people are using. Don't hesitate to ask because everybody struggles with all these people things. If you ask somebody and they haven't engaged a coach, they're probably looking for one as well. So I would say ask around.

I tell people, when you're looking for a coach, kind of how we give people advice on how do you select an advisor, you want a coach that is great at listening and being able to draw your wisdom out from you. So coaches aren't there to give a lot of advice. They're there to kind of walk this path and help you discover things about yourself, and wisdom that you have, and then help you build the courage to apply it. And so you want someone who when you're with a coach, you want to feel like you're in a really safe space. There's a high degree of comfort and rapport. Really non-judgmental space, right? We can talk about all of our flaws as humans very openly and as managers.

I always coach my younger, earlier career folks on letting them know that, "Hey, when I'm talking to leaders and executives in executive coaching sessions, they're just as nervous to manage you as you feel to be led by them or intimidated by them." Managing people and having tough conversations and giving feedback, it's really intimidating. It's emotional. The reason it's hard is it all stems from the same fears we have, right? We don't want to be confrontational. We don't want people to not like us. All of these things. And so everybody has that at any level. So you want to be able to feel like you're in a really safe, non-judgmental space. And that someone's asking really good questions and listening really well, and helping you uncover solutions that really align with your values and with the goals that you have for whatever situation you're dealing with.

Creating Career Paths For “Team Builders” And “Client Servicers” [37:49]

Michael: And then I just want to come back once more. How does this evolve for the advisors over time when you get some who, I'll say just, I don't mean that in a pejorative way, but some who just continue to be the awesome client service people and grow their client base, and others who become team growers and talent developers? Do they get a different title? Do they get different compensation? Do they get different bonuses? I'm just visioning, you're a large firm when you're doing this. So these people start gravitating down very different looking tracks over time. So how does that show up in the title structure or compensation? Does it get reflected? Is there a difference between the great client servicers and the great team builders?

Katie: Yeah. That's always quite an art to get right, right? With compensation, there's multiple factors that go into every compensation discussion. And as you're kind of building out your compensation tables, for what it's worth. So that's always a multifactorial discussion. So you're looking at how are individuals adding value to their role, and where are they strong at. And you're accounting for those in different ways. So I wouldn't say that one gets paid more than the other. I think it's very individually based. In terms of titles, that's kind of a firm preference. It sort of depends on how the role evolves. In the firm setting, in the company setting, everybody had a certain basic level of expectation in terms of you have to be collaborative, you have to follow our values. So you don't necessarily need to be the best people developer or leader, but you still have to be a productive person to work with and a collaborative person.

So that was, first of all, we had to level set there. That's kind of the no-asshole thing, right? You can't just get away with being toxic and creating problems. So assuming that was a level playing field, then it was, again, getting people to play to their strengths and compensating them appropriately for that. And so sometimes that would be different. Sometimes, you might get to the same place. If you have an advisor that maybe doesn't do as much business development, but is growing a team of six associates and doing it really well, and then you have another advisor that's out doing more business development. They might come in close, it kind of depends, again, on that whole picture.

Michael: So it sounds like it wasn't necessarily for you...I don't mean to make this a better, worse thing, but it wasn't the big revenue client servicers are still at the top, and the associate-builders are second class. Nor was it like, "No, no, no, we're a talent growth organization. "And the team growers are at the top. And if you're just serving your clients well, that's fine, but you're not the same level. Like it sounds like just you had some of each, both were fine. I guess you wanted some of each or you need some of each, because someone's going to be doing some talent development. But it was okay to be either path. It was less, "At the end of the day, everyone actually has to learn to be a good talent developer" and more, "Let me at least put this out there, and let the talent developers raise their hands." I guess the natural ones or the ones that are just willing to learn. "And then we'll put the time and energy into them, but not everyone's going to do it and that's still okay."

Katie: Yeah, yeah, 100%. And you've known as our business has evolved, that mindset and culture across the board around valuing all of the roles that it takes to make these businesses work is super important. And so, again, our biggest goal was, we know that when people are playing to their strengths and they enjoy the work they're doing, they're happier and productive wherever they are. And when you're happy and productive, you're going to grow your career, you're going to do well financially in this business. And so that's the formula that works, is getting people focused in work that they love doing, and that they are able to grow in and get good at that plays to their strengths. And then, again, creating that culture where all of those roles are valued. There's not a hierarchy of, "You're worth more or more valuable if you choose this route or that route."

Michael: And I guess for the record, why push it out to the teams and not just do this more centrally? Because I do see firms that are...they hire a centralized director of financial planning. They bring in a whole bunch of paraplanners, they train them there. And then they move off to their own teams or start their own teams once they're ready to graduate out of the centralized department. But they don't put it on the lead advisors. They do it more centrally. So I'm assuming there was some intentionality to do this like, "All the advisors, we're setting a new expectation. You should be practicing the skill of being more collaborative and developing your people." Why the intentionality to be team-based development versus centralized development?

Katie: I think that was just that one experience, but I think both can work. I think there's a ton of value. That was another big thing we had done was we centralized client service, which was a great move. We had a director of client service. probably know her, Jandy Rowe, who is excellent at building a client service team. And her client service people reported to her, not into the advisors. That worked really well. And other firms will...maybe associates will report into one particular lead advisor that kind of owns training and development for that. So the centralized models can work really well, but at the end of the day, who you work with day to day, you still have to be able to have a collaborative relationship with. And they still have to be able to lead you productively, even if they're not necessarily reporting to you. So if you're sitting in meetings with a lead advisor, whether or not they're your direct manager, or a direct report, that lead advisor still needs to give you feedback. They still need to be available to help answer questions, and support your training and your learning.

And your interpersonal dynamics have to be strong. So that lead advisor has to earn your trust, and they have to help make you feel safe and comfortable in your role. And so I think regardless of reporting relationship, everyone needs to learn how to work well with others. And if you're advancing in the firm, you have to learn how to lead and support the next folks coming in, whether you're officially their manager or not, on paper. So I think even if you centralize, and again, I think either way can work, and that's really company based, but even if you are centralized, you still need your lead advisors to be collaborative, supportive leaders, if you will.

Michael: And was there some ratio of advisors who can develop people versus the rest that you wanted or had to shoot for? How many people like this do you need in your organization to be able to sustain the talent flow and pipeline?

Katie: I think in terms of, okay, if you look at the number of people that are maybe your advisors that have to lead teams, I would say, yeah, there's probably maybe 10% to 20% of them that are going to be better focused on not running a team. And the rest need to get pretty good at it.

Because as a growing organization, you really have to create this kind of development engine. So you always need to be recruiting at the intern and associate level. And those folks need to be moving up. To have that engine work, your top-level advisors need to be actively engaged in that in some capacity for the most part.

Separating HR And Talent Development Roles In A Firm [45:52]

Michael: And now going all the way back, so what was your role and title in the firm? It seemed like you had this central role of being the coach developer to help all of these different advisors and to make all this happen. Presumably, you have to be a certain size firm to be able to have a role like that. But just help me understand, what was the actual role title? What did they hire you to do? How big was the firm at the time? When do we get a seat like this in our organizations if we're growing?

Katie: When I got hired, I was hired as the director of talent management. I think they were around $1.5 billion or $2 billion [assets under management] at the time. Again, I think there was about 30 to 40 people. And then, eventually, I was the chief people officer. So at that point we had grown to about 100 employees.

Michael: That's helpful just for context. So I'm assuming just by revenue per employee numbers, they were a $10 million revenue organization, give or take a little, when you came into one of these roles, say, "Okay, we've got 30 plus people. We're going to have someone whose job is specifically focused on making sure all the organization is developing the people."

Katie: Yeah. What was unique about that is that...I mean, there's two parts to that, right? So there's HR, and then there's your people strategy and your people development. It surprises me how so many of these larger firms right now, they wrap all of that into one person, and they have one person doing that for hundreds of employees. It kind of amazes me how many firms are still doing that. And they might just be directors of HR, even HR managers that are just trying to do both of those roles for really, really large teams. And I think we were talking about earlier in the conversation that our whole business is built around people that tends to be the place that we invest in the least.

And so I think, for growing firms, and firms that are getting larger, they really have to think about both of those functions. One, making sure they're both covered, but thinking about them differently. So your HR function, that's kind of your operational piece. That's super important. You need somebody that's running the operations for your internal clients, your employees. Benefits, all of the...what it's like to work there, payroll, compensation. There's so many operational details around people. And that needs to be managed really well with people that are good experts in that. But then having somebody also dedicated to the people strategy and the development. And to me, I would put that in the growth part of the P&L [Profit and Loss Statement]. That's kind of similar to hiring your marketing team, because our people are our biggest growth strategy.

Developing our people is how we grow our business. And so we should think about that from an investment standpoint, the same way we think about investing in marketing and sales. And in fact, if we're investing in marketing and sales, it's crazy to not be investing in our people development because if you're getting a bunch of leads, they have to go somewhere. You have to the people that can service those and take them on. I think that firms that are growing would be really wise to, one, invest more holistically on the people strategy, but then make sure you've got the ops really covered so that people are having a good experience at work. And it's easy to get the support that they need, and it's easy to get their questions answered. And you're competitive and staying ahead of the game on the benefits and compensation standpoint.

And that you also have somebody who can really put their focus towards culture, and development, and the experience of growing the talent as your growth strategy, to support the growth of the firm.

Michael: I don't know if you can recall in detail, but can you list out what was in the job description for director of talent? Because I hear chief people officer, I'm like, "Cool, but that's a big firm thing." Most of us are not large enough that we're really going to have a C-level executive chief people officer. But a director of talent when I get to a couple of dozen people feels at least a little more within reach if I'm a faster growing firm. So what is that seat?

Katie: It was both of what I described, it was kind of that all encompassing role. For me, it was all of the HR stuff. Making sure handling all that operational piece, our benefits recruiting, compensation reviews, performance reviews, all of that, more tactical operations. And then also the people development piece as well. So it was kind of all encompassing.

Michael: Does that include, just for some firms, the culture aspects as well? I know people and culture is showing up as a title in that sort of business function now. So all of that was wrapped in as well. You had all the people-y things.

Katie: Yes. That role is definitely your big champion for culture. But I think culture really is owned and driven by the leadership team. So that group really has to own culture, and they have to have to model it first and foremost. But I think the people person tends to be the champion for that. And they're the person that are also really connecting with employees and making sure that they're hearing the experience they're having, they're seeing what's happening in practice, and making sure that the culture that the company wants to have, or is aspiring to have, or thinks that they have is actually happening at the ground level.

The Importance Of Setting Clear Expectations In Performance Management [51:47]

Michael: So what came next for you on your journey?

Katie: After Wipfli, I went to Savant, which was about twice the size, as chief people officer as well. So I kind of did that role, again, more under the corporate setting at a larger firm, a firm that was growing very quickly. When I joined, they were really getting aggressive on M&A. So that was kind of a whole new experience and dynamic that came into the people and culture space of how do we add firms, and find firms, integrate firms? It's like a whole other thing, as you know. Private equity came out of the scene, so it was much more dynamic experience. Did that for a couple of years.

And then three years ago, decided to go out on my own and do my own practice, and become a consultant and coach to mostly RIA firms. I have a couple of clients that are not in the RIA business, but it's 90% RIA firms. And really go back to helping those independent firms that are...I work with firms of all sizes. I'm executive coach for some solo advisors and some small partnerships. But my sweet spot is kind of that $1 billion to $5 billion firm where they need to have a high-functioning leadership team. They have a larger team of 10 to 30 to 50 people. So they've got to get really organized and good on the people development side and building their team. And they're in an active growth mode. I work with their leadership teams on getting their leadership process really buttoned up. So making sure they have a good strategy in place. They've got clarity on where they're headed. And they're very focused and executing really well. So I use a lot of EOS Traction with all my clients to do that.

And in parallel, I'm coaching them as a leadership team on how to work well together. So on their interpersonal dynamics, how to communicate better, how to navigate conflict more skillfully, how to give each other feedback and hold each other accountable. So it's kind of a dual...there's the process piece to running a good team and being effective. And then there's the interpersonal dynamics, and we have to pay attention to both of those.

And then I'm really helping them with people strategies. So the firms I work with, it doesn't make sense to probably hire a full-time person to do that yet. They can generally outsource most of the HR operations piece. They have a good benefits person, and good HR consultant that they can call on for that stuff. So then I can help them kind of on a fractional basis with their feedback system, their performance management, their job descriptions and expectations, and their developing of their people. I then coach, like I said, a lot of the leaders one on one, so I can help them as they're navigating those challenges with their people on how to show up as a better leader, and keep their team members moving forward.

Michael: For those of us who haven't been down this road before...I mean, I get job descriptions and compensation. What is performance management?

Katie: I hate the term, quite honestly. There's not an alternative that's out there. But to me, the heart of it, the way I build it with firms is, first and foremost, making sure we're setting really clear expectations for our people. Because, I would say, 70%, if not more, of the interpersonal breakdowns that happen in the workplace are because of lack of clear expectations. And that just creates a whole mess of drama that we can avoid if we're better at just being clear about expectations. So it's really making sure people are clear on what they need to do to be successful. That they're getting the feedback they need on a continuous basis. So a traditional performance management, that's like your annual review, and your quarterly check-ins.

I really try to work with firms on making sure there's a culture of feedback, and that it's happening on a continuous basis so that...you can't develop if you don't know if you're doing the right things or the wrong things. So, really helping them communicate well with their people, getting comfortable with feedback. Again, nobody likes to give feedback. We all avoid it. A lot of that's coaching leaders on getting comfortable with feedback. And then creating the structures for the career path so people can see, "Okay, what's next for me? And what does it look like to build a career here?" Giving visibility to that is super helpful. So we'll build those career paths out.

If we do have a new leader that is up and coming, or someone that is kind of on the brink of that next level, I help them really lay out what does that look like. Let's show them the steps to get there, and what the expectations of the new role will be, and what gaps do we have and how can we fill that for them, and get the training they need. To me, when I say performance management, it's really like, how do we help our people perform at their best and do their best work?

Michael: So can you share a little bit more, just because it sounds like you do and live this a lot, what are typical advisor career paths looking like at this point? Are there some common standards or waypoints of how they're getting built, how they're structured, what the levels typically are, or what you normally have to do to move up? If you can share with us some of the best practices?

Katie: I don't think they've changed too much. I think most firms are very comfortable with knowing that you're going to have two advisors, maybe three working on a relationship, and you should have a couple in the meeting. So I think that team structure is pretty well utilized. You kind of start with your associate. People have a lot of different titles for that. It can be financial planning associate, associate advisor, wealth management associate. There's lots of titles. But it's kind of your associate...sort of out of college, you're either about to take your CFP exam within a year or two, or you've already completed that. And so that's your first two to four years of just really learning the business, learning the client relationship, learning the planning.

There's a big emphasis on the financial planning piece, I think, in your first kind of five years is really mastering that. And all firms are doing so much more on that end. So you really have to become a technical expert on the various parts of financial planning. And then there's kind of this next level sort of in between where you're starting to take a more lead role with clients, you're becoming more the point of contact. Maybe there's a subset of clients that you're leading more independently, having more speaking roles within meetings and whatnot.

Michael: At that point, is that a senior associate or is that a new level? When I start taking some of my own, but I'm also working with someone else's clients.

Katie: Yeah. So in practice, it would be a senior associate. Again, firms use a lot of different titles. Sometimes, that'll be an advisor and then there's a senior advisor. Or it could be a senior associate and then there's lead advisor. So, everyone kind of has their different nuances to titles. But I would say in practice, that's kind of a senior advisor, early lead advisor-type role. And then your kind of next year, third level, if you will, that's really your most senior advisor that is leading your core client relationships. So they're the primary person responsible for that relationship. They give the most complex advice and guidance on the investment side and the financial planning. And really kind of oversee the relationship.

It's kind of three levels, I think, is the pretty standard thing that we're seeing now, that people move through with those three key phases of becoming a lead advisor. And when you're at that third level, that's also where you're doing business development now. You're learning how to...one, you're getting referrals from your own clients, and you're able to nurture those and close those. And then you're also starting to develop your own channels and ways of getting outside business.

Michael: So how long in those worlds does it take to get up to a lead advisor level? You said kind of two to four years as an associate learning the business. Two to four years and then I'm a lead advisor? Two to four years, then I'm a senior associate, and then I've got some more time before I'm typically moving into a full lead, I guess full autonomous lead position?

Katie: Yeah. I think of that senior advisor role as someone generally with ten-plus years of experience. I think that between the five and ten years, there's a lot of room for variability. Some people step into that role sooner, and they're able to take a lead role eight years into being in the career. I used to always coach my younger career advisors on just really focusing on the long game because I love the ambition, and there's so much desire, and everyone wants to work with clients and be that point person. And there's an element to what we do that it's just like, you have to have a certain number of at bats. You need to be in a certain number of meetings. You need to see a certain number of different cases with clients, and financial planning scenarios, and issues that come up. I think that transition between kind of moving out of that more entry level, kind of after you're about five years into your career, that kind of next five to ten years is more fluid, and can look a little different for everybody. But yeah, hopefully that helps.

New Advisor Hiring And Development In A World Of AI [1:01:30]

Michael: And do you see these paths training, and as we get into a technology, AI-driven world? I've seen a number of firms now starting to debate things like, "There are AI note takers that take great notes and capture the takeaways. And that's basically what I used to have my associate advisors do because it meant they could train and learn because they're in client meetings. And I'm not just paying them to sit there and do nothing. I'm paying them to also take good notes, capture the follow-ups, make sure the client tasks get done, record for compliance. There were benefits to having the person in the room, and now maybe I don't need the person because I've got an AI note taker." So what do they do? Do they do something different? Are we all going to use AI tools and blow up our talent pipelines in probably ten years from now? How do you think about this? I'm very much seeing this start to show up, at least as a question, a debate, a conversation in a lot of firms.

Katie: Yeah, it's top of mind for me because it's coming up a lot with clients and in conversations in our study groups.

Michael: Clients meaning advisors who are your clients?

Katie: Yeah, yeah, not end client. It's this kind of thought of, "Well, if we have AI note takers and whatnot, maybe we don't need to hire as many associates, or we can slow down kind of our hiring trajectory." For me, I just feel a ton of caution bells kind of ringing on that because I think, to your point, you do not want to blow up your talent pipeline. You've got to create that engine, and you have to have it steadily growing. And I think that if AI can take notes, that's great because we can get our associates doing more meaningful work sooner.

So I would focus more on how can we leverage those tools to accelerate and enhance the development of our talent pipeline rather than how do we scale back our pipeline. Because, I think, our biggest edge is always going to be the personal relationship that we bring to the advisory relationship. We had this scare back in the robo-advisor days. That didn't pan out because people want to have a relationship with the person that's guiding them on their financial journey. And I think there's definitely going to be people... I saw something you posted recently about there's going to be people that will sit down and use AI to be their financial planner. But I still think the majority of people, if not more, are going to want and value the personal connection we bring because we are living in such a virtual world now.

So I would not slow down your talent growth. I would continue to hire, and I would just put those people to better use as you embrace tools. And I would be really careful about not losing...the first part of your career, that critical thinking is such an important part of your development. So even client note taking, I think a lot of it can be tedious and it's fine to outsource that. But I think there's also a ton of value into reviewing a client meeting and your advisors, your associates really learning how to capture, "What meant the most to my client? What did I really hear in this meeting? And how do I want to make sure I factor that into the relationship I create with them?" and not allowing them to not do some of that critical thinking, and just outsourcing that to AI. Write your own emails. It's really important to learn how to write an email and how to communicate well. You're in a relationship business, so you have to learn those skills. So I'd be a little cautious about that as well, to not hinder the development of our next gen talent.

Michael: I guess in that vein, you kind of said leverage the tools for our talent pipeline instead of scaling it back, or find other, better things for them to do as the tech supports them. So can you just speak to that further?

Katie: If they're not spending a lot of hours writing notes, that's time that they could be sitting in client meetings. That's times that they could be reaching out and getting client meetings on the calendar proactively. I think we know that clients want more for what we do. So spending more time on financial planning, mastering that. Just getting more at bats. If a client has a situation that the lead advisor would normally do because the associate is bogged down with the note taking and kind of the more administrative stuff, get them involved in that. Look for ways as a lead advisor, if there's anything you can delegate because you freed up a pretty substantial chunk of time with note taking, start delegating those things faster. Your people will generally surprise you at what they're capable of. And then that frees up your time to be out in front of clients, and out in the community, and doing more business development for the team. If you've got a bunch of support that has some freed-up time to help in those other areas.

Michael: What else am I delegating to them as a lead advisor?

Katie: I think if you are able to be out and doing business development, getting them involved in your sales process. I think everybody struggles with that disciplined process around follow up with prospects, and creating that consistent experience. So helping them keep you organized in that, giving them ownership of that sales process, and seeing that through. Getting them to start thinking about what their personal networks are going to be. I think the smartest firms, what they're doing on the BD end is they're allowing some flexibility around go out and find the communities that resonate with you. Yes, we kind of know our target market. Yes, there's a lot of good things around creating a niche and whatnot. But when you can get people out in the communities that they resonate with, I think that's a really smart business development angle. So, getting them out to...whether it's prospecting business development activities, or getting them into industry activities. Especially in our virtual world, if they can get to more conferences, or if they can join a study group. I think those are just immensely valuable opportunities for development.

Michael: And how do firms then combat the fear of, "I'm just training them to eventually leave and hang their own shingle?"

Katie: Yeah. I think if you're a great place to work, people won't leave. Most people don't want to go start their own business. I mean, it's a lot of work. I can tell you it's not for the faint of heart. It is not for the faint of heart. If you can work with a great group of people that you enjoy every day, and you've got good earning potential, and good benefits, and you like the work you're doing, you're not going to leave. I think just focus on being a great place to work, make sure you're really truly living your values, and that you are investing both from your time and financially in the development of your people, of building their careers, of learning how to interact and be humans better together. To be a place where everyone's not only developing professionally, but they're becoming better personally. I think those are the things that make it pretty hard for people to leave.

The Factors That Make An Advisory Firm A Great Place To Work [1:08:48]

Michael: So you articulated some of it, but can you just go a little further of what really makes me a great place to work that my advisors won't leave? Because I don't know anybody in the advisor role that says, "I don't really want to be a very good place to work. It's going to be crappy around here. We're just going to grind hard." I think particularly just we're service businesses. It's a service profession. It's a helping profession. I've never surveyed it, but I'm pretty certain that 80% to 90% of advisory firms would rate themselves as an above average place to work.

Katie: For sure.

Michael: Just like our driving habits. In all seriousness, what really distinguishes the firms that are greater places to work, and at less risk for team turnover?

Katie: I can tell you, when I'm talking to employees, what I hear on the positive side and what I hear on the negative side. On the positive side, the clients that really love where they work, they feel like they're part of a family. They feel like they are valued and seen in the organizations that they're in. They feel like when they have a problem, or a system's not working, or a process isn't working, that they're heard and that's fixed, and it's given attention to. They feel like they get acknowledged and appreciated for the part that they play in all the work that we do for clients. They feel like they're compensated well, they have good benefits. But it's more the feeling that they have when they walk in the door. They can approach any of the leaders, and they're not intimidated to have those conversations. They're just really treated with a lot of respect. So I think those are the things that when people tell me, "I just love working here. I never want to leave here," those are the things that stand out and mean the most to them.

The folks that are frustrated by where they work are the ones where there's high drama. They might work for a manager that's really controlling, doesn't delegate well, is really intimidating in how they talk to their people. Maybe condescending, just where it's scary to have your voice with the senior person you're working with. That creates a bad experience. When they're just not getting the at bats, and they're not getting the trust to take on higher level work when there's just a process that's way too long and drawn out for that. That's super frustrating. Burnout…firms that don't hire ahead of time and don't stay proactive on capacity. People are so overwhelmed at work and we don't turn it off. And in our business, we're a service business. And so I think being really, really mindful of the level of expectations you have, and being careful with capacity and building in good capacity.

So those are the things that I think people, where they start to be like, "I don't know if this is the right place for me." I've had some folks that I've coached where there's kind of an expectation of, "You need to be an advisor like me. You need to talk the way I do. You need to kind of have the same personality, or show up in meetings the way I do." And that's really, really stifling for folks. I think it's super unwise from a leadership standpoint. Your best advisors are going to be people that are really authentic, and your clients are going to know that instantly. Our client bases are really diverse. Some people want a more technical, outspoken type of personality. Some people want someone that's more slow and works with them. All personalities are needed, I think, to work with the type of clients we work with. Being really careful to not just hire clones of yourself, but then also try to create clones of yourself, but really tap into what makes my people unique and giving them an opportunity to bring that forward. That'll create a lot of stickiness with your people.

What Katie's Consulting And Coaching Business Looks Like Today [1:12:42]

Michael: So take us back just to all the things you do again. You mentioned a little bit earlier around some coaching and consulting, but I guess just for your business as exists today, just for folks who may be curious, can you just walk us through, what do you actually do, Katie? What do you actually do?

Katie: What do I actually do? So I would say I serve as both a consultant and a coach to executive teams and individual leaders. And like I said, mostly of RIA firms. So I have a range of solo advisors to larger firms with 30-plus employees, but really serving as that kind of executive team consultant and coach to advisory firms in that $1 billion to $5 billion-ish range. I help those teams, the firms and the executive teams get really aligned and clear on their strategy. And I serve as an accountability partner and a facilitator to ensure they stay focused and they execute. So that's why I use Traction and EOS. It works really, really well for doing that. But the magic behind traction and EOS is the consistency and following the rhythm. And that's very, very hard to do on your own. And so I really help bring that rhythm and consistency to the process so that we can actually see the traction happen and execute.

And then in parallel, like I said, when I'm working with leadership teams, I'm also coaching them on how to be an effective team. We're having the hard conversations when we need to, we're learning how to navigate our different personalities and interpersonal dynamics, helping them work through conflict, helping them actually have conflict in the first place, which is actually a really healthy part of a team, right? So, again, being comfortable sharing where we disagree, and bringing up issues that are sticky, and learning how to handle those in a productive way. Helping them all gain more self-awareness and emotional intelligence, both individually and as a group. I'm really braiding the consulting and the coaching. So that's really where the coaching comes in.

And like I said, the ultimate goal is just to help these great firms that are...my ideal client is a firm that is very, very focused on people. They see that as a big part of their growth strategy, they love working with people. And they want to take care of their people. And so helping them grow the firm in a way that has less stress and more ease. Because as much as you love people, working with people is hard. That is the hardest part, is...

Michael: Humans are going to human.

Katie: Humans are going to human. So helping them make that journey a lot more ease and less friction.

Michael: And can I ask just how you price this, how you price services just so folks can at least get reasonable expectations of what's involved for this kind of coaching consulting relationships?

Katie: Yeah. So my coaching engagements are all very different. My kind of core clients are generally on a retainer. So we've got kind of usually an annual engagement. Most of my clients I've been working with for over two years. So we have a monthly retainer based on the amount of support that they need. And then they can really use that retainer. I mean, there are certain things we always do. So I'm generally always leading their leadership team meetings. I'm leading their EOS kind of rhythm. So doing annual planning, quarterly rock setting, and whatnot, and then some one-on-one coaching. And then from there, it depends on what level of support they need and want for their team. So I can kind of adjust it up and down for that.

Michael: Can you give us some sense of a range? For folks who've never hired, like, "I just have no idea." Did you just describe a thing that is one or two grand a month, or ten or 20 grand a month or something in between those?

Katie: Well, it actually ranges. Yeah. So I have clients that are on $2,000 retainers, I've had clients on $12,000 retainers a month. So there is a pretty big range. And it is really kind of what level of fractional support do you need given the size of your firm? And that kind of depends on firm size and number of employees. But some of my more midsize clients pay the highest retainers because they want a lot of support. So that's kind of what that can look like from a retainer standpoint.

And then I also do one-on-one executive coaching. Those are usually booked in six sessions at a time, and six to eight, it kind of depends on the client. But then we use those based on what they need. So that can just be a bi-weekly or a monthly call. And that's just your very traditional one-on-one executive coaching.

Michael: And then how do you price that?

Katie: I think what I noticed in my peer coaching world is that executive coaches are going to range anywhere from $350 to $550 an hour, typically, is kind of what I'm seeing.

What's Surprised Katie The Most Building Out People And Talent Functions In Advisory Firms [1:17:23]

Michael: Okay. So as you've gone these routes, just what surprised you the most about building out all these people and talent functions in advisory businesses over the years? You did it at Wipfli, you did it at Savant, you're now doing it on a consulting basis. What surprised you the most about doing this, or what it takes to do it well in advisory firms?

Katie: I think, it's kind of surprising, but also not at same time. Everybody has the same issues, right? It's kind of the same themes are everywhere. It's funny. When I work with a new client, they're like, "Oh, gosh, I'm so embarrassed. You probably think we're crazy or whatever." I'm like, "No, I literally see this with every team I work with." It's kind like how you described that iceberg. We all have a bunch of stuff below the surface.

Michael: Everyone thinks they have these unique problems of them having some people issues because it seems like everyone else's advisory firm is growing so well. And the truth is like, "Oh, no, they're having people things as well."

Katie: Everyone has people things.

Michael: They just don't post it on LinkedIn and Instagram.

Katie: Exactly, totally. And they all stem from kind of the same things. Our ego, our fears, our lack of clarity and expectations. So I think there's just so much similarity in kind of the people challenges we all face, and everybody is facing them at different levels. And, again, I don't know if this surprises me or it just makes sense, but the folks that invest in it, and pay attention to it, and come to the people side of their business, but also the people stuff, the friction with lower egos and more vulnerability, those are the best places to work. When you have the leaders that are the most vulnerable, and lean into that stuff, and they're willing to get support with it, and they're willing to learn about their blind spots, and they're committed to coaching and learning. Those are by far the places that people love working the most.

The Low Point On Katie's Journey [1:19:14]

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

Katie: I was thinking about this. It's kind of the obvious one that comes to mind is, I eventually ended up relocating out to Wisconsin when I was at Wipfli. And five months later got laid off at the start of the pandemic, as the market was going down. So that kind of stands out as a low point. But I have to say, though, I was thinking about this question. I think the split before that, what preceded that was that Roger Hewins and Wipfli, they ended up splitting the advisory firm away from the accounting firm. And so Wipfli kept its own financial advisory arm. And the Hewins team went back to running their firm independently. And that process was really...that was really tough because I loved that team. It was really hard to kind of know which way to go to sort of see that team kind of break apart.

And then that was a great example of, when you're moving through something difficult, how we can either...the human dynamics can be really, really stressful and difficult, or we can make them less so. And so that was probably another low point. I was really bummed to see that team split apart, and then not work with some of the folks that I was working with and kind of have to go through that process. So I'd say those are probably the two.

Michael: I'm fascinated by what happened. We hear a lot about accounting firms acquiring advisory firms to bring wealth in. You don't hear so many of, "And it didn't work out and they split back apart." Now at least you get the lens of hindsight. What didn't work?

Katie: Yeah. I think that the idea of it makes so much sense, but in practice it's really difficult because the structure of the business is so different. You just look at how an advisory firm is valued versus an accounting firm. Just at that basic level, right? We're fee based, they're more transactional based. So the business structure is different. And that's hard. The culture is different, certainly, as well. I think, again, the concept is great, but they're actually two pretty difficult cultures. There's not as much synergy as you would expect.

Michael: Which I now find interesting the other direction because now we're seeing more and more advisor…the trend I feel like in the 2010s was accounting firms bring wealth in. Now the trend is wealth firms bringing accounting or this tax in-house and doing tax prep. Starting to wonder if we're going to see the same thing bubble up in the other direction, which is, "My wealth management business has a really different culture and style than this tax business."

Katie: Yeah, it'll be interesting. I think that way has a better success likelihood because our margins are so much better. So we have a little bit more room to experiment and invest in certain things. I think there's a lot of CPAs when I was working at Wipfli that became financial planners and they make great planners. That can be a really, really powerful combination. I think the biggest thing is the shortage of talent. There is a shortage of talent on the accounting side. It is really hard to get CPAs. And so I know advisory firms are really nervous about how to even keep up with tax work, whether it's external or internal.

Michael: I do find there's an irony...I've seen for a lot of firms. It's so hard to find good CPAs to refer out to. "We're just going to bring the tax prep and in-house and do it instead." It's like...

Katie: Where are you going to find those people?

Michael: ...where are you going to find the good CPAs to...if you can't find people to refer out to, where are you going to find them to hire? If your business doubles in the next five years, where are you going to find enough tax preparers who are at that quality level to double your tax business? So we'll see, some are. At least EAs [Enrolled Agents] internally don't necessarily go out for a CPA if your focus is tax returns and not testing audits and such. But there is an irony to me of, "There's a talent shortage to refer to, so let's hire it ourselves."

Katie: "So we're going to bring them in-house."

Michael: I'm like, "It's the same talent problem. You're still going to have to navigate it, for better or worse."

Katie: Totally. And now you have to be an expert in hiring a different field. So yeah.

Katie's Advice For Her Younger Self And For Newer Advisors [1:23:25]

Michael: What else do you know now you wish you could go back and tell you from ten, 15 years ago about just the dynamics of the talent and people function in advisory firms? What do you know now that you wish you could go back and tell you from the past?

Katie: Well, I think getting support...I was thinking about this personally, but then in terms of how to translate that for firms. I would have gone back and told my younger self to get a lot more support early on. I'm the breadwinner for my family. And I'm a mom, I've got three kids. And so I would say, especially for women, getting more support early on personally, because...

Michael: What does that mean?

Katie: Yeah. Honestly, working into our family budget a personal assistant, a personal trainer, whatever it is. Because as women, hopefully you've heard and more people are talking about it, but there's this really big invisible load, mental load that we're carrying, kind of running our households and running our jobs. And it's part learning how to do that better in partnership at home, but it's also getting more support. And so I think in the workplace, I think that's something that also from a people development standpoint needs to be talked about more and understood more. I think male colleagues need to understand that better in terms of just the load that women are carrying. It is different. As moms, when you have children at home, there's just a mental load that women carry more than men. I think workplaces need to be very attuned to that. I think they're getting better about that.

I think also men in the workplace are seeing that at home with their wives. And so we need to be very aware of that too, and giving them support to be better partners, to help their wives with the mental and physical load that they're carrying. So I think just understanding the lifestyle needs and being a lot more open-minded about that and not worrying so much about, "Are people putting in the right amount of hours? Do we have too much vacation? Do have too much flexibility?" If you have good people, and again, you're creating a great place to work, helping them also manage their lives outside of work is really important. So I'd say that's one thing that I'd go back and probably think about. I'm enough of a Gen X-er where I kind of came out of that generation of you have to be grinding, and you to be working so hard. It's that head down, butts in seats kind of thing.

Michael: And just be your own autonomous independent self and figure it out ever since you had yourself in the house alone back in grade school.

Katie: Right, right. I don't think that's going to be sustainable. People are burning out too much, and firms have got to really pay attention to that.

Michael: So what advice would you give younger, newer advisors, looking to become a planner today and want to navigate this path well?

Katie: I'd say, like I said earlier, focus on that long game. Don't get too caught up in what's happening kind of year to year, but know that this is such a great career long term. It's a great lifestyle career. You get to do great work for clients. You get to work with great people. It's lucrative, all the above. So focus on that long game. But I also tell younger folks, really take ownership of your development. So, of course, I've talked this whole podcast about what leaders and firms need to do to develop their people, but there's another big part of that equation, which is for individuals to really own their development. And so by that I mean, if you're not clear on expectations, be proactive with those conversations. Help your managers lead you, right? So go to them and ask for regular feedback, knowing that it's hard to give feedback.

I tell my younger advisors, "A lot goes unrecognized, very little goes unnoticed. People just aren't great at giving feedback. So, ask regularly, 'What am I doing well that you want me to do more of, and what impact is that having? What do I need to do less of or do differently?'" Really soliciting that feedback. And looking to find study groups to get involved in, and looking for mentors and reaching out to them, and those things. So just really taking ownership of your development and learning how to ask the right questions and get the guidance you need if you're not getting it. I see too many people that are like, "Oh, they're not talking to me about my career path, or they're not giving me this or doing this." And I'm like, "Well, go ask them. You can ask the question and that can be a huge advantage for you."

What Success Means To Katie [1:28:03]

Michael: So as we come to the end, this is a podcast about success. And just one of the themes that comes up, that word success means very different things to different people. You've had this wonderful path of building people and talent at multiple very large organizations. Now doing it on your own as a consultant. And so the business seems to be in a wonderful place now. How do you define success for yourself at this point?

Katie: For me, it's first and foremost being healthy, staying very healthy. My family is thriving. And that I'm doing work where I'm really playing to my strengths and I'm being authentic. I think as you're developing your career, you spend a lot of time trying to be a lot of different things to a lot of people. And I have found that just showing up as myself and playing to my strengths is when I do my best work, and I feel the most rewarded. Yeah, healthy body, healthy, thriving family, and doing the work I'm best at with the people I love working with.

Michael: Very cool. I love it. Thank you so much, Katie, for joining us on the "Financial Advisor Success Podcast."

Katie: Thanks for having me, Michael. Great discussion, and such an important topic. So, glad to be here.

Michael: Thank you.