Growing To $470M In 7 Years While Making Yourself Dispensable Enough To Take A Personal Sabbatical: #FASuccess Ep 471 With Dennis Morton

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Resources Featured In This Episode:

• Dennis Morton: Website | LinkedIn
• Morton Brown Family Wealth "Looking Back Loooking Forward" Exercise – Download (PDF)
• #FASuccess Ep 135: Developing The Systematized Business Development Playbooks To 10X Your Advisory Business, with Kathryn Brown
• Steve Sanduski
• eMoney
• Shaping Wealth
• #FASuccess Ep 403: Carving Your Path As An Investment Nerd By Building A Fractional CIO Solution For Other Advisory Firms, With Eric Stein
• East Bay Investment Solutions

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Full Transcript:

Michael: Welcome, Dennis Morton, to the "Financial Advisor Success" podcast.

Dennis: Thanks for having me, Michael. Great to be here.

Michael: I'm really excited to have you joining us today and get to really delve deep into what I think is the very real challenges that come in our advisory business when we build this client base. We try to become indispensable to our clients so they'll never leave us, they can't do without us. And then after a few years, we become completely tied to the firm because all the clients are depending on us individually to be indispensable to them. And then you can't even take a vacation out of fear that clients will call, and there's no one else but you who can solve their problems.

Dennis: Yes.

Michael: And I look at the other end of the spectrum. There is some point where the firm becomes so large and there are so many advisors serving so many clients that it really probably doesn't matter anymore. And I think Peter Mallouk at Creative Planning with their bajillion dollars under their management still actually keeps a few clients. But A, I'm pretty sure he has enough team resources that all of his clients are still very well served if the man takes a vacation. And I think by their numbers, I know 99.9% of clients are not served by Peter anyways, because there are so many advisors. So he's a rounding error on his own P&L at some point.

But those are the polar extremes. In between, it gets really messy as we go from this transition from "I'm the founding advisor. I am the person who brings the clients, provides the service. They're here because I made this business myself, and they came to work with me," and into a state of, "Yay, the business is no longer reliant on me. I'm indispensable in my own business."

And I know you have lived this transition over the past couple of years in evolving your firm up to and including being able to recently take a five-week sabbatical, which sounds pretty cool. So I'm excited to talk about this journey of you're building a business that, in your case, I know literally has your name as one of the names on the door, and then trying to get to the point where you can win back some freedom from your own business, and how you get from A to B.

Dennis: You're absolutely right. I think, honestly, it has to start from some place before you reach that pinch point of identity. I'm the person who...and all of us early in our careers, we're wearing a lot of different hats. The industry almost likes having the heroic advisor, as I like to call them, the person who can do all things for all people.

Michael: We are a very cult of personality industry.

Dennis: Oh, yeah.

Michael: In general, right, we don't put...I suppose this is a little bit of American social commentary as well, but we don't put firms on the pedestal these days. We put founders on the pedestal.

Dennis: Right. Oh, it's very true. And this goes back to some of my initial observations when I started out at a Wall Street firm. I started out at Smith Barney 20 years ago. And you looked around, and I saw very little collaboration happening. Everyone's doing their own thing in the office, and it's just...it wasn't much of a team environment.

And then migrating into the independent space, you got still a sense that everyone's trying to do all the things. And at the time, we were growing our independent firm up through $200 million, $300 million, $500 million. And to me, it became evident that at some point, this is going to reach an inflection point where one person can't do all the things, or even three people can't do all the things, and we needed to start reimagining this a little bit.

So as Katie Brown and I started planning for what would become Morton Brown Family Wealth, I think it has to start with a vision that imagines this dispensable person later on, a person who's gone through a full arc of leadership responsibility. And that's what this is about. You could be a really good technical advisor, but it's the leadership component to say, "This has to be sustainable beyond me," whether you're trying to maximize the value of what you've built, whether you're trying to empower your team members around you.

Or first and foremost, take care of your clients. You have to imagine that arc that takes you from being the person who does everything to someone on the other side who does what's most meaningful for you to contribute to the success of the organization. And I've just found that to be really rare.

How A Failed Succession Encouraged Dennis To Create A Firm Where He Wouldn't Be Indispensable [07:05]

Michael: I'd love to, I guess, just hear more of this perspective of why or how this was... It feels like a founding principle for you. You said you and Katie were planning from the start in this direction. So why? When, as you noted, all the models of the industry history around you don't look so much like this?

Dennis: Yeah. I think, as with a lot of things, I'm sure in everyone's career, it's informed by experience. And we were really the product of a failed succession plan. So we were next generation at our previous firm. And credit where credit is due here, our firm had become part of the Dynasty Network for a couple of years. And suddenly, we started meeting people. We started going to conferences, meeting people who were running firms around the country through Dynasty, really starting to understand practice management and what it meant to build an enterprise, what it meant to build an actual functional firm, not a cluster of advisors.

And we were just entranced by that idea and thought that, "Well, one, as next gen, we would think this is our responsibility to advocate for this because it helps us to move beyond the transition from the founders to the next gen, and that's in our best interest too."

But we ran into challenges that there wasn't as much appetite for that transition on both sides, which eventually Katie and I said, "I think we need to migrate our clients to a firm that's really under our vision. And, oh, by the way, we don't want to wake up 15, 20 years and be in the same position that we just got out of and trying to undo the same things."

So we've really had, from the outset, a vision of what it would look like, really a long-term plan that eventually we're taking off hats as we go and extracting us from those things where we would be more impediments to what the firm needs to do than beneficial.

Michael: So can you share more about...what was it you were seeing when you were getting more immersed into the Dynasty network of...? What was different there of, I think you said, firms that were really focused on practice management and the enterprise, and not just this functional collection of advisors? I don't know if you can make that more tangible for us. What were the things that they were doing differently that you weren't feeling where you were?

Dennis: I think we were just seeing firms that were, one, many of them were much larger than us. They were breaking away firms from wirehouses and launching billion-dollar teams into the RIA ecosystem. And you would see that they would have multiple partners. They would have experienced professionals. They'd have chief investment officers and a lot of different functions that affirmed where we were at the time, again, maybe in the mid-300s [millions of dollars in assets under management] or so.

That was all very aspirational for us, but you start to see that there are a lot of stakeholders involved. And if any one of us decides that we are the indispensable one and we can't shed any of these functions and we have to not make that transition, then it's going to be an impediment because, say, Dynasty might have been launching a firm that had 20 years average experience or more, and there were going to be people retiring soon. There'd be people on different timelines and stuff to navigate, and you can't have someone holding on to what their identity was too long because then the chemistry just breaks down.

And it's something we talk about a lot in the firm. We're doing our annual planning meeting on Friday, just Katie and I, and we're going to sit down and talk about, what identity does this firm need from each of us over the next growth phase versus what has happened in the most recent growth phase? It's going to be different. We need to discern that and stay on top of it and be really clear.

Michael: What do you mean by identity in this context?

Dennis: Just answering the question, "I am someone who..." In the last few years, I could say I am someone who meets on a regular basis with this many clients. I am someone who is generally responsible for maybe the overall portfolio strategy, business development, all those kinds of things.

As we grow, at some point, I'm not going to be the best person to do all of those, but if I hold on to that identity of I am someone who does all that, it's not necessarily in the best interest of the firm. And I think it comes back to the mission. So I have a military background, and I had an epiphany a few years ago when I went back to Fort Bliss, Texas, to watch a change of command ceremony. And this is probably three or four years after we launched the firm.

And there was a friend of mine who was stepping down as a brigade commander and being replaced by another colonel after two years of service. And it just struck me that I took that for granted in the military, that every two years, in general, the commander is changing over. And there's no such thing as a five, six, seven-year command. There's no fiefdoms. You have to make sure that your mission is ready to hand off to somebody else within two years, and it has to be a seamless transition, and the mission continues, and we all go on.

And I thought, "Wow. That's an extreme example, but what if we thought about that in our business? Could this business go on without me, or if I necessarily wasn't in this role anymore and moved on to the next role that was needed for the mission?" And that's informed a lot of how we think of it. And it does take some humility because there's an ego there. If I really like doing this, I'm really good at it, that's great, but maybe I'm not as good as I think I am at all the things, and it takes time to work that through. So the military example really hammered that home for me.

Michael: Well, I'm struck. There's so many different layers to where the identity part gets wrapped up in there, right? In the past, I'm someone who meets with 200 clients, or 150 clients, or 100 clients, or our 30 top clients. We already sometimes redefine it that way, but what if the business gets to a point where I don't meet with clients anymore? I find that's really hard for a lot of advisors. What if, even though we built it with all my investment strategies, at some point, we hire a chief investment officer, and I'm not the investment person for the firm that I created anymore?

Dennis: Yes. This comes back to...well, the whole point of this podcast is talking about success. How does each advisor define success? And if you define it as being the person who all of these people rely upon, that's a heavy lift to get past that and think it through. And I've heard at times, and not just in finance, but in other places too, leaders will say things like, "Well, people just sit up a little bit taller when I'm around," or "They work a little bit harder when I'm here, when I'm not here they let things slip. So I need to be here all the time."

And that's a slippery slope to be in as a leader of any organization, especially in finance. So I think you have to think in terms of, do I trust the people around me enough to go to learn, to take the lumps, to figure things out, and eventually work better as a team and a cohesive team to accomplish the same, if not more?

Michael: So how do you flip that mindset or experience of...and I think that's a common thing for a lot of us as founders, the team works harder when I'm here, things slip when I'm not around?

Dennis: Yeah. We put together a Big Hairy Audacious Goal about five years ago in 2020, the depths of the pandemic. And I think it is probably the smartest thing we've done of all the decisions we made in founding our own firm. And we stared at some of the numbers and said, "Okay, we're sitting at," at the time, "maybe $120 million, $130 million in assets." We said, "We want to be a billion-dollar firm within ten years. What would we have to do to get there? So you set that out there and start doing the backwards planning.

And we have a spreadsheet that we wrote five years ago that shows the AUM year by year, the growth rate, revenue, number of households, number of employees, number of FAs [financial advisors], all this stuff. This is what it would look like if we get there. And we stared at it and we said, "Okay, that's a reach, but we think we can do it."

And after a little time staring at that and chewing on it, it came out flat to us because, at the time and still now, Katie and I both have youngish families, we have kids at home. And I think in 2020, I had 4 kids under the age of 14. And I did the math on that in my head and said, "In ten years' time, a lot is going to be different for me. And this is a season of life I won't get back. We won't get back. So we need to add in some qualitative things here that make sure that we are not so indispensable to the business that we don't enjoy this journey and the fruits of our labor along the way. We don't want..."

And it's a modeling behavior here in a minute. But we put in place a program where, after five years of service, every member of the team was eligible for a five-week mini-sabbatical. Disappear, shut down your email, we don't want to see you. Go get refreshed and spend time with your family and your loved ones, and then come back ready to go.

And I went first in 2023. And I had to prepare myself and the team. I had to think through what it meant to not be here. Could we still grow? Could we still delegate the proper functions? And I think we had six people then, maybe seven. We're going to have ten soon here now. So what do we need to think through? How do we prepare the team?

And by the time I left, we were totally confident this was going to be fine. And it was even better than fine. It was awesome. The firm grew. We had all the... Everything was taken care of. Katie did a great job. And then the next year, Katie went. And I did the same for her.

So we've had the two founding partners step away for a total of ten weeks within the first five years of owning the business. And I think the dividends for the confidence of our team have been extraordinary. And we've since had three other people go on their sabbaticals and another one coming up next year. So it's been adding that qualitative element to a quantitative, Big Hairy Audacious Goal helped to make all of us feel like we are dispensable for all the right reasons, for the best reasons.

Creating A Structure To Allow The Founders (And The Rest Of The Team) Take 5-Week Sabbaticals [17:38]

Michael: So what do you do to actually be able to go away for five weeks from a business with, I think, six or seven teams? So it's not that there's 100 people and everything runs. That's a small, tight team. That's a big goal.

Dennis: I couldn't disappear into the business. You're right. Yeah. All right. So this is... There is so much about what we've learned. One, clients loved it. They absolutely loved that we were doing this, and they embraced it totally.

Michael: So how did you communicate it? That's an interesting thing unto itself. I feel like some of us would communicate that because it's a reasonable, proper notification. Some of us, I suspect, would not communicate it because we don't want to worry or distract clients. We're just going to do our best to cover down in the event they call. So how did you communicate this?

Dennis: So this was educational for me, too, because I will admit this was a hard thing to do. I'm not immune to the psychology that goes into that dispensability. So it was November of 2022, and we had our annual planning call with our business coach. We work with Steve Sanduski. And we get on a call with Steve, and he says, "Okay, what's the plan for 2023? What are the things you have going on?" And so we started rattling off things like AUM and hiring and just the usual stuff.

And then Katie gives me a nudge and goes, "Psst, you're on sabbatical." I said, "Oh, yeah." Remember that sabbatical we talked about a few years ago? I'm taking mine next year. So we're doing that." And he goes, "Oh, great. When are you leaving and where are you going?" And I said, "I don't know. I haven't planned it yet." He goes, "So you have a plan to disappear for over a month next year. It's coming up probably within the next six, seven months. Your team hasn't been notified. It's not on your calendar, and you haven't even started planning where you're going?" And I'm like, "Oh, my gosh. This is exactly what I tell my clients not to do."

Michael: Sometimes your coach needs to give you a little tough love…

Dennis: My goodness.

Michael: Shout out to Steve.

Dennis: It was such an epiphany because I had to turn to Katie. And I was like, "You know what? He's right." And then I had to go to my wife and say, "You know what? He's right. We haven't done these things. And I'm pushing it off, pushing it off."

So my homework was within the next couple of weeks, I had to send him the dates for when I was going, put them on my calendar, communicate to the team, and start planning where we were going to go. So we did. And in June of 2023, while all my kids were still high school age or younger, we disappeared into Europe for over a month and had an amazing time. And as I said, the team took care of it. I did personal calls to clients. We updated them along the way on this is what's going to happen. This is who you call if you need this and all these things.

We communicated the continuity plan. And they were so grateful. One, that we'd thought about it, but they couldn't wait to hear the stories. And it's turned into this thing. It just opened up lines of communication between us that just didn't exist before. And when Cody, one of our advisors, got back from his sabbatical back in September, the client reception was amazing. Just the stories he shared and everything else.

So it's become a modeling behavior. These are the things we want our clients to do. We want you to plan for things, save for things, and spend your money. And make sure you know that it's okay to disappear from the day-to-day nature of life and disconnect, and go in whatever form it takes. It doesn't have to be what we did, but in some form. That kind of planning helps to prevent you feeling like you're chained to your desk or you can't possibly leave.

And we still hear that. I still hear advisors who are late in their career saying, "I wish I could find the time to step away." And I think that's why it was important for us to plan for it as close to day one as we did.

Michael: I love this idea, phenomenon that we're so afraid to tell the client that we're doing this thing, we're going on this vacation, we're going on the sabbatical. And then when you actually build up the courage to tell the client, the client's like, "That's awesome. Go you!" I wish I'd done that at some point with my kids. How about that?

Dennis: Yeah. It really has been. It has been heartwarming. And I think there's another element of authenticity that comes through. This isn't just the business where we come and we grind and we chase. This is where we're coming to live our lives. And there was a reason why Katie was very generous in recommending that I go first, because my kids are a little bit older, and my son was going to be graduating high school the next year. And you never know when you're going to get that back.

So I think they saw it as us being authentic. This is how we really want to run our business. And we could just grind it out and keep growing for the sake of growth, but it's helped to put our growth in context. They know we're not just chasing it down without taking the breaks along the way and enjoying the fruits of our labor.

Michael: So how does this work when you get to other team members?

Dennis: Similar. We make sure that they know this is out there. In fact, I was just talking to Cody a while ago. He said they started a couple of years ago just thinking about where they wanted to go, how they wanted to plan their destinations, all of those things. And they'll get the same thing we did. It was five weeks off.

So those are three advisors between Katie and Cody, and myself. But then, when Maddy Miller, our director of Marketing and Community Outreach, when she went on hers last December, that was interesting because we don't have someone redundant in marketing. And we had to think through how does she plan for that? What kinds of things can she set in motion that can be automated from a marketing perspective, so we maintain the presence that we want to have? We're going to hire someone part-time to come in and consult with us over that period to be available that she's communicated to. And we've been able to do the same thing regardless of job function now.

Michael: So I'm still just trying to wrap my head around this. I guess in your case and Katie's because just that there's so much weight on us as founders, so what did you do? What was the plan? What dropped? Who covered what? Do you just cram all of your meetings for the year into the other 47 weeks after you get back from the 5? Is someone subbing in for your client meetings? What did you do?

Dennis: So I think we've had a few accidentally brilliant hires over the years. So we've always had two deep relationships on client service. So there's always somebody involved. Maybe Cody is a backup for me. Maybe I'm a backup for Katie on certain relationships. We've always had too deep knowledge and been good about socializing the team with people.

If you flashback to the conversation you had with Katie a few years ago, that's something that's really gelled recently, is clients understanding the team concept. That it's not just, "Hey, I go to Dennis because Dennis is my guy." They know that there are people that they can call for all of those functions.

So we did some joint meetings. We did some updates. We also hired a financial planning specialist a few years ago, John. And John's job is to maintain the quality control across all the financial planning within the firm. So if somebody calls up and has a question about their plan, or I had this experience at certain points in my career, if a person calls up with a question about their plan, especially if it's someone who I have a secondary relationship with, am I aware of all the things that are updated and happening? And that's John's job.

So we knew that there was somebody who was responsible for the plan. There was someone who could speak to the markets. There was someone who could backstop. And, of course, all the client service people were here. So a lot of it was how we built the team because we'd had this...the same time that we put together the Big Hairy Audacious Goal and the sabbatical plan, we built a 20-person org chart and said, "We don't have 20 people yet, but as we add people in, do we have the redundancies that make sure we can do this and it can happen?"

And then once it was communicated and we realized it wasn't going to be...It was going to be well-received by clients, but it wasn't going to yield a lot of inbound queries just based on, is my person here? It turned out to be much, much easier even than we expected.

Michael: Because the organization is so team-based in the first place that when clients had a planning question, they just knew they could go to John anyways, and if they had an investment question, they knew who else they could go to, and so on down the line.

Dennis: Yeah. We had an email that went out to everyone just with links to everyone's contact information, saying this is who's going to be able to speak to any of these issues. And I think it really comes back to even when Katie and I were sitting down with the initial cohort of clients that came over when we launched the firm. We sat down and had a lot of joint meetings, saying, "There are two of us here, there are going to be more of us, and the redundancy and the depth is something that matters to us."

And so we started talking about partnership, we started talking about team, and de-emphasizing the individual hero investor so that they know that what we're building here isn't going to look like that. And the evidence is going to be when one of us walks away for a short period of time, nothing changes.

What Morton Brown's Team Structure Looks Like Today [27:00]

Michael: So can you help us understand more of, I guess, what the team structure is and how it works? So I guess I'm thinking about maybe organizational charts. It's like, what are the seats on the org chart? But then I'm also just trying to understand, really, how does the word teamwork in your firm...? And I think you said there are some clients that you share with Cody, there are some clients that you share with Katie. I'm assuming Katie and Cody have shared clients as well.

So how does teaming work? But let's start with just how many people, what are the seats? How does this team come together that can support a sabbatical environment?

Dennis: So right now, we have a team of eight, but we're in a hiring cycle. We'll have a team of ten within the next probably four to six weeks. So right now, I think we have better lead advisor depth than we have, call it associate advisor depth. We're hiring two Associate Advisors, just promoted Ali in our office to an Associate Advisor role to really serve it in that supporting position.

One of our luxuries as we started out, we didn't hire many people who may have been fresh out of college, a few years into the industry. We hired some people with some depth behind them, five, ten years of experience at least. And that's really helped us to ramp up quickly, but now we're hiring younger people to start filling in those associate roles.

So it's something that's changing now, but we've started...we also have embraced an outsourced model, and maybe this is part of the Dynasty legacy, where we leaned on outside service providers. So we have three lead advisors who also will fill in on support as needed on certain relationships.

We have an associate advisor that's going to be ramping up into that role, supporting one or two of the other advisors. We have the financial planning specialist, who, as I said, the quality control for all planning across the firm. Then we have our director of Marketing and Community Outreach. We have a director of Operations, a Client Service Representative, and then also we're going to be hiring a new Customer Service Associate to come in and do more administration.

So I think the shape of the advisory teams is probably something that changes over the next couple of years. In fact, that's going to be a topic when we meet for our offsite and have our coaching call on Friday. Let's pull up that org chart. Does it still make sense with this group of clients growing at this rate, going into this season of the business?

Michael: I guess I can't help but note, you've said there are three lead advisors. It sounds like once you get to the end of this hiring cycle, you'll have three associates, two that you're hiring and one that moved up internally.

Dennis: Actually, it'll be two associates, three leads.

Michael: So two associates.

Dennis: Yeah.

Michael: Okay. So is the vision like that's, again, going to be a shared resource where associate supports multiple advisors, or are you moving towards a one-to-one assigned relationship structure?

Dennis: It'll be shared, at least to start, because we want them...one of the things that we've come to appreciate is that for people we've hired out of the wirehouses before, and different firms and people coming, and they've all had different experiences at their firms, and the methods are different.

And we have a really good process now around our operations and everything else. We want these associates to come in and spend time in a planning meeting with Katie and hear how she talks, spend time in a planning meeting with me, spend time in Operations and Marketing, and learning the functions of the business. After that period of floating, we expect they'll start to associate more with one advisor than another, but that's something we have our finger on the pulse of to see when that makes sense to make that transition.

Michael: So how has it worked up to this point that you said there's clients of you and Cody, there's clients of you and Katie? Who shares what? How do you set or determine that? Who has what roles in practice? It's like, how does that sharing work?

Dennis: Yeah, I think Cody has been with us for a little over five years. So the first couple of years that he was in there, he was largely serving in a support role, but gradually started to take over more responsibility for some of Katie's and my clients, and also developing his own. Each advisor does have business development responsibility. So that happened.

We did have an advisor who joined us for a couple of years, and just turned out to not be right fit for him, not be right fit for us. So we've learned some lessons in how that worked, and understanding just the associate and profile that we want to have in that role. And I think that's something where we're working on that job description to see how it fits into where we are now.

But I would say Cody's a fully formed lead advisor now, as are Katie and I. And we're managing that and looking to add the depth and support. But the clients know that multiple people are aware of their circumstances and aware of their plan.

Michael: And the shared dynamic was simply whatever clients came on board to you or Katie while Cody was in the associate role, that those are the ones that he happens to be involved with now?

Dennis: Yes.

Michael: Okay. And then what didn't work for the advisor who wasn't the right fit? Now that you've got a couple of reps in, what worked and didn't work? I feel like there's a lesson learned there in retrospect.

Dennis: Yeah, I think it was just a set of expectations. There was a way that... Going out and developing clients of our own is a lot of, I think, the definition of making it for a lot of us as advisors. Did I go out and bring that in? I think he wanted to bring in his own clients', work, maybe more in a silo than we were working.

And our focus has been, for the last few years, to build the engine that the firm is bringing in a certain number of prospects and new relationships every year, that help to feed the advisory team and keep them doing good work and managing the capacity. And I think that model, as we got further into it, he's like, "I don't think that's what I want to do. I'd rather go out in a more traditional way and develop business, networking, and the getting-out-there approach, some more traditional methods." And that's just... We were trying to get away from that. That was how I started. And I don't think that would be a...it wasn't going to be scalable for us in the way that we thought our potential was.

Michael: So what changes now? Are there things you're doing to try to ask or find or suss that out or discourage those people away now, just knowing that that's not a culture fit, that's not a style fit?

Dennis: Right. I think it is something where we are looking at people who've had experience at RIAs before, maybe just not the right opportunity. There's that bobbing and weaving that happens early in a career to find the right opportunity. And then the previous guy had come from a wirehouse.

So I think we're looking at people who can understand, are credentialed, maybe already CFPs, already CPAs. We've had quite a few of those coming through the pipeline that we really like. So I think there's an opportunity to find people who are used to doing the work, are credentialed, but also have had some experience or awareness of what makes an RIA different and what a team function looks like versus a siloed ensemble like you'd find in a wirehouse.

Dennis's Client Onboarding Meeting Cadence [34:10]

Michael: Okay. And so just to get a picture, I guess, of the rest of the firm, can you just give us the rest of the metrics of the firm? So I'm just thinking AUM, revenue, number of clients, just to match together to this eight moving on ten-person team.

Dennis: Sure. So we're at $475 million in assets now, about 275 households serviced. And we should be at around $3.7 million in revenue this year.

Michael: Okay. So how do you feel about capacity at those numbers?

Dennis: We feel good about capacity because I think one of the things that was definitely a stretch for us, even 100 relationships ago, was the quality of financial planning. That's what we were really trying to solve for with John is that if every advisor is doing the best financial plan they can do for each of their clients, and then trying to go out and do the investment management meetings and all the other things, we think that's a risk for what we really consider our bread and butter and what we want to be known for.

So if we have somebody who can do the planning, be engaged in the financial plan creation, update process, and even serving as a voice for a lot of planning questions that clients have, that frees up the capacity of the advisors to be well-positioned and well-prepared to head into every conversation that they have. So I think there's these support roles that have been integral, but that's why we're adding in those two other support advisors with the intent of them growing into leads as well.

Michael: So then, help me understand more of how John's role works centrally. So nominally, it sounds like he's building plans, but I'm just thinking practically, is he in data-gathering meetings? Does he run data-gathering meetings? Do you hand data off to him? Does he present things? How do you make sure he's delivering the right thing if you may know the client better? How does the actual planning process work between the lead advisor and John?

Dennis: Right. So when a new client comes on board, they'll get an email from the Client Service Associate, just introducing or reintroducing everyone who's on the team and explaining just what the next steps are in the planning process. And John will be introduced, and using PreciseFP, will gather up statements, data points, his templates built out for how he gathers those. And he'll start emailing and direct engaging with the clients, again to build up that trust that there's somebody else other than the lead advisor who's gathering this information.

Then he'll debrief with the lead advisor once all the information is gathered, and we'll go into...we'll schedule what's called a Fact Summary Meeting, which is where we sit down. John will be at that meeting, in most cases, with the lead advisor. And we look through everything that we've gathered in eMoney and ask the client, "Do we have the full spectrum of your financial life captured here, and is captured the right way?"

And we'll fine-tune some of the data points in there and then start talking through the scenarios. And they'll tell us some of the scenarios that are unique to them. We'll talk about some of the scenarios that maybe they haven't thought about. And then John will go back and model all those in the decision center within eMoney, which he's become very adept at. We've been very happy with eMoney in recent years on the capability of the Decision Center, but it needs to have a champion. That was what it came back to.

If all of us are trying to do things as well as we can, there's going to be different skill levels and different interest in developing that skill. We need to make sure we're adept at showing this the right way for every single client. So John will model those out, then we'll have the full financial plan presentation, and then the implementation plan.

And he's been great at leaning into the implementation, interacting really well with the advisors, and making sure that clients have a confidence level in what we've put in. Also, one of our initiatives a couple of years ago was coming up with our one-page financial plan, just getting something simplified down so that if someone says…well, I'll give the personal example: When my wife says, "Dennis, you're late in showing me what our financial plan is the last six months or so," I can run one document for her. And that's all she needs to see so that everything's where it needs to be. And so he has that built out in eMoney, so we can produce it for clients. He'll communicate that out to them as a follow-up. And again, there's that level of trust in the quality of the work.

Michael: So I want to make sure I understand the process. So client gets a PreciseFP link for the data gathering, the hard data number stuff. John is intro'ed in that email from the client service admin. Clients start entering data, and if they have questions, John engages with them because you're actually trying to show there's a team, there's lots of people, and keep John engaged. The next meeting is a fact summary meeting of John, the lead advisor, and the client. This is a client-facing meeting, right?

Dennis: Yes.

Michael: Okay. So here's the data we got into eMoney. Does it all look right? Did we miss anything? Because we've all had the clients say they gave us everything, and then you showed them the stuff. They're like, "Oh, wait, you missed those two things."

Dennis: Yeah, exactly.

Michael: Yeah, that's why we ask for them upfront. So they get to see the initial skeleton and make sure it's all there. Maybe they start talking about scenarios they want to model. So I guess I'm trying to envision how far do you get into the qualitative side of data-gathering/discovery?

Dennis: As the lead advisor?

Michael: Yeah, as the lead advisor, or I guess just even where that happens. So obviously, we often get glimpses of that in the prospect, pre-client process. Sometimes it shows up in data gathering, but that might actually be conversations with Jonathan. Maybe it shows up here in Fact Summary Meeting, depending on how you lead the meeting. So I think I'm just trying to understand where and how does that happen, and who drives that part?

Dennis: I think speaking for myself, as lead advisor, when I sit down with John before a Fact Summary Meeting, because we'll have a review meeting before that just to make sure I understand what he's gathered, any nuance or things that might not be clear to him. And I'm already thinking about what's going to change and the reason the client came to us in the first place.

So here's the static picture, and we'll start thinking about specifically what are the things that they're not aware of, or I always like pulling up... I always joke that I'm the son of an accountant and an art teacher, so I like pictures with my numbers.

Michael: I like that.

Dennis: And we'll show things visually to them and say, "Listen, here's what we're seeing here," either from a cash flow perspective or the composition of the balance sheet and saying, "This visual either looks really healthy to me or there are some things where I think we're going to spend a lot of time talking about," because of the visual nature of it. I like bringing the pictures up as soon as possible because I found that more of my clients are visual learners than not. We can go down through the spreadsheets and go down through the cash flow reports. But I like the visuals to pull up.

So I always check with John, do we have something that looks, in the form of a picture, the way we want it to look, the way it should look? And then it'll be the good basis for modeling the scenarios and the changes.

Michael: And when you talk about creating pictures, ultimately, is this eMoney output or are you building something separate?

Dennis: No, it's literally eMoney and me scribbling on a pad. There have been a lot of scribbles of diagrams and things, but the eMoney, and especially in the one page financial plan is saying, "Listen, we're going to show you where there's that trough post-retirement where that's the window for Roth conversions," or you just show them the picture that makes it easy to understand the ebbs and the flows that are happening.

Michael: So you've got a review meeting where you're trying to visualize the visuals as it were. You get to spot, "Okay, I know they gave this in data, but they talked to me about that during the pre-meeting. So I know we're going to have to get into this further."

So in Fact Summary Meeting, you're sitting down with the client, and this is the "Let's just look at all the numbers. Does this all look right? What kinds of scenarios do you want to model we get a little more qualitative perspective?" So then, the next meeting is a plan presentation meeting. Leading up to that, John's building the scenarios in eMoney. So what do you bring into the plan presentation meeting? What do you cover there?

Dennis: Well, one thing that's pretty evident sometimes coming out of the Fact Summary Meeting is maybe one person sitting across the table hasn't seen this before. And where do we need to build awareness? Or maybe it doesn't have an appreciation for the difference between a qualified account and a taxable account, or all those different things in the balance sheet.

So as I'm listening to the conversation and some of the questions that come up in that first meeting with the client, it gives me hints as to how to present this plan in a way that's both educational and effective for the tasks that are going to come out of it. And the learning curves are going to be flat or steep, depending on the nature of the conversation. But that's a lot of the prep that goes into it and the subtlety of the presentation.

Michael: And so this will be all eMoney output, Decision Center output. Are you printing things? Are you putting it up on a screen?

Dennis: Up on a screen, yes. We'll share it.

Michael: And so what comes next? Do you have a separate meeting around implementation of plan recommendations kind of thing?

Dennis: We'll cover the implementation recommendations at the end of the plan presentation and then assign responsibility for who in the firm is going to be acting upon that and following through on it. But the other part is getting around to the investment conversation. Sometimes that can be paired in there. A lot of times that's a third meeting because we don't want it to be overwhelming. And there also might be some things coming out of that full plan presentation that inform the investment conversation.

So typically, we'll use something like Nitrogen to give a presentation on the current state of the investment portfolio and show proposals. And then we'll also get them comfortable with how we present. So we use Black Diamond as our performance reporting and talking through just how the investment process works. And again, the visuals help in that regard.

Michael: And so I guess relative to the overall business, because it sounds like you run AUM model, are assets moving...? So I guess, when are assets moving in this process?

Dennis: Usually, that starts pretty shortly after that initial email goes out. We'll start working on that and making sure that...because the mechanics of it, it takes some time. So we usually start up on that with our Client Service Associate, which has been Ali up to this point, would be reaching out and helping them to...just making them comfortable with what that process is going to be. And she's very good at that.

Michael: And so that's how you frame it to clients, like, "Hey, we're going to start the process here. It takes some time. So that way we have the ACAT transfers can be underway while we're doing some of the planning work. So that by the time we're ready to craft some recommendations and implement, your dollars will have moved."

Dennis: Yes.

Michael: And then I'm presuming actual investment implementation doesn't come until after the second/third meeting...

Dennis: Correct.

Michael: ...depending on whether you needed a separate investment meeting to actually get to an investment recommendation, an allocation, a investment policy statement.

Dennis: Right. And there are some instances where we'll be having investment-related conversations. Somebody brings over a concentrated stock, and we'll start thinking, "Right, we need to more quickly put this into context," especially if there's a time sensitivity to it. But yeah, usually it's after that second or third meeting that we've agreed upon the investment strategy.

Michael: And then you had said you were working on a one-page plan initiative. So when does that show up in the process here?

Dennis: That's the deliverable after that second meeting. So we're going to go over those things and say, "This is..." And you've seen all of this already today. You may get this in your inbox, and it'll sit there. But when we update your plan or when you come in for a client review meeting, this is what we're going to pull up first. If we need to do a deeper dive into some of the granular details, we can do it. But we want you to be socialized with this one-page document that shows you everything you need to know.

Michael: And so what's on your one-page plan, and how do you build it?

Dennis: So on the one-page plan, it'll show the asset or this thing with the cash flow bar charts. So expenses and income sources color-coded based on source. So you can see, to get to our expense line, we need... We'll have this much in Social Security, this much in discretionary withdrawals, this much in RMDs, and then the lifetime portfolio value showing if you do all of those things, it's still looking this way to you.

We also have Monte Carlo on there just showing probability of success, which is still something that people seem to appreciate. They asked for that, so we put that in there, and then just a simplified balance sheet. And sometimes we'll include things like taxes as well, just tax exposure, but that's pretty much it on the tiles.

Michael: And how are you making this?

Dennis: It's in eMoney.

Michael: Okay, you're using eMoney?

Dennis: Yeah. Yes. In fact, I think we had just started trying to do one on our own, and then an email came in from eMoney saying, "By the way, we have this now." And we said, "Great, that was... We can buy back that time."

Michael: Alrighty then.

Dennis: Yes, yes. So...

Michael: I like it when my providers make the thing that I was planning to do anyways, and then they just give it to me.

Dennis: Yes.

The Role Of Associate Advisors At Morton Brown Family Wealth [48:09]

Michael: So given this process and what John is doing, now help me understand what the vision is for the associate advisors as you continue to grow and add team and capacity. What are they going to be doing? How does that compare or contrast to what John does?

Dennis: We want them to be deeply involved in the relationship. So we want them to be Certified Financial Planners. We want them to be able to appreciate and present the planning work that John is doing, but also be able to navigate the relationship side of it. We want them to develop into full leads.

Our team went through the Shaping Wealth Behavioral Coaching Program a couple of years ago. And I think that's really helped to inform some of the skillsets that we need to develop to make sure our clients can...that they believe their plan. That's been an amazing thing to me to see, even at this stage in my career, that sometimes you can go through all of that work of financial planning, invest somebody in a way that's appropriate, and there's still just a little bit of skepticism, "Yeah, but what if?" Or "Yeah, but did you think of that?"

And I think we want these advisors to learn our process, to learn the way that we work with clients, and then also be really good at managing the relationships that are going to help people to stick with that plan. That's what we want to be scalable. And we've also outsourced certain functions. I didn't mention this. We also have an outsourced CIO that we use. Actually, one of your guests from early last year, Eric Stein, over at East Bay [Investment Solutions].

Michael: Oh, yeah.

Dennis: Yeah, he's our CIO. So the advisors, we're not expecting them to be the experts, the stock pickers, all the things that we were starting out in the brokerage world. We want them to be experts on the families that they're serving, and then bringing all these resources to bear.

Michael: And so thus the framing John is the financial planning strategist because that's a centralized resource for the advisors. East Bay is an outsourced investment resource for the advisors. And so the advisors themselves very much live in a manage relationships, coach, and manage client behavior, and all of the rest of these are resources they tap.

Dennis: Yes. We want them to be excellent communicators. I'm just a huge believer that communication is at least three-quarters of what we do, and getting that part right. As we go through the interview process, I can hear sometimes, as we're screening people, when there's the sense that the facts are going to tell the story and the story tells the story. We need people to appreciate that. That's the human side of what we do. So we want this to be a place where people who are really good like that can come and thrive as advisors.

How Dennis Is Planning To Scale His Firm [51:04]

Michael: So now, I guess I'm just trying to think through, how do you look at capacity then going forward? I'm just trying to understand how this scales, how... I don't know. How many clients do advisors have? How does the sharing work? How does the John's role or other additional people in John's role work? How are you envisioning that as the firm continues to add and grow from here?

Dennis: So we believe that our scale is more than we thought it was, or our capacity is more than we thought it was a few years ago, because of how successfully John has navigated the financial planning side of it, of how well East Bay has handled the portfolio management side of it.

So I remember telling people that in my capacity or the capacity of a lead advisor, we believe was somewhere, maybe in the 60 to 75 range. I believe it's higher than that. I don't know what the number is right now, but I know that the preparation levels and the deliverables are much easier now than they were three years ago because of the infrastructure we've built out.

I could see us we would be hiring more financial planning specialists to work alongside John. The East Bay team has been growing. So that's been a more helpful resource for us. So I think the capacity is something that...my opinion on that has changed in the last two years based on how we've been able to do what we're doing for more people and still not feel like our hair is on fire.

Michael: Well, I guess sheer math of it, as you stand today, you said 275 client households, and there's 3 of you. It's you and Katie, and Cody. So you're already at about 92 clients per. Now, granted, you're also hiring two associates. So that number will come down as you expand team now and expand capacity. But it seems you've already drifted somewhat higher.

Dennis: Yes. And I think that that's something where when we came to this hiring cycle, we said, "We should hire two. I think it would be good to have two coming in together and figuring this out, and having a group. I think it's going to be something that we're going to do multiple times in the years to come." And then the client service, making sure that we have capacity there.

Michael: And how do you think about client service capacity? Where do those...if there are thresholds or targets that you set, or you're finding where those lines are as you grow?

Dennis: I think we're finding where they are. We've been growing pretty consistently in number of households over the last few years, and that seemed... In the three roles, we have the Client Relationship Specialist, which is Karen, and she's handling a lot of the prospect-level engagement, communication with clients, some of the non-administrative functions. So we've bifurcated those things. Then the Client Service Associate is handling money movement, account openings, those types of things.

And then we also have a Director of Operations, Melanie, who is more internal on the business. So I think right now, between those, that seems to be a good mix, although I could see us adding another administrator here before too long.

Michael: Okay. And it just seems the math of the capacity looks great unto itself. You're $3.7 million of revenue, 3 lead advisors. So a little over $1.2 million of revenue per advisor, which are just phenomenal metrics for the firm as a whole. It seems like it is moving along very comfortably on this pace.

Dennis: And it's interesting you say that because when...we talked about this with Steve in our coaching calls, but we had a document, this spreadsheet that we had for our Big Hairy Audacious Goal, and at our last quarterly offsite a couple months ago, Katie happened to pull it up, and she points to me. She goes, "Look at this. We're 3% ahead on the AUM goal that we prescribed 5 years ago. We're within $100,000 of the revenue." The team is like, it said we would have nine people. We're soon to have ten. We're at eight, we're going to have ten.

These numbers, we pulled them out, not out of thin air, but we just backwards planned them. And it was very intentional. So we've been thinking about this capacity for five years now. And we're hovering right around where we said we would be. And I think that's heartening as planners of the business, that we can think about those things and get roughly where they are and then continue to reimagine, "Okay, what do we need next to make sure we're still growing the right way?"

Deciding Which Functions To Outsource Or Perform In-House [55:36]

Michael: So now take me back in all of this to where we started the conversation, which is how we make ourselves more dispensable, how the business is less dependent on us, so that we can take sabbaticals and do other things. So I guess just connect the dots back to me now of, look, many of us grow firms that add the revenue, hire the team. If anything, your revenue per advisor and per team member is above average for a lot of firms out there.

So, yay profitability, watch out capacity, usually the double-edged sword that goes with that. Yet here you are saying, "No, we don't have a capacity problem. We're continuing to hire and reinvest in the staff, but I did a five-week sabbatical two years ago, and Katie did a five-week sabbatical last year."

So I guess I'm just trying to connect the dots. How are you running this healthy, high-margin firm, and you are able to find the time off and take sabbaticals, and a lot of advisors who are maybe at similar revenue and team size metrics? But I know very few that can comfortably say they can go take five weeks off next year and not have a lot of stuff go sideways.

Dennis: I think a lot of it has to do with our commitment, one, to running a very, Katie would call it a clean and simple business. There are not a lot of moving parts. Again, the outsourcing of the CIO function, working with an outsourced CFO, having outsourced marketing support, coaching, all those other things, it helps us to not spin our wheels in an inefficient way.

If I was still the de facto CIO, which up until four or five years ago I was, that would be a tax on my ability to service the clients that needed to be. Or if we were spending too much time in planning for next year and we had to look through the financials of the business and make sure we're tracking all these metrics and all those things, the commitment to the outsourced model and the support model has, I think, opened up capacity in ways that I didn't experience before, either early in the years of Morton Brown or at our previous firm where we just didn't do those things. It was very internal, and I don't feel the capacity crunch right now. Could it happen? I certainly think it could, but we've been comfortable spending money on outside resources that sometimes are fractional but can be ramped up or down as we need them.

Michael: So then, how do you think about what you outsource versus insource? You outsourced to East Bay on investments, but you hired John internally.

Dennis: Right. I think that was how well does somebody need to know the world out there versus know these clients we serve in here? John has to be an expert on the types of planning issues that these 275 households have, and he can do that. We've experienced that so far. He's been able to do that.

I don't need Eric and team to know the Smith family. I need them to help to translate the investment world out there, and they do a really good job of that, of helping to say, "How do we build the gates for getting into our portfolios? What makes it in? Is there a good rationale for everything, and are we being prudent in our investment process and vetting different ideas that come in?" So I need Eric to help us understand the world out there. We hire people internally who help us to understand these 275 people, and the next 100, and how we can serve them better.

Michael: Okay. So CFO gets outsourced because, yes, someone needs to run the numbers and support us on the business projections, but you don't need to know individual clients. You need to be really good at accounting for numbers and running financial projections.

Dennis: That's it. You need to know Morton Brown. That's what we need you to understand Morton Brown, not our households.

Hiring A Director Of Marketing To Amplify The Firm And Boost Growth [59:43]

Michael: And I guess ditto for marketing, right? They have to understand the firm, but they're not running business development. They're not building the client relationships. You do that. They're running marketing to make the phone ring. So as it were, to create opportunities for you, so you don't need them to be one-to-one with individual clients in the same way, either. Am I thinking about that right?

Dennis: Well, one caveat, actually, a big caveat. We do have an internal Director of Marketing. Some of the marketing resources, she will pull in, and she's been really good about reaching out and saying, "You know what, this is where we need somebody naturally good at this, or somebody technologically good at this," and has never been reluctant to say, "This is beyond what we have the ability to do here."

But Maddy, and she was...at one point, there were four people sitting around the table. It was Katie and I, Pat, our administrator, who retired a couple of years ago, and then we hired Maddy as the director of marketing. And it was a great conversation with Steve, because that summer, this was the summer of 2019, we were trying to decide, do we hire a new advisor to grow business, or do we hire our director of marketing to grow business? We're in a marketing associate.

And when we posted for both jobs, I said, "Well, let's see who walks in the doors." We had some good candidates for advisors, and some good candidates for marketing associates. And then Maddy sends in her application, and she's worked for 35-member law firms. And she's been all in the professional services, but all with attorneys. And she says, "I'm looking for something different. I'm looking for co-conspirators, people I can collaborate with." The attorneys, in her experience, wouldn't really want to do the work.

And we made the case that we'd be willing to do the work. That's the point we were trying to project, punch above our weight now. And as we interviewed her, she kept sending us unsolicited feedback like, "Maybe you could do this. Maybe you could try this." And it was all brilliant stuff.

And Steve, in one of our calls, said, "I don't think you need another advisor. I think you need someone to amplify. One, you guys already have the capacity." We only had about 100 and some households at the time. "You need somebody to amplify what you're doing." So we took a flyer, and we hired Maddy. And I think we've quadrupled in size since then.

And it was exactly what we needed to do, because she knows our personalities and what we believe to be our authentic message. And she also understands that ideal client profile, the types of families we serve. She's brilliant at discerning that and being very precise in the ways in which we communicate, our social media presence, all of those things. So that's another...marketing has become an area that I would describe as not being externally oriented, but very internally oriented and precise.

Michael: So can you explain a little more than just what is Maddy actually doing? I find for a lot of firms, where we start with founders who are visible and do business development and have our names on the door, growth tends to be very founder-led. And often there's a lot of question like, but what does a marketing person do for me? I grow the business because I get referrals and I network. What do they do? What does a marketing person do?

Dennis: She owns the data around our business development process, too. So in our CRM, which is a Salesforce with a Salentica overlay, she has all of our scorecards built out, our prospect and lead pipelines, all of our wallet share opportunities, you name it. She has all of that mapped out, works with the advisors on how they present that to the community. So she works with us on our business development plans and helps us to think through how we uniquely attract ideal clients for each of us.

But if you look through our marketing folder, it's everything from the events we run, community relations. That's why marketing and community relations is part of her job, building leadership-level relationships for herself and the community. She's become renowned for how good she is at what she does.

So it's writing, communication, social media, all of those things have really fallen under her. Now, like I said, she's pulled in support on certain things where she said, "We need a little bit of oomph based on our initiatives," but it really has been...her leadership role in the firm has really grown in recent years.

Michael: And so if I heard in there, ultimately, there is still a lot of biz dev obligation on the advisors. And so she's helping advisors build their business development plans.

Dennis: Yes. Effectively, I think our marketing folder inside our OneDrive is a treasure trove of just resources, things we've written, the podcasts we've recorded, things we've communicated. There's a lot of things in there that say, "This is how we think about planning, investing, and the way we serve clients."

And one of the things that she does with each advisor is how do we use the resources that we've created? We've developed a voice. How do we communicate that voice to people who need to hear it? And I think advisors, sometimes it can be overwhelming. I could say anything. What do I say? And she's really good about helping us all to figure out this would be an authentic way for you to communicate with your clients or your prospective clients.

Morton Brown's Ideal Client Profile [1:04:59]

Michael: So who are ideal prospective clients for you? Is there a specialization, a niche, a focus of who you're going after, or is it entirely each advisor sets their own individual business development plan? They may have different segments they're focusing on that's ideal for them.

Dennis: What we've learned is... And we have a couple of different profiles. We spent some time updating that earlier this year. But there's definitely a demographic and a psychographic profile. One of the things that I really like to think about are our clients. And we live in a community in the Lehigh Valley region of Pennsylvania that's... It's the third-largest population center in Pennsylvania, but it tends to be very small and mid-sized business-focused. There used to be a lot of corporate presence here. There's still some, but it's not a Fortune 500-driven community.

So when you have a lot of small and mid-sized business owners, that's about...I think it's 70% of our clients are current or former business owners. And what you end up working with are a lot of leaders. And we've thought a lot about that in recent years and say, "Look down this list. How many of these people are the founder, the CEO, the president, the leader of the nonprofit," dah, dah, dah, and there's a pattern here.

And Katie and I have not been shy about. One of our jobs, we're founders and leaders of a firm, but we've also had some pretty substantial leadership roles out in our community for nonprofits and other organizations that we support. And the people who are involved in that have gravitated towards us, and it's become... We speak the same language. We have some of the same values.

And so we asked ourselves, what is it that leaders see in the way we run our business that would make it attractive to us? And I think there are people who appreciate having people around them, and smart people. They know they need to...they had to hire that CFO, they had to hire that whip-smart HR person. They like delegating. They're not afraid to delegate.

So some of our clients who have done this for a long time, we just realized, "Oh, my gosh, these people are all leaders in their professional worlds and want that same standard for their financial lives." And I think while we hopefully were witty and humorous and light, we were also serious as a heart attack about getting this right. And we take our work very seriously. And I think that that's something that our clients have come to appreciate. We've become more confident in saying out loud.

Michael: And so then, if I'm understanding well, if I define a specialization for you all, it's those small to mid-sized business owners, they're in the Lehigh region of Pennsylvania. So I guess connecting dots, thus Maddy is Director of Marketing and Community Outreach, that essentially local community marketing, we're the best for...Morton Brown is the best for small business owners in our local community region. That's how you define your unique market space.

Dennis: And it's gone beyond that. I think we're at this point, 80% of our clients are within, call it an hour, or a 90-minute radius from where we are in Eastern Pennsylvania. But we're also in, I think, 15 states now. So it's moved beyond that.

Michael: Because you're attracting them from more broadly, or because they're having their liquidity events and relocating other locations?

Dennis: Yeah. Right around now is when Eastern Pennsylvania starts to go a little South.

Michael: Yes, yes, yes. We're recording as the weather turns.

Dennis: Yes. So no, some of it is it's both. So we're getting referrals to family members who also own businesses or business partners who are located elsewhere. It's just started to expand a little bit. And that's been a fun development because obviously, with our remote capabilities now. And we can do this from anywhere. And I think to be able to do this from a place where the quality of life is high, I think it's an underserved market here in our community, because I think back to, I said a few years ago, there was Focus and maybe a couple of the larger aggregators that have been starting to come into the area.

Since then, everybody's here. And it's been discovered a little bit, but I still think that there's a standard of financial planning and investment advice that we're still lagging behind just a little bit. So it's a great place to be developing a business and trying to do good work.

Michael: And so was this an intentional shift in evolution that... It sounds like it started out more local, and now it's expanding because referrals, relocations, word of mouth, all those good things. Was that a strategy, or that's just life and growth is playing out, and we're going to step into the opportunity that's before us?

Dennis: And social media. I think if you had told us seven or eight years ago that social media would be as important for our development as it's become, it really has, in ways that I still don't fully understand. And Maddy gets it more than I do, obviously, but it's amazing to hear.

We meet people for the first time, or somebody calls in. A call from someone in Delaware recently, called up and said, "I've heard good things. I've been watching you. And I think it's time we have a conversation." That people know us so much better because we're very active, especially on LinkedIn, just talking about, again, that authentic presentation of this is the business that we run. These are the people we work with. And social media has been an engine for growth in ways that I didn't fully appreciate a few years ago.

Michael: Can you explain that further? What are you doing on social? What are you posting or showing up with on LinkedIn that's getting folks engaged and interested?

Dennis: Speaking, well, I think for both Katie and I, we became much more comfortable in sharing who we actually are. This is the work that we do. This is where we came from. These are the things that...this is what we thought the business was. This is what we know it to be now. And to the extent Morton Brown is a departure from where we came before, it's that we always felt like we had to be someone different. Whether it was Katie spending a lot of time as a financial planner and operations and compliance, or me feeling like I had to be a very broker-oriented, salesy guy. I think we've both come along to, one, being very comfortable building a business that didn't feel like that, that was more true to us. But then going out there on LinkedIn and sharing the stories that have made us who we are.

And that's been really powerful because I do feel like people will now turn to us and, really, off the bat, be very open about why it is that they're attracted to us. So I'll post about the way that I met my wife. The way I met my wife and how our relationship with money was defined from the fact that very shortly after we met in the summer of 2001, she was living in Jersey City, and I was in El Paso, I was in the army.

And I went to visit her in Jersey City, and we spent all weekend in Lower Manhattan. It was Labor Day weekend, 2001. And then a week later, the Twin Towers came down. And she's living in the New York area. I was immediately put on alert to go to war. And we liked each other. We had just met, but within a year, we were engaged. But our conversations took a very serious turn early on. What happens if I go to war? What happens to our careers? So life gets pulled forward.

I remember I've shared different aspects of that over time, just to say, when I talk to people about how serious I take planning, because... Take a time like right now, we're sitting here, and the markets have been frothy, and there's all talk of bubbles and things like that. And I turn that around and I say, "What would your future self be really grateful that you did right now?"

Because I remember sitting there, I could have said that on Labor Day of 2001, "What would Gina and I do right now to plan, or even afterwards, when I still hadn't gone to war yet? What are the things that we can do that our future selves will be happy that we did this from a position of strength, versus reactive in an emergency, something like that?"

And the more I got comfortable saying, "You know what, I have some background..." I wasn't a finance major. I didn't make it in the brokerage world. "But I think there are some interesting things to say that I've observed in this really weird career that I've had. And I'm just going to put it out there and see if people can relate to it." And they have, and it's been really good. And it's helped me to think through just what are the lessons we see outside of money and finance that are really pertinent? And let's communicate those out to an audience that might be able to relate to them.

Conducting A Brand DNA Exercise To Define Morton Brown's Culture [1:13:47]

Michael: So what surprised you the most on this journey of building an advisory business, particularly as you and Katie are now driving it yourselves for the past seven years after having exited a succession plan that didn't work?

Dennis: I think the culture has really caught us off guard. Even just a couple of years ago, I think we would have said, "I think the team's doing well. I think we've communicated the values of things." In the last few months, especially in our most recent...we do quarterly off-sites as a team. This team fights for the culture of the firm. When we're hiring, we're very transparent in how we're looking. And they've really put language around what this culture is, the things that we do to the point where...

Katie and I did a brand DNA exercise before we launched Morton Brown, just vision, mission, the words that we identify with, and a lot of the things that go into who we are. And two years ago, we said, "You know what? We should revisit that whole process because there are more people at this table now, and they seem to really care what is important to us."

We scrapped the original brand DNA and went back to the drawing board with the whole team around. And we came up with our new vision statement, which is "To have a positive impact on the experience people have with money, relationships, and life." And ever since then, it just feels like they've owned it. It was something that we all agreed upon. It's come to life, and it just informs a lot of what we do.

And I think that when we have...especially the money part, that's easy, and the life part, too. We want people to support their highest aspirations for life with their financial resources. But the relationships part, that's the one where you start to see just the impact that each one of our teammates can have on the confidence of a client.

And we did our client appreciation event a couple of weeks ago. It's our seventh one. And I think we had 130-some people there. And the joy in that room was amazing. And you see, that's the relationship side. And I think that really, we hadn't been in that world before. I hadn't seen that in this profession. So really cool. Very surprising.

Michael: And I'm just curious, how did you do this updated brand DNA process?

Dennis: So we had gone through this in the beginning, and we revisited a truncated version of that with the team. But it was amazing the number of consistent words that came up between four and five different people. And got to realize that we're actually living this out. We should codify this. We should amplify it and share it with our clients, that this is what we're here for. And so I think we've taken that, and I think it was smart of us to realize it needed to be revisited because it's definitely just... I think it is our DNA now.

The Low Point On Dennis's Journey [1:16:47]

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

Dennis: The window between fall of 2007 and the spring of '09 was tough. In '07, I was working at Smith Barney and I was fired, or let go for lack of production. I was 18 months in, I was building a fee-based business, and I hit up against the you're not selling enough commission-based product and they hadn't figured out how to reward fee-based business yet. And this is late '07.

And so I left for about a week before they figured out that they could hire me back as a registered marketing associate or something. But I saw that the writing was on the wall, that New York was going to make decisions based on short-termism, and I was building something long-term.

So, fortunately, a couple of weeks later, I got a call from somebody at a local accounting firm who said, "We have a position with our wealth management unit. Would you be interested in talking to us?" I had given him my business card a year prior, and he happened to pull it off the scrap heap, and he said, "Would you be interested in talking to an independent firm?" And I said, "Would I ever?" And again, this was late '07. The market had just peaked and was starting to fall.

By the beginning of '08, I had left to join what was then Kincannon Wealth Management, independent firm, where Katie was already a minority partner there. There were a handful of partners. She had just been made partner, I think, the year prior. So she hired me as part of the team that was hiring for that role.

So I'm there, I'm restarting my career. I think I brought $5 million in assets under management with me, but I'm restarting my career. No longer needed to cold call, but I have to figure something else out. And around that time, my wife had also just had a miscarriage, but we got pregnant again quickly. So I started building relationships and restarting the networking process there.

And then in December of 2008, she gave birth to our second son, who was born with congenital leukemia. So diagnosed at birth, right before Christmas of '08, December 15th. And this was the life-changing part, is that he was born at the local hospital. And again, we're in a large population center, but as soon as they said the diagnosis, they said, "He can't be treated here. He's going to have to go down to the Children's Hospital of Philadelphia or to Hershey Medical Center," either of which is at least an hour and a half away from us.

So in the middle of the night, on his third day on earth, we went out to Hershey Medical Center, and he started chemotherapy. And we moved into a Ronald McDonald house, and I'm still working. I'm commuting back and forth from the Ronald McDonald house. We have a 2-year-old son and then the newborn baby. And so we navigated that for pretty much the rest of the financial crisis. And he passed in April of 2009.

So that was a really tough time, professionally. In fact, as I was thinking about that recently, I just don't remember that much about the Great Financial Crisis. Now, I didn't have many clients at the time, but it still could have been more upending on its own. But there were a lot of things that we navigated as a family.

But in hindsight, I think we came through very strong. I think I came through with a strength of commitment. One, that we had so much support from our community that this felt like home. Neither one of us is from here originally. This felt like home. I felt more committed to making this career work and got much more involved in community activities, saying, "We're not going to pretend like we're visitors anymore. We're going to get involved. I'm going to start joining some nonprofit boards and just not waltzing through life. We're committed."

And we also decided that we don't want a family to ever have this happen again, where they can't get treated at home, because that was the real disruptive thing. If he could have received chemotherapy at home, that would have been very different.

So we reached out to the local hospitals and said, "At some point in the future, if there's ever plans to build a children's hospital here, let us know." And we just left it there. Seven years later, I get a call saying one of the hospitals, Lehigh Valley Health Network, was doing a feasibility study for a children's hospital here in our community, and they wanted to ask a few questions.

So I went in and answered some questions for the feasibility study. When we first put that feeler out there, we didn't have two nickels to rub together. At this point, I'm a partner in our firm. Things are going much better. And we were able to join the campaign executive committee to help build the first children's hospital in our community.

Michael: Wow. And so is it built now?

Dennis: It is, yeah, up and running. Thriving, yeah. Lehigh Valley Reilly Children's Hospital. And it really was that intentional moment where we say, "Listen, we're coming off of a really tough stretch of time in our family, but I think there are some things that we can do to really make good on this."

Dennis's Advice For His Younger Self And For Newer Advisors [1:21:47]

Michael: So what else do you know now you wish you could go back and tell you 10, 15 years ago, as you were starting this growth-building journey of a business?

Dennis: I think that leadership really matters. I think for a long time, I tried to be a good advisor, a good planner, a good stock picker, looked around me at different people in the professions, and seeing what they were doing and trying to get that right. And I think getting my CFP and just learning about this business has been really helpful.

But what I discounted was that my leadership skills were going to be very useful as well. And that was building a team, casting a vision, navigating the inevitable ups and downs of the markets, of the business cycles, and all those things. I think that part, I could have leaned into a little bit sooner. I thought it might be out of place because I didn't see it happening a lot back in those siloed worlds of the Smith Barneys, or in what can be still the Wild West of independence, a little bit.

So I think what I'm able to do now and the skillset that I've dusted off is something that I wish I could have told myself 15 years ago, "Lean into this a little bit. I think it would be helpful." And yeah, but I'm glad I discovered it now. I can't argue with any aspect of my career to say that it hasn't been very informative, helpful, and really taught me a lot.

Michael: So any other advice you would give younger, newer advisors coming into the profession today?

Dennis: One of the best pieces of advice I was ever given was when I was discerning this career and was interviewed with a...somebody got me a conversation with some people at Deutsche Bank, and there were some brokers and analysts and other people, and I was trying to decide if I wanted to go into finance, which of these jobs would I like? And I told them, when I was talking to one CFA, I said, "I'm afraid that I don't have the skillset. I have a humanities degree, an army background, and I'm not coming from typical financial advisor stock. I think I should go get my MBA."

And he cut me off, and he goes, "Don't do it. I'm going to save you, at the time, $100,000 right now. Do not do that. Here's what you need to do…" And he described finding a brokerage or a place like that. "If you think a financial advisor is what you want to be, here's the path that you should follow."

So one, he saved me $100,000, but that was the first inkling that maybe my background wasn't a hindrance, that maybe being well-read in subjects other than math and finance and accounting and everything else could be a valuable resource. And it probably took me four or five years before I really did start saying, "You know what, I'm bringing a unique perspective. Maybe not from the 50% of this profession that's math, but the 50% of it is humanity."

And so I advise people to not go so deep on the finance part of it that you're missing the lessons you can learn from other disciplines, from reading literature, from reading psychology, from whatever it might be. Just read from diverse sources because it's going to make you a better translator of the world for the clients that you serve. And I think, again, I had that and didn't realize it for a little bit, but I would encourage, especially young people coming into the profession, to do that.

Michael: So what was the rest of the path the CFA advised in lieu of the expensive MBA that you didn't end up needing to spend money on?

Dennis: He said, "Pretty much get hired by a big firm. Go out and find a Merrill or a Morgan, or a Smith Barney, and just get into one of their training programs." And I applied to all of them. And I remember I was working for a uniform company at the time, and I had to fill in running a route to pick up laundry for one of my service people.

And I got the call from the Smith Barney branch manager, and I had to stand up on top of the truck to get cell phone reception, and he offered me a job, and he said, "Everything about your application process said I should not offer you this job, but I'm going to give you a chance anyway." So I think through the static of the cell reception, he heard me say yes, and I was off to the races.

Michael: So in retrospect, we see you didn't stay there. That wasn't your path in the long run. So do you still feel good about that path? Would you do it differently now or tell young people to do it differently today?

Dennis: I've seen it work out differently, and I don't have a view on the inside to make a good recommendation. I do know that the wirehouses are doing a much better job of integrating teams. Someone like me wouldn't have been tossed out into the world and say, "Go track down business somewhere." I probably would have been put onto a team, and that's a mixed bag for how that shows up.

I still think that there's value in that, but the most important thing that I think happened to me was showing up to the Schwab Impact Conference for the first time in 2012 and just seeing that, oh, my gosh, there's a whole world of stuff happening out there. There's certainly more options now than there were then, with just the larger independent firms and options available out there. But I think if you find the right team, whether it's on a large firm or a wirehouse, that's a pretty good founding experience. And I wouldn't disparage that in the least.

What Success Means To Dennis [1:27:14]

Michael: So as we come to the end here, this is a podcast about success, and just one of the things we've long observed, that word success means very different things to different people. And so you're on this wonderful path of success with the firm as you cross half a billion of assets while on track for the billion-dollar goal that you and Katie penciled out, so the business seems in a wonderful place and a wonderful trajectory. How do you define success for yourself personally at this point?

Dennis: I think it has a lot to do with being a good influence on the people around me. So I never would have expected to be in this position now, if you told 20 years ago me, "This is not where I expect to end up," but I feel like the opportunity to have a positive influence on my family, my coworkers, my community, especially when...I'll share a quick anecdote from my daughter, especially when it comes to doing daring things. I never would have predicted. If you told my high school guidance counselor, "Dennis is going to be an entrepreneur and run an advisory business," he would have laughed you out of the room.

But I think my life's been an adventure, and I love the idea that the example is rubbing off on people around me. So I asked my 9-year-old daughter at lunch a few days ago, I was like, "How would you describe the Morton family?" And she said, "We're risk-takers." I was like, "What do you mean by that?" I thought that was an odd thing for her to say, but she goes...she's used her fingers to draw something. She's like, "We know something's going to be challenging going this way, but going that way could turn out great." And I thought, "Huh, that's pretty cool. And if that's how she sees us, that will inform her life well."

So I think I've enjoyed this journey so far, but I love the idea that we're all taking some risks in this business together. I think it's led to some success and recognition, and the things that are fun. And I think it just makes us excited for whatever the next adventure could be.

Michael: I love that. I love that. Well, thank you, Dennis, so much for joining us on the "Financial Advisor Success" podcast.

Dennis: Thank you, Michael. This has been great.

Michael: Thank you.