Hi everybody, and welcome. I am the NAPFA Genesis webinar coordinator, Stephen Fletcher of Evo Advisors in Richmond, Virginia, and welcome to this NAPFA Genesis webinar sponsored by LLIS. I'd like to welcome our panelists today. We are joined by Carla McEvoy, our current NAPFA chair, Jessica Smith, president of Longview Financial Advisors, Jacob Keebler, and senior advisor at Bluestem, and Eric Heyman, CEO of Austin Asset and the co-author of Success to Succession. Thank you all for joining us today. All right, so I wanted to kick this off and first start with, because you were all hand-selected for this, so you each have a very different background that got you to the point where you joined the management team of the firms that you worked for and then became a partner or an owner for the firms that you work for. So Carla, starting with you, if you wouldn't mind giving us just a little bit of background on yourself, kind of your career path to get to where you are, and then a little bit about your firm as well. Sure. Well, this is a changing story as you know, Stephen. So I actually was a career changer about 25 years ago. I was in the software industry and just found myself really drawn to financial planning for a variety of reasons. And, you know, fairly early on got connected with some NAFTA advisors here in the San Francisco Bay area who acted as tremendous mentors to me. And in 2000, about 2007, one of them introduced me to Peggy Kapanis, who was the owner and founder of HC Financial Advisors in Lafayette, California. And it just so happened that she was looking to bring somebody on and I started with them almost a year later. We chatted for quite a long time. So I started with her in 2008. And honestly, just a couple of years later, she approached me and said, you know, I'm at the age where I need to consider what my succession is going to be. And I don't know if I would advise this for everyone, but I kept saying no, no, no, no, no, I have young children. I don't want to do that. But she was persistent. We ended up forming a team of three of us that bought her out over a period of about six years. We started in 2011, completed just before 2017, grew the firm quite a bit during that period. And then what has changed a lot recently is we were beginning to think about the third generation of owners. And after a lot of thought, decided to merge HC Financial actually with the Mather Group, who's based in Chicago, another NAPFA firm. And so we just completed that last week. So I'm now a managing director at the Mather Group. So I've really, you know, had a lot of changes in my career. It's all been really fantastic and really, really pleased to share whatever I can today. Excellent. Thank you, Carla. I'm sure that things are really just calm for you guys right now with that transition being only a week behind you. I have more to share than usual this week. Thank you, Carla. Eric, would you mind sharing? Sure, happy to. Yeah, so thanks for being here. There was a time when I felt like I needed to be on the other side of this phone call for many years. And so it's kind of fun to be on this side, I guess now. In some ways, similar timeline. So Carla, I was an intern for this firm when I was in college, 25 years ago this past June. So I've been here for 25 years now. It's the only real job I ever had. Never had a resume. I've never gone on job interviews. I worked here for free as an intern and just stayed. But I joined the founder of the firm. He had the firm for 10 years. It was a solo practice, NAPFA member, you know, what you call a typical lifestyle practice in those days where he had his list of clients and that was pretty much it. And I joined him because he had an idea for building a larger firm, but he really wanted to focus on clients that didn't like the business side of things where I didn't know how to work with clients. I was just a kid in college, but I knew how to like organize stuff, right? And build files and send out agreements and invoices and these things that need to happen in order to build a business. And so it was a wonderful marriage because we were complete opposites. I could do the things he didn't want to do and he could do the things I didn't know how to do as a young kid. And we built the firm into a wonderful practice. About 10 years into that experience, we started talking about what was next for him. He's 28 years older than I am. And so this conversation around, hey, you know, at some point, what does this look like for you in terms of your path? And so in 2007, we started a seven-year succession plan that we designed. And then I kind of just, as Carla mentioned, a lot of wonderful mentors out there and people that I was able to ask their advice around. And so we designed this plan and it became an area of real interest of mine in our industry and people that are wrestling with this back in those days. And so we orchestrated the operational, the financial, and then the biggest piece was the emotional challenge of just how do you let go of something? And so he retired in 2014. There were three of us. So I became an owner in 2000. So about three years into this story, I became an owner focused on basically managing the business and started buying ownership from him. And so by the time he retired, I owned 40%, he owned 60. I mean, I'm sorry, by the time we started the succession plan, I owned 40%, he owned 60. Then we added two more owners that then eventually the three of us bought him out in 2014 when he fully retired from the firm. So it's been eight years since he's retired. The lights are still on, the clients didn't go anywhere, so it worked. And it's been a wonderful experience. The firm now is 24 people, billion two, billion three, depending on what day it is, 15 CFPs. And it's the only story I know. And so I'm happy to share as we get through this kind of the different bumps and bruises along the way and also some of the successes and interesting things that we're able to do. So thank you for having me. Yep. Thank you, Eric. Jessica. Yes. Hi. So my experience is actually somewhat similar to Eric's. And Eric and I have actually talked about this off and on throughout the years too. He's been a mentor to me through this process. So I'm glad to be on the panel with him and everyone else, of course. So yes, I also started off as an unpaid intern my senior year of college. I was unpaid, though, I think for only about two weeks because the person I started working for, Larry West at West Financial Consulting, he had an admin support who left and followed her husband to Texas so that he could start a new career. So at that point, he needed someone as an admin. So I then got hired as an administrative support. And then at the end of my senior year, he hired me on as a pair planner and every other hat that you can wear, because when you have two people in a firm, you just kind of do everything. And there's a beauty to that, too, because he couldn't do it all. He had to rely more on me. And so that allowed me a lot of opportunities that I don't think I would have gotten at a different firm. I got to jump in really quickly. I started going to NAPFA conferences immediately, meeting some really wonderful people. And that NAPFA community, it's so cool to have Genesis because that NAPFA community has really changed over the years and gotten much younger than it was back in those days. And that was 2005. And so anyway, I stayed on with him. We worked together for about five years. We talked about a succession around me just buying him out. But I actually chose not to go that route because I did not want to handle the investment side of things. And again, things have changed a lot since then, but there weren't a lot of tamps available at that time either. So we started talking about it. We had a friend, Jeff Cederholm, who had a practice about two hours away. He was very heavily investment focused. And we were very heavily planning focused. So it seemed like a dream. So they merged their companies and at that point, turned it into an employee-owned company. So anyone who had been at the company for at least one year had the opportunity to buy in. And there were limitations on what you could buy in. And we can go into that later if that's helpful to anyone. So we started off that way. And so now we're an employee-owned company. We're a smaller company. We have seven people of the seven. There are four of us who are owners. They're working within the company. We do have one retired owner as well. And so we're still working through our transition plan here. But it's been an exciting ride for me because I came in this process not knowing anything about running a business. I went to school to be a financial advisor, not to run a business. So I've learned a lot along the way. Jeff Cederholm, who was the president of our company up until 2020, he and I worked for about seven years with a consultant named Tracy Beckus, who really helped us through the transition, helped us to share some ideas. To Eric's point, there's this emotional pull between letting go of something you built, your baby, and for that second generation to step up and actually take it on and do it in a respectful way that honors boundaries and that sort of thing, but also allows you to show what you can do. And Tracy helped us a lot with that. And so it's been a fun process. And now I serve as president of the company, but we have a very team approach. So a team of owners, a team of employees that really pull together to work with our clients. Excellent. Thank you. And for anyone that doesn't know, Jessica is also the boss, I guess we can say, of our next NAPFA chair, Jeff Jones. So she has her hands cut out for her keeping him in line. And please make sure that Jeff knows that I said that at some point. Last but not least, and I neglected to say this in his introduction, but Jacob Keebler is also the award-winning Jacob, our new professional of the year from 2019, 2018, Jacob? One of those years in there somewhere. Sometime pre-pandemic, it's all blurring out. Thank you, Stephen. So my journey actually is very similar to Jessica and Eric. And looking back, I almost feel old now because when I entered the industry, it was almost unheard of for college students to be coming into the industry, let alone becoming owners. And now we've got a full panel full of them. So this is awesome. So yeah, I graduated college in 2008. I met my, who would become my business partner, Karen Folk. As a student, she had come into guest lecture. I turned into an internship. Unlike Jessica, mine was paid, although I think it was 10 bucks an hour. And I was taking a pay cut from my other college job to take it. But similar to Jessica, her part-time assistant quit. So I got to kind of come in and not only be the intern, but be the administrative assistant, paraplaner all in one. And Karen was also a solo entrepreneur, lifestyle practice. She was a former faculty member at the University of Illinois. So our client base was and continues to be pretty focused on professors and administrators at research-based universities. And when I joined her as an intern and then basically everything else, as summer was drawing to an end, she was like, listen, I'm in my early 60s. My retirement plan is to hopefully outlive my clients. And as they die off, my practice will dwindle down. But that may not be a sustainable succession plan. Would you be interested in joining me after graduation? And this was 2008. We're in the midst of the biggest economic recession since the 20s or 30s. And so the job market wasn't looking so hot. And it seemed like a great opportunity to enter the industry at a time where my only other option was push insurance products. And so I jumped at the chance and got a pay raise to $12 an hour coming on full-time with a degree from a big 10 university. So that was a little challenging, but I took the risk. And the great thing about it was I got to do everything. I got to sit in every single client meeting. I got to see how the firm was run. And similar to Jessica, the idea of ownership was enticing, but the idea of doing it by myself was not. And so Karen and I worked together for a couple of years where I was basically pair planner slash associate and working with her on clients, but starting the conversation around what would an eventual partnership look like? And the thing I expressed was, well, I'd be interested in buying, but I'd want to grow the firm and be more of an ensemble style firm by the time you fully retired. And I had the great fortune of working with Karen. She was never territorial about the business in that a lot of times when I've seen other firms struggle with succession, it's around the next generation wants more control and the original generation isn't ready to give that up. And Karen was the opposite where she quickly recognized that in order for me to be interested, the firm had to mold and adapt to incorporate my vision into it. And so it worked very well. So in 2011 is when we officially partnered up. The firm was so small at that point where she essentially sold me 50% of the goodwill of her business. And then we jointly created the entity of Bluestem as a 50-50 partnership. And I started taking on the duties of ownership essentially right away. So kind of becoming the managing partner. And over the next five years while we worked together, taking more of a leading role as the business leader. And during that time, we grew from basically Karen and I in a part-time assistant to we've today got nine total. So we've got four advisors, a financial planning resident, and then three client services associates, plus a financial planning back office person. So yeah, so that's it in a nutshell. I'm happy to go into more detail as we continue this conversation. Awesome. Thank you each of you for that background. So to transition a little bit, I'm just going to pepper you guys with some questions and I'll kind of pick one of you to start answering it and then everybody else just kind of jump in as you have something to add. So I think you kind of touched on this each of you a little bit in your introductions. But for those who are on the call, maybe some are working for a firm that maybe it was just a firm they could get a job at. Or maybe they really did want to work at a particular firm. But for each of you, and Carla, we'll start with you. How did you know that the firm where you were was one that you wanted to become an owner of? Become an owner, not just work. So, you know, value wise, I think that HC Financial met absolutely everything that I was looking for in a firm. I would never have been comfortable with anything other than a fee only NAPFA firm. And, you know, the DNA of our firm is definitely entrenched in NAPFA. And I guess the other thing that was very appealing to me is that, you know, we already had a female owner. It sounds odd now, but way back then it wasn't that common for owners to be female. And I knew that I was going to have the support and, you know, again, the mentorship of Peggy to be able to jump into that ownership role and succeed. And so I think those were the things that really drew me and made me feel like, you know, this is the right place. Excellent. Thank you, Carla. Anybody else want to add something to that? I'll just jump in real quick. So just to add to, I mean, I think that the values piece is certainly a huge foundational aspect of, can I, do I even agree with the things that they care about? Right. The two others that came to mind for me were his vision, right? Like, what was it that he wanted to accomplish that was down the road that maybe I could be helpful to, right? So the idea of being an owner is an additional contribution, right? Besides just being a really good employee, could I contribute to the execution of this vision in a way that could actually reward me while rewarding the other, the prior owner or the founder? So that was a big one for me. It was just, what was his vision for the company? And could I align myself or see myself making an impact in that? And then the other was the variety piece. Like he and I were complete opposites. So it was nice to know that I wouldn't be stepping on his toes if I was excelling in the area of my influence in the business, right? So we had this vision. Let's say his vision was very attractive to me, but my execution of that was the same thing he was doing. I don't know if me being an owner would have been as interesting, but because my contribution would have been of a different totally variety, it made being an owner very interesting because I had a lot more clear space. I had a lot more open reign with what I could do to be helpful, where it wasn't like invading his space. So that was helpful to me. I didn't want to be an advisor. I mean, I got my CFP because I want to learn what we do, but I wanted to run the business. So he was totally fine with that. I think that's something to be aware of is, where can you make a name for yourself or put your fingerprint in the firm that's unique? To you, it was really important to me to become an owner. Yeah, I'll just contrast. Sorry, Jessica. Sorry, Jacob. I didn't mean to step on your toes there. Go ahead. I was just going to say, I would contrast Eric a little bit in that, I sort of begrudgingly became an owner because when I entered the industry, fee only was prevalent, but not real prevalent. So like if you were in the big cities, Chicago, et cetera, it was easy to find a NAFA registered advisor, but we were the only NAFA advisor for probably 180 miles. And so to me, it was a means to an end. And I figured that as we grew, I could identify other people to help with the management of the business and focus on being an advisor. And then what I ended up discovering is that I actually am really good at leadership and strategy and I love my clients, but I'm not sure that that's going to be my path is continuing to be an advisor. So, so, you know, I think I would say you don't really know where your career is going to end up and just like helping our clients, the journey, your career will be a journey and it's certainly good to plan, but also plan for your plans to be wrong. Yeah, that's a good point. I agree with everything that's been said. The one thing I would add for me personally is having a voice and feeling like I could speak up and add about that value that, that Eric and Jacob and Carla have been talking about is I had that from day one when I walked in the office, it didn't matter what title I had with it. I was heard, my comments were taken seriously. And even if it wasn't a formal career ladder or formal management career or owner career ladder, I knew it was there because we talked about it and it was out on the table very early on from being hired. And I was shown that I could provide leadership, which, you know, to Jacob's point also, I I'm very much like Jacob in the way that I love the leadership aspect of things. My husband says, I like to tell people what to do, and maybe that's the case, but I really like to lead a mentor honestly. And so that they gave me a lot, I say, they both of the founders give me a lot of room to do that over the years. Excellent. Thank you all for that input. So a few questions that kind of came in while you guys were talking with that first section, and I want to make sure we can kind of get back to some of the other questions we have here, but I want to make sure these get answered. Eric, can you give maybe some examples or some specifics? You mentioned your contribution was different than those of your partner. Can you maybe give a few ideas of what you're talking about there? I'd say at the highest level, I was 22 years old, 23 years old. So his ability to work with clients was much different than mine. So most of my contribution was internal, right? So he was externally contributing to the growth of the business. I was internally contributing to it by creating systems, right? Just the basics. This was 1997. So just the basics of how you access client's information. How did you organize it? Did you have agreements that were similar across all of your clients? What were you billing them? When did you bill them? Could you provide a service that was repeatable? So it wasn't one-off every single time. So it was things like that. It was much more around, you know, operational efficiency, things that would help the firm scale. Like how would we hire people? What would their job description be? So it was much more business internal functions that I was focused on. While he was figuring out, the joke we had in the office was he caught the fish. I figured out what we put on the menu, right? So he figured out how to find the clients and what to do for the clients. I told him what the recipe was going to be and how we were going to deliver that to them. And that became how our contributions were materially different. So while I didn't have a big voice outside the firm or client facing, it was all the stuff that made it so that the stuff, the things we did for the clients became better. And then we could do more of it, right? Create scale. So, I mean, the firm doubled in size the first year I was there. Now the revenue was only $150,000, but it had been $150,000 for three years, right? So, I mean, the fact that immediately double the size of the firm in a year and then quadruple it within three years, it was a lot of systems and just making things repeatable. So that was my, that was how different we were. Yeah. I think, Stephen, can I add one thing? I think that that point is actually really interesting. When I got together with the three partners that ended up buying out Piggy, I like to think that we were intentional about this. I don't think we were, but it turned out to be this wonderful partnership because we did have, we had the Eric, one of my partners really dug getting into the operational side of things. And I really, that's like my least favorite thing in the whole world. I really like to mentor and manage people. So I did a lot of that sort of led our financial planning group. And then our third partner was, was basically focused or is focused on investments. And so the three of us just ended up being this kind of, you know, perfect person altogether because we had very different skill sets and very different interests. So I think that's actually a really important thing to think about. Awesome. Thank you. Okay. So another question that came in Jessica, you mentioned some restrictions that were in place for those employee buy-ins. You mentioned one of them being the years of employment. Were there any other important employee buy-in restrictions that you guys had in place that you think might be kind of helpful for everybody to know about? Sure. So this has changed pretty drastically since then, but I'll share what we did and I'll share where it has changed and try to take out all the middle bits. So it's, it's concise. So we initially started with everyone being able, after one year of service to buy in by 1% of the company and up to half of your salary with the intention that it would be a longer planned period because our second founder was not ready to leave yet. He was not ready to give up a ton of control yet. And so it was going to happen over several years. Obviously you start to do the math. It didn't quite work that way. You hire a lot of young people. They can't afford to do it. We did not have the kind of options for lending at that point that we have now. It's much easier now than it used to be. And so we've, we changed this a few times and more recently changed it in the last couple of years where we don't have a limitation on the amount that anyone can buy in any one year. You just can't own more than 20% of the company, because again, as I mentioned before, we're very team focused and we don't want one person who is able to make all of the decisions at the ownership level. So we, we changed that a little bit there. You do have to wait longer to be, to be an owner. You have to be credentialed. There's a few more things that we've learned along the way. It was a learning experience for us. And that's one thing I would add is be adaptable. Things change because a lot of times this is new to everybody, whether you're a buyer or seller, and we're just trying to figure out the best thing. I, you know, you've heard a lot. Negotiation is when both parties are like equally unhappy. The idea is that maybe equally acceptable, you know, that we're willing to adapt and give in a little bit to make the, the dream come true for both sides. Right. So we've changed it a bit, but that's where we are now. We don't have quite the same level of limitations, but we do have a limit on the amount up to 20% of the company. Awesome. Thank you. And then Eric and Carla, you both mentioned about six to seven year timelines where you were kind of coming in and making a transition. Was that the original plan? And would you suggest a similar timeline of someone's looking to kind of start that negotiation with, with their partners? I'm kind of, what are the pros and cons, if you will, of, of the timelines that you guys had? Eric, you're on mute. So I guess I'll go. Boy, that, that question is hard to answer because it, it depends. As Jessica noted, you know, getting lending back when I was doing this was not really feasible. So the only option you had was, you know, to pay down a note over a period of time. So, you know, if you do the math, it's, it's the valuation and also the profitability of the firm. And you, you know, we, as we were doing all the numbers figured, it would take between seven and eight years. And you know, fortunately hit a really strong period in the market when we were buying her out. And so that accelerated things a little bit. But I, you know, I think you need to be prepared for, for, you know, for a number of years before this happens that, you know, part of what happens as, as we were thinking about, you know, what do we do next is the valuation of the firm had grown to, to such a scale that it was going to, you know, take numerous people, you know, 10 plus years to, to, to buy us out. So so I guess I'm going to just answer that question with it. It depends on what it is that you're buying. I'll kind of color it a little bit in the same way. And that, you know, my first bought in as an owner, we weren't talking about succession and transition. It was, I'd been with a firm for a few years and it was his way of getting me to stay in the firm. And my way of saying, I want to be part of this business because I see, I was seeing it grow quite a bit. And I thought that I was making a contribution to that. So when I originally was buying into the firm, just to Carla's point, I mean, it was seller financing, right? So it was, he was holding the note and I made him really big car payments or house payments, you know every month it felt like. And then I bought in more shares over the first seven years. And then we got to a place where we said, what's going to be ultimately your exit. So then that's when the succession planning kicked in. But at that point, like I said, I own 40% of the company by then. And so it wasn't like it was a predetermined at a certain period of time, we're going to start a succession plan and transition. The transition plan in terms of it taking seven years for us was as much around the operational side as it was financial, right? It was, how do we work himself out of clients? How do we change management of the business and all those aspects? But I was buying into the firm for 14 years. So I mean, the last shares I bought were when he retired in 2014. The first shares I bought were in 2000. So it was a, I mean, it was a 17, 18 year process to buy the shares that I own today. And I'm actually a seller now. So I've been selling shares to gen three over the last three years. So I've gone from buyer to taking control to now being a seller. And so it just, but it does take time. I mean, external financing is much more available. We've used that now for the last, last eight years to where at least the seller can be paid up front. But to Carla's point, amortization schedule based on the growth of the firm, it's probably gonna be a seven to 10 year kind of process to pay that off. So I don't think there's magic to the time in terms of how long it takes to buy in. It's just culturally to Jessica's point, what's the ownership criteria? Like what are the thresholds to become an owner? And what are you trying to decide, decide with your ownership of the firm, broad centralized, everyone can do it. Only advisors can do it. And that's a philosophical cultural question that each firm kind of has to decide for themselves. So I think ownership criteria is helpful to decide who becomes an owner, but the timeline it takes, it was mostly driven by the founder and the runway that we have. So. Yep. Awesome. Thank you. Okay. So the next question we have Jacob, we'll come to you first for this one. So why work at a firm to become a second or third generation owner, instead of just starting your own? Great question. Maybe a little self-serving as we're all owners and seeking talent. I think, I think the answer is being a solo entrepreneur, I think has many life advantages but it comes with disadvantages as well. And to me, the biggest of that is that nobody can be good at everything. In fact, I was just talking to a colleague earlier about this and he described it as, you know, we don't hire unicorns, meaning you can't hire someone that is good at both the EQ, emotional connecting with clients on a values level, and also is a great fisherman and can, you know, go out and find clients and also deeply technically proficient at investment management and taxes and all the other things that it takes to be a good practitioner. And so for me growing and buying into an ensemble style practice was all about the idea that, you know, you could work with a team of other talented individuals who are good at things that you are not. And that allows you to focus on your strengths and rely on those around you to fill in the gaps. And, you know, with my own personal story, you know, our firm was also growing quite rapidly. So from 2011 to when Karen ultimately retired and I purchased her company, shares, we had grown from, you know, well in 2008, we had 35 clients and I think when she retired we were over a hundred and our revenue had increased like tenfold. And part of that was we were way undercharging in the beginning. And when she retired, it was sort of like, well, we had grown to this point where I had a team and that was great. And I was kind of like, well, why are we growing now? And I didn't quite know what the next move was. And it took a couple of years to figure out, you know, where did I want to take the business from where we had gotten to in 2016? Because quite honestly, we had exceeded every goal I'd ever set. And there is a sort of a diminishing return of, you know, each addition to the team. And equally as important, I want to continue focusing on the things that I'm good at and get rid of the activities that I don't enjoy. And so to me, it's exciting to figure out how to get back into the business that I'm good at and how to get back into the business that I'm not good at. And I think that's a big part of why we're here. I think it's a big part of why we're here. it's exciting to figure out how to get the firm to the next level. So we can hire that next person and I can stop doing the things I don't enjoy. But, but I want to do it in an intentional manner. So we, we have slowed way down. You know, we were growing at like 20 to 30% a year compound for those first 10 years. And now I'm like, you know, can we keep it at 10 or less and still provide enough opportunity for my team members to develop and grow? And that, and that's actually one of our biggest challenges now is sort of balancing that growing intentionally and purposefully. But also, you know, not growing too slowly where we're not giving opportunity to the next generation. And that's one thing I haven't mentioned is I do have another partner now, which is after Karen retired, I offered equity to one of my employees. He bought in at 25% or initially 10% and then an additional 15. And we're kind of in the early stages of starting to think about how do we make that a repeatable process where as we grow, at what point do we start transitioning and letting additional employees buy in as well? Awesome. Thanks Jacob. Anybody else have anything they want to add to that question? So Steven, when, you know, one thing somebody has to consider, I think, you know, going off on your own versus joining a firm, you know, it takes a while to get profitable. So, you know, if you're going to start a firm, you have to, you have to have a different way of funding your lifestyle for a few years. And I think it's really important for people to remember that. I'm not saying, you know, I'm not opposed to going off and doing things on your own, but I think that cashflow in the first couple of years is a crucial piece to think about. Yeah. The only thing I'd add to Jacob's point is that just the, for me, it was a lot about the mentorship and development that I could get from being around somebody that had a lot more experience than I had and just being a sponge. Right. So I think the flip side of being on your own is that you're kind of isolated. Right. So yes, you can have a study group and you can have friends in the industry and things like that. But when the client calls with a question that you don't know how to answer, there's no one down the hall. Right. And that's, that was the biggest attraction to me was I just, I wanted to learn from someone that had, you know, he'd been in the business for so much longer than I was. And so it was, it felt very safe to do that. And from a mentorship and development standpoint, I couldn't have learned what I learned without that, without being having that proximity to someone that knew that. So, but I think you're right. It's just, it is the runway to having a business of enough scale to support yourself as well as maybe a helper and a support person or beginning to build out a business, there's some major growth barriers in that and it can be challenging. I think there's some benefit to finding someone that maybe has a different skill set than you have and finding a way to connect the strengths that you both bring to the table, nothing else with another person if you can't find a larger firm. Awesome. Thank you. A bunch of you just jumped right into that right firm, the right fit right out of college. Maybe this is with some people you've been managing on your team or just some other experiences that you've had along the way. But for those who are in the audience who are asking these types of questions, okay, they do want to work for a firm, they don't want to go start their own thing, but maybe they decide they're not at the right firm. Maybe that firm is not looking to add someone as a partner, not looking to add someone as management, but there's just that they don't want to or they can't move any further up. What do you think those next steps should look like? Jessica, I'm going to come to you first on this one. Well, I think the first question is, do you stay at that firm or do you move on? I think if you want to stay, if you have some desire in some way to stay but make it work, find a way that you can be useful. What I mean by that, I'll give you an example. A few years ago, I was not happy with our valuation process. Before I went to our other owners, I did a lot of research and figured out who we could go to help us maybe evaluate it, what the costs were, what the pros and cons were for each one. I made a point of showing the value of that decision to the other owners in the company. Then that went a long way, we ended up making some changes as a result of that. If you're at a firm that you feel can be open-minded, and it's very important to you that you have that career track, then I think figure out a way that you can show them what it is, what the value is to them as well as to you and to the company. But if you find that it really isn't the place you need to be, it's a values thing. You need to figure out what your values are, what your goals are, and find a firm that aligns with that, especially if you're interested in taking it over, because you're going to want to work long-term there, and you're going to want to make sure that you're in agreement with how things are being done, and that you have a voice. I've mentioned that so many times, because to me, I think that has been the most beneficial piece to where I work. Regardless of if it was with West Financial or after the merger with Longview Financial, I've always had a voice, and that's been important to have people who are open-minded enough to hear you out, and hear what it is that you can bring to the firm, and how your request can be beneficial. And then the last thing I'll add to this is, if you do decide to go out and interview with other people, don't be afraid to ask the question in an interview. I, as someone who hires, I am intrigued when people bring up the question about, what is the management career path? What is the ownership career path? Because that's telling me you're thinking long-term, and you're not wanting to go anywhere. And it's hard enough in today's market to find someone anyway, but if you can find someone with that kind of attitude, they already have a leg up, right? So those would be the only points I would add to that question. I could jump on and add to Jessica. Early on in Karen and I's conversation, in talking with the few other successful advisors that we had found that had made it through a transition, one of the descriptions that stuck with me was that, that a partnership is like a marriage, and just like marriage, there's a dating process, and you should not marry necessarily the first person that you date, right? I mean, obviously there are those stories of high school sweethearts where it turns into long, successful marriages, but that is the exception, not the rule. And so, I think it is important to be willing to walk away when it's not working. And it's very common for people to ask me, having gone through this, like, tell me about the details of your partnership arrangement, and how you work through these specific issues around valuation, or buy-sell arrangements, or non-competes. And to me, that's putting the cart in front of the horse, in that these people are thinking that the process of hiring outside experts, and attorneys, and so forth, that that's going to uncover and prevent problems, when to Jessica's point, it's all about values and expectations. So if there's no alignment there, the partnership is never going to work. You've got to have trust in the people that you work with, and share common values and vision. And if those things are in alignment, when problems come up, there's the trust that, you know, we may not agree, but we'll be able to work these things out. But if you don't share those common values, you know, no ironclad partnership agreement or corporate charter is going to fix fundamental issues. I'll add to here in that, you know, the life cycle of a firm can change, right? So you may join a firm in a high growth period, and you're super excited, and they're growing like crazy, and then it reaches some plateau. And that's what I hear from people like peers, at least I used to hear a lot more when we were younger. It's like, I don't know what's going to happen next. Like, where do we stop growing? Or now they've changed their approach to marketing, or they've changed their approach to what clients are going to take. They've raised their minimums, whatever it is that a firm does as it gets more successful. And I think what's changed is, do I want to go to the same destination that they're going to go to, right? Like, if they've changed where they're going to go, or who they're going to be when they grow up, if you will, and that's not interesting to you, then that's one of the first things I see for people is just, my career development is not, at this firm may not take me where I want to personally go. And in that case, then I, to Jessica's point, 100%. If you're going to talk to other firms, then ask that question right away. Like, where's the organization going to be in five years? What's the structure that you're going to put into place? Like, what's your plan for ownership and management? Like, I love it when employees ask that question because I should have an answer to it if I'm going to be hiring people that want the things that I want, right? And if they don't ask me those questions, I'm actually skeptical of their commitment to the firm, right? Like, if you're not trying to pry it out of my hands or get the information out of my brain, then I'm actually not as sure that you are committed to where we're going. And so I think it's great for an employee to question, where's the firm going and do I see myself as part of it? Because if you can answer that, if you're willing to ask that question and lean into that tension, it shows the managers and owners that you actually care enough to like address the elephant in the room, which is, I don't know if I'm going to be part of the story. Can you help me understand where you see I'm going to be part of the story and maybe connect the dots? And as a leader or owner, now the responsibility is on you to paint a picture or to tell a story that maybe does align with what they want or you paint a picture that you care about and it doesn't align and you at least know now, like you at least can call it what it is and bless and release them to some other business or some other project that they really care more about. And we've had people that have been part of our firm where they decide they want to go back and work for a really small firm again. That's fine, but we're not going to be a really small firm again, right? We're not going to go back to having five people. Or we've had some people that have said, we're not growing fast enough. I want to be part of a firm that has like 100 employees with multiple offices. I'm like, we're not going to be that either, right? And I think that's okay, but the worst scenario is that you don't have that conversation and they're still on your team, right? And so that's where I think it's, I encourage people if they feel the tension of I'm not sure if I'm where I want to be to talk to the people that have some control over it and then talk to other people that are running firms that you might be interested in, ask them those tough questions. I think that's a wonderful thing about our little cottage industries. It still is so new that our firms are taking different paths. And so if the path you're on for five or 10 years takes you to a place that you don't want to go to, odds are you can probably find another firm that's probably going to take you where you want to go to if you're willing to commit to what you care about. And I say that because along the way here, there were plenty of conversations I had with a founder about I want to go here, you want to go there. If I'm staying, we have to go there. And if you don't want to go there, that's fine. I'll just leave. And we had those conversations. I'm not kidding. It's either me or this, and I was okay. But what it did was it got him to commit to what he cared about too. And if there was an alignment, then I was okay with that because I knew what I cared about and it was a deal breaker and I would go do something else. So. Excellent. Thank you. All right. So the next question we got is, what do you wish you had known when you were starting this journey that you now know at the end? What's maybe one of those like one or two biggest lessons that you took away? And Carla, I'll start with you. Sure. So I mentioned this a little bit in my intro and it probably defies all the things that everybody's saying here. But when I was first asked about ownership, I was like, no, I don't want that. And I'd had a lot of management experience in my past. So it wasn't that I didn't feel I was qualified. It just didn't feel like the right time in my life. And so the one thing that I've really learned is sort of the joy of running a business. There's certainly a lot of responsibility and there's times when it's stressful, but there's really nothing that I've done in my career, either before financial planning or now that has been as gratifying. So I think, I wish I had jumped in there with two feet right away and I'm really glad that Peggy saw something in me and just kept pushing me. And I'm so thankful for that. Excellent. Thank you, Carla. Jacob. Gosh, it's such a hard question to articulate and answer too. I think, as I sort of mentioned earlier, when Karen and I partnered up, we sort of had a vision of what we want to be in five years. And that was solely based on, we needed to grow in order to make the partnership work. And to be clear, what we really needed is, we needed growth to get to this point of an ensemble practice where I felt like I had that team. So that when Karen started to exit, I had that backing and that support. And so we hit that and we exceeded that and that was great. And I think what I learned was that goals are going to change. And what I wished I would have done at the beginning has been more clear about what the underlying purpose, exactly what it is that I wanted to accomplish. Not from a revenue or a size or any of those things because you always hit your goal. And then when you do, it's sort of like, well, that's great, but what's next? Or at least that's the way I tend to be. And I think where I'm at now is I'm really trying to be more clear about, what does the business do to support my life? And what does it do to support the lives of my team? And what is the impact that we're trying to make in our community and with our clients? And I really want to be better about saying no, because I think there are too many businesses out there that just sort of go along with what everyone else is trying to do. And it's grow for growth's sake and fear of if we don't grow, we're going to be devoured by our competition. And my perception is that the most successful businesses are the ones who don't give a damn what anyone else thinks. The business is all about serving some function and they're willing to go against the grain and they're willing to do it their own way. And that's attractive, right? People want to work for a company that has real vision and that is trying to accomplish something. You don't have to serve all people, right? Like we don't need that many clients. We don't need that many team members. And if you're really clear about what's important to you and what you want to accomplish, you will find the right people. You will find the right clients. So I guess I could try to articulate this concisely. It's just being clear about what's important and staying focused on measuring every decision you make by those values and saying no to everything else. And it's hard. I feel like I struggle with that every day. Thank you, Jacob. That was fantastic. Eric? So on this one, as I listened to where we're sharing, and I mean, again, to Jacob's point, I mean, I could give you a copay for this one. We could sit and talk about this for an hour as my therapist. But the thing that stands out the most, I think about what would I wish I've known. I was 24 when I became an owner of the firm and I had no idea what that meant. So the thing I wish I would have done earlier was build out my list of mentors and wise counsel that were owners and leaders of their firms. I wish I had done it sooner. I'm fortunate that I did it in my late 20s, but those first three or four years, I was like, I'll figure it out, right? I'll just, you know, I'll be on an island and I'll be with my founder and we'll do this together. And what I wish I would have done was do a lot more window shopping of other firms and site visits and engaging. And I mean, I'm in some wonderful study groups and I've had that for 15, 20 years. But those first three to five years of being an owner, I think I paid a lot of dumb tax on my own. If I would have probably been more vulnerable or been more open to feedback, I would have asked those tough questions in the hospitality suite of the person I was really scared of, right? I'll give you an example quickly. Tim Kochus and I are great friends. We wrote a book together, but it was 20 years ago where I approached him and I was totally shaking in my boots. I'm like, he's Tim Kochus, oh my gosh. And we just had a conversation and we formed a wonderful friendship and I can text him and we can go busy each other on holidays and stuff. But it was getting over myself, right? Just as a young owner or a new owner and going, you don't have to have it all figured out. Like just go ask somebody else that you might get three or four nos, but if you get one really good yes, that's all that matters. And so my encouragement to younger owners or new owners is, yes, look inside your firm for mentorship and leadership from the current owners. But frankly, I learned a lot more outside the office from different disciplines of leadership, outside of our industry, all the places that I could around ownership and leadership and management. Most of it happened outside the walls of the office, whereas the first few years, I was putting too much pressure on the founder, probably to teach me everything about how to be an owner and a leader. And I wish I would have looked outside the walls sooner. So that's my biggest, if I can go back in time, I would have sought out a lot more outside advice sooner. Awesome, thank you, Eric. Jessica. Yeah, oh my goodness, all of these. I checked the box with everything that has just been said. So I don't even know if I can come up with something new, but I will say this, and it's not a decision I made. It was a decision that Jeff Sederholm, one of the founders made. And I will say it's the best decision. So instead of what I would have done differently, I think the best decision was that we hired a coach. And it's kind of getting to Eric's point. So I didn't know anything about running a business when I started into this. I was trained to be a financial advisor, which I love doing. But I didn't have the knowledge around the business piece. And you can be taught some by doing it. But the really learning how to be a true visionary and how important, like Jacob was saying, like knowing what your vision is, what your goals are, where you want to be. And you can train yourself. This is the thing I didn't know that she taught me. You can train yourself to be a better visionary. It's just like any other muscle. You've got to practice. You've got to use it. And so just practicing where my shortcomings are. And that was, for me, the biggest one through this process. And I still have a lot to learn. But man, did she teach me a lot. So instead of going the path of what I would have done differently, because I can say I agree with everything everyone else said, I would add that probably the best decision was not my decision, someone else's, but it was to get a coach. Awesome. Thank you. Well, we are right up here at 4 o'clock. And I know that you are all very busy professionals. So thank you so much for taking the time, each and every one of you. Really, my heartfelt thanks to you. We've been trying to put something like this, this type of panel of NAPFA members, four NAPFA members together for a while. So thank you to each of you for saying yes and joining us today. Thank you also to everybody who participated. And thank you to everybody who participated over the last four years. This is my last webinar as the Genesis webinar coordinator. It's been a great ride. So everybody who's been on any of these, if you sat and listened to me, really, really, really struggled four years ago up through now. Hopefully, I've gotten a little bit better at this. But it's been a great ride. And I appreciate the opportunity to have been able to serve NAPFA and serve alongside people like our panelists here today. So again, thank you to everybody, our panelists and our attendees today. I hope everybody has a wonderful afternoon.

webinar

NAPFA Genesis

panel

owners

career journey

values

mentorship

goals

financial planning industry